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Press Release

Chemical Financial Corporation Reports First Quarter 2012 Results

Company Release - 4/16/2012 8:00 AM ET

MIDLAND, Mich., April 16, 2012 (GLOBE NEWSWIRE) -- Chemical Financial Corporation (Nasdaq:CHFC) today announced 2012 first quarter net income of $12.4 million, or $0.45 per diluted share, compared to 2011 fourth quarter net income of $11.2 million, or $0.41 per diluted share, and 2011 first quarter net income of $9.2 million, or $0.33 per diluted share.

"We continued to create momentum entering the new year and our earnings performance continued its upward trend. Our 2012 first quarter earnings of $0.45 per share were 36 percent higher than 2011 first quarter earnings per share and marked the highest level of quarterly earnings per share Chemical Financial has reported since the fourth quarter of 2006. In addition to a lower loan loss provision and higher net interest income, this quarter's earnings, as compared to the first quarter of 2011, were aided by an after-tax nonrecurring gain of $0.9 million from the sale of our merchant processing business to First Data, which bolstered noninterest income," said David B. Ramaker, Chairman, Chief Executive Officer and President of the Corporation.

"We are benefiting from continued stability in the Michigan economy, and have seen pockets of increasing economic strength. At the same time, we remain cognizant of the challenges at hand, and diligent in our efforts to proactively address asset quality issues," added Ramaker. "We feel that we are uniquely positioned to continue our pattern of long-term growth and profitability, both organically and via acquisition opportunities that we believe will arise as our state's banking industry consolidates," said Ramaker.

The increase in net income in the first quarter of 2012 over the fourth quarter of 2011 was attributable to a $1.1 million increase in noninterest income and a $1.5 million decrease in operating expenses that was partially offset by a decrease in net interest income of $0.9 million. The increase in net income in the first quarter of 2012 over the first quarter of 2011 was attributable to a $1.0 million increase in net interest income, a $2.5 million decrease in the provision for loan losses and a $1.9 million increase in noninterest income that was partially offset by a $0.9 million increase in operating expenses.

The Corporation's return on average assets during the first quarter of 2012 was 0.92 percent, up from 0.83 percent in the fourth quarter of 2011 and 0.70 percent in the first quarter of 2011. The Corporation's return on average equity was 8.7 percent in the first quarter of 2012, up from 7.7 percent in the fourth quarter of 2011 and 6.6 percent in the first quarter of 2011.

Net interest income was $46.2 million in the first quarter of 2012, down $0.9 million, or 1.9 percent, from the fourth quarter of 2011 and up $1.0 million, or 2.2 percent, from the first quarter of 2011.

The decrease in net interest income in the first quarter of 2012, as compared to the fourth quarter of 2011, was primarily attributable to the timing of certain sources of interest income. The positive impact of average loans being $52 million higher in the first quarter of 2012, as compared to the fourth quarter of 2011, was offset by the net impact of interest-earning assets and interest-bearing liabilities repricing during the quarter.

The increase in net interest income in the first quarter of 2012 over the first quarter of 2011 was primarily attributable to an increase in average loans of $152 million, or 4.1 percent, between these two quarters that was partially offset by the net impact of interest-earning assets and interest-bearing liabilities repricing during the twelve months ended March 31, 2012.  

The net interest margin (on a tax-equivalent basis) in the first quarter of 2012 was 3.76 percent, compared to 3.84 percent in the fourth quarter of 2011 and 3.78 percent in the first quarter of 2011.

The provision for loan losses was $5.0 million in the first quarter of 2012, compared to $5.1 million in the fourth quarter of 2011 and $7.5 million in the first quarter of 2011. Net loan charge-offs were $5.5 million in both the first quarter of 2012 and fourth quarter of 2011, compared to $7.4 million in the first quarter of 2011.

Noninterest income was $12.6 million in the first quarter of 2012, up from $11.5 million in the fourth quarter of 2011 and $10.8 million in the first quarter of 2011.  The higher level of noninterest income in the first quarter of 2012 was primarily attributable to the sale of the Corporation's merchant card servicing business to First Data in the first quarter of 2012 that resulted in a nonrecurring gain on the sale of $1.3 million. The transaction will provide additional merchant services to customers and will also provide the Corporation with future revenue sharing opportunities. 

