For further information:
David B. Ramaker, CEO
Lori A. Gwizdala, CFO
989-839-5350
Chemical Financial Corporation Reports 2016 Second Quarter Operating Results
MIDLAND, MI, July 26, 2016 -- Chemical Financial Corporation ("Corporation" or "Chemical") (NASDAQ:CHFC) today announced 2016 second quarter net income of $25.7 million, or $0.67 per diluted share, compared to 2016 first quarter net income of $23.3 million, or $0.60 per diluted share and 2015 second quarter net income of $19.0 million, or $0.54 per diluted share. Net income was $49.0 million, or $1.27 per diluted share, for the six months ended June 30, 2016, compared to $36.9 million, or $1.08 per diluted share, for the six months ended June 30, 2015.
Merger and acquisition-related transaction expenses ("transaction expenses") attributable to the pending merger with Talmer Bancorp, Inc. ("Talmer"), which was announced on January 26, 2016, were $3.1 million in the second quarter of 2016, $2.6 million in the first quarter of 2016 and $5.6 million for the six months ended June 30, 2016, while transaction expenses attributable to the April 1, 2015 acquisition of Monarch Community Bancorp, Inc. ("Monarch") and the May 31, 2015 acquisition of Lake Michigan Financial Corporation ("Lake Michigan") were $3.5 million and $4.8 million for the three- and six- month periods ended June 30, 2015, respectively. Excluding transaction expenses, net income in the second quarter of 2016 was $27.7 million, or $0.72 per diluted share, compared to $24.9 million, or $0.65 per diluted share, in the first quarter of 2016 and $21.7 million, or $0.61 per diluted share, in the second quarter of 2015. Net income, excluding transaction expenses, was $52.6 million, or $1.37 per diluted share, for the six months ended June 30, 2016, compared to $40.4 million, or $1.18 per diluted share, for the six months ended June 30, 2015.
"We are pleased to report another quarter of solid financial results, with second quarter per share net income growing by double-digit annual rates, excluding transaction expenses, over last year’s second quarter. This sustained growth is not only reflective of the efforts of the extended Chemical team, but also of the reception of our products and community banking philosophy among the communities and customers we serve," noted David B. Ramaker, Chairman, Chief Executive Officer and President of Chemical Financial Corporation.
"Interest income in the quarter was aided by the loan interest accretion attributable to the higher than anticipated credit quality of the Byron Bank and Northwestern Bank acquired portfolios," added Ramaker. "Our ability to continue to execute at a high level while a significant portion of our senior management team concentrates on past and pending mergers and acquisitions is a testament to our core banking team’s focus on serving our customers."
The Corporation's return on average assets was 1.11% during the second quarter of 2016, compared to 1.01% in the first quarter of 2016 and 0.94% in the second quarter of 2015. The Corporation's return on average shareholders' equity was 10.0% in the second quarter of 2016, compared to 9.2% in the first quarter of 2016 and 8.6% in the second quarter of 2015. Excluding transaction expenses, the Corporation's return on average assets was 1.19% during the second quarter of 2016, compared to 1.09% in the first quarter of 2016 and 1.07% in the second quarter of 2015 and the Corporation's return on average shareholders' equity was 10.8% in the second quarter of 2016, compared to 9.9% in the first quarter of 2016 and 9.8% in the second quarter of 2015.
Net interest income was $77.5 million in the second quarter of 2016, $3.2 million, or 4.3%, higher than the first quarter of 2016 and $11.8 million, or 18%, higher than the second quarter of 2015. The increase in net interest income in the second quarter of 2016, compared to the first quarter of 2016, was primarily attributable to loan growth in the second quarter of 2016 and an increase in the amount of interest accretion recognized on acquired loans resulting from improvements in expected cash flows from certain pools of acquired loans. During the second quarter of 2016, the Corporation transferred $10 million of nonaccretable discount to accretable yield due to lower expected losses on loans acquired in both the 2010 acquisition of OAK Financial Corporation and the 2014 acquisition of Northwestern Bancorp, Inc. The Corporation's net interest income included $2.5 million of interest accretion on acquired loans in the second quarter of 2016, compared to $0.7 million in the first quarter of 2016 and $0.8 million in the second quarter of 2015. The increase in net interest income in the second quarter of 2016 over the second quarter of 2015 was primarily attributable to the positive impact of organic loan growth and the impact of the Corporation's acquisition of Lake Michigan.
The net interest margin (on a tax-equivalent basis) was 3.70% in the second quarter of 2016, compared to 3.60% in the first quarter of 2016 and 3.59% in the second quarter of 2015. The average yield on the loan portfolio was 4.19% in the second quarter of 2016, compared to 4.13% in the first quarter of 2016 and 4.17% in the second quarter of 2015. Interest accretion on acquired loans contributed 11 basis points to the Corporation's net interest margin in the second quarter of 2016, compared to 3 basis points in the first quarter of 2016 and 4 basis points in the second quarter of 2015. Interest accretion on acquired loans comprised 13 basis points of the yield on the Corporation's loan portfolio in the second quarter of 2016, compared to 4 basis points in the first quarter of 2016 and 5 basis points in the second quarter of 2015. The average yield of the investment securities portfolio was 2.34% in the second quarter of 2016, compared to 2.29% in the first quarter of 2016 and 2.03% in the second quarter of 2015. The Corporation's average cost of funds was 0.27% in the second quarter of 2016, compared to 0.25% in the first quarter of 2016 and 0.22% in the second quarter of 2015.
The provision for loan losses was $3.0 million in the second quarter of 2016, compared to $1.5 million in both the first quarter of 2016 and the second quarter of 2015. The increase in the provision for loan losses was due to loan growth, with loans in the Corporation's originated loan portfolio up $377 million during the second quarter of 2016. Net loan charge-offs were $1.8 million, or 0.10% of average loans, in the second quarter of 2016, compared to $4.5 million, or 0.25% of average loans, in the first quarter of 2016 and $1.8 million, or 0.12% of average loans, in the second quarter of 2015. Net loan charge-offs in the second quarter of 2016 and in the first quarter of 2016 included $1.0 million and $2.9 million, respectively, of losses from one commercial loan relationship.
The Corporation's nonperforming loans, consisting of nonaccrual loans, accruing loans past due 90 days or more as to principal or interest payments and nonperforming troubled debt restructurings, totaled $62.0 million at June 30, 2016, compared to $73.3 million at March 31, 2016 and $70.9 million at June 30, 2015. The $11.3 million, or 15%, decrease in nonperforming loans during the second quarter of 2016 was attributable to a combination of $6.4 million of principal paydowns, $3.9 million of nonaccrual loans being upgraded to accruing status during the quarter, and net loan charge-offs. Nonperforming loans comprised 0.81% of total loans at June 30, 2016, compared to 0.99% at March 31, 2016 and 1.01% at June 30, 2015.
At June 30, 2016, the allowance for loan losses of the originated loan portfolio was $71.5 million, or 1.12% of originated loans, compared to $70.3 million, or 1.17% of originated loans, at March 31, 2016 and $74.9 million, or 1.40% of originated loans, at June 30, 2015. The allowance for loan losses of the originated loan portfolio as a percentage of nonperforming loans was 115% at June 30, 2016, compared to 96% at March 31, 2016 and 106% at June 30, 2015.
Noninterest income was $20.9 million in the second quarter of 2016, compared to $19.4 million in the first quarter of 2016 and $20.7 million in the second quarter of 2015. Noninterest income in the second quarter of 2016 was higher than the first quarter of 2016, due primarily to higher seasonal trust fees from the preparation of trust tax returns and higher seasonal overdraft fees. Mortgage banking revenue was $0.2 million higher in the second quarter of 2016, compared to the first quarter of 2016, due to an increase in gains from the sales of residential mortgages, which was partially offset by a $0.4 million impairment of the Corporation's mortgage servicing asset resulting from the recent decline in market interest rates.
Operating expenses were $59.1 million in the second quarter of 2016, compared to $58.9 million in the first quarter of 2016 and $56.8 million in the second quarter of 2015. Operating expenses included transaction expenses of $3.1 million in the second quarter of 2016, $2.6 million in the first quarter of 2016 and $3.5 million in the second quarter of 2015. Excluding these transaction expenses, operating expenses were $56.0 million in the second quarter of 2016, $0.3 million lower than the first quarter of 2016 and $2.7 million, or 5%, higher than the second quarter of 2015. The decrease in operating expenses in the second quarter of 2016, compared to the first quarter of 2016, was primarily attributable to a $0.7 million reduction in payroll tax expenses (these are highest in the first quarter of the year) and a $1.4 million reduction in credit related expenses. The reduction in credit related expenses was driven by higher gains from the sale of other real estate properties and a $0.7 million gain resulting from the receipt of life insurance proceeds on a policy the Corporation had previously obtained as collateral on a loan. These decreases were partially offset by $1.1 million of higher outside services expense and a $1.0 million write-down included in occupancy expenses associated with the closure of several branch locations during the quarter. A portion of the increase in outside services during the quarter was attributable to the seasonal trust fees described above and increases in various project costs, many of which have been accelerated to complete them in advance of the pending Talmer merger.
