EXHIBIT 99(a)
FINANCIAL STATEMENTS AND SCHEDULES
CHEMICAL FINANCIAL CORPORATION
401 (K) SAVINGS PLAN
YEARS ENDED DECEMBER 31, 1995 AND
DECEMBER 31, 1994 WITH
REPORT OF INDEPENDENT AUDITORS
REPORT OF INDEPENDENT AUDITORS
Administrative Committee of the
Chemical Financial Corporation 401 (k) Savings Plan
We have audited the accompanying statements of assets,
liabilities and participants' equity of the Chemical Financial Corporation
401 (k) Savings Plan as of December 31, 1995 and 1994 and the related
statements of changes in participants' equity for the years then ended.
These financial statements are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the assets, liabilities and
participants' equity of the Plan at December 31, 1995 and 1994, and the
changes in such participants' equity for the years then ended in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investments and reportable transactions as of
and for the year ended December 31, 1995 are presented for purposes of
complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974, and are not a required part of the financial statements. The
supplemental schedules have been subjected to the auditing procedures
applied in our audit of the 1995 financial statements and, in our opinion,
are fairly stated in all material respects in relation to the 1995
financial statements taken as a whole.
S/ ERNST & YOUNG LLP
February 16, 1996
NOTES TO FINANCIAL STATEMENTS
CHEMICAL FINANCIAL CORPORATION 401 (K) SAVINGS PLAN
DECEMBER 31, 1995
NOTE A - - SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared under the accrual
basis of accounting in accordance with generally accepted accounting
principles. As a result, the financial statements include accrual amounts
for investment income and contributions which are not reported on the
Annual Return/Report of Employee Benefit Plan (Form 5500) filed with the
Department of Labor.
Investments are stated at aggregate fair value. Securities
traded on a national securities exchange are valued at the last reported
sales price on the last business day of the Plan year. Investments traded
in the over-the-counter market and listed securities for which no sale was
reported on that date are valued at the last reported bid price.
Unrealized appreciation (depreciation) in the aggregate fair
value of investments represents the change in the difference between
aggregate fair value and the cost of investments. The realized gain or
loss on sale of investments is the difference between the proceeds received
and the cost of the specific investments sold. Realized gains and losses
are different than the related amounts reported on Form 5500 which are
computed as the difference between the proceeds received and the fair value
at the beginning of the year as prescribed by the Department of Labor
regulations.
Expenses incurred in connection with the operation of the Plan
are borne by Chemical Financial Corporation.
NOTE B - - DESCRIPTION OF THE PLAN
The Plan is a voluntary, defined-contribution plan covering all
eligible employees of the Corporation and subsidiaries.
The Plan provides for the deferral of salaries, wages and bonuses
in accordance with Section 401 (k) of the Internal Revenue Code. Employees
of the Corporation or any of its subsidiaries are eligible for
participation upon attaining age 21 and completing one year of service. At
December 31, 1995 there were 400 participants in the Plan. Participants
may be eligible to contribute up to 10% of their annual compensation, up to
a maximum of $9,240 in both 1995 and 1994. The employer made no
contributions to the Plan during 1995 or 1994. Participants may direct
their contributions into an intermediate bond, an index fund, a stock and
bond fund, a money market or Chemical Financial Corporation common stock
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
fund or a combination of these funds, and may elect to change the
percentage directed to each fund quarterly. All participant contributions
are fully vested. Participant loans are permitted under the Plan. These
loans are subject to a strict set of rules established by laws and
regulations. As of December 31, 1995 the Plan had four participant loans
outstanding at interest rates ranging from 9.50%-11.75%.
Information about the plan agreement and the vesting and benefit
provisions is contained in the Summary Plan Description contained in the
Chemical Financial Corporation Employee Handbook and is available along
with information regarding investment alternatives from the Plan
Administrator and Personnel Departments.
