EXHIBIT 99.1
For further information:
David B. Ramaker, CEO
Lori A. Gwizdala, CFO
989-839-5350
Chemical Financial Corporation Reports First Quarter 2013 Results
MIDLAND, MI, April 15, 2013 -- -- Chemical Financial Corporation (NASDAQ:CHFC) today announced 2013 first quarter net income of $13.2 million, or $0.48 per diluted share, compared to 2012 fourth quarter net income of $11.7 million, or $0.42 per diluted share, and 2012 first quarter net income of $12.4 million, or $0.45 per diluted share.
"Despite economic conditions that can best be described as tepid, we continue to post strong earnings growth as a result of the combination of lower credit-related costs and higher organic balance sheet growth," noted David B. Ramaker, Chairman, Chief Executive Officer and President of the Corporation. "While asset quality and loan loss metric improvements are expected to continue, we will increasingly look to the combination of asset growth and cost controls to drive future earnings growth. We are confident that our community-focused, relationship-oriented approach and strong financial condition will continue to make Chemical Bank the financial institution of choice for the businesses and residents in the Michigan markets we serve."
Net income of $13.2 million in the first quarter of 2013 was $1.5 million, or 13.5%, higher than the fourth quarter of 2012 largely due to a $2.0 million reduction in the provision for loan losses, which was driven by the continued improvement in the credit quality of the loan portfolio.
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Noninterest income increased in the first quarter of 2013 over the fourth quarter of 2012. Operating expenses were the same in both quarters. Higher operating expenses in the first quarter of 2013, largely attributable to the 21 branch banking offices acquired in December 2012 (branch acquisition transaction), were offset by lower performance-based compensation expense and the absence of acquisition-related expenses ($1.8 million incurred in the fourth quarter of 2012).
Net income in the first quarter of 2013 was $0.8 million, or 7.0%, higher than the first quarter of 2012, largely due to a reduction in the provision for loan losses of $2.0 million. The Corporation also recognized an increase of $1.5 million in net interest income and significant growth in noninterest income in the first quarter of 2013 over the first quarter of 2012. These increases were offset by higher operating costs in the first quarter of 2013, largely attributable to the branch acquisition transaction.
The Corporation's return on average assets was 0.91% during the first quarter of 2013, compared to 0.83% in the fourth quarter of 2012 and 0.92% in the first quarter of 2012. The Corporation's return on average shareholders' equity was 9.0% in the first quarter of 2013, compared to 7.7% in the fourth quarter of 2012 and 8.7% in the first quarter of 2012.
The net interest margin (on a tax-equivalent basis) was 3.54% in the first quarter of 2013, compared to 3.74% in the fourth quarter of 2012 and 3.76% in the first quarter of 2012. The decrease in the net interest margin in the first quarter of 2013 was primarily attributable to the branch acquisition transaction, in which the Corporation acquired $340 million in cash and $44
2
million in loans. The Corporation invested the cash acquired in the branch acquisition transaction in short-term investment securities and intends to deploy these assets into loans by growing its market share in the new markets.
Net interest income was $47.7 million in the first quarter of 2013, $0.3 million lower than the fourth quarter of 2012, although $1.5 million higher than the first quarter of 2012. The increase in net interest income in the first quarter of 2013 over the first quarter of 2012 resulted largely from the branch acquisition transaction. The increase in net interest income attributable to loan growth was largely offset by the net unfavorable impact of interest-earning assets and interest-bearing liabilities repricing during the twelve months ended March 31, 2013.
The provision for loan losses (provision) was $3.0 million in the first quarter of 2013, compared to $5.0 million in both the fourth quarter of 2012 and the first quarter of 2012. Net loan charge-offs were $4.7 million in the first quarter of 2013, compared to $5.2 million in the fourth quarter of 2012 and $5.5 million in the first quarter of 2012.
Noninterest income was $16.2 million in the first quarter of 2013, compared to $14.7 million in the fourth quarter of 2012 and $13.3 million in the first quarter of 2012. Noninterest income in the first quarter of 2013 included $0.8 million of investment securities gains that were attributable to the Corporation's sales of $32 million of available-for-sale investment securities. The proceeds from the sales of the investment securities were used to prepay all of the Corporation's Federal Home Loan Bank (FHLB) advances totaling $34.3 million. The Corporation incurred prepayment fees of $0.8 million in conjunction with the prepayment of the
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FHLB advances, with these prepayment fees included in other operating expenses. Net interest income for the remainder of 2013 will be positively impacted by the prepayment of the FHLB advances. During the first quarter of 2012, the Corporation recognized a gain of $1.3 million in noninterest income on the sale of its merchant card servicing business. Excluding the gains from the sales of the investment securities and merchant card servicing business (non-recurring gains), noninterest income in the first quarter of 2013 was $0.7 million higher than the fourth quarter of 2012 and $3.4 million higher than the first quarter of 2012.