The Corporation's efficiency ratio was 55.1% in the second quarter of 2016, 58.8% in the first quarter of 2016 and 60.5% in the second quarter of 2015.
Total assets were $9.51 billion at June 30, 2016, compared to $9.30 billion at March 31, 2016 and $9.02 billion at June 30, 2015. The increase in total assets during the three months ended June 30, 2016 was attributable to loan growth that was largely funded by an increase in Federal Home Loan Bank (FHLB) advances. The increase in total assets during the twelve months ended June 30, 2016 was also attributable to loan growth that was funded by a combination of organic growth in customer deposits, an increase in FHLB advances and proceeds from maturing investment securities. Investment securities were $1.01 billion at June 30, 2016, compared to $1.03 billion at March 31, 2016 and $1.16 billion at June 30, 2015.
Total loans were $7.65 billion at June 30, 2016, up $280 million, or 3.8%, from total loans of $7.37 billion at March 31, 2016 and up $613 million, or 8.7%, from total loans of $7.03 billion at June 30, 2015. During the second quarter of 2016, consumer installment loans grew $151 million, commercial real estate and real estate construction loans grew $58 million, residential mortgage loans grew $33 million, commercial loans grew $31 million and home equity loans grew $7 million.
Total deposits were $7.46 billion at June 30, 2016, compared to $7.65 billion at March 31, 2016 and $7.29 billion at June 30, 2015. The decrease in deposits during the second quarter of 2016 was primarily attributable to a $183 million decline in seasonal municipal deposit accounts. The increase in total deposits during the twelve months ended June 30, 2016 was attributable to organic growth in customer deposits of $268 million, or 3.8%, which was partially offset by a decrease of $96 million related to maturing brokered deposits that were acquired in the Lake Michigan transaction.
Securities sold under agreements to repurchase with customers were $256 million at June 30, 2016, compared to $283 million at March 31, 2016 and $305 million at June 30, 2015. Short-term borrowings were $300 million at June 30, 2016 and $227 million at June 30, 2015 (there were none at March 31, 2016) and consisted of short-term FHLB advances utilized by the Corporation to fund short-term liquidity needs. Long-term borrowings were $372 million at June 30, 2016, compared to $274 million at March 31, 2016 and $148 million at June 30, 2015. The increase in short-term and long-term borrowings during the second quarter of 2016 was attributable to the Corporation's liquidity needs to replace the seasonal decrease in municipal deposit accounts and to partially fund loan growth. During the second quarter of 2016, the Corporation borrowed $100 million of long-term FHLB advances that mature in three years at a fixed rate of 1.00%.
At June 30, 2016, the Corporation's tangible equity to tangible assets ratio and total risk-based capital ratio were 8.2% and 11.4%, respectively, compared to 8.2% and 11.5%, respectively, at March 31, 2016 and 7.8% and 11.6%, respectively, at June 30, 2015. At June 30, 2016, the Corporation's book value was $27.45 per share, compared to $26.99 per share at March 31, 2016 and $25.74 per share at June 30, 2015. At June 30, 2016, the Corporation's tangible book value was $19.68 per share, compared to $19.20 per share at March 31, 2016 and $17.89 per share at June 30, 2015.
This press release contains references to financial measures which are not defined in generally accepted accounting principles ("GAAP"). Such non-GAAP financial measures include the Corporation's tangible equity to tangible assets ratio, tangible book value per share, presentation of net interest income and net interest margin on a fully taxable equivalent (FTE) basis, and information presented excluding transaction expenses, including net income, diluted earnings per share, return on average assets, return on average shareholders' equity and operating expenses. These non-GAAP financial measures have been included as the Corporation believes they are helpful for investors to analyze and evaluate the Corporation's financial condition. Reconciliations of non-GAAP financial measures may be found in the financial tables included with this press release.
Chemical Financial Corporation will host a conference call to discuss its second quarter 2016 operating results on Wednesday, July 27, 2016, at 10:30 a.m. ET. Anyone interested may access the conference call on a live basis by dialing toll-free at 1-800-930-7709 and entering 485377 for the conference ID. The call will also be broadcast live over the Internet hosted at Chemical Financial Corporation's website at www.chemicalbankmi.com under the "Investor Info" section. A copy of the slide-show presentation and an audio replay of the call will remain available on Chemical Financial Corporation's website for at least 14 days.
Chemical Financial Corporation is the second largest banking company headquartered and operating branch offices in Michigan. The Corporation operates through its subsidiary bank, Chemical Bank, with 175 banking offices spread over 47 counties in Michigan. At June 30, 2016, the Corporation had total assets of $9.5 billion. Chemical Financial Corporation's common stock trades on The NASDAQ Stock Market under the symbol CHFC and is one of the issues comprising The NASDAQ Global Select Market. More information about the Corporation is available by visiting the investor relations section of its website at www.chemicalbankmi.com.
Forward-Looking Statements
This press release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy and the Corporation. Words and phrases such as "anticipates," "believes," "continue," "estimates," "expects," "forecasts," "future," "intends," "is likely," "judgment," "look ahead," "look forward," "on schedule," "opinion," "opportunity," "plans," "potential," "predicts," "probable," "projects," "should," "strategic," "trend," "will," and variations of such words and phrases or similar expressions are intended to identify such forward-looking statements. Such statements are based upon current beliefs and expectations and involve substantial risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These statements include, among others, statements related to future levels of loan charge-offs, future levels of provisions for loan losses, real estate valuation, future levels of nonperforming assets, the rate of asset dispositions, future capital levels, future dividends, future growth and funding sources, future liquidity levels, future profitability levels, future deposit insurance premiums, future asset levels, the effects on earnings of future changes in interest rates, the future level of other revenue sources, future economic trends and conditions, future initiatives to expand the Corporation’s market share, expected performance and cash flows from acquired loans, future effects of new or changed accounting standards, future opportunities for acquisitions, opportunities to increase top line revenues, the Corporation’s ability to grow its core franchise, future cost savings and the Corporation’s ability to maintain adequate liquidity and capital based on the requirements adopted by the Basel Committee on Banking Supervision and U.S. regulators. All statements referencing future time periods are forward-looking.
Management's determination of the provision and allowance for loan losses; the carrying value of acquired loans, goodwill and mortgage servicing rights; the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment); and management's assumptions concerning pension and other postretirement benefit plans involve judgments that are inherently forward-looking. There can be no assurance that future loan losses will be limited to the amounts estimated. All of the information concerning interest rate sensitivity is forward-looking. The future effect of changes in the financial and credit markets and the national and regional economies on the banking industry, generally, and on the Corporation, specifically, are also inherently uncertain. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("risk factors") that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. The Corporation undertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise.
This press release also contains forward-looking statements regarding Chemical's outlook or expectations with respect to its planned merger with Talmer Bancorp, Inc. ("Talmer"), the expected costs to be incurred in connection with the transaction, the expected impact of the transaction on Chemical's future financial performance and consequences of the integration of Talmer into Chemical.
Risk factors relating both to the transaction and the integration of Talmer into Chemical after closing include, without limitation:
| |
| • | Completion of the transaction is dependent on, among other things, receipt of regulatory approvals, the timing of which cannot be predicted with precision at this point and which may not be received at all. |
| |
| • | The impact of the completion of the transaction on Chemical's financial statements will be affected by the timing of the transaction. |
| |
| • | The transaction may be more expensive to complete and the anticipated benefits, including anticipated cost savings and strategic gains, may be significantly harder or take longer to achieve than expected or may not be achieved in their entirety as a result of unexpected factors or events. |
| |
| • | The integration of Talmer’s business and operations into Chemical, which will include conversion of Talmer’s operating systems and procedures, may take longer than anticipated or be more costly than anticipated or have unanticipated adverse results relating to Chemical's or Talmer’s existing businesses. |
| |
| • | Chemical’s ability to achieve anticipated results from the transaction is dependent on the state of the economic and financial markets going forward. Specifically, Chemical may incur more credit losses than expected and customer and employee attrition may be greater than expected. |
| |
| • | The outcome of pending or threatened litigation, whether currently existing or commencing in the future, including litigation related to the transaction. |
| |
| • | The effect of divestitures that may be required by regulatory authorities in certain markets in which Chemical and Talmer compete. |
| |
| • | The challenges of integrating, retaining and hiring key personnel. |
| |
| • | Failure to attract new customers and retain existing customers in the manner anticipated. |
In addition, risk factors include, but are not limited to, the risk factors described in Item 1A of Chemical's Annual Report on Form 10-K for the year ended December 31, 2015. These and other factors are representative of the risk factors that may emerge and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.
