FirstMerit in Akron, Ohio, posted lower third-quarter profit, citing narrower profit margins and a larger loan-loss provision.
The $25.2 billion-asset company's net income fell 7.6% to $59.0 million, from the same period last year. Earnings per share fell 8.1% to 34 cents. Adjusted revenue fell 2.6% to $260.5 million.
Net interest income before the provision for loan losses fell 4.3% to $185 million. The net interest margin dropped 27 basis points to 3.33%.
Total loans rose 3.6% to $15.8 billion, as FirstMerit originated more installment loans and it introduced lending for boats and recreational vehicles. FirstMerit increased its provision by 55% to $14.7 million.
Noninterest income rose 2.4% to $71.4 million. Higher income from trust department services, ATM fees and investment services offset a decline in deposit service charges and loan sales and servicing income.
Noninterest expense dropped 1.5% to $161 million, largely based on cuts in salaries, wages, pensions and employee benefits. The efficiency ratio worsened by 79 basis points to 60.71%.