The increase in noninterest income of $0.7 million in the first quarter of 2013 (excluding non-recurring gains) over the fourth quarter of 2012 was primarily driven by an increase in revenue generated from customers' debit card usage of $0.7 million and an increase in wealth management revenue of $0.5 million. The increase in debit card revenue was partially attributable to the branch acquisition transaction. These increases were partially offset by a decrease in mortgage banking revenue of $0.5 million.
The increase in noninterest income of $3.4 million in the first quarter of 2013 over the first quarter of 2012 (excluding non-recurring gains) was attributable to increases across all major categories of noninterest income and was driven by growth in the volume of services provided and additional fees/revenue earned as a result of the branch acquisition transaction. Revenue generated from customers' debit card usage was $1.0 million higher, mortgage banking revenue was $0.8 million higher, service charges and fees on deposit accounts were $0.7 million higher and wealth management revenue was $0.5 million higher.
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Operating expenses were $42.0 million in both the first quarter of 2013 and fourth quarter of 2012, compared to $37.0 million in the first quarter of 2012. As previously discussed, operating expenses in the first quarter of 2013 included $0.8 million of prepayment fees incurred to prepay the Corporation's FHLB advances. Operating expenses in the fourth quarter of 2012 included acquisition-related transaction expenses of $1.8 million. Excluding the prepayment fees and acquisition-related transaction expenses (non-recurring expenses), operating expenses in the first quarter of 2013 were $1.0 million higher than the fourth quarter of 2012 and $4.2 million higher than the first quarter of 2012.
The $1.0 million increase in operating expenses in the first quarter of 2013 over the fourth quarter of 2012 (excluding non-recurring expenses) was primarily attributable to incremental operating costs associated with the branch acquisition transaction. The incremental operating costs were partially offset by lower credit-related expenses and performance-based compensation. Credit-related expenses, comprised of loan collection costs and other real estate (ORE) net costs, of $1.0 million in the first quarter of 2013 were $0.2 million lower than the fourth quarter of 2012. Performance-based compensation expense of $1.3 million in the first quarter of 2013 was $1.1 million lower than the fourth quarter of 2012.
The $4.2 million increase in operating expenses in the first quarter of 2013 (excluding non-recurring expenses) over the first quarter of 2012 was primarily attributable to incremental operating costs associated with the branch acquisition transaction and a combination of merit and market-driven compensation increases provided to the Corporation's employees effective January 1, 2013.
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The Corporation's efficiency ratio was 64.4% in the first quarter of 2013, 63.0% in the fourth quarter of 2012 and 62.1% in the first quarter of 2012.
Total assets were $5.99 billion at March 31, 2013, up from $5.92 billion at December 31, 2012 and $5.45 billion at March 31, 2012. The increase in total assets during the twelve months ended March 31, 2013 was primarily attributable to the branch acquisition transaction that added $404 million in assets on the acquisition date. The Corporation has maintained significant amounts of funds at the Federal Reserve Bank (FRB), with $477 million in balances held at the FRB at March 31, 2013, compared to $514 million at December 31, 2012 and $353 million at March 31, 2012.
Total loans were $4.19 billion at March 31, 2013, up from $4.17 billion at December 31, 2012 and $3.84 billion at March 31, 2012. During the three and twelve months ended March 31, 2013, total loans increased $17.5 million, or 0.4%, and $342 million, or 8.9%, respectively. The increase in loans during the twelve months ended March 31, 2013 was attributable to a combination of improving economic conditions, increased market share, and the acquisition of $44 million of loans in the branch acquisition transaction. The average yield on the loan portfolio was 4.69% in the first quarter of 2013, compared to 4.79% in the fourth quarter of 2012 and 5.10% in the first quarter of 2012.
Investment securities were $961 million at March 31, 2013, compared to $817 million at December 31, 2012 and $867 million at March 31, 2012. The average yield of the investment
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securities portfolio was 2.19% in the first quarter of 2013, compared to 2.21% in the fourth quarter of 2012 and 2.28% in the first quarter of 2012.
Total deposits were $5.01 billion at March 31, 2013, up from $4.92 billion at December 31, 2012 and $4.46 billion at March 31, 2012. The Corporation experienced an increase in total deposits of $546 million, or 12.2%, during the twelve months ended March 31, 2013, with the increase largely attributable to the branch acquisition transaction. The Corporation acquired $404 million of deposits on the date of acquisition. Remaining brokered deposits acquired in the Corporation's 2010 acquisition of Byron Bank were $44 million at March 31, 2013, compared to $62 million at December 31, 2012 and $94 million at March 31, 2012. The repricing of matured customer certificates of deposit and the decrease in interest rates on various interest-bearing deposit accounts to reflect lower market interest rates resulted in the Corporation's average cost of funds declining to 0.36% in the first quarter of 2013 from 0.41% in the fourth quarter of 2012 and 0.54% in the first quarter of 2012.
