EXHIBIT 99.1
For further information:
David B. Ramaker, CEO
Lori A. Gwizdala, CFO
989-839-5350
Chemical Financial Corporation Reports Third Quarter 2010 Earnings
MIDLAND, MI, October 25, 2010 -- Chemical Financial Corporation (NASDAQ:CHFC) today announced 2010 third quarter net income of $8.9 million, or $0.32 per diluted share, compared to net income of $4.4 million, or $0.17 per diluted share, in the second quarter of 2010 and $2.5 million, or $0.10 per diluted share, in the third quarter of 2009. Net income was $15.6 million, or $0.60 per diluted share, for the nine months ended September 30, 2010, compared to $7.5 million, or $0.31 per diluted share, for the nine months ended September 30, 2009.
"We are pleased with our reported third quarter earnings, which benefited from higher net interest income, as well as a lower provision for loan losses, partially offset by higher expenses. The quarter's improvements were attributable, in part, to our acquisition of O.A.K. Financial Corporation (OAK), parent company of Byron Bank, which became accretive to earnings this quarter," said David B. Ramaker, Chairman, Chief Executive Officer and President. "The acquisition has given Chemical Financial Corporation a much larger presence in the attractive Grand Rapids market, which will serve our franchise well in the months and years ahead. During the quarter, we completed the integration of Byron Bank into Chemical Bank, which, we are happy to report, went smoothly for all stakeholders involved."
"The Michigan economy continues to struggle and has yet to show signs of sustainable growth. Consequently, credit quality concerns will remain paramount and key credit quality metrics will likely remain at elevated levels. Signs of stabilization in our loan portfolio resulted in a decline in the provision for loan losses from $12.7 million in the second quarter of 2010 to $8.6 million in the third quarter." Ramaker said.
"With modest loan demand and the challenges of the Michigan economy, we will continue to opportunistically pursue various strategies, including acquisitions, as a means to grow our core banking franchise. Our dedication to Michigan, capital strength, and focus on small and middle-
market commercial lending, positions us well to take advantage of opportunities in the markets we serve," said Ramaker.
The Company's return on average assets during the third quarter of 2010 was 0.67 percent, up from 0.36 percent in the second quarter of 2010 and 0.24 percent in the third quarter of 2009. The return on average equity was 6.3 percent in the third quarter of 2010, up from 3.3 percent in the second quarter of 2010 and 2.0 percent in the third quarter of 2009.
Included in the third quarter and year-to-date 2010 results were $1.1 million and $4.1 million, respectively, of merger-related costs related to the acquisition of OAK. The net impact of these costs reduced third quarter and year-to-date diluted earnings per share by $0.03 per share and $0.12 per share, respectively. As previously reported, the Company completed its acquisition of OAK on April 30, 2010. The acquisition of OAK and Byron Bank resulted in increases in the Company's total assets of $820 million, total loans of $631 million, total deposits of $693 million (core deposits of $495 million) and goodwill of $40 million as of the acquisition date. Assets and liabilities acquired in the OAK transaction were recorded at fair value, with selected financial amounts and ratios reported separately for the "acquired" loan portfolio. The consolidation and systems conversion of Byron Bank into Chemical Bank was completed in the third quarter of 2010.
Higher net income in the third quarter of 2010, compared to the second quarter of 2010, was attributable primarily to a lower provision for loan losses, lower merger-related costs and one additional month of operating results of OAK being included in the third quarter.
Net interest income was $45.9 million in the third quarter of 2010, up from $42.9 million in the second quarter of 2010 and $36.7 million in the third quarter of 2009. The net interest margin (on a tax-equivalent basis) in the third quarter of 2010 was 3.80 percent, down from 3.88 percent in the second quarter of 2010 and 3.83 percent in the third quarter of 2009. The increases in net interest income were primarily attributable to the acquisition of OAK, although they were also attributable to a decrease in the average cost of deposits related to maturing higher-cost customer certificates of deposit and maturing higher-cost wholesale funding. The decreases in net interest margin were primarily attributable to the Company's increased level of liquidity during the three
and twelve months ended September 30, 2010, because funds were held in low yielding short-term deposits at the Federal Reserve Bank (FRB).