Operating expenses were $36.3 million in the first quarter of 2012, down from $37.8 million in the fourth quarter of 2011 and up from $35.4 million in the first quarter of 2011. The decrease in operating expenses of $1.5 million in the first quarter of 2012, as compared to the fourth quarter of 2011, was largely attributable to a reduction in credit-related operating expenses. During the fourth quarter of 2011, the Corporation recognized net expense of $1.9 million applicable to writedowns of other real estate (ORE) and net realized gains/losses on ORE sales, compared to a net gain of $0.3 million in the first quarter of 2012. The increase in operating expenses of $0.9 million in the first quarter of 2012, as compared to the first quarter of 2011, was primarily attributable to higher compensation costs that were partially offset by lower loan collection costs, consulting expenses and FDIC premiums.  The Corporation's efficiency ratio was 60.4 percent in the first quarter of 2012, compared to 63.1 percent in the fourth quarter of 2011 and 61.8 percent in the first quarter of 2011.

Total assets were $5.45 billion at March 31, 2012, up from $5.34 billion at both December 31, 2011 and March 31, 2011. The increase in total assets during the first quarter of 2012 was largely attributable to an increase in interest-bearing balances held at the Federal Reserve Bank (FRB) resulting from an increase in customer deposits. The Corporation continues to maintain significant amounts of funds generated from deposit growth at the FRB, and thus maintains a high level of available liquidity, with $348 million in balances held at the FRB at March 31, 2012, compared to $256 million at December 31, 2011 and $520 million at March 31, 2011.

Total loans were $3.84 billion at March 31, 2012, compared to $3.83 billion at December 31, 2011 and $3.68 billion at March 31, 2011. The increase in total loans of $161 million, or 4.4 percent, during the twelve months ended March 31, 2012 was attributable to a combination of improving economic conditions and higher loan demand, as well as the Corporation increasing its market share. During the twelve months ended March 31, 2012, commercial loans increased $83 million, or 10.1 percent, real estate commercial loans increased $21 million, or 1.9 percent, real estate residential loans increased $52 million, or 6.5 percent, and consumer installment and home equity loans increased $43 million, or 5.1 percent, while real estate construction loans decreased $38 million, or 27 percent. Loan demand eased in the first quarter of 2012 with an increase in total loans of $12 million, or an annualized growth rate of 1.2 percent. The average yield on the loan portfolio was 5.10 percent in the first quarter of 2012, compared to 5.25 percent in the fourth quarter of 2011 and 5.48 percent in the first quarter of 2011.

Investment securities were $867 million at March 31, 2012, compared to $851 million at December 31, 2011 and $750 million at March 31, 2011.

Total deposits were $4.46 billion at March 31, 2012, compared to $4.37 billion at December 31, 2011 and $4.38 billion at March 31, 2011. The Corporation experienced an increase of $95 million, or 2.2 percent, in total deposits during the first quarter of 2012, primarily attributable to increases in consumer demand deposit and savings accounts. Federal Home Loan Bank (FHLB) advances totaled $42.1 million at March 31, 2012, compared to $43.1 million at December 31, 2011 and $72.9 million at March 31, 2011. Brokered deposits totaled $94 million at March 31, 2012, compared to $95 million at December 31, 2011 and $151 million at March 31, 2011. The repricing of matured customer certificates of deposit and various interest-bearing deposit accounts resulted in the Corporation's average cost of funds declining to 0.67 percent in the first quarter of 2012 from 0.73 percent in the fourth quarter of 2011 and 0.87 percent in the first quarter of 2011.

At March 31, 2012, the Corporation's tangible equity to assets ratio and total risk-based capital ratio were 8.7 percent and 13.7 percent, respectively, compared to 8.7 percent and 13.3 percent, respectively, at December 31, 2011 and 8.5 percent and 13.0 percent, respectively, at March 31, 2011. At March 31, 2012, the Corporation's book value was $21.10 per share, compared to $20.82 per share at December 31, 2011 and $20.54 per share at March 31, 2011.

The credit quality of the Corporation's loan portfolio showed further improvement during the first quarter of 2012. At March 31, 2012, the Corporation's nonperforming loans, consisting of nonaccrual loans, accruing loans past due 90 days or more and nonperforming troubled debt restructurings, totaled $98.5 million, compared to $106.3 million at December 31, 2011 and $145.9 million at March 31, 2011, representing declines of 7.3 percent and 32.4 percent, respectively. At March 31, 2012, the Corporation's $473 million acquired loan portfolio was overall performing better than expected, despite the establishment of a $2.2 million allowance for loan losses on these loans that was primarily attributable to one of the fourteen loan pools experiencing a decline in expected cash flows, with $0.6 million of this allowance established in the first quarter of 2012.