Chemical Financial Corporation Announces 2016 Second Quarter Operating Results
Consolidated Statements of Financial Position (Unaudited)
Chemical Financial Corporation
(In thousands, except per share data)
|
| | | | | | | | | | | | | | | | |
| | | June 30,
2016 | | March 31,
2016 | | December 31,
2015 | | June 30,
2015 |
| | | |
| Assets | | | | | | | | |
| Cash and cash equivalents: | | | | | | | | |
| Cash and cash due from banks | | $ | 179,310 |
| | $ | 168,739 |
| | $ | 194,136 |
| | $ | 167,054 |
|
| Interest-bearing deposits with the Federal Reserve Bank (FRB) and other banks | | 53,650 |
| | 122,635 |
| | 44,653 |
| | 47,980 |
|
| Total cash and cash equivalents | | 232,960 |
| | 291,374 |
| | 238,789 |
| | 215,034 |
|
| Investment securities: | | | | | | | | |
| Available-for-sale | | 458,552 |
| | 514,015 |
| | 553,731 |
| | 685,706 |
|
| Held-to-maturity | | 552,828 |
| | 518,300 |
| | 509,971 |
| | 469,837 |
|
| Total investment securities | | 1,011,380 |
| | 1,032,315 |
| | 1,063,702 |
| | 1,155,543 |
|
| Loans held-for-sale | | 13,990 |
| | 9,667 |
| | 10,327 |
| | 7,798 |
|
| Loans: | | | | | | | | |
| Total loans | | 7,647,269 |
| | 7,366,885 |
| | 7,271,147 |
| | 7,034,743 |
|
| Allowance for loan losses | | (71,506 | ) | | (70,318 | ) | | (73,328 | ) | | (74,941 | ) |
| Net loans | | 7,575,763 |
| | 7,296,567 |
| | 7,197,819 |
| | 6,959,802 |
|
| Premises and equipment | | 102,709 |
| | 105,868 |
| | 106,317 |
| | 111,968 |
|
| Goodwill | | 286,867 |
| | 286,867 |
| | 287,393 |
| | 285,512 |
|
| Other intangible assets | | 34,270 |
| | 36,266 |
| | 38,104 |
| | 41,201 |
|
| Interest receivable and other assets | | 256,233 |
| | 244,708 |
| | 246,346 |
| | 243,867 |
|
| Total Assets | | $ | 9,514,172 |
| | $ | 9,303,632 |
| | $ | 9,188,797 |
| | $ | 9,020,725 |
|
| Liabilities | | | | | | | | |
| Deposits: | | | | | | | | |
| Noninterest-bearing | | $ | 2,007,629 |
| | $ | 1,951,193 |
| | $ | 1,934,583 |
| | $ | 1,860,863 |
|
| Interest-bearing | | 5,457,017 |
| | 5,698,923 |
| | 5,522,184 |
| | 5,432,116 |
|
| Total deposits | | 7,464,646 |
| | 7,650,116 |
| | 7,456,767 |
| | 7,292,979 |
|
| Interest payable and other liabilities | | 71,417 |
| | 64,120 |
| | 76,466 |
| | 66,174 |
|
| Securities sold under agreements to repurchase with customers | | 256,213 |
| | 283,383 |
| | 297,199 |
| | 305,291 |
|
| Short-term borrowings | | 300,000 |
| | — |
| | 100,000 |
| | 227,000 |
|
| Long-term borrowings | | 371,597 |
| | 273,722 |
| | 242,391 |
| | 148,490 |
|
| Total liabilities | | 8,463,873 |
| | 8,271,341 |
| | 8,172,823 |
| | 8,039,934 |
|
| Shareholders' Equity | | | | | | | | |
| Preferred stock, no par value per share | | — |
| | — |
| | — |
| | — |
|
| Common stock, $1 par value per share | | 38,267 |
| | 38,248 |
| | 38,168 |
| | 38,110 |
|
| Additional paid-in capital | | 727,145 |
| | 725,874 |
| | 725,280 |
| | 722,329 |
|
| Retained earnings | | 310,585 |
| | 294,859 |
| | 281,558 |
| | 251,456 |
|
| Accumulated other comprehensive loss | | (25,698 | ) | | (26,690 | ) | | (29,032 | ) | | (31,104 | ) |
| Total shareholders' equity | | 1,050,299 |
| | 1,032,291 |
| | 1,015,974 |
| | 980,791 |
|
| Total Liabilities and Shareholders' Equity | | $ | 9,514,172 |
| | $ | 9,303,632 |
| | $ | 9,188,797 |
| | $ | 9,020,725 |
|
Chemical Financial Corporation Announces 2016 Second Quarter Operating Results
Consolidated Statements of Income (Unaudited)
Chemical Financial Corporation
(In thousands, except per share data)
|
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | June 30, 2016 | | March 31, 2016 | | June 30, 2015 | | June 30, 2016 | | June 30, 2015 |
| | | | | | | | | | | |
| Interest Income | | | | | | | | | | |
| Interest and fees on loans | | $ | 77,578 |
| | $ | 74,401 |
| | $ | 64,613 |
| | $ | 151,979 |
| | $ | 122,710 |
|
| Interest on investment securities: | | | | | | | | | | |
| Taxable | | 1,798 |
| | 1,929 |
| | 2,202 |
| | 3,727 |
| | 4,509 |
|
| Tax-exempt | | 2,640 |
| | 2,665 |
| | 2,185 |
| | 5,305 |
| | 4,091 |
|
| Dividends on nonmarketable equity securities | | 777 |
| | 256 |
| | 551 |
| | 1,033 |
| | 749 |
|
| Interest on deposits with the FRB and other banks | | 144 |
| | 213 |
| | 128 |
| | 357 |
| | 250 |
|
| Total interest income | | 82,937 |
| | 79,464 |
| | 69,679 |
| | 162,401 |
| | 132,309 |
|
| Interest Expense | | | | | | | | | | |
| Interest on deposits | | 4,260 |
| | 4,059 |
| | 3,630 |
| | 8,319 |
| | 6,982 |
|
| Interest on short-term borrowings | | 226 |
| | 100 |
| | 101 |
| | 326 |
| | 199 |
|
| Interest on long-term borrowings | | 956 |
| | 975 |
| | 213 |
| | 1,931 |
| | 213 |
|
| Total interest expense | | 5,442 |
| | 5,134 |
| | 3,944 |
| | 10,576 |
| | 7,394 |
|
| Net Interest Income | | 77,495 |
| | 74,330 |
| | 65,735 |
| | 151,825 |
| | 124,915 |
|
| Provision for loan losses | | 3,000 |
| | 1,500 |
| | 1,500 |
| | 4,500 |
| | 3,000 |
|
| Net interest income after provision for loan losses | | 74,495 |
| | 72,830 |
| | 64,235 |
| | 147,325 |
| | 121,915 |
|
| Noninterest Income | | | | | | | | | | |
| Service charges and fees on deposit accounts | | 6,337 |
| | 5,720 |
| | 6,445 |
| | 12,057 |
| | 12,361 |
|
| Wealth management revenue | | 5,782 |
| | 5,201 |
| | 5,605 |
| | 10,983 |
| | 10,676 |
|
| Other charges and fees for customer services | | 6,463 |
| | 6,392 |
| | 6,516 |
| | 12,855 |
| | 12,506 |
|
| Mortgage banking revenue | | 1,595 |
| | 1,405 |
| | 1,688 |
| | 3,000 |
| | 3,091 |
|
| Gain on sale of investment securities | | 18 |
| | 19 |
| | 28 |
| | 37 |
| | 607 |
|
| Other | | 702 |
| | 682 |
| | 392 |
| | 1,384 |
| | 708 |
|
| Total noninterest income | | 20,897 |
| | 19,419 |
| | 20,674 |
| | 40,316 |
| | 39,949 |
|
| Operating Expenses | | | | | | | | | | |
| Salaries, wages and employee benefits | | 33,127 |
| | 33,890 |
| | 31,711 |
| | 67,017 |
| | 60,964 |
|
| Occupancy | | 5,514 |
| | 4,905 |
| | 4,386 |
| | 10,419 |
| | 8,812 |
|
| Equipment and software | | 4,875 |
| | 4,404 |
| | 4,480 |
| | 9,279 |
| | 8,878 |
|
| Merger and acquisition-related transaction expenses (transaction expenses) | | 3,054 |
| | 2,594 |
| | 3,457 |
| | 5,648 |
| | 4,819 |
|
| Other | | 12,515 |
| | 13,094 |
| | 12,751 |
| | 25,609 |
| | 24,332 |
|
| Total operating expenses | | 59,085 |
| | 58,887 |
| | 56,785 |
| | 117,972 |
| | 107,805 |
|
| Income before income taxes | | 36,307 |
| | 33,362 |
| | 28,124 |
| | 69,669 |
| | 54,059 |
|
| Federal income tax expense | | 10,600 |
| | 10,100 |
| | 9,100 |
| | 20,700 |
| | 17,200 |
|
| Net Income | | $ | 25,707 |
| | $ | 23,262 |
| | $ | 19,024 |
| | $ | 48,969 |
| | $ | 36,859 |
|