The Company recorded an $8.6 million provision for loan losses in the third quarter of 2010, compared to $12.7 million in the second quarter of 2010 and $14.2 million in the third quarter of 2009. Third quarter 2010 net loan charge-offs were $8.6 million, compared to $7.3 million in the second quarter of 2010 and $6.7 million in the third quarter of 2009. The third quarter of 2010 marked the first time in fifteen quarters that the provision for loan losses did not exceed net loan charge-offs.
Total noninterest income was $11.1 million in the third quarter of 2010, compared to $11.0 million in the second quarter of 2010 and $10.1 million in the third quarter of 2009. The increase in the third quarter of 2010, as compared to the second quarter of 2010, was primarily attributable to one additional month of OAK noninterest income. Service charges on deposit accounts, driven primarily by overdraft fees, were $0.4 million less in the third quarter of 2010, as compared to the second quarter of 2010, due to changes in regulatory requirements regarding the processing of electronic ATM and debit card transactions. This reduction was mostly offset with $0.3 million in higher mortgage banking revenue.
Operating expenses were $36.2 million in the third quarter of 2010, up from $34.6 million in the second quarter of 2010 and $29.6 million in the third quarter of 2009. The increase in operating expenses in the third quarter of 2010, as compared to the second quarter of 2010, was primarily attributable to one additional month of OAK operating expenses. Operating expenses in the third quarter of 2010 included $1.1 million of merger-related costs applicable to the OAK transaction, compared to $2.3 million in the second quarter of 2010. Acquisition-related costs of $0.1 million are expected to be incurred in the fourth quarter of 2010. Credit-related operating expenses remained elevated at $1.8 million in the third quarter of 2010, the same amount incurred in both the second quarter of 2010 and the third quarter of 2009. The Company's third quarter 2010 efficiency ratio was 62.3 percent, compared to 63.1 percent in the second quarter of 2010 and 62.3 percent in the third quarter of 2009.
Total assets were $5.40 billion at September 30, 2010, up from $5.12 billion at June 30, 2010 and $4.27 billion at September 30, 2009. At September 30, 2010, total loans were $3.64 billion, compared to $3.65 billion at June 30, 2010 and $3.00 billion at September 30, 2009. Investment securities were $766 million at September 30, 2010, compared to $811 million at June 30, 2010 and $645 million at September 30, 2009. The increases in assets, loans and investment securities during the twelve months ended September 30, 2010 were primarily attributable to the acquisition of OAK.
Total deposits were $4.47 billion at September 30, 2010, compared to $4.20 billion at June 30, 2010 and $3.40 billion at September 30, 2009. The Company experienced an increase of $268 million, or 6.4 percent, in total deposits during the quarter ended September 30, 2010, with the majority attributable to a seasonal increase in municipal customer deposits of $223 million. The Company continues to maintain the majority of new funds generated from internal deposit growth in interest-bearing balances at the FRB, thereby further enhancing the Company's liquidity position, with $596 million in balances held at the FRB at September 30, 2010. The Company has used a portion of its liquidity to pay off maturing Federal Home Loan Bank (FHLB) advances and brokered deposits acquired in the OAK transaction in 2010 and intends to continue to pay off these wholesale funding sources as they mature. The Corporation has $27.5 million of FHLB advances and brokered deposits maturing during the fo urth quarter of 2010. FHLB advances totaled $85.4 million at September 30, 2010, down from $86.6 million at June 30, 2010 and $115 million at September 30, 2009. Brokered deposits acquired in the OAK transaction totaled $152 million at September 30, 2010, compared to $169 million at June 30, 2010.
At September 30, 2010, the Company's tangible equity to assets ratio and total risk-based capital ratio were 8.4 percent and 13.7 percent, respectively, compared to 8.8 percent and 13.6 percent, respectively, at June 30, 2010. At September 30, 2010, the Company's book value stood at $20.44 per share, compared to $20.27 per share at June 30, 2010.
The credit quality of the Company's loan portfolio is showing signs of stabilization. At September 30, 2010, the Company's originated loan portfolio, representing all loans other than those acquired in the OAK transaction, had nonaccrual loans and loans past due 90 days or more
totaling $119.4 million, compared to $116.3 million at June 30, 2010 and $128.9 million at September 30, 2009. The Company's nonperforming loans at September 30, 2010, also included commercial, real estate commercial and real estate residential loans that have been modified due to financial difficulties being experienced by the customer of $28.5 million, compared to $26.6 million at June 30, 2010 and $9.6 million at September 30, 2009. At September 30, 2010, these modified loans were current in accordance with their modified terms. Loans in the acquired portfolio that meet the Company's definition of nonperforming, but for which the risk of loss was recognized at acquisition, totaled $12.5 million at September 30, 2010, compared to $10.1 million at June 30, 2010.
