News
News Home
Quick Bites
Exploradio
News Archive
News Channel
Special Features
NPR
nowplaying
On AirNewsClassical
Loading...
  
School Closings
WKSU Support
Funding for WKSU is made possible in part through support from the following businesses and organizations.

Northeast Ohio Medical University

Knight Foundation

Don Drumm Studios


For more information on how your company or organization can support WKSU, download the WKSU Media Kit.

(WKSU Media Kit PDF icon )


Donate Your Vehicle to WKSU

Programs Schedule Make A Pledge Member BenefitsFAQ/HelpContact Us
Economy and Business


FirstMerit buying Michigan bank for $912 million
Marks first expansion into Wisconing for Akron-based bank
by WKSU's KABIR BHATIA


Reporter
Kabir Bhatia
 
In The Region:
Akron-based FirstMerit Bank announced today that it's buying a Michigan-based bank in a deal valued at nearly a billion dollars.  WKSU's Kabir Bhatia reports.
FirstMerit buying Michigan bank for $912 million

Other options:
Windows Media / MP3 Download (1:24)


FirstMerit is swapping stock to buy Citizens Republic Bank in a deal that amounts to a 13 percent premium for Citizens’ shareholders.

The combined company will have $24 billion in assets and employ more than 5,000 people in Pennsylvania, Ohio, Michigan, Illinois, and, in a first for FirstMerit, Wisconsin.

Case Western Reserve University banking professor William Mahnic says consolidating operations is one way banks can increase profits now that the feds are clamping down on credit-card fees.

“So if banks can’t replace the income that they used to earn, what they need to do is work on the other side of the equation.  And that’s reducing costs.  The easiest for a bank to reduce its cost, is to grow, because banks have a lot of fixed costs based in their operation center.  If they can buy another bank, eliminate their fixed costs, do their processing through the original processing center, they can save a lot of money.  And that falls to the bottom line.”

But, Firstmerit CEO Paul Greig says it’s too early to discuss details.

“The transition and integration activity in planning really begins today.  So it would be premature for us to give any specificity on what synergies will occur from a cost savings perspective.”

Prof. Mahnic also says he’s surprised more regional banks aren’t consolidating.

“Too many banks that will eventually become buyers are still recovering from the credit crisis.  And they just don’t have the balance sheet that’s necessary – or, the stock price history if they’re going to use stock as a consideration – to convince sellers to sell to them.”

Mahnic says an increase in acquisitions of smaller, regional banks is likely in the next year or two.  

As part of the Citizens deal, FirstMerit will repay the federal government about $345 million it gave Citizens’ in the banking bailout.  The entire deal is expected to close next year, and the acquired branches will re-branded as FirstMerit.
Add Your Comment
Name:

Location:

E-mail: (not published, only used to contact you about your comment)


Comments:




 
Page Options

Print this page

E-Mail this page / Send mp3

Share on Facebook




Stories with Recent Comments

Ohio becomes first in the nation to dump PARCC testing
Best test to use for elementary schools is the old pre common core Iowa test of basic skills. This test measures apples to apples and tests the skills appropri...

Ohio is moving forward with new standardized tests
Mr Chow, Nice piece on testing. Should not Ohio go to an open bid process for the new assessment contract? Ohio has stayed with a "connected" DC non-profit fo...

The Surpreme Court gay-marriage decision plays out in Ohio Amish country
Keep in mind that the majority of the people residing in Holmes County are Amish, a church people who do not vote because they do not believe in governmental ru...

Akron council committee recommends Forney for its opening
Which committee member voted for Wilhite?

Nearly a dozen Cuyahoga gay couples get licenses to marry after the Supreme Court ruling
Presiding Judge Anthony J. Russo a graduate of Chanel High School and supposed member of St. Francis Parish in Gates Mills has just excommunicated himself. As ...

Canton Youth Symphony is named orchestra of the year
This is what makes CSO the hippest small town orchestra in America!

What can be expected if Ohio's tobacco taxes increase?
let's face it! The increase has little to do with smoking cessation

Rare Cleveland Indians photo from 1911 hits the auction block
Paddy Livingston, who cut his teeth on a Louisville Slugger in Kent, Ohio was one of the immortals that played in that game. He was the catcher. Ty Cobb actuall...

Nexus denies Green's request to relocate its planned gas pipeline
These people have so much power. Too much. They could care less about the people they leave when it is done. Spectra does not, and admits, they do not do the...

Copyright © 2015 WKSU Public Radio, All Rights Reserved.

 
In Partnership With:

NPR PRI Kent State University

listen in windows media format listen in realplayer format Car Talk Hosts: Tom & Ray Magliozzi Fresh Air Host: Terry Gross A Service of Kent State University 89.7 WKSU | NPR.Classical.Other smart stuff. NPR Senior Correspondent: Noah Adams Living on Earth Host: Steve Curwood 89.7 WKSU | NPR.Classical.Other smart stuff. A Service of Kent State University