During the first quarter of 2013, the Corporation paid off all of its FHLB advances outstanding. FHLB advances totaled $34.3 million at December 31, 2012 and $42.1 million at March 31, 2012.
At March 31, 2013, the Corporation's tangible equity to assets ratio and total risk-based capital ratio were 8.1% and 13.3%, respectively, compared to 8.1% and 13.2%, respectively, at December 31, 2012 and 8.7% and 13.7%, respectively, at March 31, 2012. The decreases in the
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Corporation's equity ratios from March 31, 2012 to March 31, 2013 were attributable to an increase in average assets that resulted from the branch acquisition transaction.
At March 31, 2013, the Corporation's book value was $21.97 per share, compared to $21.69 per share at December 31, 2012 and $21.10 per share at March 31, 2012. At March 31, 2013, the Corporation's tangible book value was $17.34 per share, compared to $17.03 per share at December 31, 2012 and $16.84 per share at March 31, 2012.
The credit quality of the Corporation's loan portfolio continued to show improvement during the first quarter of 2013. 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 $86.4 million at March 31, 2013, compared to $90.9 million at December 31, 2012 and $98.5 million at March 31, 2012. At March 31, 2013, nonperforming loans as a percentage of total loans were 2.06%, compared to 2.18% at December 31, 2012 and 2.56% at March 31, 2012.
Other real estate and repossessed assets totaled $18.2 million at March 31, 2013, compared to $18.5 million at December 31, 2012 and $25.9 million at March 31, 2012.
At March 31, 2013, the allowance for loan losses of the originated loan portfolio was $82.3 million, or 2.16% of originated loans, compared to $84.0 million, or 2.22% of originated loans, at December 31, 2012 and $85.6 million, or 2.54% of originated loans, at March 31, 2012. The allowance for loan losses of the originated loan portfolio as a percentage of nonperforming loans
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was 95% at March 31, 2013, compared to 92% at December 31, 2012 and 87% at March 31, 2012. The allowance for loan losses of the acquired loan portfolio was $0.5 million at both March 31, 2013 and December 31, 2012, compared to $2.2 million at March 31, 2012. Management believes that the Corporation's acquired loan portfolio totaling $374 million at March 31, 2013 was performing, overall, at or slightly better than original expectations.
Chemical Financial Corporation is the second largest banking company headquartered and operating branch offices in Michigan. The Corporation operates through a single subsidiary bank, Chemical Bank, with 156 banking offices spread over 38 counties in the lower peninsula of Michigan. At March 31, 2013, the Corporation had total assets of $6.0 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.
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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 (Corporation). Words such as "anticipates," "believes," "confident," "continue," "estimates," "expects," "focus," "forecasts," "intends," "is likely," "judgment," "opinion," "opportunities," "plans," "predicts," "projects," "should," "trend," "will," and variations of such words and 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, 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 cash flows from acquired loans, future effects of new or changed accounting standards, future opportunities for acquisitions, the impact of branch acquisition transactions on the Corporation's business, opportunities to increase top line revenues, the Corporation's ability to grow its core franchise, and future cost savings. 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. 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.
Risk factors include, but are not limited to, the risk factors described in Item 1A of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2012. 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.