Other real estate and repossessed assets totaled $22.7 million at September 30, 2010, compared to $21.7 million at June 30, 2010 and $19.1 million at September 30, 2009.
At September 30, 2010, the allowance for loan losses was $89.5 million, or 2.94 percent of originated loans, down slightly from 2.95 percent at June 30, 2010, although up from 2.58 percent at September 30, 2009. The allowance for loan losses as a percentage of nonperforming loans of the originated portfolio was 61 percent at September 30, 2010, down from 63 percent at June 30, 2010, although up from 56 percent at September 30, 2009. At September 30, 2010, nonperforming loans of the originated portfolio as a percentage of originated loans were 4.86 percent, up from 4.71 percent at June 30, 2010 and 4.61 percent at September 30, 2009.
Chemical Financial Corporation is the second-largest bank holding company headquartered in Michigan. The Company operates through a single subsidiary bank, Chemical Bank, with 142 banking offices spread over 32 counties in the lower peninsula of Michigan. At September 30, 2010, the Company had total assets of $5.4 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 Chemical is available by visiting the investor relations section of its website atwww.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 Chemical Financial Corporation (Chemical Financial or Company)
itself. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "is likely," "judgment," "plans," "predicts," "projects," "should," "will," variations of such words and similar expressions are intended to identify such forward-looking statements. The future effect of changes in the financial and credit markets and the national and regional economy on the banking industry, generally, and on Chemical Financial, 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. Chemical Financial u ndertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise.
Risk factors include, but are not limited to, the risk factors described in Item 1A in Chemical Financial Corporation's Annual Report on Form 10-K for the year ended December 31, 2009; the timing and level of asset growth; changes in market interest rates; changes in banking laws and regulations; changes in tax laws; changes in prices, levies and assessments; the impact of technological advances and issues; governmental and regulatory policy changes; opportunities for acquisitions and the effective completion of acquisitions and integration of acquired entities; the possibility that anticipated cost savings and revenue enhancements from acquisitions, restructurings, reorganizations and bank consolidations may not be realized fully or at all or within expected time frames; the local and global effects of current and future military actions, and current uncertainties and fluctuations in the financial markets and stocks of financial services providers due to concerns about capital levels and c redit availability and concerns about the Michigan economy in particular. 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.
Risk factors also include, but are not limited to, risks and uncertainties related both to the acquisition of OAK and to the integration of the acquired business into Chemical Financial including:
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.
Chemical Financial's ability to achieve anticipated results from the transaction is dependent on the state of the economic and financial markets going forward, which have been under significant stress recently. Specifically, Chemical Financial may incur more credit losses from OAK's loan portfolio than expected and deposit attrition may be greater than expected.
The complete integration of OAK's business and operations into Chemical Financial, which includes conversion of OAK's operating systems and procedures, may take longer than anticipated or be more costly than anticipated or have unanticipated adverse results relating to OAK's or Chemical Financial's existing businesses.
