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