| Earnings Per Common Share: | | | | | | | | | | |
| Weighted average common shares outstanding for basic earnings per share | | 38,258 |
| | 38,198 |
| | 35,162 |
| | 38,228 |
| | 33,992 |
|
| Weighted average common shares outstanding for diluted earnings per share, including common stock equivalents | | 38,600 |
| | 38,521 |
| | 35,397 |
| | 38,560 |
| | 34,227 |
|
| Basic earnings per share | | $ | 0.67 |
| | $ | 0.61 |
| | $ | 0.54 |
| | $ | 1.28 |
| | $ | 1.08 |
|
| Diluted earnings per share | | 0.67 |
| | 0.60 |
| | 0.54 |
| | 1.27 |
| | 1.08 |
|
| | | | | | | | | | | |
| Cash Dividends Declared Per Common Share | | 0.26 |
| | 0.26 |
| | 0.24 |
| | 0.52 |
| | 0.48 |
|
| | | | | | | | | | | |
| Key Ratios (annualized where applicable): | | |
| | | | |
| | | | |
| Return on average assets | | 1.11 | % | | 1.01 | % | | 0.94 | % | | 1.06 | % | | 0.96 | % |
| Return on average shareholders' equity | | 10.0 | % | | 9.2 | % | | 8.6 | % | | 9.6 | % | | 8.8 | % |
| Net interest margin | | 3.70 | % | | 3.60 | % | | 3.59 | % | | 3.65 | % | | 3.57 | % |
| Efficiency ratio | | 55.1 | % | | 58.8 | % | | 60.5 | % | | 56.9 | % | | 61.4 | % |
Chemical Financial Corporation Announces 2016 Second Quarter Operating Results
Selected Quarterly Information (Unaudited)
Chemical Financial Corporation
(Dollars in thousands, except per share data)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2nd Quarter 2016 | | 1st Quarter 2016 | | 4th Quarter 2015 | | 3rd Quarter 2015 | | 2nd Quarter 2015 | | 1st Quarter 2015 |
| | | |
| Summary of Operations | | | | | | | | | | | | |
| Interest income | | $ | 82,937 |
| | $ | 79,464 |
| | $ | 80,629 |
| | $ | 78,851 |
| | $ | 69,679 |
| | $ | 62,630 |
|
| Interest expense | | 5,442 |
| | 5,134 |
| | 5,153 |
| | 5,234 |
| | 3,944 |
| | 3,450 |
|
| Net interest income | | 77,495 |
| | 74,330 |
| | 75,476 |
| | 73,617 |
| | 65,735 |
| | 59,180 |
|
| Provision for loan losses | | 3,000 |
| | 1,500 |
| | 2,000 |
| | 1,500 |
| | 1,500 |
| | 1,500 |
|
| Net interest income after provision for loan losses | | 74,495 |
| | 72,830 |
| | 73,476 |
| | 72,117 |
| | 64,235 |
| | 57,680 |
|
| Noninterest income | | 20,897 |
| | 19,419 |
| | 20,052 |
| | 20,215 |
| | 20,674 |
| | 19,275 |
|
| Operating expenses, excluding transaction expenses (non-GAAP) | | 56,031 |
| | 56,293 |
| | 55,739 |
| | 57,365 |
| | 53,328 |
| | 49,658 |
|
| Transaction expenses | | 3,054 |
| | 2,594 |
| | 2,085 |
| | 900 |
| | 3,457 |
| | 1,362 |
|
| Income before income taxes | | 36,307 |
| | 33,362 |
| | 35,704 |
| | 34,067 |
| | 28,124 |
| | 25,935 |
|
| Federal income tax expense | | 10,600 |
| | 10,100 |
| | 10,200 |
| | 9,600 |
| | 9,100 |
| | 8,100 |
|
| Net income | | $ | 25,707 |
| | $ | 23,262 |
| | $ | 25,504 |
| | $ | 24,467 |
| | $ | 19,024 |
| | $ | 17,835 |
|
| Net income, excluding transaction expenses | | $ | 27,692 |
| | $ | 24,948 |
| | $ | 26,859 |
| | $ | 25,052 |
| | $ | 21,683 |
| | $ | 18,720 |
|
| | | | | | | | | | | | | |
| Per Common Share Data | | | | | | | | | | | | |
| Net income: | | | | | | | | | | | | |
| Basic | | $ | 0.67 |
| | $ | 0.61 |
| | $ | 0.67 |
| | $ | 0.64 |
| | $ | 0.54 |
| | $ | 0.54 |
|
| Diluted | | 0.67 |
| | 0.60 |
| | 0.66 |
| | 0.64 |
| | 0.54 |
| | 0.54 |
|
| Diluted, excluding transaction expenses | | 0.72 |
| | 0.65 |
| | 0.70 |
| | 0.65 |
| | 0.61 |
| | 0.57 |
|
| Cash dividends declared | | 0.26 |
| | 0.26 |
| | 0.26 |
| | 0.26 |
| | 0.24 |
| | 0.24 |
|
| Book value - period-end | | 27.45 |
| | 26.99 |
| | 26.62 |
| | 26.18 |
| | 25.74 |
| | 24.68 |
|
| Tangible book value - period-end | | 19.68 |
| | 19.20 |
| | 18.78 |
| | 18.32 |
| | 17.89 |
| | 18.95 |
|
| Market value - period-end | | 37.29 |
| | 35.69 |
| | 34.27 |
| | 32.35 |
| | 33.06 |
| | 31.36 |
|
| | | | | | | | | | | | | |
| Key Ratios (annualized where applicable) | | | | | | | | | | | | |
|
| Net interest margin (taxable equivalent basis) | | 3.70 | % | | 3.60 | % | | 3.64% | | 3.55 | % | | 3.59 | % | | 3.55 | % |
| Efficiency ratio | | 55.1 | % | | 58.8 | % | | 57.1% | | 59.9 | % | | 60.5 | % | | 62.4 | % |
| Return on average assets | | 1.11 | % | | 1.01 | % | | 1.10% | | 1.05 | % | | 0.94 | % | | 0.98 | % |
| Return on average shareholders' equity | | 10.0 | % | | 9.2 | % | | 10.1% | | 9.8 | % | | 8.6 | % | | 9.0 | % |
| Average shareholders' equity as a percent of average assets | | 11.1 | % | | 11.0 | % | | 10.9 | % | | 10.7 | % | | 10.9 | % | | 10.8 | % |
| Capital ratios (period end): | | | | | | | | | | | | |
| Tangible shareholders' equity as a percent of tangible assets | | 8.2 | % | | 8.2 | % | | 8.1 | % | | 7.8 | % | | 7.8 | % | | 8.5 | % |
| Total risk-based capital ratio | | 11.4 | % | | 11.5 | % | | 11.8 | % | | 11.6 | % | | 11.6 | % | | 13.0 | % |
| | | | | | | | | | | | | |
Chemical Financial Corporation Announces 2016 Second Quarter Operating Results
Average Balances, Fully Tax Equivalent (FTE) Interest and Effective Yields and Rates* (Unaudited)
Chemical Financial Corporation
(Dollars in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | June 30, 2016 | | March 31, 2016 | | June 30, 2015 |
| | | Average Balance | | Interest (FTE) | | Effective Yield/Rate* | | Average
Balance | | Interest (FTE) | | Effective
Yield/Rate* | | Average Balance | | Interest (FTE) | | Effective Yield/Rate* |
| | | | | | | | | | | | | | | | | | | |
| Assets | | | | | | | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | | | | | | | | |
| Loans:** | | | | | | | | | | | | | | | | | | |
| Commercial | | $ | 1,940,197 |
| | $ | 20,711 |
| | 4.29 | % | | $ | 1,901,879 |
| | $ | 19,774 |
| | 4.18 | % | | $ | 1,516,520 |
| | $ | 16,176 |
| | 4.28 | % |
| Commercial real estate and real estate construction | | 2,419,187 |
| | 30,035 |
| | 4.99 |
| | 2,361,105 |
| | 28,254 |
| | 4.81 |
| | 1,979,578 |
| | 24,034 |
| | 4.87 |
|
| Residential mortgage | | 1,485,267 |
| | 13,805 |
| | 3.72 |
| | 1,453,420 |
| | 13,588 |
| | 3.74 |
| | 1,220,291 |
| | 11,872 |
| | 3.89 |
|
| Consumer installment and home equity | | 1,666,541 |
| | 13,744 |
| | 3.32 |
| | 1,583,067 |
| | 13,483 |
| | 3.43 |
| | 1,556,425 |
| | 13,145 |
| | 3.39 |
|
| Total loans | | 7,511,192 |
| | 78,295 |
| | 4.19 |
| | 7,299,471 |
| | 75,099 |
| | 4.13 |
| | 6,272,814 |
| | 65,227 |
| | 4.17 |
|
| Taxable investment securities | | 515,303 |
| | 1,798 |
| | 1.40 |
| | 554,524 |
| | 1,929 |
| | 1.39 |
| | 698,521 |
| | 2,202 |
| | 1.26 |
|
| Tax-exempt investment securities | | 484,271 |
| | 4,061 |
| | 3.35 |
| | 496,304 |
| | 4,100 |
| | 3.30 |
| | 396,295 |
| | 3,361 |
| | 3.39 |
|
| Other interest-earning assets | | 43,615 |
| | 777 |
| | 7.16 |