Chemical Financial Corporation Announces Third Quarter Operating Results |
Consolidated Statements of Financial Position (Unaudited)
Chemical Financial Corporation
| September 30 | December 31 | September 30 | ||||||
Assets: | |||||||||
Cash and cash equivalents: | |||||||||
Cash and cash due from banks | $ | 118,441 | $ | 131,383 | $ | 90,215 | |||
Interest-bearing deposits with unaffiliated banks and others | | 600,909 | | 229,326 | | 375,489 | |||
Total cash and cash equivalents | 719,350 | 360,709 | 465,704 | ||||||
Investment securities: | |||||||||
Trading | 1,471 | - | - | ||||||
Available-for-sale | 608,823 | 592,521 | 512,413 | ||||||
Held-to-maturity | | 155,475 | | 131,297 | | 132,438 | |||
Total Investment Securities | 765,769 | 723,818 | 644,851 | ||||||
Other securities | 26,189 | 22,128 | 22,128 | ||||||
Loans held-for-sale | 19,547 | 8,362 | 7,043 | ||||||
Loans: | |||||||||
Commercial | 794,739 | 584,286 | 575,062 | ||||||
Real estate commercial | 1,077,760 | 785,675 | 782,640 | ||||||
Real estate construction | 167,738 | 121,305 | 118,116 | ||||||
Real estate residential | 747,135 | 739,380 | 753,744 | ||||||
Consumer | | 853,499 | | 762,514 | | 773,902 | |||
Total Loans | 3,640,871 | 2,993,160 | 3,003,464 | ||||||
Allowance for loan losses | | (89,521 | ) | | (80,841 | ) | | (77,491 | ) |
Net Loans | 3,551,350 | 2,912,319 | 2,925,973 | ||||||
Premises and equipment | 66,212 | 53,934 | 53,172 | ||||||
Goodwill | 110,266 | 69,908 | 69,908 | ||||||
Other intangible assets | 14,532 | 5,408 | 5,477 | ||||||
Interest receivable and other assets | | 127,093 | | 94,126 | | 74,107 | |||
Total Assets | $ | 5,400,308 | $ | 4,250,712 | $ | 4,268,363 | |||
Liabilities: | |||||||||
Deposits: | |||||||||
Noninterest-bearing | $ | 696,710 | $ | 573,159 | $ | 533,430 | |||
Interest-bearing | | 3,770,692 | | 2,844,966 | | 2,870,069 | |||
Total Deposits | 4,467,402 | 3,418,125 | 3,403,499 | ||||||
Interest payable and other liabilities | 31,744 | 27,708 | 36,891 | ||||||
Short-term borrowings | 254,799 | 240,568 | 233,693 | ||||||
Federal Home Loan Bank advances | | 85,390 | | 90,000 | | 115,000 | |||
Total Liabilities | 4,839,335 | 3,776,401 | 3,789,083 | ||||||
Shareholders' Equity: | |||||||||
Preferred stock, no par value per share | - | - | - | ||||||
Common stock, $1 par value per share | 27,440 | 23,891 | 23,890 | ||||||
Additional paid-in capital | 429,459 | 347,676 | 347,667 | ||||||
Retained earnings | 115,187 | 115,391 | 119,920 | ||||||
Accumulated other comprehensive loss | | (11,113 | ) | | (12,647 | ) | | (12,197 | ) |
Total Shareholders' Equity | | 560,973 | | 474,311 | | 479,280 | |||
Total Liabilities and Shareholders' Equity | $ | 5,400,308 | $ | 4,250,712 | $ | 4,268,363 |
Chemical Financial Corporation Announces Third Quarter Operating Results |
Consolidated Statements of Income (Unaudited)
Chemical Financial Corporation
Three Months Ended | Nine Months Ended | |||||||||||
(In thousands, except per share data) | 2010 | | 2009 | | 2010 | | 2009 | |||||
Interest Income: | ||||||||||||
Interest and fees on loans | $ | 51,485 | $ | 43,289 | $ | 141,481 | $ | 129,079 | ||||
Interest on investment securities: | ||||||||||||
Taxable | 2,718 | 3,527 | 8,806 | 12,053 | ||||||||
Tax-exempt | 1,391 | 962 | 3,594 | 2,632 | ||||||||
Dividends on other securities | 81 | 132 | 458 | 562 | ||||||||
Interest on deposits with unaffiliated banks and others | | 323 | | 156 | | 743 | | 345 | ||||
Total Interest Income | 55,998 | 48,066 | 155,082 | 144,671 | ||||||||
Interest Expense: | ||||||||||||
Interest on deposits | 9,314 | 9,942 | 27,216 | 29,917 | ||||||||
Interest on short-term borrowings | 168 | 251 | 489 | 723 | ||||||||
Interest on Federal Home Loan Bank advances | | 623 | | 1,210 | | 2,205 | | 3,800 | ||||
Total Interest Expense | | 10,105 | | 11,403 | | 29,910 | | 34,440 | ||||
Net Interest Income | 45,893 | 36,663 | 125,172 | 110,231 | ||||||||
Provision for loan losses | | 8,600 | | 14,200 | | 35,300 | | 43,400 | ||||