The Corporation, acting through its Board of Directors, has the
right to amend or terminate the Plan at any time.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE C - - INVESTMENTS
During the years ended December 31, 1995 and December 31, 1994
the Plan's net appreciation (depreciation) in the fair value of investments
(including investments bought, sold, as well as held during the year) is
summarized as follows:
1995 1994
Chemical Financial Corporation Common Stock Fund $ 291,513 $ (13,297)
Intermediate Bond Fund 3,364 (4,690)
Index Fund 42,819 (4,887)
Stock and Bond Fund 21,488 (2,827)
$ 359,184 $ (25,701)
The fair value of individual investments that represent 5% or more of the
Plan's net assets are as follows:
DECEMBER 31
1995 1994
Chemical Financial Corporation Common Stock $ 1,081,080 $ 569,480
Federated Investors Mutual Funds:
Federated Short-Intermediate Government Trust 127,111 106,631
Max-Cap Fund 460,200 283,040
Stock and Bond Fund, Inc. 56,354
Treasury Obligations Fund 159,338 187,867
Fidelity Investments-Puritan Fund 219,730
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE D -- TRANSACTIONS WITH PARTIES-IN-INTEREST
THE FOLLOWING IS A SUMMARY OF TRANSACTIONS (AT COST) WITH PARTIES-IN-INTEREST:
CHEMICAL FEDERATED MUTUAL FUNDS FIDELITY
FINANCIAL STOCK MONEY INVESTMENTS-
CORP. COMMON INTERMEDIATE INDEX AND BOND MARKET STOCK AND
STOCK FUND BOND FUND FUND FUND FUND BOND FUND
Balance at December 31, 1993 $ 338,932 $ 146,423 $ 182,967 $ 23,000 $ 112,369 $
Purchased in 1994 212,698 9,704 103,800 35,916 631,670
Sales in 1994 (6,425) (45,408) (556,172)
Distributions in 1994 (11,817)
Balance at December 31, 1994 533,388 110,719 286,767 58,916 187,867
Purchases in 1995 268,711 28,707 143,302 656,802 $ 203,072
Sales in 1995 (25,115) (11,910) (7,601) (58,916) (685,331) (2,368)
Distributions in 1995 (18,845)
Balance at December 31, 1995 $ 758,139 $ 127,516 $ 422,468 $ 0 $ 159,338 $ 200,704
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE E - - INCOME TAX STATUS
The Internal Revenue Service has ruled that the Plan
qualifies under Section 401(a) of the Internal Revenue Code (IRC) and
therefore, is not subject to tax under present tax laws. Once
qualified, the Plan is required to operate in conformity with the IRC
in order to maintain its qualification. The Plan Sponsor is not aware
of any course of action or series of events that would adversely
affect the Plan's qualified status.
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SCHEDULE OF ASSETS HELD FOR INVESTMENT
CHEMICAL FINANCIAL CORPORATION 401(K) SAVINGS PLAN
DECEMBER 31, 1995 AND FOR THE YEAR THEN ENDED
DESCRIPTION OF INVESTMENT INCLUDING
IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST,
LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST CURRENT
Chemical Financial Corporation Common Stock - 28,080 shares
Common Stock at $38.50/share current value $ 758,139 $ 1,081,080
Federated Investors Mutual Funds:
Federated Short-Intermediate
Government Trust Intermediate Bond Fund - 12,187 units 127,516 127,111
Max-Cap Fund Index Fund - 34,139 units 422,468 460,200
Treasury Obligations Fund Money Market Fund - 159,338 units,
$1,00/unit current value 159,338 159,338
Fidelity Investments-Puritan Fund Stock and Bond Fund - 12,918 units 200,704 219,730
Total Mutual Funds 910,026 966,379
Four loans at interest rates ranging
from 9.50% - 11.75% and maturing
Participant Loans 3/13/97 - 2/29/2000 13,135 13,135
TOTAL INVESTMENTS $ 1,681,300 $ 2,060,594
There were no investment assets reportable as acquired and disposed of during
the year.
