FirstMerit (FMER) in Akron, Ohio, trumped higher noninterest costs with more lending for a slight gain in quarterly profits.
The $14.6 billion-asset company reported earnings of $30.6 million in the second quarter, up about 2% from a year earlier. Its earnings per share of 28 cents met analysts' estimates, according to Thomson Reuters.
FirstMerit's average noncovered loans increased about 9% to $7.9 billion. Commercial loans rose 13% to $5.3 billion. Though commercial loans were the primary driver of overall loan growth, FirstMerit has also experienced increased average consumer loans for four consecutive quarters, it said Tuesday.
Noninterest income was $55.3 million, up 7% from the second quarter as loan sales and servicing income rose 78% to $5.1 million. Net interest income rose less than 1%, to $121.7 million, from a year earlier.
FirstMerit announced in the second quarter a cost-cutting plan that included closing eight branches and eliminating assistant branch manager positions. That resulted in $8.9 million in one-time charges in the quarter. Noninterest expense was $119.1 million, up about 8% from a year earlier.
Earnings were $60.9 million in the first half, up 6% year over year.