Net Interest Income after Provision for Loan Losses | 37,293 | 22,463 | 89,872 | 66,831 | ||||||||
Noninterest Income: | ||||||||||||
Service charges on deposit accounts | 4,680 | 4,949 | 14,162 | 14,205 | ||||||||
Trust and investment services revenue | 2,521 | 2,306 | 7,416 | 7,055 | ||||||||
Other charges and fees for customer services | 2,555 | 1,971 | 6,896 | 5,766 | ||||||||
Mortgage banking revenue | 1,204 | 840 | 2,837 | 3,452 | ||||||||
Investment securities gains | 82 | - | 82 | 95 | ||||||||
Other | | 77 | | 26 | | 166 | | 334 | ||||
Total Noninterest Income | 11,119 | 10,092 | 31,559 | 30,907 | ||||||||
Operating Expenses: | ||||||||||||
Salaries, wages and employee benefits | 18,015 | 15,765 | 49,650 | 45,865 | ||||||||
Occupancy | 2,903 | 2,497 | 8,474 | 7,611 | ||||||||
Equipment | 3,698 | 2,435 | 10,110 | 7,141 | ||||||||
Other | | 11,600 | | 8,885 | | 31,821 | | 28,186 | ||||
Total Operating Expenses | | 36,216 | | 29,582 | | 100,055 | | 88,803 | ||||
Income Before Income Taxes | 12,196 | 2,973 | 21,376 | 8,935 | ||||||||
Federal Income Tax Expense | | 3,325 | | 500 | | 5,825 | | 1,450 | ||||
Net Income | $ | 8,871 | $ | 2,473 | $ | 15,551 | $ | 7,485 | ||||
Net income per common share: | ||||||||||||
Basic | $ | 0.32 | $ | 0.10 | $ | 0.60 | $ | 0.31 | ||||
Diluted | 0.32 | 0.10 | 0.60 | 0.31 | ||||||||
Cash dividends declared per common share | 0.20 | 0.295 | 0.60 | 0.885 | ||||||||
Average common shares outstanding: | ||||||||||||
Basic | 27,438 | 23,890 | 25,883 | 23,890 | ||||||||
Diluted | 27,471 | 23,912 | 25,911 | 23,907 |
Chemical Financial Corporation Announces Third Quarter Operating Results |
Financial Summary (Unaudited)
Chemical Financial Corporation
Three Months Ended | Nine Months Ended | |||||||||||
(Dollars in thousands) | 2010 | | 2009 | | 2010 | | 2009 | |||||
Average Balances | ||||||||||||
Total assets | $ | 5,264,545 | $ | 4,111,923 | $ | 4,799,067 | $ | 4,014,060 | ||||
Total interest-earning assets | 4,925,102 | 3,894,124 | 4,506,962 | 3,790,588 | ||||||||
Total loans | 3,664,925 | 2,985,388 | 3,364,129 | 2,971,557 | ||||||||
Total deposits | 4,326,096 | 3,235,959 | 3,909,630 | 3,138,608 | ||||||||
Total interest-bearing liabilities | 3,946,563 | 3,036,864 | 3,601,960 | 2,949,836 | ||||||||
Total shareholders' equity | 557,927 | 480,064 | 520,517 | 485,612 |
Three Months Ended | Nine Months Ended | |||||||||||
| 2010 | | 2009 | | 2010 | | 2009 | |||||
Key Ratios (annualized where applicable) | ||||||||||||
Net interest margin (taxable equivalent basis) | 3.80% | 3.83% | 3.80% | 3.96% | ||||||||
Efficiency ratio | 62.3% | 62.3% | 62.6% | 62.0% | ||||||||
Return on average assets | 0.67% | 0.24% | 0.43% | 0.25% | ||||||||
Return on average shareholders' equity | 6.3% | 2.0% | 4.0% | 2.1% | ||||||||
Average shareholders' equity as a | ||||||||||||
percent of average assets | 10.6% | 11.7% | 10.8% | 12.1% | ||||||||
Tangible shareholders' equity as a | ||||||||||||
percent of total assets | 8.4% | 9.7% | ||||||||||
Total risk-based capital ratio | 13.7% | 15.7% |
Sept 30 | June 30 | March 31 | Dec 31 | Sept 30 | June 30 | March 31 | ||||||||||||||
Credit Quality Statistics | ||||||||||||||||||||
Originated Loans | $ | 3,045,872 | $ | 3,034,515 | ||||||||||||||||
Acquired Loans | 594,999 | 613,446 | ||||||||||||||||||
Originated Portfolio: | ||||||||||||||||||||
Nonaccrual loans | 112,832 | 107,981 | $ | 100,882 | $ | 106,589 | $ | 120,186 | $ | 109,944 | $ | 94,737 | ||||||||
Loans 90 or more days past due | ||||||||||||||||||||
and still accruing | 6,526 | 8,301 | 7,204 | 11,733 | 8,699 | 10,502 | 10,240 | |||||||||||||
Troubled debt restructurings - | ||||||||||||||||||||
commercial loans | 9,834 | 7,791 | 6,243 | - | - | - | - | |||||||||||||
Troubled debt restructurings - | ||||||||||||||||||||
real estate residential loans | 18,712 | 18,856 | 15,799 | 17,433 | 9,567 | 3,981 | - | |||||||||||||
Total nonperforming loans - | ||||||||||||||||||||
originated portfolio | 147,904 | 142,929 | 130,128 | 135,755 | 138,452 | 124,427 | 104,977 | |||||||||||||
