
Press Release
Chemical Financial Corporation Announces Second Quarter Operating Results
MIDLAND, Mich., July 22 /PRNewswire-FirstCall/ -- Aloysius J. Oliver, Chairman of Chemical Financial Corporation (Nasdaq: CHFC), today announced second quarter net income of $13.67 million or $.58 per diluted share, up $.13 million as compared with net income of $13.54 million, or $.57 per diluted share for the second quarter of 2002. This represents an increase of 1.8% in earnings per share and a 1.0% increase in net income for the second quarter 2003. The returns on average assets and average equity during the second quarter of 2003 were 1.54% and 12.4%, respectively, as compared with 1.54% and 13.7%, respectively, for the second quarter of 2002.
Net interest income decreased $1.67 million, or 4.5%, to $35.03 million in the second quarter of 2003, as compared to the second quarter 2002. The decrease, in part, was due to the low interest rate environment and the decrease in the yield on our earning assets which is outpacing the decrease in our cost of funds. The Corporation's earnings were positively affected by an increase in noninterest income of $2.09 million, or 26.2%. This increase was primarily due to higher service charge income of $1.23 million. Operating expenses increased by $.18 million, or .8%.
For the six months ended June 30, 2003, the Corporation earned net income of $27.68 million or $1.17 per share, as compared to net income of $27.25 million, or $1.15 per share for the first six months of 2002. This represents a 1.7% increase in earnings per share.
Total assets of the Corporation at June 30, 2003 were $3.59 billion, up 3.2% over the $3.48 billion in total assets reported at June 30, 2002. Total deposits at June 30, 2003 were $2.88 billion, up 3.6% over total deposits of $2.78 billion at June 30, 2002. Total loans increased 7.2% during the latest twelve months, from $2.09 billion at June 30, 2002, to $2.24 billion in outstanding loans at June 30, 2003.
The Corporation's provision for loan losses for the quarter ended June 30, 2003 was $1.27 million as compared to net loan losses of $1.48 million. As of June 30, 2003, the allowance for loan losses was $30.48 million and represented 1.36% of total loans. Non-performing loans were $10.21 million, or .46% of total loans at the current quarter-end.
Shareholders' equity at June 30, 2003 was $443 million, or $18.73 per share, and represented 12.4% of total assets and a tangible equity to asset ratio of 11.4% as of June 30, 2003.
Chemical Financial Corporation is the fourth largest bank holding company headquartered in Michigan. The Company's three subsidiary banks operate 129 "Chemical Bank" offices and 2 loan production offices spread over 32 counties in the lower peninsula of Michigan.
Chemical Financial Corporation common stock trades on The NASDAQ Stock Market under the symbol CHFC and is one of the issues comprising the NASDAQ Financial 100 index.
Forward Looking Statements
This press release contains forward-looking statements. Words such as "anticipates," "believes," "estimates," "expects," "intends," "should," "will," variations of such words and similar expressions are intended to identify forward-looking statements. These statements reflect management's current beliefs as to the expected outcomes of future events and are not guarantees of future performance. These statements involve certain risks, uncertainties and assumptions 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. Factors that could cause a difference include, among others: changes in the national and local economies or market conditions; changes in interests rates and banking regulations; the impact of competition from traditional or new sources; and the possibility that anticipated cost savings and revenue enhancements from mergers and acquisitions and bank consolidations may not be fully realized at all or within the expected time frames. These and other factors that may emerge could cause decisions and actual results to differ materially from current expectations. Chemical undertakes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.
