EXHIBIT 99(b)
Audited Financial Statements
Chemical Financial Corporation
1992 Stock Purchase Plan
for Subsidiary Directors
December 31, 1995
AUDITED FINANCIAL STATEMENTS
CHEMICAL FINANCIAL CORPORATION
1992 STOCK PURCHASE PLAN
FOR SUBSIDIARY DIRECTORS
DECEMBER 31, 1995
TABLE OF CONTENTS
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . 2
Statement of Financial Condition . . . . . . . . . . . . . . . . . . . . 3
Statement of Income and Changes in Plan Equity . . . . . . . . . . . . . 4
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . 5
All Schedules (Nos. I, II and III) for which provision is made in
the applicable accounting regulations of the Securities and Exchange
Commission are inapplicable and therefore have been omitted.
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REPORT OF INDEPENDENT AUDITORS
Plan Administrator
Chemical Financial Corporation
1992 Stock Purchase Plan for
Subsidiary Directors
We have audited the accompanying statements of financial
condition of the Chemical Financial Corporation 1992 Stock Purchase Plan
for Subsidiary Directors as of December 31, 1995 and 1994 and the related
statements of income and changes in plan equity for the years then ended.
These financial statements are the responsibility of the Plan's
administrator. Our responsibility is to express an opinion on these
financial statements based on our audits.
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 the administrator, 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 financial position of the
Chemical Financial Corporation 1992 Stock Purchase Plan for Subsidiary
Directors at December 31, 1995 and 1994, and the results of its operation
and changes in its plan equity for the years then ended in conformity with
generally accepted accounting principles.
S/ ERNST & YOUNG LLP
January 19, 1996
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CHEMICAL FINANCIAL CORPORATION
1992 STOCK PURCHASE PLAN
FOR SUBSIDIARY DIRECTORS
STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31,
1995 1994
ASSETS
Cash $ 1,089 $ 1,424
Common stock receivable of Chemical
Financial Corporation, at market value -
(7,375 shares at a cost of $239,025 at
December 31, 1995 and 9,143 shares
at a cost of $245,900 at December 31,
1994) - (Notes 1 and 2) 293,156 243,813
Total assets $ 294,245 $ 245,237
LIABILITIES AND PLAN EQUITY
Plan equity (49 participants at December 31,
1995 and December 31, 1994) $ 294,245 $ 245,237
See accompanying notes.
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CHEMICAL FINANCIAL CORPORATION
1992 STOCK PURCHASE PLAN
FOR SUBSIDIARY DIRECTORS
STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY
YEARS ENDED DECEMBER 31
1995 1994
ADDITIONS
Participant contributions (Note 3) $ 235,800 $ 243,325
Dividend equivalents 2,944 2,670
Other income 399
238,744 246,394
DEDUCTIONS
Plan distributions 243,867 185,735
5,123 60,659
Net realized and unrealized appreciation
(depreciation) in fair value of investments
(Note 1): 54,131 (2,087)
Net increase 49,008 58,572
Plan equity at beginning of year 245,237 186,665
Plan equity at end of year $ 294,245 $ 245,237
See accompanying notes.
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CHEMICAL FINANCIAL CORPORATION
1992 STOCK PURCHASE PLAN
FOR SUBSIDIARY DIRECTORS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
VALUATION OF COMMON STOCK RECEIVABLE
Common stock receivable of Chemical Financial Corporation is
recorded at the fair market value of the number of shares receivable at the
end of the period. Market value is based on the closing bid price of the
Corporation's stock at year end ($39.75 per share at December 31, 1995 and
$26.67 per share at December 31, 1994).
Unrealized appreciation or depreciation in the fair value of the
underlying shares of common stock of Chemical Financial Corporation
represents the change in the difference between aggregate fair value and
the cost of the common stock receivable of Chemical Financial Corporation.
The realized gain or loss in the fair value of the underlying shares of
common stock of Chemical Financial Corporation is determined by computing
the difference between the average cost per share and the market value per
share on the distribution of the common stock of Chemical Financial
Corporation to the participants as of the distribution date.
INCOME
Dividend equivalents and fractional share interests are accrued
on the Corporation's dividend or other record date.
CONTRIBUTIONS
Contributions are accounted for on the accrual basis.