Other real estate and repossessed |
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Total nonperforming assets | 170,608 | 164,653 | 148,941 | 153,295 | 157,519 | 142,771 | 125,665 | |||||||||||||
Acquired portfolio - | ||||||||||||||||||||
total nonperforming loans | 12,500 | 10,050 | - | - | - | - | - | |||||||||||||
Net loan charge-offs (year-to-date) | 26,620 | 18,039 | 10,686 | 35,215 | 22,965 | 16,300 | 8,494 | |||||||||||||
Allowance for loan losses as a | ||||||||||||||||||||
percent of total originated loans | 2.94% | 2.95% | 2.82% | 2.70% | 2.58% | 2.35% | 2.12% | |||||||||||||
Allowance for loan losses as a percent | ||||||||||||||||||||
of nonperforming originated loans | 61% | 63% | 65% | 60% | 56% | 56% | 60% | |||||||||||||
Nonperforming originated loans as a | ||||||||||||||||||||
percent of total originated loans | 4.86% | 4.71% | 4.35% | 4.54% | 4.61% | 4.18% | 3.56% | |||||||||||||
Nonperforming assets as a percent | ||||||||||||||||||||
of total originated loans plus ORE | 5.56% | 5.39% | 4.95% | 5.09% | 5.21% | 4.77% | 4.23% | |||||||||||||
Nonperforming assets as a | ||||||||||||||||||||
percent of total assets | 3.16% | 3.22% | 3.47% | 3.61% | 3.69% | 3.57% | 3.16% | |||||||||||||
Net loan charge-offs as a percent of | ||||||||||||||||||||
average loans (year-to-date, |
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Sept 30 | June 30 | March 31 | Dec 31 | Sept 30 | June 30 | March 31 | ||||||||||||||
Additional Data - Intangibles | ||||||||||||||||||||
Goodwill | $ | 110,266 |
| $ | 109,149 |
| $ | 69,908 |
| $ | 69,908 |
| $ | 69,908 |
| $ | 69,908 |
| $ | 69,908 |
Core deposit intangibles |
| 10,352 |
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| 10,791 |
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| 2,183 |
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| 2,331 |
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| 2,480 |
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| 2,629 |
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| 2,847 |
Mortgage servicing rights (MSR) |
| 3,718 |
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| 3,641 |
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| 3,059 |
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| 3,077 |
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| 2,997 |
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| 2,869 |
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| 2,377 |
Other intangible assets |
| 462 |
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| 591 |
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| - |
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| - |
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| - |
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| - |
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| - |
Amortization of core deposit |
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Chemical Financial Corporation Announces Third Quarter Operating Results |
Nonperforming Assets (Unaudited)
Chemical Financial Corporation
| Sept 30 | June 30 | March 31 | Dec 31 | Sept 30 | June 30 | March 31 | |||||||||||||
Originated Portfolio: |
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Nonaccrual loans: |
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Commercial | $ | 19,440 |
| $ | 21,643 |
| $ | 18,382 |
| $ | 19,309 |
| $ | 21,379 |
| $ | 20,371 |
| $ | 16,419 |
Real estate commercial |
| 59,353 |
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| 57,085 |
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| 51,865 |
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| 49,419 |
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| 58,930 |
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| 50,067 |
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| 41,826 |
Real estate construction |
| 16,085 |
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| 13,397 |
