FirstMerit Corporation (NASDAQ:FMER) Q4 2014 Earnings Conference Call - Final Transcript

Jan 27, 2015 • 11:00 am ET


FirstMerit Corporation (NASDAQ:FMER) Q4 2014 Earnings Conference Call - Final Transcript


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Good morning. My name is Michelle and I will be your conference operator today. At this time, I would like to welcome everyone to the FirstMerit Fourth Quarter 2014 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remark, there will be a question-and-answer session. (Operator Instructions)

I would now like to turn the conference over to Mr. Tom O'Malley. Please go ahead, sir.

Tom O''Malley

Good morning. Welcome, and thanks for joining us on our Fourth Quarter 2014 Earnings Call. For our prepared remarks today will have Paul Greig, our Chief Executive Officer; and Terry Bichsel, our Chief Financial Officer in comment. Following those comments, we will take your questions. For the question-and-answer session, Bill Richgels, our Chief Credit Officer; and Mark DuHamel, our Treasurer and Director of Corporate Development will also be participating and happy to take your questions.

(Forward-Looking Cautionary Statements)

I will now turn the call

Unidentified Speaker

call over to Paul Greig.

Paul Greig

Thank you, Tom, and good morning, everyone. Our fourth quarter and full year 2014 results reflect strong performance across the Company's three lines of business Commercial, Retail and Wealth. The overall performance and strategic initiatives we have pursued positioned us well for 2015 and provide a solid foundation for the future. I want to thank our employees across the Company for their hard work and dedication that allowed us to grow revenues and take market share.

These efforts resulted in a $1 billion increase in our total loan portfolio the highest level of organic growth in the Company's history. This morning I will comment on our 2014 performance and discuss our fourth quarter highlights and business drivers. As Tom mentioned, I'll then turn the call over to Terry Bichsel for more in-depth revenue of the quarter and the outlook for 2015.

As I report 2014 performance results, please recognize that the prior year's numbers reflect the fact that we acquired Citizens Republic Bancorp early in the second quarter of 2013. For 2014, we reported record net income of $238 million which is up 30% versus last year's net income of $184 million. Total revenue for the year was also a record $1.1 billion or 7.5% over the year ago level. Reported earnings per share are $1.39 up 17% from last year. The return on assets for '14 was 97 basis points up from 85 basis points in 2013. The return on average tangible common equity was 12.7%.

We believe the foundation of our successful business strategy is organic growth. We are executing on differentiated action plans for each business segment. As our Midwest economy continues to recover, our commercial customers are expanding businesses and are increasing their investments in capital projects. FirstMerit benefits from the close relationships we maintained with our customers as they turn to us to facilitate their growth.

Commercial loan production was up 19% over 2013. The commercial originated portfolio ended the year at $7.8 billion, up $1.2 billion or 18%. Equipment leasing for the year grew