S&P lifts FirstMerit rating 1 notch to "BBB+"

NEW YORK - Standard & Poor's Ratings Services said Tuesday it raised its rating on FirstMerit Corp. by one notch to "BBB+," or seven notches below the highest "AAA" rating, from "BBB."

"The upgrade reflects the positive and seemingly sustainable impact the management team has made since taking the helm of FirstMerit about three years ago," said Standard & Poor's credit analyst Dan Teclaw.

S&P said Akron, Ohio-based FirstMerit has upgraded its banking platform to a solidly profitable, low-risk commercial banking franchise, improving the asset quality of its loan portfolio. Last month, FirstMerit said its fourth-quarter profit slipped 7 percent as higher credit costs offset an increase in loans, but the result narrowly beat Wall Street's forecast.

"Through the turbulent markets and mortgage crisis, the company has avoided the pitfalls many other companies experienced in that it consciously avoided Alt-A and subprime mortgages, has no brokered originations in its consumer mortgage book, and holds an innocuous investment portfolio," added Teclaw.

FirstMerit, with assets of $11.1 billion, operates 160 branches in Ohio and western Pennsylvania.

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