|FirstMerit Exits Manufactured Housing Lending Business
AKRON, Ohio, Oct. 31 /PRNewswire/ -- During an analyst presentation in New York City at 12:45 PM Eastern time today, FirstMerit Corporation (Nasdaq: FMER) will announce that it is exiting the manufactured housing lending business.
Effective immediately, FirstMerit will cease new manufactured housing loan originations, but will continue to manage the existing $800 million portfolio over its remaining term. There will be no impact on current consumer customers and the bank will continue servicing existing loan contracts until their maturity.
``Returns in manufactured housing lending are unacceptably low due to industry overcapacity and to deteriorating general economic conditions,'' said John R. Cochran, Chairman and Chief Executive Officer. ``We have concluded that this business cannot meet our strategic and profitability objectives, so we are exiting the business.''
To cover the cost of exiting this business, FirstMerit will take a $42.1 million after-tax charge in the fourth quarter. The charge includes $10.1 million to shut down Mobile Consultants, Inc., the manufactured housing loan subsidiary; $21.2 million to reflect a change in assumptions related to loan loss severity; $9.4 million to additional loan loss reserves; and $1.4 million for severance costs. Other than this one-time charge, FirstMerit believes its action will have a negligible effect, if any, on subsequent operating earnings and will remain ``well capitalized.''
The presentations will be available simultaneously by webcast and call-in audio for media, investors, shareholders and other interested parties.
The webcast can be accessed at www.firstmerit.com/about/cochranpresents . To listen to the live webcast, please go to the website at least fifteen minutes early to download and install any necessary audio software. A replay will be available for seven days on the FirstMerit website.
To listen by telephone, dial toll-free 1-800-633-8545 at least five minutes before start time. No passcode is necessary. A replay will be available beginning at 3:30 PM on October 31, 2001, through 3:30 PM on November 7, 2001, by dialing 1-800-633-8284, reservation #19941391.
|FirstMerit Corporation (Nasdaq: FMER) is a financial services company headquartered in Akron, Ohio with assets of $10.3 billion as of September 30, 2001, and 158 banking offices in 11 Ohio and Western Pennsylvania counties. FirstMerit provides a complete range of banking and financial services to consumers and businesses through its core operations. Principal wholly-owned subsidiaries include: FirstMerit Bank, N.A., FirstMerit Mortgage Corporation, FirstMerit Title Agency, Ltd., FirstMerit Credit Life Insurance Company, and FirstMerit Community Development Corporation.