Huntington Bancorp's profits took a hit in the third quarter from $159 million in merger and integration costs tied to its acquisition of FirstMerit.
Profits fell 17% from a year earlier to $127 million, but revenue rose 24% to $938 million.
The acquisition, completed in August, has presented cost challenges much of the year. Merger expenses led to an 11% year-over-year decline in profits during the second quarter. In the first nine months of the year Huntington reported net income of $426 million, down 13% from the same period in 2015.
Huntington was not the only Midwestern bank to report a third-quarter, merger-related earnings drop-off. On Tuesday, Chemical Financial Corp. of Midland, Mich., said costs associated with its Aug. 31 acquisition of Talmer Bancorp totaled $37.5 million during the third quarter. As a result its profit shrank 56% from a year earlier to $10.7 million.
According to Huntington's chairman and chief executive, Steve Steinour, the integration of FirstMerit — which held earning assets of $23.7 billion when the deal closed — is proceeding smoothly.
"We remain confident we will complete the majority of system conversions during the first quarter of 2017, swiftly moving toward our target of realizing $255 million of annualized cost savings," Steinour said in a press release Wednesday.
Huntington's third-quarter report provided the first glimpse of the combined company's balance sheet. It had assets of $100.7 billion (up 44%), loans of $66.3 billion (Up 34%) and deposits of $77.4 billion (up 43%).
Nonaccrual loans decreased on a linked-quarter basis, totaling $404 million, or 0.62% of total loans, as of Sept. 30. Net chargeoffs of $40 million were 0.26% of average loans.