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Chemical Financial Corporation Announces First Quarter Operating Results |
Consolidated Statements of Financial Position (Unaudited)
Chemical Financial Corporation
| March 31
2013 | | December 31
2012 | | March 31
2012 | |
| (In thousands, except per share data) | |
Assets | | | | | | | | | |
Cash and cash equivalents: | | | | | | | | | |
Cash and cash due from banks | $ | 101,501 | | $ | 142,467 | | $ | 120,435 | |
Interest-bearing deposits with the Federal Reserve Bank | | 477,225 | | | 513,668 | | | 353,243 | |
Total cash and cash equivalents | | 578,726 | | | 656,135 | | | 473,678 | |
Investment securities: | | | | | | | | | |
Available-for-sale | | 703,622 | | | 586,809 | | | 676,007 | |
Held-to-maturity | | 257,749 | | | 229,977 | | | 191,297 | |
Total investment securities | | 961,371 | | | 816,786 | | | 867,304 | |
Loans held-for-sale | | 14,850 | | | 17,665 | | | 25,080 | |
| | | | | | | | | |
Loans: | | | | | | | | | |
Commercial | | 1,038,115 | | | 1,002,722 | | | 903,935 | |
Commercial real estate | | 1,162,383 | | | 1,161,861 | | | 1,095,793 | |
Real estate construction and land development | | 98,007 | | | 100,237 | | | 101,157 | |
Residential mortgage | | 872,454 | | | 883,835 | | | 861,301 | |
Consumer installment and home equity | | 1,014,302 | | | 1,019,080 | | | 880,912 | |
Total loans | | 4,185,261 | | | 4,167,735 | | | 3,843,098 | |
Allowance for loan losses | | (82,834 | ) | | (84,491 | ) | | (87,785 | ) |
Net loans | | 4,102,427 | | | 4,083,244 | | | 3,755,313 | |
| | | | | | | | | |
Premises and equipment | | 73,501 | | | 75,458 | | | 66,661 | |
Goodwill | | 120,164 | | | 120,164 | | | 113,414 | |
Other intangible assets | | 14,902 | | | 15,388 | | | 10,939 | |
Interest receivable and other assets | | 124,587 | | | 132,412 | | | 139,130 | |
Total Assets | $ | 5,990,528 | | $ | 5,917,252 | | $ | 5,451,519 | |
| | | | | | | | | |
Liabilities | | | | | | | | | |
Deposits: | | | | | | | | | |
Noninterest-bearing | $ | 1,086,986 | | $ | 1,085,857 | | $ | 914,523 | |
Interest-bearing | | 3,920,372 | | | 3,835,586 | | | 3,546,861 | |
Total deposits | | 5,007,358 | | | 4,921,443 | | | 4,461,384 | |
Interest payable and other liabilities | | 30,931 | | | 54,716 | | | 32,809 | |
Short-term borrowings | | 347,484 | | | 310,463 | | | 335,082 | |
Federal Home Loan Bank (FHLB) advances | | - | | | 34,289 | | | 42,120 | |
Total liabilities | | 5,385,773 | | | 5,320,911 | | | 4,871,395 | |
| | | | | | | | | |
Shareholders' Equity: | | | | | | | | | |
Preferred stock, no par value per share | | - | | | - | | | - | |
Common stock, $1 par value per share | | 27,532 | | | 27,499 | | | 27,491 | |
Additional paid-in capital | | 433,648 | | | 433,195 | | | 431,549 | |
Retained earnings | | 174,209 | | | 166,766 | | | 145,195 | |
Accumulated other comprehensive loss | | (30,634 | ) | | (31,119 | ) | | (24,111 | ) |
Total shareholders' equity | | 604,755 | | | 596,341 | | | 580,124 | |
Total Liabilities and Shareholders' Equity | $ | 5,990,528 | | $ | 5,917,252 | | $ | 5,451,519 | |
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Chemical Financial Corporation Announces First Quarter Operating Results |
Consolidated Statements of Income (Unaudited)
Chemical Financial Corporation
| Three Months Ended
March 31 |
| 2013 | | 2012 |
| (In thousands, except per share data) |
Interest Income | | | | | |
Interest and fees on loans | $ | 47,905 | | $ | 48,256 |
Interest on investment securities: | | | | | |
Taxable | | 2,438 | | | 2,565 |
Tax-exempt | | 1,564 | | | 1,485 |
Dividends on nonmarketable equity securities | | 151 | | | 130 |
Interest on deposits with the Federal Reserve Bank | | 321 | | | 228 |
Total Interest Income | | 52,379 | | | 52,664 |
| | | | | |
Interest Expense | | | | | |
Interest on deposits | | 4,566 | | | 6,102 |
