FirstMerit Corp. (FMER) in Akron, Ohio, earned $40.7 million in the third quarter, up 16% from the same period a year ago, due largely to its recent acquisition of Citizens Republic Bancorp in Flint, Mich.
The $24.1 billion-asset company earned 23 cents per share, missing estimates of analysts polled by Bloomberg by 11 cents.
FirstMerit's net interest income climbed 72% to $207.1 million, while its net interest margin rose 39 basis points to 4.05%. Driving the higher interest revenue was a 15% increase in originated loans, a 68% increase in deposits, and a 67% increase in investments.
Noninterest income rose 31% to $71 million as First Merit saw gains from trust department income, service charges on deposits, credit card and ATM fees, investment services and bank-owned life insurance.
Noninterest expenses spiked 95% to $211 million, primarily because of $33.4 million in one-time costs related to FirstMerit's acquisition of Citizens.
The company also showed marked improvement in credit quality, chopping its loan-loss provision by 58% to $6.4 million. Net chargeoffs declined 81% to $2.9 million. FirstMerit did not include acquired loans and covered assets in its discussion of asset quality.
FirstMerit completed its $912 million purchase of Citizens in April.