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| 15,870 |
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| 15,184 |
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| 18,196 |
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| 17,935 |
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| 18,504 |
Real estate residential |
| 13,485 |
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| 12,499 |
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| 10,913 |
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| 15,508 |
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| 15,739 |
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| 15,905 |
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| 12,803 |
Consumer | | 4,469 | | | 3,357 | | | 3,852 | | | 7,169 | | | 5,942 | | | 5,666 | | | 5,185 |
Total nonaccrual loans |
| 112,832 |
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| 107,981 |
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| 100,882 |
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| 106,589 |
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| 120,186 |
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| 109,944 |
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| 94,737 |
Accruing loans contractually past |
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Commercial |
| 909 |
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| 2,108 |
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| 2,576 |
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| 1,371 |
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| 1,073 |
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| 1,201 |
|
| 2,581 |
Real estate commercial |
| 2,265 |
|
| 2,030 |
|
| 1,483 |
|
| 3,971 |
|
| 2,138 |
|
| 1,542 |
|
| 4,352 |
Real estate construction |
| - |
|
| 436 |
|
| 988 |
|
| 1,990 |
|
| 675 |
|
| 259 |
|
| 538 |
Real estate residential |
| 2,316 |
|
| 2,842 |
|
| 1,636 |
|
| 3,614 |
|
| 3,839 |
|
| 6,236 |
|
| 1,699 |
Consumer | | 1,036 | | | 885 | | | 521 | | | 787 | | | 974 | | | 1,264 | | | 1,070 |
Total accruing loans contractually |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Troubled debt restructurings - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Troubled debt restructurings - real |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
estate residential loans | | 18,712 | | | 18,856 | | | 15,799 | | | 17,433 | | | 9,567 | | | 3,981 | | | - |
Total nonperforming loans |
| 147,904 |
|
| 142,929 |
|
| 130,128 |
|
| 135,755 |
|
| 138,452 |
|
| 124,427 |
|
| 104,977 |
Other real estate and repossessed assets | | 22,704 | | | 21,724 | | | 18,813 | | | 17,540 | | | 19,067 | | | 18,344 | | | 20,688 |
Total nonperforming assets | $ | 170,608 | | $ | 164,653 | | $ | 148,941 | | $ | 153,295 | | $ | 157,519 | | $ | 142,771 | | $ | 125,665 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans - Acquired |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans | $ | 8,974 |
| $ | 7,692 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Past due 90 days & over |
| 1,539 |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Troubled debt restructurings | | 1,987 | | | 2,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 12,500 | | $ | 10,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Represents the fair value of those loans acquired in the OAK transaction that met the Company's definition of a nonperforming loan, but for which the risk of credit loss was already considered in the fair value estimate at the acquisition date. |
Chemical Financial Corporation Announces Third Quarter Operating Results |
Summary of Loan Loss Experience (Unaudited)
Chemical Financial Corporation
| Three Months Ended |
| |||||||||||||||||||
| Sept 30 | June 30 | March 31 | Dec 31 | Sept 30 | June 30 | March 31 |
| |||||||||||||
Allowance for loan losses at |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for loan losses |
| 8,600 |
|
| 12,700 |
|
| 14,000 |
|
| 15,600 |
|
| 14,200 |
|
| 15,200 |
|
