Shares of FirstMerit Corporation (FMER) declined 0.54% following the redemption notices to two property trustees – Citizens Funding Trust I and Citizens Michigan Statutory Trust I. Redemption notices have been sent to these preferred security holders nearly 19 years and 52 years before the maturity date.
As of Jun 30, 2014, the total principal amount outstanding was $73.7 million which includes securities worth of $48.7 million held by Citizens Funding Trust I and $25.0 million held by Citizens Michigan Statutory Trust I. Upon redemption, the preferred security holders will receive accrued interest plus 100% of the outstanding principal amount.
With assets of approximately $24.6 billion as of Jun 30, 2014, FirstMerit, the Akron, OH-based bank, offers a wide range of banking and other financial services to consumers and businesses. FirstMerit’s capital and balance sheet position improved in the second quarter of 2014 in comparison to the prior-year quarter. Given its healthy financial position, it should not be difficult for the company to pay the redemption amount.
Currently, FirstMerit carries a Zacks Rank #5 (Strong Sell). Some better-ranked Mid-west banks include First Business Financial Services, Inc. (FBIZ), First Financial Corp. (THFF) and German American Bancorp Inc. (GABC). All these stocks hold a Zacks Rank #2 (Buy).
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