Other real estate and repossessed assets totaled $25.9 million at March 31, 2012, compared to $25.5 million at December 31, 2011 and $26.4 million at March 31, 2011.

At March 31, 2012, the allowance for loan losses of the originated portfolio was $85.6 million, or 2.54 percent of originated loans, compared to 2.60 percent at December 31, 2011 and 2.85 percent at March 31, 2011. The allowance for loan losses of the originated portfolio as a percentage of nonperforming loans was 87 percent at March 31, 2012, compared to 82 percent at December 31, 2011 and 61 percent at March 31, 2011. At March 31, 2012, nonperforming loans as a percentage of total loans were 2.56 percent, down from 2.77 percent at December 31, 2011 and 3.96 percent at March 31, 2011.

Chemical Financial Corporation is the second-largest bank holding company headquartered and operating branch offices in Michigan. The Corporation operates through a single subsidiary bank, Chemical Bank, with 142 banking offices spread over 32 counties in the lower peninsula of Michigan. At March 31, 2012, the Corporation had total assets of $5.5 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.

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. Words such as "anticipated," "believe," "capitalize," "continue," "feel," "focus," "further," "improving," "intends," "look," "opportunities," "progress," "strategies," "trends," "will," "yet" 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 the credit quality of the loan portfolio, future levels of nonperforming loans, future economic trends and conditions, anticipated consolidation opportunities in Michigan's banking industry, future income levels, and our ability to grow our loan portfolio, improve credit quality and control operating costs. 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, mortgage servicing rights and other real estate owned and 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) involve judgments that are inherently forward-looking. 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 or that other real estate owned can be sold for its carrying value or at all. The future effect of changes in the financial and credit markets and the national and regional economy 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, 2011. 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.

Chemical Financial Corporation Announces First Quarter Operating Results  
       
Consolidated Statements of Financial Position (Unaudited)    
Chemical Financial Corporation       
       
  March 31 December 31 March 31
(In thousands, except per share data) 2012 2011 2011
Assets:      
Cash and cash equivalents:      
Cash and cash due from banks  $ 120,435  $ 121,294  $ 116,445
Interest-bearing deposits with unaffiliated banks and others  353,243  260,646  525,174
Total cash and cash equivalents  473,678  381,940  641,619
Investment securities:      
Available-for-sale  676,007  667,276  585,992
Held-to-maturity  191,297  183,339  163,890
Total Investment Securities  867,304  850,615  749,882
Loans held-for-sale  25,080  18,818  4,033
       
Loans:      
Commercial   903,935  895,150  821,115
Real estate commercial   1,095,793  1,071,999  1,074,842
Real estate construction and land development   101,157  118,176  139,439
Real estate residential   861,301  861,716  809,085
Consumer installment and home equity  880,912  884,244  838,035
Total Loans  3,843,098  3,831,285  3,682,516
Allowance for loan losses  (87,785)  (88,333)  (89,674)
Net Loans  3,755,313  3,742,952  3,592,842
       
Premises and equipment  66,661  65,997  65,135
Goodwill  113,414  113,414  113,414
Other intangible assets  10,939  11,472  13,060
Interest receivable and other assets  139,130  154,245  155,110
Total Assets  $ 5,451,519  $ 5,339,453  $ 5,335,095
       
Liabilities:      
Deposits:      
Noninterest-bearing   $ 914,523  $ 875,791  $ 766,876
Interest-bearing   3,546,861  3,491,066  3,615,395
Total Deposits  4,461,384  4,366,857  4,382,271
Interest payable and other liabilities  32,809  54,024  30,038
Short-term borrowings  335,082  303,786  286,193
Federal Home Loan Bank advances   42,120  43,057  72,854
Total Liabilities  4,871,395  4,767,724  4,771,356
       
Shareholders' Equity:      
Preferred stock, no par value per share  --  --  --
Common stock, $1 par value per share  27,491  27,457  27,451
Additional paid-in capital  431,549  431,277  429,990
Retained earnings  145,195  138,324  120,935
Accumulated other comprehensive loss  (24,111)  (25,329)  (14,637)
Total Shareholders' Equity  580,124  571,729  563,739
Total Liabilities and Shareholders' Equity  $ 5,451,519  $ 5,339,453  $ 5,335,095
     
