Earnings Call Excerpt
FirstMerit (FMER)
Q4 2007 Earnings Call
January 22, 2008 02:00 pm
Executives
Tom O’Malley – Investor Relations
Paul Grieg – Exec. Chairman, CEO
Bill Richgels- Chief Credit Officer
Terry Bichel –CFO
Mark Duhamel - Treasurer
Analysts
John Pancari - JP Morgan
Erika Panala - Merrill Lynch
Scott Riffer - San Boromeo (ph)
Andrea Jao – Lehman Brothers
Terry McEvoy - Oppenheimer
Presentation
Operator
(Operator Instructions.)
It is now my pleasure to turn the floor over to your host, Tom O’Malley. Sir, you may begin your conference.
Tom O’ Malley
Welcome to our Fourth Quarter 2007 and Full Year Earnings Conference Call. Joining me today are Paul Grieg, our Chairman and CEO, Bill Richgels our Chief Credit Officer, Terry Bichel, our Chief Financial Officer and Mark Duhamel, our treasurer. We will have a question and answer session following our comments. I will now turn the call over to Paul Grieg.
Paul Grieg
I would also like to welcome you to our conference call. We concluded 2007 with positive momentum in our financial performance. Three significant factors highlight the quarter’s $0.39 per share results. First we have experienced four consecutive quarters of operating revenue growth, second, we have generated net interest margin expansion off the prior quarter and third, we have decreases in reported man interest expense compared with the prior and year-ago quarter.
The decreases occurred despite the fact that $2.4 million of Visa litigation matters are included in this quarter’s non-interest expense. This highlights the true diligence of our expense management this quarter.
In 2007, our entire team focused on improving the credit performance of FirstMerit. In addition to the commercial loan sales in the first quarter, we aligned incentives throughout the company focusing on credit improvement. Secondly, we restructured the credit department to ensure that issues are properly monitored and dealt with in a timely manner and that credit quality improvement game plans for each riskier borrower are reviewed continuously. And then third, we added key personnel support for this mission.
In May Bill Richgels joined us from JP Morgan Chase as our Chief Credit Officer. Bill brings broad and deep experience managing a mid West commercial loan administration platform.
The results from these steps are reflected in improved credit performance and position us to face what is likely to be a challenging 2008. In the fourth quarter, non-performing assets increased $3.1 million. I would like to note that $2.3 million of that increase is related to two items, first we are selling four parcels of land originally purchased for brand’s construction and secondly, we purchased the homes of two executives due to their relocation.
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