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STATEMENT OF ASSETS, LIABILITIES AND PARTICIPANTS' EQUITY
CHEMICAL FINANCIAL CORPORATION 401 (K) SAVINGS PLAN
DECEMBER 31, 1995
CHEMICAL CASH
STOCK FINANCIAL AND
INTERMEDIATE AND CORPORATION MONEY PARTICIPANT
BOND INDEX BOND STOCK MARKET LOAN
FUND FUND FUND FUND FUND FUND TOTAL
ASSETS:
Investments at fair value:
Chemical Financial Corporation
Common Stock $ 1,081,080 $ 1,081,080
Federated Investors Mutual Funds:
Federated Short-Intermediate
Government Trust $ 127,111 127,111
Max-Cap Fund $ 460,200 460,200
Treasury Obligations Fund 1,302 5,043 $ 3,018 10,145 $ 138,647 $ 1,183 159,338
Fidelity Investments-Puritan Fund 219,730 219,730
Participation loans 13,135 13,135
128,413 465,243 222,748 1,091,225 138,647 14,318 2,060,594
Employee contributions receivable 1,262 3,671 3,053 8,298 1,504 17,788
Cash and accrued income 593 48 9 69 656 59 1,434
Total Assets (equal to participant's $ 130,268 $ 468,962 $ 225,810 $ 1,099,592 $ 140,807 $ 14,377 $ 2,079,816
equity)
See accompanying notes.
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STATEMENT OF ASSETS, LIABILITIES AND PARTICIPANTS' EQUITY
CHEMICAL FINANCIAL CORPORATION 401 (K) SAVINGS PLAN
DECEMBER 31, 1994
CHEMICAL CASH
STOCK FINANCIAL AND
INTERMEDIATE AND CORPORATION MONEY PARTICIPANT
BOND INDEX BOND STOCK MARKET LOAN
FUND FUND FUND FUND FUND FUND TOTAL
ASSETS:
Investments at fair value:
Chemical Financial Corporation
Common Stock $ 569,480 $ 569,480
Federated Investors Mutual Funds:
Federated Short-Intermediate
Government Trust $ 106,631 106,631
Max-Cap Fund $ 283,040 283,040
Stock and Bond Fund, Inc. $ 56,354 56,354
Treasury Obligations Fund 7,890 38,529 20,432 12,161 $ 107,290 $ 1,565 187,867
114,521 321,569 76,786 581,641 107,290 1,565 1,203,372
Participation loan 1,714 1,714
Cash and accrued income 1,873 4,312 1,456 7,353 1,843 8 16,845
Total Assets (equal to participant's $ 116,394 $ 325,881 $ 78,242 $ 588,994 $ 109,133 $ 3,287 $ 1,221,931
equity)
See accompanying notes.
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STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY
CHEMICAL FINANCIAL CORPORATION 401(K) SAVINGS PLAN
YEAR ENDED DECEMBER 31, 1995
CHEMICAL CASH
STOCK FINANCIAL AND
INTERMEDIATE AND CORPORATION MONEY PARTICIPANT
BOND INDEX BOND STOCK MARKET LOAN
FUND FUND FUND FUND FUND FUND TOTAL
Additions:
Interest and dividend income $ 6,902 $ 70,850 $ 11,177 $ 18,443 $ 7,253 $ 1,223 $ 115,848
Employee contributions 30,587 88,305 68,760 211,717 38,340 437,709
37,489 159,155 79,937 230,160 45,593 1,223 553,557
Deductions:
Participants' accounts
distributed upon withdrawal (3,783) (13,846) (6,437) (23,290) (7,500) (54,856)
Net transfers between funds (23,196) (45,047) 52,580 12,215 (6,419) 9,867 - -
Net realized and unrealized
appreciation (depreciation)
in fair value of investments:
Realized (319) 1,360 (100) 4,664 5,605
Unrealized 3,683 41,459 21,588 286,849 353,579
Net increase 13,874 143,081 147,568 510,598 31,674 11,090 857,885
Participants' equity at
beginning of year 116,394 325,881 78,242 588,994 109,133 3,287 1,221,931
Participants' equity at
end of year $ 130,268 $ 468,962 $ 225,810 $ 1,099,592 $ 140,807 $ 14,377 $ 2,079,816
See accompanying notes.