Chemical Financial Corporation Announces First Quarter Operating Results    
     
Consolidated Statements of Income (Unaudited)    
Chemical Financial Corporation     
     
  Three Months Ended
  March 31
(In thousands, except per share data) 2012 2011
Interest Income:    
Interest and fees on loans  $ 48,256  $ 49,440
Interest on investment securities:    
Taxable  2,565  2,324
Tax-exempt  1,485  1,479
Dividends on nonmarketable equity securities  130  123
Interest on deposits with unaffiliated banks and others  228  309
Total Interest Income  52,664  53,675
     
Interest Expense:    
Interest on deposits  6,102  7,878
Interest on short-term borrowings  104  150
Interest on Federal Home Loan Bank advances   263  442
Total Interest Expense  6,469  8,470
Net Interest Income   46,195  45,205
Provision for loan losses  5,000  7,500
Net Interest Income after Provision for Loan Losses  41,195  37,705
     
Noninterest Income:    
Service charges on deposit accounts  4,505  4,096
Wealth management revenue  2,921  2,766
Other charges and fees for customer services  2,689  2,658
Mortgage banking revenue  1,185  1,064
Gain on sale of merchant card services  1,280  --
Other   69  188
Total Noninterest Income  12,649  10,772
     
Operating Expenses:    
Salaries, wages and employee benefits  20,569  18,325
Occupancy   3,154  3,338
Equipment and software  3,118  2,722
Other  9,454  11,004
Total Operating Expenses  36,295  35,389
Income Before Income Taxes  17,549  13,088
Federal Income Tax Expense   5,175  3,900
Net Income   $ 12,374  $ 9,188
     
Net income per common share:    
Basic  $ 0.45  $ 0.33
Diluted  0.45  0.33
     
Cash dividends declared per common share  0.20  0.20
     
Average common shares outstanding:    
Basic  27,478  27,451
Diluted  27,539  27,482
     
Chemical Financial Corporation Announces First Quarter Operating Results
           
Financial Summary (Unaudited)          
Chemical Financial Corporation           
  Three Months Ended
  March 31  Dec 31  Sept 30  June 30  March 31
(Dollars in thousands) 2012 2011 2011 2011 2011
Average Balances           
Total assets  $ 5,396,420  $ 5,341,079  $ 5,323,962  $ 5,255,244  $ 5,302,558
Total interest-earning assets  5,061,882  5,008,813  4,985,380  4,928,590  4,963,384
Total loans  3,824,604  3,772,140  3,769,745  3,707,468  3,672,301
Total deposits  4,416,273  4,378,066  4,358,658  4,299,728  4,362,774
Total interest-bearing liabilities  3,903,986  3,847,003  3,853,443  3,857,678  3,942,406
Total shareholders' equity  574,261  578,105  573,580  565,500  560,661
           
Key Ratios (annualized where applicable)          
Net interest margin (taxable equivalent basis) 3.76% 3.84% 3.80% 3.78% 3.78%
Efficiency ratio  60.4% 63.1% 60.2% 58.2% 61.8%
Return on average assets 0.92% 0.83% 0.87% 0.84% 0.70%
Return on average shareholders' equity 8.7% 7.7% 8.0% 7.8% 6.6%
Average shareholders' equity as a percent of average assets 10.6% 10.8% 10.8% 10.8% 10.6%
Capital ratios (period end):          
Tangible shareholders' equity as a percent of total assets 8.7% 8.7% 8.6% 8.9% 8.5%
Total risk-based capital ratio 13.7% 13.3% 13.1% 13.0% 13.0%
           
  March 31  Dec 31  Sept 30  June 30  March 31
  2012 2011 2011 2011 2011
Credit Quality Statistics          
Originated Loans  $ 3,370,279  $ 3,338,502  $ 3,265,054  $ 3,225,179  $ 3,143,489
Acquired Loans  472,819  492,783  495,372  522,831  539,027
Nonperforming Loans:          
 Nonaccrual loans  79,153  78,394  91,112  105,350  106,296
 Accruing loans past due 90 days or more  2,646  3,817  3,015 3,744 2,196
 Troubled debt restructurings  16,749 24,058 26,268 26,835 37,367
 Total nonperforming loans   98,548  106,269  120,395 135,929 145,859
Other real estate and repossessed assets (ORE)  25,944  25,484  28,679 24,607 26,355
Total nonperforming assets  124,492  131,753  149,074 160,536 172,214
           
