FirstMerit 4th-qtr profit falls by half on bad loans; stock prices slides

By Pzf-ajc, AP
Tuesday, January 26, 2010

FirstMerit 4Q profit falls by half; stock slides

AKRON, Ohio — FirstMerit Corp. on Tuesday said its fourth-quarter profit fell by half on soured loans and the bank was set aside more money to cover more.

Shares of the Akron bank, which fell well short of Wall Street expectations, tumbled more than 4 percent.

Nonperforming assets totaled $101 million up to Dec. 31, an increase of 76 percent from the $57.5 million a year earlier.

Net charge-offs, or loans written off as uncollectable, totaled $31.2 million, in the fourth quarter, double what the bank recorded a year earlier.

For the final three months of 2009, FirstMerit earned $14.5 million, or 17 cents per share, down from $29.1 million, or 35 cents per share, in the year-earlier period.

Analysts polled by Thomson Reuters, on average, expected a profit of 24 cents per share.

Net interest income, or money earned from deposits and loans, was $87.4 million, compared with $93.2 million in the fourth quarter of 2008.

The bank, which operates in Ohio and Western Pennsylvania, increased its provision for loan losses, or the money set aside to cover unpaid loans, to $30 million, from $17 million in the year-ago quarter.

For the year, FirstMerit earned $82.2 million, or 90 cents per share, compared with $119.5 million, or $1.46 per share, in 2008.

FirstMerit shares fell $1.02 to $21.18. The stock has moved between $12.44 and $23.47 in the past year

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