FirstMerit Corporation (NASDAQ:FMER) Focusing on Profit Opportunities, Not Empire-Building

The expansion and acquisitions made by FirstMerit Corporation (NASDAQ:FMER) over the last year, have focused on assets that are profitable and not just part of "empire-building," says Miller Tabak.

They said, "Having begun reinventing its business model in 2010 with three major acquisitions and an expansion into Chicago, we think FMER will be ready to further expand its Midwest franchise in 2011. Management believes there could be plenty of further opportunities for FDIC-assisted deals in the Chicago-area market, but is also starting to look at other markets adjacent to its core footprints in the Akron area and Chicago. While we have some trepidation about FMER eventually 'biting off more than it can chew,' right now, we believe that management has centered its focus on profit opportunities, not on 'empire-building,' and that, at its current size, FMER is likely to find quite a few more accretive acquisitions before finding itself having trouble garnering economies of scale.

"We are adjusting our 2010-2011-2012 EPS estimates for FMER to $1.08-$1.81-$2.15 from the previous $1.07-$1.77-$2.16."

Miller Tabak Reiterates a "Strong Buy" on FirstMerit Corp, which closed Friday at $19.79, down $0.34, or 1.69 percent. Miller raised their price target on them to $27.68.