| | 39,493 |
| | 256 |
| | 2.61 |
| | 34,269 |
| | 551 |
| | 6.45 |
|
| Interest-bearing deposits with the FRB and other banks | | 82,246 |
| | 144 |
| | 0.70 |
| | 136,919 |
| | 213 |
| | 0.63 |
| | 132,834 |
| | 128 |
| | 0.39 |
|
| Total interest-earning assets | | 8,636,627 |
| | 85,075 |
| | 3.96 |
| | 8,526,711 |
| | 81,597 |
| | 3.84 |
| | 7,534,733 |
| | 71,469 |
| | 3.80 |
|
| Less: allowance for loan losses | | 71,790 |
| | | | | | 73,547 |
| | | | | | 75,079 |
| | | | |
| Other assets: | | | | | | | | | | | | | | | | | | |
| Cash and cash due from banks | | 148,034 |
| | | | | | 158,277 |
| | | | | | 148,950 |
| | | | |
| Premises and equipment | | 104,488 |
| | | | | | 105,959 |
| | | | | | 103,907 |
| | | | |
| Interest receivable and other assets | | 515,039 |
| | | | | | 523,634 |
| | | | | | 404,627 |
| | | | |
| Total assets | | $ | 9,332,398 |
| | | | | | $ | 9,241,034 |
| | | | | | $ | 8,117,138 |
| | | | |
| Liabilities and Shareholders' Equity | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | $ | 1,892,512 |
| | $ | 582 |
| | 0.12 | % | | $ | 1,953,626 |
| | $ | 468 |
| | 0.10 | % | | $ | 1,539,348 |
| | $ | 291 |
| | 0.08 | % |
| Savings deposits | | 2,073,412 |
| | 476 |
| | 0.09 |
| | 2,048,867 |
| | 389 |
| | 0.08 |
| | 1,951,477 |
| | 360 |
| | 0.07 |
|
| Time deposits | | 1,582,467 |
| | 3,202 |
| | 0.81 |
| | 1,625,573 |
| | 3,202 |
| | 0.79 |
| | 1,490,753 |
| | 2,979 |
| | 0.80 |
|
| Short-term borrowings | | 418,232 |
| | 226 |
| | 0.22 |
| | 349,699 |
| | 100 |
| | 0.12 |
| | 398,197 |
| | 101 |
| | 0.10 |
|
| Long-term borrowings | | 281,327 |
| | 956 |
| | 1.37 |
| | 266,022 |
| | 975 |
| | 1.47 |
| | 62,901 |
| | 213 |
| | 1.36 |
|
| Total interest-bearing liabilities | | 6,247,950 |
| | 5,442 |
| | 0.35 |
| | 6,243,787 |
| | 5,134 |
| | 0.33 |
| | 5,442,676 |
| | 3,944 |
| | 0.29 |
|
| Noninterest-bearing deposits | | 1,979,423 |
| | — |
| | — |
| | 1,906,896 |
| | — |
| | — |
| | 1,727,850 |
| | — |
| | — |
|
| Total deposits and borrowed funds | | 8,227,373 |
| | 5,442 |
| | 0.27 |
| | 8,150,683 |
| | 5,134 |
| | 0.25 |
| | 7,170,526 |
| | 3,944 |
| | 0.22 |
|
| Interest payable and other liabilities | | 72,011 |
| | | | | | 72,422 |
| | | | | | 61,749 |
| | | | |
| Shareholders' equity | | 1,033,014 |
| | | | | | 1,017,929 |
| | | | | | 884,863 |
| | | | |
| Total liabilities and shareholders' equity | | $ | 9,332,398 |
| | | | | | $ | 9,241,034 |
| | | | | | $ | 8,117,138 |
| | | | |
| Net Interest Spread (Average yield earned on interest-earning assets minus average rate paid on interest-bearing liabilities) | | | | | | 3.61 | % | | | | | | 3.51 | % | | | | | | 3.51 | % |
| Net Interest Income (FTE) | | | | $ | 79,633 |
| | | | | | $ | 76,463 |
| | | | | | $ | 67,525 |
| | |
| Net Interest Margin (Net Interest Income (FTE) divided by total average interest-earning assets) | | | | | | 3.70 | % | | | | | | 3.60 | % | | | | | | 3.59 | % |
|
| |
| * | Fully taxable equivalent (FTE) basis using a federal income tax rate of 35%. The presentation of net interest income on a FTE basis is not in accordance with GAAP, but is customary in the banking industry. The adjustments to determine tax equivalent net interest income were $2.1 million, $2.1 million and $1.8 million for the three months ended June 30, 2016, March 31, 2016 and June 30, 2015, respectively. |
| ** | Nonaccrual loans and loans held-for-sale are included in average balances reported and are included in the calculation of yields. Also, tax equivalent interest includes net loan fees. |
Chemical Financial Corporation Announces 2016 Second Quarter Operating Results
Average Balances, Fully Tax Equivalent (FTE) Interest and Effective Yields and Rates* (Unaudited)
Chemical Financial Corporation
|
| | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended |
| | | June 30, 2016 | | June 30, 2015 |
| | | Average Balance | | Interest (FTE) | | Effective Yield/Rate* | | Average Balance | | Interest (FTE) | | Effective Yield/Rate* |
| Assets | | (Dollars in thousands) |
| Interest-earning assets: | | | | | | | | | | | | |
| Loans:** | | | | | | | | | | | | |
| Commercial | | $ | 1,921,038 |
| | $ | 40,485 |
| | 4.24 | % | | $ | 1,435,204 |
| | $ | 30,332 |
| | 4.26 | % |
| Commercial real estate and real estate construction | | 2,390,146 |
| | 58,289 |
| | 4.90 |
| | 1,855,943 |
| | 44,887 |
| | 4.88 |
|
| Residential mortgage | | 1,469,344 |
| | 27,393 |
| | 3.73 |
| | 1,172,014 |
| | 22,853 |
| | 3.90 |
|
| Consumer installment and home equity | | 1,624,804 |
| | 27,227 |
| | 3.37 |
| | 1,527,838 |
| | 25,815 |
| | 3.41 |
|
| Total loans | | 7,405,332 |
| | 153,394 |
| | 4.16 |
| | 5,990,999 |
| | 123,887 |
| | 4.16 |
|
| Taxable investment securities | | 534,914 |
| | 3,727 |
| | 1.39 |
| | 716,606 |
| | 4,509 |
| | 1.26 |
|
| Tax-exempt investment securities | | 490,287 |
| | 8,161 |
| | 3.33 |
| | 364,264 |
| | 6,293 |
| | 3.46 |
|
| Other interest-earning assets | | 41,554 |
| | 1,033 |
| | 5.00 |
| | 31,867 |
| | 749 |
| | 4.74 |
|
| Interest-bearing deposits with the FRB and other banks | | 109,582 |
| | 357 |
| | 0.66 |
| | 125,694 |
| | 250 |
| | 0.40 |
|
| Total interest-earning assets | | 8,581,669 |
| | 166,672 |
| | 3.90 |
| | 7,229,430 |
| | 135,688 |
| | 3.78 |
|
| Less: allowance for loan losses | | 72,669 |
| | | | | | 75,477 |
| | | | |
| Other assets: | | | | | | | | | | | | |
| Cash and cash due from banks | | 153,156 |
| | | | | | 143,658 |
| | | | |
| Premises and equipment | | 105,223 |
| | | | | | 100,525 |
| | | | |
| Interest receivable and other assets | | 519,337 |
| | | | | | 363,040 |
| | | | |
| Total assets | | $ | 9,286,716 |
| | | | | | $ | 7,761,176 |
| | | | |
| Liabilities and Shareholders' Equity | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | |
| Interest-bearing demand deposits | | $ | 1,923,068 |
| | $ | 1,050 |
| | 0.11 | % | | $ | 1,523,240 |
| | $ | 615 |
| | 0.08 | % |
| Savings deposits | | 2,061,141 |
| | 865 |
| | 0.08 |
| | 1,864,891 |
| | 730 |
| | 0.08 |
|
| Time deposits | | 1,604,020 |
| | 6,404 |
| | 0.80 |
| | 1,412,162 |
| | 5,637 |
| | 0.80 |
|
| Short-term borrowings | | 383,966 |
| | 326 |
| | 0.17 |
| | 370,317 |
| | 199 |
| | 0.11 |
|
| Long-term borrowings | | 273,675 |
| | 1,931 |
| | 1.42 |
| | 31,624 |
| | 213 |
| | 1.36 |
|
| Total interest-bearing liabilities | | 6,245,870 |
| | 10,576 |
| | 0.34 |
| | 5,202,234 |
| | 7,394 |
| | 0.29 |
|
| Noninterest-bearing deposits | | 1,943,159 |
| | — |
| | — |
| | 1,657,864 |
| | — |
| | — |
|
| Total deposits and borrowed funds | | 8,189,029 |
| | 10,576 |
| | 0.26 |
| | 6,860,098 |
| | 7,394 |