Interest on short-term borrowings | | 114 | | | 104 |
Interest on Federal Home Loan Bank advances | | 47 | | | 263 |
Total Interest Expense | | 4,727 | | | 6,469 |
Net Interest Income | | 47,652 | | | 46,195 |
Provision for loan losses | | 3,000 | | | 5,000 |
Net Interest Income after Provision for Loan Losses | | 44,652 | | | 41,195 |
| | | | | |
Noninterest Income | | | | | |
Service charges and fees on deposit accounts | | 5,195 | | | 4,505 |
Wealth management revenue | | 3,445 | | | 2,921 |
Other charges and fees for customer services | | 4,651 | | | 3,365 |
Mortgage banking revenue | | 2,012 | | | 1,185 |
Gain on sale of investment securities | | 847 | | | - |
Gain on sale of merchant card services | | - | | | 1,280 |
Other | | 89 | | | 69 |
Total Noninterest Income | | 16,239 | | | 13,325 |
| | | | | |
Operating Expenses | | | | | |
Salaries, wages and employee benefits | | 23,369 | | | 20,569 |
Occupancy | | 3,663 | | | 3,154 |
Equipment and software | | 3,450 | | | 3,118 |
Other | | 11,475 | | | 10,130 |
Total Operating Expenses | | 41,957 | | | 36,971 |
Income Before Income Taxes | | 18,934 | | | 17,549 |
Federal income tax expense | | 5,700 | | | 5,175 |
Net Income | $ | 13,234 | | $ | 12,374 |
| | | | | |
Net income per common share: | | | | | |
Basic | $ | 0.48 | | $ | 0.45 |
Diluted | | 0.48 | | | 0.45 |
| | | | | |
Key Ratios: | | | | | |
Return on average assets | | 0.91% | | | 0.92% |
Return on average shareholders' equity | | 9.0% | | | 8.7% |
Net interest margin | | 3.54% | | | 3.76% |
Efficiency ratio | | 64.4% | | | 62.1% |
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Chemical Financial Corporation Announces First Quarter Operating Results |
Financial Summary (Unaudited)
Chemical Financial Corporation
| Three Months Ended |
| March 31
2013 | | Dec 31
2012 | | Sept 30
2012 | | June 30
2012 | | March 31
2012 |
| (Dollars in thousands) |
Average Balances | | | | | | | | | | | | | | |
Total assets | $ | 5,924,820 | | $ | 5,576,422 | | $ | 5,433,491 | | $ | 5,360,598 | | $ | 5,396,420 |
Total interest-earning assets | | 5,579,789 | | | 5,251,531 | | | 5,105,101 | | | 5,044,629 | | | 5,061,882 |
Total loans | | 4,152,570 | | | 4,077,918 | | | 3,987,928 | | | 3,901,321 | | | 3,824,604 |
Total deposits | | 4,950,956 | | | 4,590,370 | | | 4,464,582 | | | 4,383,628 | | | 4,416,273 |
Total interest-bearing liabilities | | 4,221,638 | | | 3,926,582 | | | 3,823,954 | | | 3,817,753 | | | 3,903,986 |
Total shareholders' equity | | 599,406 | | | 600,794 | | | 591,683 | | | 582,873 | | | 574,261 |
| | | | | | | | | | | | | | |
Key Ratios (annualized where applicable) | | | | | | | | | | | | | | |
Net interest margin (taxable equivalent basis) | | 3.54% | | | 3.74% | | | 3.76% | | | 3.80% | | | 3.76% |
Efficiency ratio | | 64.4% | | | 63.0% | | | 59.3% | | | 58.7% | | | 62.1% |
Return on average assets | | 0.91% | | | 0.83% | | | 0.96% | | | 1.04% | | | 0.92% |
Return on average shareholders' equity | | 9.0% | | | 7.7% | | | 8.8% | | | 9.6% | | | 8.7% |
Average shareholders' equity as a | | | | | | | | | | | | | | |
percent of average assets | | 10.1% | | | 10.8% | | | 10.9% | | | 10.9% | | | 10.6% |
Capital ratios (period end): | | | | | | | | | | | | | | |
Tangible shareholders' equity as a | | | | | | | | | | | | | | |
percent of total assets | | 8.1% | | | 8.1% | | | 8.8% | | | 9.0% | | | 8.7% |
Total risk-based capital ratio | | 13.3% | | | 13.2% | | | 13.6% | | | 13.6% | | | 13.7% |
| March 31
2013 | | Dec 31
2012 | | Sept 30
2012 | | June 30
2012 | | March 31
2012 |
Credit Quality Statistics | | | | | | | | | | | | | | |
Originated Loans | $ | 3,810,989 | | $ | 3,775,140 | | $ | 3,606,547 | | $ | 3,515,110 | | $ | 3,370,279 |
Acquired Loans | | 374,272 | | | 392,595 | | | 412,612 | | | 447,232 | | | 472,819 |
