AKRON, Ohio (AP) ¿ The regional bank FirstMerit Corp. said Tuesday that its first-quarter profit fell 12.3 percent, but results beat analysts' expectations. For the January-March period, net income available to common shareholders was $27.6 million, or 34 cents per share, compared with $31.4 million, or 39 cents per share, a year earlier. Analysts polled by Thomson Reuters, on average, were expecting earnings of 27 cents per share. The estimates typically exclude one-time items. Net interest income, or income earned from loans and deposits, rose 3 percent to $88.6 million. Other income, from fees and charges, edged up 4 percent to $55.2 million. During the quarter, FirstMerit set aside $18.1 million to cover loan losses, up 57 percent from the first quarter of last year. Net chargeoffs, or loans written off as unpaid, were $15.6 million, or 0.86 percent of average loans, up from $11.3 million, or 0.65 percent of loans, in the year-ago period. Nonperforming assets, or loans considered past due, more than doubled to $76.2 million, or 1.04 percent of loans and other real estate.
Last week, FirstMerit repurchased 125,000 shares of preferred stock it had sold to the Treasury Department in January as part of the government's capital purchase program. The bank bought back the preferred shares at a price of $126.2 million, which included accrued and unpaid dividends of $1.2 million. A handful of regional banks have returned their funds, and many others, including JPMorgan Chase & Co. and Goldman Sachs Group Inc., have expressed a desire to do so as soon as possible. Part of the $700 billion financial rescue program passed last fall, the preferred stock purchases were implemented in the hopes of bolstering banks' balance sheets and stimulating lending. FirstMerit also announced a quarterly dividend of 29 cents payable in cash and stock. Previously, the company paid an all-cash dividend. By paying 13 cents-per-share in common stock, the bank will save about $10.5 million in capital per quarter. Shares added 52 cents, or 2.7 percent, to $20.05 in pre-market trading.