| | 0.22 |
|
| Interest payable and other liabilities | | 72,216 |
| | | | | | 57,697 |
| | | | |
| Shareholders' equity | | 1,025,471 |
| | | | | | 843,381 |
| | | | |
| Total liabilities and shareholders' equity | | $ | 9,286,716 |
| | | | | | $ | 7,761,176 |
| | | | |
| Net Interest Spread (Average yield earned on interest-earning assets minus average rate paid on interest-bearing liabilities) | | | | | | 3.56 | % | | | | | | 3.49 | % |
| Net Interest Income (FTE) | | | | $ | 156,096 |
| | | | | | $ | 128,294 |
| | |
| Net Interest Margin (Net Interest Income (FTE) divided by total average interest-earning assets) | | | | | | 3.65 | % | | | | | | 3.57 | % |
|
| |
| * | Fully taxable equivalent (FTE) basis using a federal income tax rate of 35%. The presentation of net interest income on a FTE basis is not in accordance with GAAP, but is customary in the banking industry. The adjustments to determine tax equivalent net interest income were $4.3 million and $3.4 million for the six months ended June 30, 2016 and June 30, 2015, respectively. |
| ** | Nonaccrual loans and loans held-for-sale are included in average balances reported and are included in the calculation of yields. Also, tax equivalent interest includes net loan fees. |
Chemical Financial Corporation Announces 2016 Second Quarter Operating Results
Noninterest Income and Operating Expenses Information (Unaudited)
Chemical Financial Corporation
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2nd Quarter 2016 | | 1st Quarter 2016 | | 4th Quarter 2015 | | 3rd Quarter 2015 | | 2nd Quarter 2015 | | 1st Quarter 2015 |
| | | |
| Noninterest income | | | | | | | | | | | | |
| Service charges and fees on deposit accounts | | $ | 6,337 |
| | $ | 5,720 |
| | $ | 6,398 |
| | $ | 6,722 |
| | $ | 6,445 |
| | $ | 5,916 |
|
| Wealth management revenue | | 5,782 |
| | 5,201 |
| | 5,151 |
| | 4,725 |
| | 5,605 |
| | 5,071 |
|
| Electronic banking fees | | 4,786 |
| | 4,918 |
| | 4,712 |
| | 5,059 |
| | 4,775 |
| | 4,572 |
|
| Mortgage banking revenue | | 1,595 |
| | 1,405 |
| | 1,606 |
| | 1,436 |
| | 1,688 |
| | 1,403 |
|
| Other fees for customer services | | 1,677 |
| | 1,474 |
| | 1,839 |
| | 1,759 |
| | 1,741 |
| | 1,418 |
|
| Other | | 720 |
| | 701 |
| | 346 |
| | 514 |
| | 420 |
| | 895 |
|
| Total noninterest income | | $ | 20,897 |
| | $ | 19,419 |
| | $ | 20,052 |
| | $ | 20,215 |
| | $ | 20,674 |
| | $ | 19,275 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2nd Quarter 2016 | | 1st Quarter 2016 | | 4th Quarter 2015 | | 3rd Quarter 2015 | | 2nd Quarter 2015 | | 1st Quarter 2015 |
| | | |
| Operating expenses | | | | | | | | | | | | |
| Salaries and wages | | $ | 26,887 |
| | $ | 26,743 |
| | $ | 27,341 |
| | $ | 27,872 |
| | $ | 25,535 |
| | $ | 23,741 |
|
| Employee benefits | | 6,240 |
| | 7,147 |
| | 5,630 |
| | 6,113 |
| | 6,176 |
| | 5,512 |
|
| Occupancy | | 5,514 |
| | 4,905 |
| | 4,620 |
| | 4,781 |
| | 4,386 |
| | 4,426 |
|
| Equipment and software | | 4,875 |
| | 4,404 |
| | 5,102 |
| | 4,589 |
| | 4,480 |
| | 4,398 |
|
| Outside processing and service fees | | 4,833 |
| | 3,711 |
| | 3,576 |
| | 4,146 |
| | 3,926 |
| | 3,558 |
|
| FDIC insurance premiums | | 1,338 |
| | 1,407 |
| | 1,482 |
| | 1,441 |
| | 1,337 |
| | 1,225 |
|
| Professional fees | | 1,020 |
| | 1,036 |
| | 1,112 |
| | 1,235 |
| | 1,258 |
| | 1,237 |
|
| Intangible asset amortization | | 1,195 |
| | 1,194 |
| | 1,341 |
| | 1,270 |
| | 987 |
| | 791 |
|
| Credit-related expenses | | (1,331 | ) | | 30 |
| | 600 |
| | 90 |
| | (192 | ) | | 133 |
|
| Transaction expenses | | 3,054 |
| | 2,594 |
| | 2,085 |
| | 900 |
| | 3,457 |
| | 1,362 |
|
| Other | | 5,460 |
| | 5,716 |
| | 4,935 |
| | 5,828 |
| | 5,435 |
| | 4,637 |
|
| Total operating expenses | | $ | 59,085 |
| | $ | 58,887 |
| | $ | 57,824 |
| | $ | 58,265 |
| | $ | 56,785 |
| | $ | 51,020 |
|
Chemical Financial Corporation Announces 2016 Second Quarter Operating Results
Composition of Loans and Deposits and Additional Information on Intangible Assets (Unaudited)
Chemical Financial Corporation
(Dollars in Thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | June 30, 2016 | | March 31, 2016 | | June 30, 2016 vs March 31, 2016 (% Change) | | Dec 31,
2015 | | Sept 30, 2015 | | June 30, 2015 | | June 30, 2016 vs June 30, 2015 (% Change) |
| | | | | | | | | | | | | | | |
| Composition of Loans | | | | | | | | | | | | | | |
| Commercial loan portfolio: | | | | | | | | | | | | | | |
| Commercial | | $ | 1,953,301 |
| | $ | 1,922,259 |
| | 1.6 | % | | $ | 1,905,879 |
| | $ | 1,829,870 |
| | $ | 1,754,873 |
| | 11.3 | % |
| Commercial real estate | | 2,157,733 |
| | 2,143,051 |
| | 0.7 |
| | 2,112,162 |
| | 2,227,364 |
| | 2,243,513 |
| | (3.8 | ) |
| Real estate construction | | 285,848 |
| | 242,899 |
| | 17.7 |
| | 232,076 |
| | 145,581 |
| | 112,312 |
| | 154.5 |
|
| Subtotal - commercial loans | | 4,396,882 |
| | 4,308,209 |
| | 2.1 |
| | 4,250,117 |
| | 4,202,815 |
| | 4,110,698 |
| | 7.0 |
|
| Consumer loan portfolio: | | | | | | | | | | | | | | |
| Residential mortgage | | 1,494,192 |
| | 1,461,120 |
| | 2.3 |
| | 1,429,636 |
| | 1,394,427 |
| | 1,310,167 |
| | 14.0 |
|
| Consumer installment | | 1,048,622 |
| | 897,078 |
| | 16.9 |
| | 877,457 |
| | 899,751 |
| | 887,907 |
| | 18.1 |
|
| Home equity | | 707,573 |
| | 700,478 |
| | 1.0 |
| | 713,937 |
| | 719,202 |
| | 725,971 |
| | (2.5 | ) |
| Subtotal - consumer loans | | 3,250,387 |
| | 3,058,676 |
| | 6.3 |
| | 3,021,030 |
| | 3,013,380 |
| | 2,924,045 |
| | 11.2 |
|
| Total loans | | $ | 7,647,269 |
| | $ | 7,366,885 |
| | 3.8 | % | | $ | 7,271,147 |
| | $ | 7,216,195 |
| | $ | 7,034,743 |
| | 8.7 | % |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | June 30, 2016 | | March 31, 2016 | | June 30, 2016 vs March 31, 2016 (% Change) | | Dec 31,
2015 | | Sept 30, 2015 | | June 30, 2015 | | June 30, 2016 vs June 30, 2015 (% Change) |
| | | | | | | | | | | | | | | |
| Composition of Deposits | | | | | | | | | | | | | | |
| Noninterest-bearing demand | | $ | 2,007,629 |
| | $ | 1,951,193 |
| | 2.9 | % | | $ | 1,934,583 |
| | $ | 1,875,636 |
| | $ | 1,860,863 |
| | 7.9 | % |
| Savings | | 1,107,558 |
| | 1,080,940 |
| | 2.5 |
| | 1,026,269 |
| | 1,004,987 |
| | 1,015,036 |
| | 9.1 |
|
| Interest-bearing demand | | 1,819,865 |
| | 2,005,053 |
| | (9.2 | ) | | 1,870,197 |
| | 2,029,556 |
| | 1,630,211 |
| | 11.6 |
|
| Money market accounts | | 969,566 |
| | 1,006,271 |
| | (3.6 | ) | | 978,306 |
| | 1,013,924 |
| | 1,041,654 |
| | (6.9 | ) |
| Brokered deposits | | 173,092 |
| | 186,143 |
| | (7.0 | ) | | 207,785 |
| | 229,650 |
| | 269,248 |
| | (35.7 | ) |