Nonperforming Assets: | | | | | | | | | | | | | | |
Nonperforming loans | | 86,417 | | | 90,854 | | | 90,877 | | | 92,811 | | | 98,548 |
Other real estate and repossessed assets
(ORE) | |
18,194
| | |
18,469
| | |
19,467
| | |
23,509
| | |
25,944
|
Total nonperforming assets | | 104,611 | | | 109,323 | | | 110,344 | | | 116,320 | | | 124,492 |
| | | | | | | | | | | | | | |
Performing troubled debt restructurings | | 30,723 | | | 31,369 | | | 30,406 | | | 26,383 | | | 27,177 |
| | | | | | | | | | | | | | |
Allowance for loan losses-originated as a
percent of: | | | | | | | | | | | | | | |
Total originated loans | | 2.16% | | | 2.22% | | | 2.33% | | | 2.40% | | | 2.54% |
Nonperforming loans | | 95% | | | 92% | | | 93% | | | 91% | | | 87% |
| | | | | | | | | | | | | | |
Nonperforming loans as a percent of total
loans | |
2.06%
| | |
2.18%
| | |
2.26%
| | |
2.34%
| | |
2.56%
|
Nonperforming assets as a percent of: | | | | | | | | | | | | | | |
Total loans plus ORE | | 2.49% | | | 2.61% | | | 2.73% | | | 2.92% | | | 3.22% |
Total assets | | 1.75% | | | 1.85% | | | 1.98% | | | 2.17% | | | 2.28% |
| | | | | | | | | | | | | | |
Net loan charge-offs (year-to-date): | | | | | | | | | | | | | | |
Originated | | 4,657 | | | 20,142 | | | 14,939 | | | 10,622 | | | 5,548 |
Acquired | | - | | | 2,200 | | | 2,200 | | | - | | | - |
Total loan charge-offs (year-to-date) | | 4,657 | | | 22,342 | | | 17,139 | | | 10,622 | | | 5,548 |
Net loan charge-offs as a percent of | | | | | | | | | | | | | | |
average loans (year-to-date, annualized) | | 0.45% | | | 0.57% | | | 0.59% | | | 0.55% | | | 0.58% |
| March 31
2013 | | Dec 31
2012 | | Sept 30
2012 | | June 30
2012 | | March 31
2012 |
Additional Data - Intangibles | | | | | | | | | | | | | | |
Goodwill | $ | 120,164 | | $ | 120,164 | | $ | 113,414 | | $ | 113,414 | | $ | 113,414 |
Core deposit intangibles | | 11,417 | | | 11,910 | | | 6,777 | | | 7,144 | | | 7,512 |
Mortgage servicing rights (MSR) | | 3,485 | | | 3,478 | | | 3,466 | | | 3,463 | | | 3,427 |
Amortization of core deposit intangibles
(quarter only) | |
493
| | |
467
| | |
367
| | |
368
| | |
367
|
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Chemical Financial Corporation Announces First Quarter Operating Results |
Average Balances, Tax Equivalent Interest and Effective Yields and Rates (Unaudited)*
| Three Months Ended March 31, 2013 | |
|
Average
Balance
| | Tax
Equivalent
Interest | |
Effective
Yield/Rate
| |
Assets | (Dollars in thousands) | |
Interest-earning assets: | | | | | | | | |
Loans** | $ | 4,167,614 | | $ | 48,361 | | 4.69 | % |
Taxable investment securities | | 666,809 | | | 2,438 | | 1.46 | |
Tax-exempt investment securities | | 215,727 | | | 2,388 | | 4.43 | |
Other interest-earning assets | | 25,572 | | | 151 | | 2.39 | |
Interest-bearing deposits with the Federal Reserve Bank | | 504,067 | | | 321 | | 0.26 | |
Total interest-earning assets | | 5,579,789 | | | 53,659 | | 3.89 | |
Less: allowance for loan losses | | 84,978 | | | | | | |
Other Assets: | | | | | | | | |
Cash and cash due from banks | | 117,620 | | | | | | |
Premises and equipment | | 74,608 | | | | | | |
Interest receivable and other assets | | 237,781 | | | | | | |
Total assets | $ | 5,924,820 | | | | | | |
| | | | | | | | |
Liabilities and shareholders' equity | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | |
Interest-bearing demand deposits | $ | 1,102,386 | | $ | 252 | | 0.09 | % |
Savings deposits | | 1,337,415 | | | 296 | | 0.09 | |
Time deposits | | 1,451,681 | | | 4,018 | | 1.12 | |
Short-term borrowings | | 322,308 | | | 114 | | 0.14 | |
FHLB advances | | 7,848 | | | 47 | | 2.43 | |
Total interest-bearing liabilities | | 4,221,638 | | | 4,727 | | 0.45 | |
Noninterest-bearing deposits | | 1,059,474 | | | - | | - | |
Total deposits and borrowed funds | | 5,281,112 | | | 4,727 | | 0.36 | |