NOTE 2 - DESCRIPTION OF THE PLAN
The Chemical Financial Corporation 1992 Stock Purchase Plan for
Subsidiary Directors (the Plan) was implemented by Chemical Financial
Corporation (the Corporation) on April 30, 1992. The Plan is designed to
provide non-employee directors and advisory directors of the Corporation's
subsidiaries, who are neither directors or employees of the Corporation,
with a convenient method of acquiring Corporation stock.
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CHEMICAL FINANCIAL CORPORATION
1992 STOCK PURCHASE PLAN
FOR SUBSIDIARY DIRECTORS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 2 - DESCRIPTION OF THE PLAN (continued)
Subsidiary directors and advisory directors, who elect to
participate in the Plan, may elect to contribute to the Plan fifty percent
or one hundred percent of their director board fees and/or fifty percent or
one hundred percent of their director committee fees, earned as directors
or advisory directors of the Corporation's subsidiaries. Participant
contributions to the Plan are made by the Corporation's subsidiaries on
behalf of each electing participant. Amounts remitted to the Plan are
credited to a separate cash account for each participant. As of the last
day of each month, each participant's cash account is debited for the
purchase of whole shares of the Corporation's stock and credited to a
separate participant stock account. The stock purchased under the Plan
during the calendar year is issued by the Corporation directly to the
participants in the following calendar year, in the month of January. The
Plan provides for dividend equivalents to be credited to each participant's
cash account, as of the dividend record date of the Corporation's common
stock. Dividend equivalents are calculated by multiplying the
Corporation's dividend rate by the number of shares of common stock in each
participant's stock account, as of the Corporation's dividend record date.
The Plan also provides for an appropriate credit to each participant's
stock account for stock dividends, stock splits or other distributions of
the Corporation's common stock by the Corporation. Fractional shares
calculated as a result of the above adjustments are converted to cash based
on the market price of the Corporation's common stock, and are credited to
each participant's cash account. Plan participants may terminate their
participation in the Plan, at any time, by written notice of withdrawal to
the Corporation. Participants will cease to be eligible to participate in
the Plan when they cease to serve as directors or advisory directors of
subsidiaries of the Corporation. Upon withdrawal from the Plan, each
participant will receive the shares of common stock of the Corporation in
their participant stock account and the cash in their participant cash
account.
The Corporation expects to maintain the Plan indefinitely,
however it reserves the right to terminate or amend the Plan at any time,
provided, however, that no termination or amendment shall affect or
diminish any participant's right to the benefit of contributions made by
him/her prior to the date of such amendment or termination.
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CHEMICAL FINANCIAL CORPORATION
1992 STOCK PURCHASE PLAN
FOR SUBSIDIARY DIRECTORS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 2 - DESCRIPTION OF THE PLAN (continued)
The Plan provides that all expenses of the Plan and its administration
shall be paid by Chemical Financial Corporation.
The Plan is not qualified under Sections 401(a) or 501(a) of the
Internal Revenue Code of 1986, as amended. The Plan does not provide for income
taxes because any income is taxable to the participants. Participants in the
Plan must treat as taxable income the contributions made to the Plan by the
Corporation's subsidiaries on their behalf. Dividend equivalents and any other
cash credited to the participants' cash accounts are taxable to the participants
for Federal and state income tax purposes in the year such dividend equivalent
or cash is credited to the participant cash account. Upon disposition of the
common stock of Chemical Financial Corporation purchased under the Plan,
participants must treat any gain or loss as long-term or short-term capital gain
or loss depending upon when such disposition occurs.
NOTE 3 - CONTRIBUTIONS
Contributions by participating companies are as follows:
YEARS ENDED DECEMBER 31
1995 1994
PARTICIPATING COMPANY
Chemical Bank & Trust $ 66,600 $ 79,450
Chemical Bank Bay Area 54,000 55,925
Chemical Bank Central 20,500 20,100
Chemical Bank Huron 600 600
Chemical Bank Michigan 22,650 22,300
Chemical Bank Montcalm 17,100 16,550
Chemical Bank North 4,200 4,000
Chemical Bank South 16,600 18,200
Chemical Bank West 8,800 8,600
Chemical Bank Key State 12,950 10,000
CFC Data Corp 11,800 7,600
Total Contributions $ 235,800 $ 243,325
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