Consolidated Statements of Financial Position (Unaudited) Chemical Financial Corporation and Subsidiaries June 30, December 31, June 30, (In thousands) 2003 2002 2002 Assets: Cash and demand deposits due from banks $122,712 $148,112 $135,309 Federal funds sold 41,200 69,900 49,600 Interest-bearing deposits with unaffiliated banks 6,096 53,135 25,992 Investment securities taxable 1,040,945 1,076,292 1,034,830 Investment securities nontaxable 47,877 51,690 54,759 Total Investment Securities 1,088,822 1,127,982 1,089,589 Commercial loans 329,929 327,438 324,116 Real estate construction loans 106,747 108,589 112,331 Real estate commercial loans 527,400 481,084 468,261 Real estate residential loans 753,014 648,286 649,720 Consumer loans 519,727 509,789 531,197 Total Loans 2,236,817 2,075,186 2,085,625 Less: Allowance for loan losses 30,482 30,672 31,011 Net Loans 2,206,335 2,044,514 2,054,614 Premises and equipment 40,795 42,767 43,092 Intangible assets 39,472 40,489 42,548 Other assets 42,397 41,994 36,240 Total Assets $3,587,829 $3,568,893 $3,476,984 Liabilities and Shareholders' Equity: Noninterest-bearing deposits $530,010 $475,933 $458,604 Interest-bearing deposits 2,347,416 2,371,339 2,319,251 Total Deposits 2,877,426 2,847,272 2,777,855 FHLB borrowings 148,573 157,393 167,528 Other borrowings - short term 88,949 104,212 97,836 Interest payable and other liabilities 29,741 29,677 26,609 Total Liabilities 3,144,689 3,138,554 3,069,828 Shareholders' Equity: Common stock, $1 par value 23,665 23,684 22,552 Surplus 324,213 325,149 290,887 Retained earnings 78,558 62,721 81,218 Accumulated other comprehensive income 16,704 18,785 12,499 Total Shareholders' Equity 443,140 430,339 407,156 Total Liabilities and Shareholders' Equity $3,587,829 $3,568,893 $3,476,984 Consolidated Statements of Income (Unaudited) Chemical Financial Corporation and Subsidiaries Quarter Ended Six Months Ended June 30, June 30, (In thousands, except per share data) 2003 2002 2003 2002 Interest Income: Interest and fees on loans $36,155 $39,001 $72,569 $79,545 Interest on investment securities: Taxable 9,778 12,965 20,458 24,959 Nontaxable 639 750 1,316 1,532 Total Interest on Investment Securities 10,417 13,715 21,774 26,491 Interest on federal funds sold 107 381 443 1,073 Interest on deposits with unaffiliated banks 18 185 157 448 Total Interest Income 46,697 53,282 94,943 107,557 Interest Expense: Interest on deposits 9,453 14,112 20,293 29,654 Interest on FHLB borrowings 2,077 2,238 4,190 4,448 Interest on other borrowings - short term 138 235 307 501 Total Interest Expense 11,668 16,585 24,790 34,603 Net Interest Income 35,029 36,697 70,153 72,954 Provision for loan losses 1,272 1,352 1,567 2,005 Net Interest Income after Provision for Loan Losses 33,757 35,345 68,586 70,949 Noninterest Income: Service charges on deposit accounts 4,227 3,001 8,090 5,615 Other charges and fees for customer services 1,869 1,739 3,812 3,559 Mortgage banking revenue 1,861 1,622 3,408 4,178 Trust services revenue 1,791 1,615 3,518 3,296 Investment securities gains (losses) 308 (40) 492 (84) Other 30 57 80 83 Total Noninterest Income 10,086 7,994 19,400 16,647 Operating Expenses: Salaries and employee benefits 13,594 13,434 27,283 27,248 Occupancy 1,937 1,895 3,901 3,774 Equipment 2,079 1,929 4,128 4,127 Other 5,572 5,747 10,896 11,551 Total Operating Expenses 23,182 23,005 46,208 46,700 Income Before Income Taxes 20,661 20,334 41,778 40,896 Federal income taxes 6,991 