Interest payable and other liabilities | | 44,302 | | | | | | |
Shareholders' equity | | 599,406 | | | | | | |
Total liabilities and shareholders' equity | $ | 5,924,820 | | | | | | |
Net Interest Spread (Average yield earned on interest-earning | | | | | | | | |
assets minus average rate paid on interest-bearing liabilities) | | | | | | | 3.44 | % |
Net Interest Income (FTE) | | | | $ | 48,932 | | | |
Net Interest Margin (Net Interest Income (FTE) divided by | | | | | | | | |
total average interest-earning assets) | | | | | | | 3.54 | % |
* | Taxable equivalent basis using a federal income tax rate of 35%. |
** | 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. |
14
Chemical Financial Corporation Announces First Quarter Operating Results |
Nonperforming Assets (Unaudited)
Chemical Financial Corporation
| March 31
2013 | | Dec 31
2012 | | Sept 30
2012 | | June 30
2012 | | March 31
2012 |
| (Dollars in thousands) |
Nonperforming Loans: | | | | | | | | | | | | | | |
Nonaccrual loans: | | | | | | | | | | | | | | |
Commercial | $ | 12,186 | | $ | 14,601 | | $ | 15,217 | | $ | 12,673 | | $ | 11,443 |
Commercial real estate | | 35,849 | | | 37,660 | | | 41,311 | | | 41,691 | | | 46,870 |
Real estate construction and land development | | 4,273 | | | 5,401 | | | 6,664 | | | 3,485 | | | 3,809 |
Residential mortgage | | 10,407 | | | 10,164 | | | 11,307 | | | 12,613 | | | 12,687 |
Consumer installment and home equity | | 3,536 | | | 3,472 | | | 3,825 | | | 3,994 | | | 4,344 |
Total nonaccrual loans | | 66,251 | | | 71,298 | | | 78,324 | | | 74,456 | | | 79,153 |
Accruing loans contractually past due 90 days | | | | | | | | | | | | | | |
or more as to interest or principal payments: | | | | | | | | | | | | | | |
Commercial | | 4 | | | - | | | 273 | | | 300 | | | 1,005 |
Commercial real estate | | 177 | | | 87 | | | 247 | | | 269 | | | 75 |
Real estate construction and land development | | - | | | - | | | - | | | - | | | - |
Residential mortgage | | 196 | | | 1,503 | | | 431 | | | 840 | | | 333 |
Consumer installment and home equity | | 874 | | | 769 | | | 1,147 | | | 1,157 | | | 1,233 |
Total accruing loans contractually past due | | | | | | | | | | | | | | |
90 days or more as to interest or principal
payments | |
1,251
| | |
2,359
| | |
2,098
| | |
2,566
| | |
2,646
|
Nonperforming troubled debt restructurings: | | | | | | | | | | | | | | |
Commercial loan portfolio | | 14,587 | | | 13,876 | | | 6,553 | | | 11,691 | | | 11,258 |
Consumer loan portfolio | | 4,328 | | | 3,321 | | | 3,902 | | | 4,098 | | | 5,491 |
Total nonperforming troubled debt
restructurings | |
18,915
| | |
17,197
| | |
10,455
| | |
15,789
| | |
16,749
|
Total nonperforming loans | | 86,417 | | | 90,854 | | | 90,877 | | | 92,811 | | | 98,548 |
Other real estate and repossessed assets | | 18,194 | | | 18,469 | | | 19,467 | | | 23,509 | | | 25,944 |
Total nonperforming assets | $ | 104,611 | | $ | 109,323 | | $ | 110,344 | | $ | 116,320 | | $ | 124,492 |
15
Chemical Financial Corporation Announces First Quarter Operating Results |
Summary of Loan Loss Experience (Unaudited)
Chemical Financial Corporation
| Three Months Ended | |
| March 31
2013 | | Dec 31
2012 | | Sept 30
2012 | | June 30
2012 | | March 31
2012 | |
| (Dollars in thousands) | |
Allowance for loan losses - originated loan
portfolio | | | | | | | | | | | | | | | |
Allowance for loan losses - originated, at
beginning of period |
$
|
83,991
| |
$
|
84,194
| |
$
|
84,511
| |
$
|
85,585
| |
$
|
86,733
| |
Provision for loan losses - originated | | 3,000 | | | 5,000 | | | 4,000 | | | 4,000 | | | 4,400 | |
Loans charged off: | | | | | | | | | | | | | | | |
Commercial | | (1,359 | ) | | (1,623 | ) | | (551 | ) | | (974 | ) | | (1,079 | ) |
Commercial real estate | | (2,060 | ) | | (1,532 | ) | | (1,952 | ) | | (2,178 | ) | | (2,268 | ) |