Performing troubled debt restructurings  27,177  20,394  15,543  12,889  --
           
Allowance for loan losses-originated as a percent of:        
Total originated loans 2.54% 2.60% 2.68% 2.78% 2.85%
Nonperforming loans 87% 82% 73% 66% 61%
Nonperforming loans as a percent of total loans 2.56% 2.77% 3.20% 3.63% 3.96%
Nonperforming assets as a percent of:          
Total loans plus ORE 3.22% 3.42% 3.93% 4.26% 4.64%
Total assets 2.28% 2.47% 2.74% 3.08% 3.23%
Net loan charge-offs as a percent of average loans (year-to-date, annualized) 0.58% 0.73% 0.78% 0.77% 0.80%
           
  March 31  Dec 31  Sept 30  June 30  March 31
  2012 2011 2011 2011 2011
Additional Data - Intangibles          
Goodwill  $ 113,414  $ 113,414  $ 113,414  $ 113,414  $ 113,414
Core deposit intangibles  7,512  7,879  8,261  8,643  9,024
Mortgage servicing rights (MSR)  3,427  3,593  3,561  3,577  3,832
Other intangible assets  --  --  27  107  204
Amortization of core deposit intangibles (quarter only)  367  382  382  381  382
           
Chemical Financial Corporation Announces First Quarter Operating Results
       
Average Balances, Tax Equivalent Interest and Effective Yields and Rates (Unaudited)*
       
  Three Months Ended March 31, 2012
    Tax  
  Average  Equivalent Effective
(Dollars in thousands) Balance Interest Yield/Rate
Assets      
Interest-Earning Assets:      
Loans**  $ 3,842,168  $ 48,737  5.10%
Taxable investment securities 663,689 2,565  1.55
Tax-exempt investment securities 182,543 2,261  4.95
Other interest-earning assets 25,572 130  2.05
Interest-bearing deposits with unaffiliated banks and others 347,910 228  0.26
Total interest-earning assets 5,061,882 53,921  4.28
Less: Allowance for loan losses 88,595    
Other Assets:      
Cash and cash due from banks 112,357    
Premises and equipment 66,261    
Interest receivable and other assets 244,515    
Total Assets  $ 5,396,420    
       
Liabilities and shareholders' equity      
Interest-bearing Liabilities:      
Interest-bearing demand deposits  $ 880,665  $ 272  0.12%
Savings deposits 1,162,328 394  0.14
Time deposits 1,497,913 5,436  1.46
Short-term borrowings 320,476 104  0.13
FHLB advances 42,604 263  2.48
Total interest-bearing liabilities 3,903,986 6,469  0.67
Noninterest-bearing deposits 875,367    
Total deposits and borrowed funds 4,779,353    
Interest payable and other liabilities 42,806    
Shareholders' equity 574,261    
Total Liabilities and Shareholders' Equity  $ 5,396,420    
Net Interest Spread (Average yield earned minus average rate paid)    3.61%
Net Interest Income (FTE)    $ 47,452  
Net Interest Margin (Net Interest Income (FTE) divided by total average interest-earning assets)      3.76%
       
* 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.      
       
Chemical Financial Corporation Announces First Quarter Operating Results
           
Nonperforming Assets (Unaudited)          
Chemical Financial Corporation           
           
  March 31 Dec 31 Sept 30 June 30 March 31
(Dollars in thousands) 2012 2011 2011 2011 2011
Nonperforming Loans:          
Nonaccrual loans:          
Commercial  $ 11,443  $ 10,726  $ 10,804  $ 14,386  $ 15,672
Real estate commercial  46,870  44,438  48,854  57,324 59,931
Real estate construction and land development  3,809  6,190  7,877  8,933 9,414
Real estate residential  12,687  12,573  17,544  17,809 15,505
Consumer installment and home equity  4,344  4,467  6,033  6,898 5,774
Total nonaccrual loans  79,153  78,394  91,112  105,350 106,296
Accruing loans contractually past due 90 days or more as to
interest or principal payments:
       