| Other time deposits | | 1,386,936 |
| | 1,420,516 |
| | (2.4 | ) | | 1,439,627 |
| | 1,461,458 |
| | 1,475,967 |
| | (6.0 | ) |
| Total deposits | | $ | 7,464,646 |
| | $ | 7,650,116 |
| | (2.4 | )% | | $ | 7,456,767 |
| | $ | 7,615,211 |
| | $ | 7,292,979 |
| | 2.4 | % |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | June 30, 2016 | | March 31, 2016 | | Dec 31,
2015 | | Sept 30, 2015 | | June 30, 2015 | | March 31, 2015 |
| | | | | | | | | | | | | |
| Additional Data - Intangibles | | | | | | | | | | | | |
| Goodwill | | $ | 286,867 |
| | $ | 286,867 |
| | $ | 287,393 |
| | $ | 286,454 |
| | $ | 285,512 |
| | $ | 180,128 |
|
| Core deposit intangibles (CDI) | | 24,429 |
| | 25,542 |
| | 26,654 |
| | 27,890 |
| | 28,353 |
| | 20,072 |
|
| Mortgage servicing rights (MSR) | | 9,677 |
| | 10,478 |
| | 11,122 |
| | 11,540 |
| | 12,307 |
| | 11,583 |
|
| Noncompete agreements | | 164 |
| | 246 |
| | 328 |
| | 434 |
| | 541 |
| | — |
|
Chemical Financial Corporation Announces 2016 Second Quarter Operating Results
Nonperforming Assets (Unaudited)
Chemical Financial Corporation
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | June 30, 2016 | | March 31, 2016 | | December 31, 2015 | | Sept 30, 2015 | | June 30, 2015 | | March 31, 2015 |
| | | |
| Nonperforming Assets | | | | | | | | | | | | |
| Nonperforming Loans: | | | | | | | | | | | | |
| Nonaccrual loans: | | | | | | | | | | | | |
| Commercial | | $ | 14,577 |
| | $ | 19,264 |
| | $ | 28,554 |
| | $ | 26,463 |
| | $ | 17,260 |
| | $ | 18,904 |
|
| Commercial real estate | | 21,325 |
| | 25,859 |
| | 25,163 |
| | 24,969 |
| | 25,287 |
| | 24,766 |
|
| Real estate construction | | 496 |
| | 546 |
| | 521 |
| | 544 |
| | 502 |
| | 953 |
|
| Residential mortgage | | 5,343 |
| | 5,062 |
| | 5,557 |
| | 6,248 |
| | 6,004 |
| | 6,514 |
|
| Consumer installment | | 285 |
| | 360 |
| | 451 |
| | 536 |
| | 393 |
| | 433 |
|
| Home equity | | 1,971 |
| | 2,328 |
| | 1,979 |
| | 1,876 |
| | 1,769 |
| | 1,870 |
|
| Total nonaccrual loans | | 43,997 |
| | 53,419 |
| | 62,225 |
| | 60,636 |
| | 51,215 |
| | 53,440 |
|
| Accruing loans contractually past due 90 days or more as to interest or principal payments: | | | | | | | | | | | | |
| Commercial | | 3 |
| | 370 |
| | 364 |
| | 122 |
| | 711 |
| | 52 |
|
| Commercial real estate | | 3 |
| | — |
| | 254 |
| | 216 |
| | 56 |
| | 148 |
|
| Real estate construction | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Residential mortgage | | 407 |
| | 423 |
| | 402 |
| | 572 |
| | 424 |
| | 172 |
|
| Consumer installment | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Home equity | | 1,071 |
| | 679 |
| | 1,267 |
| | 558 |
| | 588 |
| | 429 |
|
| Total accruing loans contractually past due 90 days or more as to interest or principal payments | | 1,484 |
| | 1,472 |
| | 2,287 |
| | 1,468 |
| | 1,779 |
| | 801 |
|
| Nonperforming troubled debt restructurings: | | | | | | | | | |
| |
|
| Commercial loan portfolio | | 14,240 |
| | 15,351 |
| | 16,297 |
| | 15,559 |
| | 14,547 |
| | 15,810 |
|
| Consumer loan portfolio | | 2,233 |
| | 3,013 |
| | 3,071 |
| | 3,554 |
| | 3,365 |
| | 2,690 |
|
| Total nonperforming troubled debt restructurings | | 16,473 |
| | 18,364 |
| | 19,368 |
| | 19,113 |
| | 17,912 |
| | 18,500 |
|
| Total nonperforming loans | | 61,954 |
| | 73,255 |
| | 83,880 |
| | 81,217 |
| | 70,906 |
| | 72,741 |
|
| Other real estate and repossessed assets | | 8,440 |
| | 9,248 |
| | 9,935 |
| | 11,207 |
| | 14,197 |
| | 14,744 |
|
| Total nonperforming assets | | $ | 70,394 |
| | $ | 82,503 |
| | $ | 93,815 |
| | $ | 92,424 |
| | $ | 85,103 |
| | $ | 87,485 |
|
| | | | | | | | | | | | | |
| Nonperforming loans as a percent of total loans | | 0.81 | % | | 0.99 | % | | 1.15 | % | | 1.13 | % | | 1.01 | % | | 1.28 | % |
| Nonperforming assets as a percent of: | | | | | | | | | | | | |
| Total loans plus other real estate and repossessed assets | | 0.92 | % | | 1.12 | % | | 1.29 | % | | 1.28 | % | | 1.21 | % | | 1.53 | % |
| Total assets | | 0.74 | % | | 0.89 | % | | 1.02 | % | | 1.00 | % | | 0.94 | % | | 1.16 | % |
| | | | | | | | | | | | | |
| Performing troubled debt restructurings | | $ | 49,378 |
| | $ | 49,886 |
| | $ | 47,810 |
| | $ | 44,803 |
| | $ | 45,808 |
| | $ | 45,981 |
|
Chemical Financial Corporation Announces 2016 Second Quarter Operating Results
Summary of Allowance and Loan Loss Experience (Unaudited)
Chemical Financial Corporation
(Dollars in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2nd Quarter 2016 | | 1st Quarter 2016 | | 4th Quarter 2015 | | 3rd Quarter 2015 | | 2nd Quarter 2015 | | 1st Quarter 2015 | | Six Months Ended |
| | | | | | | | | June 30, 2016 | | June 30, 2015 |
| | | | | | | |
| Allowance for loan losses - originated loan portfolio | | | | | | |
| Allowance for loan losses - beginning of period | | $ | 70,318 |
| | $ | 73,328 |
| | $ | 75,626 |
| | $ | 74,941 |
| | $ | 75,256 |
| | $ | 75,183 |
| | $ | 73,328 |
| | $ | 75,183 |
|
| Provision for loan losses | | 3,000 |
| | 1,500 |
| | 2,000 |
| | 1,500 |
| | 1,500 |
| | 2,000 |
| | 4,500 |
| | 3,500 |
|
| Net loan (charge-offs) recoveries: | | | | | | | | | | | | | | | | |
| Commercial | | (1,153 | ) | | (3,115 | ) | | (2,207 | ) | | 86 |
| | (36 | ) | | (424 | ) | | (4,268 | ) | | (460 | ) |
| Commercial real estate | | (187 | ) | | (440 | ) | | (624 | ) | | 145 |
| | (581 | ) | | (415 | ) | | (627 | ) | | (996 | ) |
| Real estate construction | | — |
| | (11 | ) | | — |
| | (1 | ) | | (49 | ) | | (91 | ) | | (11 | ) | | (140 | ) |
| Residential mortgage | | 8 |
| | (172 | ) | | (545 | ) | | (214 | ) | | (661 | ) | | (492 | ) | | (164 | ) | | (1,153 | ) |
| Consumer installment | | (486 | ) | | (602 | ) | | (770 | ) | | (782 | ) | | (590 | ) | | (649 | ) | | (1,088 | ) | | (1,239 | ) |
| Home equity | | 6 |
| | (170 | ) | | (152 | ) | | (49 | ) | | 102 |
| | 144 |
| | (164 | ) | | 246 |
|
| Net loan charge-offs | | (1,812 | ) | | (4,510 | ) | | (4,298 | ) | | (815 | ) | | (1,815 | ) | | (1,927 | ) | | (6,322 | ) | | (3,742 | ) |
| Allowance for loan losses - end of period | | 71,506 |
| | 70,318 |
| | 73,328 |
| | 75,626 |
| | 74,941 |
| | 75,256 |
| | 71,506 |
| | 74,941 |
|
| Allowance for loan losses - acquired loan portfolio | | | | | | | | | | | | |
| Allowance for loan losses - beginning of period | | — |
| | — |
| | — |
| | — |
| | — |
| | 500 |
| | — |
| | 500 |
|
| Provision for loan losses | | — |
| | — |
| | — |
| | — |
| | — |
| | (500 | ) | | — |
| | (500 | ) |
| Allowance for loan losses - end of period | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Total allowance for loan losses | | $ | 71,506 |