Real estate construction and land
development | |
(97
|
)
| |
(1,238
|
)
| |
(51
|
)
| |
(45
|
)
| |
(32
|
)
|
Residential mortgage | | (734 | ) | | (1,224 | ) | | (1,357 | ) | | (1,140 | ) | | (1,717 | ) |
Consumer installment and home equity | | (1,224 | ) | | (1,504 | ) | | (1,485 | ) | | (1,835 | ) | | (1,451 | ) |
Total loan charge-offs | | (5,474 | ) | | (7,121 | ) | | (5,396 | ) | | (6,172 | ) | | (6,547 | ) |
Recoveries of loans previously charged off: | | | | | | | | | | | | | | | |
Commercial | | 160 | | | 278 | | | 135 | | | 140 | | | 191 | |
Commercial real estate | | 50 | | | 1,202 | | | 325 | | | 298 | | | 421 | |
Real estate construction and land
development | |
1
| | |
-
| | |
-
| | |
-
| | |
2
| |
Residential mortgage | | 161 | | | 104 | | | 237 | | | 199 | | | 22 | |
Consumer installment and home equity | | 445 | | | 334 | | | 382 | | | 461 | | | 363 | |
Total loan recoveries | | 817 | | | 1,918 | | | 1,079 | | | 1,098 | | | 999 | |
Net loan charge-offs - originated | | (4,657 | ) | | (5,203 | ) | | (4,317 | ) | | (5,074 | ) | | (5,548 | ) |
Allowance for loan losses - originated, at
end of period | |
82,334
| | |
83,991
| | |
84,194
| | |
84,511
| | |
85,585
| |
| | | | | | | | | | | | | | | |
Allowance for loan losses - acquired loan
portfolio | | | | | | | | | | | | | | | |
Allowance for loan losses - acquired, at
beginning of period | |
500
| | |
500
| | |
2,200
| | |
2,200
| | |
1,600
| |
Provision for loan losses - acquired | | - | | | - | | | 500 | | | - | | | 600 | |
Net loan charge-offs - acquired (commercial) | | - | | | - | | | (2,200 | ) | | - | | | - | |
Allowance for loan losses - acquired, at
end of period | |
500
| | |
500
| | |
500
| | |
2,200
| | |
2,200
| |
| | | | | | | | | | | | | | | |
Total allowance for loan losses | $ | 82,834 | | $ | 84,491 | | $ | 84,694 | | $ | 86,711 | | $ | 87,785 | |
16
Chemical Financial Corporation Announces First Quarter Operating Results |
Selected Quarterly Information (Unaudited)
Chemical Financial Corporation
| 1st Qtr.
2013 | | 4th Qtr.
2012 | | 3rd Qtr.
2012 | | 2nd Qtr.
2012 | | 1st Qtr.
2012 |
| (Dollars in thousands, except per share data) |
Summary of Operations | | | | | | | | | | | | | | |
Interest income | $ | 52,379 | | $ | 53,126 | | $ | 52,501 | | $ | 52,467 | | $ | 52,664 |
Interest expense | | 4,727 | | | 5,132 | | | 5,591 | | | 6,021 | | | 6,469 |
Net interest income | | 47,652 | | | 47,994 | | | 46,910 | | | 46,446 | | | 46,195 |
Provision for loan losses | | 3,000 | | | 5,000 | | | 4,500 | | | 4,000 | | | 5,000 |
Net interest income after provision | | | | | | | | | | | | | | |
for loan losses | | 44,652 | | | 42,994 | | | 42,410 | | | 42,446 | | | 41,195 |
Noninterest income | | 16,239 | | | 14,676 | | | 12,719 | | | 13,944 | | | 13,325 |
Operating expenses | | 41,957 | | | 42,008 | | | 36,723 | | | 36,199 | | | 36,971 |
Income before income taxes | | 18,934 | | | 15,662 | | | 18,406 | | | 20,191 | | | 17,549 |
Federal income tax expense | | 5,700 | | | 4,000 | | | 5,300 | | | 6,325 | | | 5,175 |
Net income | $ | 13,234 | | $ | 11,662 | | $ | 13,106 | | $ | 13,866 | | $ | 12,374 |
| | | | | | | | | | | | | | |
Net interest margin | | 3.54% | | | 3.74% | | | 3.76% | | | 3.80% | | | 3.76% |
| | | | | | | | | | | | | | |
Per Common Share Data | | | | | | | | | | | | | | |
Net income: | | | | | | | | | | | | | | |
Basic | $ | 0.48 | | $ | 0.42 | | $ | 0.48 | | $ | 0.50 | | $ | 0.45 |
Diluted | | 0.48 | | | 0.42 | | | 0.48 | | | 0.50 | | | 0.45 |
Cash dividends declared | | 0.21 | | | 0.21 | | | 0.21 | | | 0.20 | | | 0.20 |
Book value - period-end | | 21.97 | | | 21.69 | | | 21.75 | | | 21.42 | | | 21.10 |
Tangible book value - period-end | | 17.34 | | | 17.03 | | | 17.52 | | | 17.17 | | | 16.84 |
Market value - period-end | | 26.38 | | | 23.76 | | | 24.20 | | | 21.50 | | | 23.44 |
17