| 14,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated portfolio: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans charged off: |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
| (2,830 | ) |
| (1,438 | ) |
| (1,365 | ) |
| (3,636 | ) |
| (1,786 | ) |
| (3,289 | ) |
| (3,290 | ) |
Real estate commercial |
| (2,586 | ) |
| (2,108 | ) |
| (2,289 | ) |
| (3,009 | ) |
| (1,703 | ) |
| (1,930 | ) |
| (2,589 | ) |
Real estate construction |
| (146 | ) |
| (643 | ) |
| (644 | ) |
| (3,633 | ) |
| (874 | ) |
| (762 | ) |
| (1,700 | ) |
Real estate residential |
| (1,767 | ) |
| (1,747 | ) |
| (3,173 | ) |
| (1,070 | ) |
| (1,346 | ) |
| (1,043 | ) |
| (235 | ) |
Consumer | | (1,916 | ) | | (2,361 | ) | | (4,427 | ) | | (1,998 | ) | | (1,996 | ) | | (1,544 | ) | | (1,253 | ) |
Total loan charge-offs |
| (9,245 | ) |
| (8,297 | ) |
| (11,898 | ) |
| (13,346 | ) |
| (7,705 | ) |
| (8,568 | ) |
| (9,067 | ) |
Recoveries of loans previously |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
| 212 |
|
| 171 |
|
| 373 |
|
| 220 |
|
| 349 |
|
| 130 |
|
| 205 |
|
Real estate commercial |
| 38 |
|
| 29 |
|
| 170 |
|
| 91 |
|
| 91 |
|
| 226 |
|
| 87 |
|
Real estate construction |
| 19 |
|
| 1 |
|
| - |
|
| 261 |
|
| 46 |
|
| - |
|
| - |
|
Real estate residential |
| 109 |
|
| 175 |
|
| 185 |
|
| 174 |
|
| 231 |
|
| 127 |
|
| 82 |
|
Consumer | | 286 | | | 568 | | | 484 | | | 350 | | | 323 | | | 279 | | | 199 |
|
Total loan recoveries | | 664 | | | 944 | | | 1,212 | | | 1,096 | | | 1,040 | | | 762 | | | 573 |
|
Net loan charge-offs | | (8,581 | ) | | (7,353 | ) | | (10,686 | ) | | (12,250 | ) | | (6,665 | ) | | (7,806 | ) | | (8,494 | ) |
Allowance for loan losses at |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemical Financial Corporation Announces Third Quarter Operating Results |
Selected Quarterly Information (Unaudited)
Chemical Financial Corporation
(Dollars in thousands, except per | 3rd Qtr. | 2nd Qtr. | 1st Qtr. | 4th Qtr. | 3rd Qtr. | 2nd Qtr. | 1st Qtr. | |||||||||||||
Summary of Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income | $ | 55,998 |
| $ | 52,962 |
| $ | 46,122 |
| $ | 48,060 |
| $ | 48,066 |
| $ | 48,283 |
| $ | 48,322 |
Interest expense | | 10,105 | | | 10,071 | | | 9,734 | | | 10,847 | | | 11,403 | | | 11,305 | | | 11,732 |
Net interest income |
| 45,893 |
|
| 42,891 |
|
| 36,388 |
|
| 37,213 |
|
| 36,663 |
|
| 36,978 |
|
| 36,590 |
Provision for loan losses | | 8,600 | | | 12,700 | | | 14,000 | | | 15,600 | | | 14,200 | | | 15,200 | | | 14,000 |
Net interest income after |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
provision for loan losses |
| 37,293 |
|
| 30,191 |
|
| 22,388 |
|
| 21,613 |
|
| 22,463 |
|
| 21,778 |
|
| 22,590 |
Noninterest income |
| 11,119 |
|
| 11,000 |
|
| 9,440 |
|
| 10,212 |
|
| 10,092 |
|
| 10,958 |
|
| 9,857 |
Operating expenses | | 36,216 | | | 34,650 | | | 29,189 | | | 28,807 | | | 29,582 | | | 30,016 | | | 29,205 |
Income before income taxes |
| 12,196 |
|
| 6,541 |
|
| 2,639 |
|
| 3,018 |
|
| 2,973 |
|
| 2,720 |
|
| 3,242 |
Federal income tax expense | | 3,325 | | | 2,150 | | | 350 | | | 500 | | | 500 | | | 426 | | | 524 |
Net income | $ | 8,871 | | $ | 4,391 | | $ | 2,289 | | $ | 2,518 | | $ | 2,473 | | $ | 2,294 | | $ | 2,718 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin |
| 3.80% |
|
| 3.88% |
|
| 3.72% |
|
| 3.77% |
|
| 3.83% |
|
| 4.00% |
|
| 4.06% |
| | | | | | | | | | | | | | | | | | | | |
Per Common Share Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic | $ | 0.32 |
| $ | 0.17 |
| $ | 0.10 |
| $ | 0.11 |
| $ | 0.10 |
| $ | 0.10 |
| $ | 0.11 |
Diluted |
| 0.32 |
|
| 0.17 |
|
| 0.10 |
|
| 0.11 |
|
| 0.10 |
|
| 0.10 |
|
| 0.11 |
Cash dividends |
| 0.200 |
|
| 0.200 |
|
| 0.200 |
|
| 0.295 |
|
| 0.295 |
|
| 0.295 |
|
| 0.295 |
Book value - period-end |
| 20.44 |
|
| 20.27 |
|
| 19.76 |
|
| 19.85 |
|
| 20.06 |
|
| 20.23 |
|
| 20.40 |
Market value - period-end |
| 20.64 |
|
| 21.78 |
|
| 23.62 |
|
| 23.58 |
|
| 21.79 |
|
| 19.91 |
|
| 20.81 |