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STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY
CHEMICAL FINANCIAL CORPORATION 401(K) SAVINGS PLAN NET INCREASE (DECREASE)
YEAR ENDED DECEMBER 31, 1994
CHEMICAL CASH
STOCK FINANCIAL AND
INTERMEDIATE AND CORPORATION MONEY PARTICIPANT
BOND INDEX BOND STOCK MARKET LOAN
FUND FUND FUND FUND FUND FUND TOTAL
Additions:
Interest and dividend income $ 5,548 $ 8,092 $ 2,096 $ 10,879 $ 3,717 $ 386 $ 30,718
Employee contributions 33,118 105,407 42,956 172,588 29,910 383,979
38,666 113,499 45,052 183,467 33,627 386 414,697
Deductions:
Participants' accounts
distributed upon withdrawal (24,689) (2,498) (22) (14,625) (515) (42,349)
Net transfers between funds (42,261) 26,249 11,508 28,892 (21,900) (2,488) - -
Net realized and unrealized
appreciation (depreciation)
in fair value of investments:
Realized (527) 1,884 1,357
Unrealized (4,163) (4,887) (2,827) (15,181) (27,058)
Net increase (decrease) (32,974) 132,363 53,711 184,437 11,212 (2,102) 346,647
Participants' equity at
beginning of year 149,368 193,518 24,531 404,557 97,921 5,389 875,284
Participants' equity at
end of year $ 116,394 $ 325,881 $ 78,242 $ 588,994 $ 109,133 $ 3,287 $ 1,221,931
See accompanying notes.
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SCHEDULE OF REPORTABLE TRANSACTIONS
CHEMICAL FINANCIAL CORPORATION
401(K) SAVINGS PLAN
YEAR ENDED DECEMBER 31, 1995
CURRENT
DESCRIPTION OF ASSET VALUE ON
INTEREST RATE AND EXPENSE TRANS-
MATURITY IN PURCHASE SELLING LEASE INCURRED WITH COST ACTION NET GAIN
IDENTITY OF PARTY INVOLVED CASE OF A LOAN PRICE PRICE RENTAL TRANSACTION OF ASSET DATE (LOSS)
Category i) A transaction with
respect to any asset
involving an amount in
excess of 5% of the current
value of plan assets:
Federal Investors Index Fund:
4,900 units $ 13.36 $ 65,464 $ 65,464
Money Market Fund:
63,590 units 1.00 63,590 63,590
65,693 units $ 1.00 65,693 65,693 $ --
Fidelity Investments Stock and Bond Fund:
4,900 units 15.09 73,941 73,941
3,865 units 15.14 58,516 58,516
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SCHEDULE OF REPORTABLE TRANSACTIONS
CHEMICAL FINANCIAL CORPORATION
401(K) SAVINGS PLAN
YEAR ENDED DECEMBER 31, 1995
CURRENT
DESCRIPTION OF ASSET VALUE ON
INTEREST RATE AND EXPENSE TRANS-
MATURITY IN PURCHASE SELLING LEASE INCURRED WITH COST ACTION NET GAIN
IDENTITY OF PARTY INVOLVED CASE OF A LOAN PRICE PRICE RENTAL TRANSACTION OF ASSET DATE (LOSS)
Category iii) A series of trans-
actions involving securities
of the same issue which,
when aggregated, involve
an amount in excess of 5%
of the current value of
plan assets:
Chemical Financial
Corporation Common Stock:
47 purchases $268,711 $268,711
32 sales 25,115 29,779 $4,664
Federated Investors Index Fund:
22 purchases 143,302 143,302
4 sales 7,601 8,961 1,360
Money Market Fund:
217 purchases 656,802 656,802
144 sales 685,331 685,331 --
Fidelity Investments Stock and Bond Fund:
26 purchases 203,072 203,072
2 sales 2,368 2,575 207
There were no category ii) or iv) reportable transactions.
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