| | $ | 70,318 |
| | $ | 73,328 |
| | $ | 75,626 |
| | $ | 74,941 |
| | $ | 75,256 |
| | $ | 71,506 |
| | $ | 74,941 |
|
| | | | | | | | | | | | | | | | | |
| Summary of net loan charge-offs: | | | | | | | | | | | | | | | | |
| Loan charge-offs | | $ | 3,620 |
| | $ | 5,458 |
| | $ | 5,439 |
| | $ | 2,195 |
| | $ | 2,724 |
| | $ | 3,143 |
| | $ | 9,078 |
| | $ | 5,867 |
|
| Loan recoveries | | (1,808 | ) | | (948 | ) | | (1,141 | ) | | (1,380 | ) | | (909 | ) | | (1,216 | ) | | (2,756 | ) | | (2,125 | ) |
| Net loan charge-offs (quarter only) | | $ | 1,812 |
| | $ | 4,510 |
| | $ | 4,298 |
| | $ | 815 |
| | $ | 1,815 |
| | $ | 1,927 |
| | $ | 6,322 |
| | $ | 3,742 |
|
| Net loan charge-offs (year-to-date) | | $ | 6,322 |
| | $ | 4,510 |
| | $ | 8,855 |
| | $ | 4,557 |
| | $ | 3,742 |
| | $ | 1,927 |
| | | | |
| | | | | | | | | | | | | | | | | |
| Net loan charge-offs as a percent of average loans: | | | | | | | | | | |
| Quarter only (annualized) | | 0.10% | | 0.25% | | 0.24% | | 0.05% | | 0.12% | | 0.14% | | | | |
| Year-to-date (annualized) | | 0.17% | | 0.25% | | 0.13% | | 0.10% | | 0.13% | | 0.14% | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | June 30, 2016 | | March 31, 2016 | | December 31, 2015 | | Sept 30, 2015 | | June 30, 2015 | | March 31, 2015 |
| | | | | | | | | | | | | |
| Originated loans | | $ | 6,378,934 |
| | $ | 6,001,714 |
| | $ | 5,807,934 |
| | $ | 5,667,159 |
| | $ | 5,351,010 |
| | $ | 5,048,662 |
|
| Acquired loans | | 1,268,335 |
| | 1,365,171 |
| | 1,463,213 |
| | 1,549,036 |
| | 1,683,733 |
| | 654,212 |
|
| Total loans | | $ | 7,647,269 |
| | $ | 7,366,885 |
| | $ | 7,271,147 |
| | $ | 7,216,195 |
| | $ | 7,034,743 |
| | $ | 5,702,874 |
|
| | | | | | | | | | | | | |
| Allowance for loan losses as a percent of: | | | | | | | | | | | | |
| Total originated loans | | 1.12% | | 1.17% | | 1.26% | | 1.33% | | 1.40% | | 1.49% |
| Nonperforming loans | | 115% | | 96% | | 87% | | 93% | | 106% | | 103% |
| Nonaccretable discount (credit mark) as a percent of acquired loans | | 4.1% | | 4.5% | | 4.4% | | 4.2% | | 3.9% | | 5.7% |
Chemical Financial Corporation Announces 2016 Second Quarter Operating Results
Non-GAAP Financial Measures (Unaudited)
Chemical Financial Corporation
(Amounts in thousands, except per share data)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2nd Quarter 2016 | | 1st Quarter 2016 | | 4th Quarter 2015 | | 3rd Quarter 2015 | | 2nd Quarter 2015 | | 1st Quarter 2015 | | Six Months Ended |
| | | | | | | | | June 30, 2016 | | June 30, 2015 |
| | | | | | | |
| Non-GAAP Operating Results | | | | | | | | | | |
| Net Income | | | | | | | | | | | | | | | | |
| Net income, as reported | | $ | 25,707 |
| | $ | 23,262 |
| | $ | 25,504 |
| | $ | 24,467 |
| | $ | 19,024 |
| | $ | 17,835 |
| | $ | 48,969 |
| | $ | 36,859 |
|
| Transaction expenses, net of tax | | 1,985 |
| | 1,686 |
| | 1,355 |
| | 585 |
| | 2,659 |
| | 885 |
| | 3,671 |
| | 3,544 |
|
| Net income, excluding transaction expenses | | $ | 27,692 |
| | $ | 24,948 |
| | $ | 26,859 |
| | $ | 25,052 |
| | $ | 21,683 |
| | $ | 18,720 |
| | $ | 52,640 |
| | $ | 40,403 |
|
| | | | | | | | | | | | | | | | | |
| Diluted Earnings Per Share | | | | | | | | | | | | | | | | |
| Diluted earnings per share, as reported | | $ | 0.67 |
| | $ | 0.60 |
| | $ | 0.66 |
| | $ | 0.64 |
| | $ | 0.54 |
| | $ | 0.54 |
| | $ | 1.27 |
| | $ | 1.08 |
|
| Effect of transaction expenses, net of tax | | 0.05 |
| | 0.05 |
| | 0.04 |
| | 0.01 |
| | 0.07 |
| | 0.03 |
| | 0.10 |
| | 0.10 |
|
| Diluted earnings per share, excluding transaction expenses | | $ | 0.72 |
| | $ | 0.65 |
| | $ | 0.70 |
| | $ | 0.65 |
| | $ | 0.61 |
| | $ | 0.57 |
| | $ | 1.37 |
| | $ | 1.18 |
|
| | | | | | | | | | | | | | | | | |
| Return on Average Assets | | | | | | | | | | | | | | | | |
| Return on average assets, as reported | | 1.11% | | 1.01% | | 1.10 | % | | 1.05 | % | | 0.94 | % | | 0.98 | % | | 1.06 | % | | 0.96 | % |
| Effect of transaction expenses, net of tax | | 0.08 | | 0.08 | | 0.06 |
| | 0.03 |
| | 0.13 |
| | 0.05 |
| | 0.08 |
| | 0.09 |
|
| Return on average assets, excluding transaction expenses | | 1.19% | | 1.09% | | 1.16 | % | | 1.08 | % | | 1.07 | % | | 1.03 | % | | 1.14 | % | | 1.05 | % |
| | | | | | | | | | | | | | | | | |
| Return on Average Shareholders' Equity | | | | | | | | | | | | | | |
| Return on average shareholders' equity, as reported | | 10.0% | | 9.2% | | 10.1 | % | | 9.8 | % | | 8.6 | % | | 9.0 | % | | 9.6 | % | | 8.8 | % |
| Effect of transaction expenses, net of tax | | 0.8 | | 0.7 | | 0.6 |
| | 0.3 |
| | 1.2 |
| | 0.5 |
| | 0.7 |
| | 0.9 |
|
| Return on average shareholders' equity, excluding transaction expenses | | 10.8% | | 9.9% | | 10.7 | % | | 10.1 | % | | 9.8 | % | | 9.5 | % | | 10.3 | % | | 9.7 | % |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | June 30, 2016 | | March 31, 2016 | | Dec 31,
2015 | | Sept 30, 2015 | | June 30, 2015 | | March 31, 2015 |
| | | |
| Tangible Book Value | | | | | | | | | | | | |
| Shareholders' equity, as reported | | $ | 1,050,299 |
| | $ | 1,032,291 |
| | $ | 1,015,974 |
| | $ | 998,363 |
| | $ | 980,791 |
| | $ | 810,501 |
|
| Goodwill, CDI and noncompete agreements, net of tax | | (297,044 | ) | | (297,821 | ) | | (299,123 | ) | | (299,681 | ) | | (299,109 | ) | | (187,991 | ) |
| Tangible shareholders' equity | | $ | 753,255 |
| | $ | 734,470 |
| | $ | 716,851 |
| | $ | 698,682 |
| | $ | 681,682 |
| | $ | 622,510 |
|
| Common shares outstanding | | 38,267 |
| | 38,248 |
| | 38,168 |
| | 38,131 |
| | 38,110 |
| | 32,847 |
|
| Book value per share (shareholders' equity, as reported, divided by common shares outstanding) | | $ | 27.45 |
| | $ | 26.99 |
| | $ | 26.62 |
| | $ | 26.18 |
| | $ | 25.74 |
| | $ | 24.68 |
|
| Tangible book value per share (tangible shareholders' equity divided by common shares outstanding) | | $ | 19.68 |
| | $ | 19.20 |
| | $ | 18.78 |
| | $ | 18.32 |
| | $ | 17.89 |
| | $ | 18.95 |
|
| | | | | | | | | | | | | |
| Tangible Shareholders' Equity to Tangible Assets | | | | | | | | | | |
| Total assets | | $ | 9,514,172 |
| | $ | 9,303,632 |
| | $ | 9,188,797 |
| | $ | 9,264,554 |
| | $ | 9,020,725 |
| | $ | 7,551,635 |
|
| Goodwill, CDI and noncompete agreements, net of tax | | (297,044 | ) | | (297,821 | ) | | (299,123 | ) | | (299,681 | ) | | (299,109 | ) | | (187,991 | ) |
| Tangible assets | | $ | 9,217,128 |
| | $ | 9,005,811 |
| | $ | 8,889,674 |
| | $ | 8,964,873 |
| | $ | 8,721,616 |
| | $ | 7,363,644 |
|
| Tangible shareholders' equity to tangible assets | | 8.2 | % | | 8.2 | % | | 8.1 | % | | 7.8 | % | | 7.8 | % | | 8.5 | % |