Commercial  1,005  1,381  282  629 455
Real estate commercial  75  374  415  143 459
Real estate construction and land development  --  287  --  --  --
Real estate residential  333  752  974  1,729 191
Consumer installment and home equity  1,233  1,023  1,344  1,243 1,091
Total accruing loans contractually past due 90 days
 or more as to interest or principal payments
 2,646  3,817  3,015  3,744 2,196
Nonperforming troubled debt restructurings:          
Commercial loan portfolio  11,258  14,675  16,457  15,443 15,201
Consumer loan portfolio  5,491  9,383  9,811  11,392 22,166
Total nonperforming troubled debt restructurings  16,749  24,058  26,268  26,835 37,367
Total nonperforming loans  98,548  106,269  120,395  135,929 145,859
Other real estate and repossessed assets  25,944  25,484  28,679  24,607 26,355
Total nonperforming assets  $ 124,492  $ 131,753  $ 149,074  $ 160,536  $ 172,214
 
Chemical Financial Corporation Announces First Quarter Operating Results
           
Summary of Loan Loss Experience (Unaudited)          
Chemical Financial Corporation           
           
  Three Months Ended
  March 31 Dec 31 Sept 30 June 30 March 31
(Dollars in thousands) 2012 2011 2011 2011 2011
Allowance for loan losses at beginning of period  $ 88,333  $ 88,713  $ 89,733  $ 89,674  $ 89,530
Provision for loan losses  5,000  5,100  6,400 7,000  7,500
Loans charged off:          
Commercial  (1,079)  (1,768)  (1,234) (1,972)  (1,976)
Real estate commercial  (2,268)  (2,120)  (3,969) (3,168)  (3,875)
Real estate construction and land development  (32)  (54)  (236) (136)  (63)
Real estate residential  (1,717)  (945)  (1,884) (1,198)  (944)
Consumer installment and home equity  (1,451)  (1,434)  (1,516) (1,832)  (1,784)
Total loan charge-offs  (6,547)  (6,321)  (8,839) (8,306)  (8,642)
Recoveries of loans previously charged off:          
Commercial  191  137  614 710  215
Real estate commercial  421  272  285 212  87
Real estate construction and land development  2  40  -- 5  --
Real estate residential  22  80  207 106  456
Consumer installment and home equity  363  312  313 332  528
Total loan recoveries  999  841  1,419 1,365  1,286
Net loan charge-offs  (5,548)  (5,480)  (7,420) (6,941)  (7,356)
Allowance for loan losses at end of period  $ 87,785  $ 88,333  $ 88,713  $ 89,733  $ 89,674
           
Allowance for loan losses-originated  $ 85,585  $ 86,733  $ 87,413  $ 89,733  $ 89,674
Allowance for loan losses-acquired  2,200  1,600  1,300  --  --
           
Provision for loan losses (year-to-date)  $ 5,000  $ 26,000  $ 20,900  $ 14,500  $ 7,500
Net loan charge-offs (year-to-date)  5,548  27,197  21,717  14,297 7,356
           
 
Chemical Financial Corporation Announces First Quarter Operating Results
           
Selected Quarterly Information (Unaudited)          
Chemical Financial Corporation           
           
  1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
(Dollars in thousands, except per share data) 2012 2011 2011 2011 2011
Summary of Operations          
Interest income  $ 52,664  $ 54,130  $ 53,998  $ 53,439  $ 53,675
Interest expense  6,469  7,045  7,729 8,145 8,470
Net interest income  46,195  47,085  46,269 45,294 45,205
Provision for loan losses  5,000  5,100  6,400 7,000 7,500
Net interest income after provision for loan losses  41,195  41,985  39,869 38,294 37,705
Noninterest income  12,649  11,501  11,225 10,902 10,772
Operating expenses   36,295  37,807  35,394 33,413 35,389
Income before income taxes  17,549  15,679  15,700 15,783 13,088
Federal income tax expense  5,175  4,475  4,075 4,750 3,900
Net income   $ 12,374  $ 11,204  $ 11,625  $ 11,033  $ 9,188
           
Net interest margin 3.76% 3.84% 3.80% 3.78% 3.78%
           
Per Common Share Data          
Net income:          
 Basic  $ 0.45  $ 0.41  $ 0.42  $ 0.40  $ 0.33
 Diluted 0.45  0.41  0.42 0.40  0.33
Cash dividends declared  0.20  0.20  0.20 0.20  0.20
Book value - period-end  21.10  20.82  21.02 20.78  20.54
Tangible book value - period-end  16.84  16.54  16.71  16.46  16.19
Market value - period-end  23.44  21.32  15.31 18.76  19.93
CONTACT: David B. Ramaker, CEO
         Lori A. Gwizdala, CFO
         989-839-5350
Source: Chemical Financial Corporation