6,799 14,094 13,651 Net Income $13,670 $13,535 $27,684 $27,245 Net income per share: Basic $0.58 $0.57 $1.17 $1.15 Diluted 0.58 0.57 1.17 1.15 Cash dividends per share 0.25 0.23 0.50 0.46 Average shares outstanding: Basic 23,684 23,681 23,690 23,668 Diluted 23,735 23,757 23,738 23,738 Financial Summary (Unaudited) Chemical Financial Corporation and Subsidiaries (Dollars in thousands) Quarter Ended Six Months Ended June 30, June 30, 2003 2002 2003 2002 Average Balances Total assets $3,563,035 $3,520,071 $3,568,663 $3,532,803 Total interest-earning assets 3,368,826 3,287,811 3,383,787 3,308,226 Total loans 2,173,962 2,073,797 2,137,557 2,104,677 Total deposits 2,856,439 2,803,846 2,859,093 2,823,488 Total shareholders' equity 441,358 397,080 437,694 395,310 Quarter Ended Six Months Ended June 30, June 30, 2003 2002 2003 2002 Key Ratios (annualized where applicable) Net interest margin 4.22% 4.54% 4.24% 4.51% Efficiency ratio 50.9% 50.9% 51.1% 51.5% Return on average assets 1.54% 1.54% 1.56% 1.56% Return on average shareholders' equity 12.4% 13.7% 12.8% 13.9% Average shareholders' equity as a percent of average assets 12.4% 11.3% 12.3% 11.2% Tangible shareholders' equity as a percent of total assets 11.4% 10.6% Total risk-based capital ratio 18.7% 18.3% June 30, 2003 2002 Credit Quality Statistics Nonaccrual loans $5,139 $8,534 Loans 90 or more days past due and still accruing interest 5,066 3,815 Total nonperforming loans 10,205 12,349 Repossessed assets acquired (RAA) 5,659 1,021 Total nonperforming assets 15,864 13,370 Net loan charge-offs 1,757 1,988 Allowance for loan losses as a percent of total loans 1.36% 1.49% Allowance for loan losses as a percent of nonperforming loans 299% 251% Nonperforming loans as a percent of total loans 0.46% 0.59% Nonperforming assets as a percent of total loans plus RAA 0.71% 0.64% Net loan charge-offs as a percent of average loans 0.17% 0.19% June 30, 2003 2002 Additional Data Goodwill $27,940 $27,940 Core deposit intangibles 8,992 10,835 Mortgage servicing rights 2,402 3,601 Amortization of intangibles 1,989 1,497 Selected Quarterly Information (Unaudited) Chemical Financial Corporation and Subsidiaries (Dollars in thousands) 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 2003 2003 2002 2002 2002 Summary of Operations Interest income $46,697 $48,246 $51,036 $52,475 $53,282 Interest expense 11,668 13,122 14,673 16,076 16,585 Net interest income 35,029 35,124 36,363 36,399 36,697 Provision for loan losses 1,272 295 1,013 747 1,352 Net interest income after provision for loan losses 33,757 34,829 35,350 35,652 35,345 Noninterest income 10,086 9,314 9,275 8,588 7,994 Noninterest expense 23,182 23,026 23,692 23,134 23,005 Income taxes 6,991 7,103 7,251 7,088 6,799 Net income 13,670 14,014 13,682 14,018 13,535 Per Common Share Data Net income: Basic $0.58 $0.59 $0.58 $0.59 $0.57 Diluted 0.58 0.59 0.57 0.59 0.57 Cash dividends 0.25 0.25 0.23 0.23 0.23 Book value 18.73 18.45 18.31 17.78 17.19
SOURCE Chemical Financial Corporation -0- 07/22/2003 /CONTACT: David B. Ramaker, President & CEO, +1-989-839-5269, or Lori A. Gwizdala, Executive Vice President & Chief Financial Officer, +1-989-839-5358, both of Chemical Financial Corporation / /Company News On-Call: http://www.prnewswire.com/gh/cnoc/comp/157448.html/ /Web site: http://chemicalbankmi.com / (CHFC) CO: Chemical Financial Corporation ST: Michigan IN: FIN SU: ERN KN-AM -- DETU004 -- 2513 07/22/2003 08:00 EDT http://www.prnewswire.com