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Chemical Financial Corporation reports first quarter 2019 net income of $62.9 million, representing $0.87 of earnings per diluted share

Chemical Financial Corporation declares cash dividend on common stock of $0.34 per share

Company Release - 4/23/2019 4:10 PM ET

DETROIT, April 23, 2019 (GLOBE NEWSWIRE) -- Chemical Financial Corporation ("Chemical") (NASDAQ:CHFC) today announced 2019 first quarter net income of $62.9 million, or $0.87 per diluted share, compared to 2018 fourth quarter net income of $73.0 million, or $1.01 per diluted share, and 2018 first quarter net income of $71.6 million, or $0.99 per diluted share. Net income, excluding the change in fair of value in loan servicing rights and merger expenses (collectively, "significant items"), a non-GAAP financial measure, was $73.3 million, or $1.02 per diluted share, in the first quarter of 2019, compared to $75.3 million, or $1.04 per diluted share, in the fourth quarter of 2018 and $68.6 million, or $0.95 per diluted share, in the first quarter of 2018.(1)  In addition, on April 23, 2019, our Board of Directors declared a second quarter dividend on our common stock of $0.34 per share. The dividend will be payable on June 21, 2019, to shareholders of record on June 7, 2019.

"Results for the quarter continue the path of our sound operating performance reflecting strong deposit growth, low loan charge-off rates and disciplined expense management," noted David T. Provost, Chief Executive Officer of Chemical and Thomas C. Shafer, Vice Chairman of Chemical and Chief Executive Officer of Chemical Bank. "As we look forward to the remainder of the year, we believe we have a solid loan pipeline to improve loan growth and continue to grow our net interest income. As we combine this loan growth with the focused control of our core operating expenses while maintaining other solid fundamentals, we believe we are in a solid position for a successful 2019."

Return on average assets was 1.17% for the first quarter of 2019, compared to 1.39% for the fourth quarter of 2018 and 1.47% for the first quarter of 2018. Return on average assets, excluding significant items, a non-GAAP financial measure, was 1.36% for the first quarter of 2019, compared to 1.44% for the fourth quarter of 2018 and 1.41% for the first quarter of 2018.(1)  Return on average tangible shareholders' equity was 14.8% for the first quarter of 2019, compared to 17.8% for the fourth quarter of 2018 and 19.0% for the first quarter of 2018. Return on average tangible shareholders' equity, excluding significant items, a non-GAAP financial measure, was 17.2% for the first quarter of 2019, compared to 18.3% for the fourth quarter of 2018 and 18.2% for the first quarter of 2018.(1)

Net interest income was $162.8 million for the first quarter of 2019, $0.6 million, or 0.4%, lower than the fourth quarter of 2018 and $11.0 million, or 7.2%, higher than the first quarter of 2018. The decrease in net interest income in the first quarter of 2019, compared to the fourth quarter of 2018, was primarily attributable to an increase in average deposit balances and cost of funds, partially offset by the benefit from an increase in average balances and yields earned on loans and investment securities. The increase in net interest income in the first quarter of 2019, compared to the first quarter of 2018, was primarily attributable to increases in average balances and yields earned on loans and investment securities, partially offset by increases in average interest-bearing deposit balances and cost of funds. First quarter of 2019 net loan growth was $54.3 million, or an annualized growth rate of 1.4%, and net loan growth over the past twelve months was $1.11 billion, or 7.8%. The investment securities portfolio grew by $277.6 million, compared to the fourth quarter of 2018, and $949.6 million, compared to the first quarter of 2018.

Net interest margin was 3.38% in the first quarter of 2019, compared to 3.42% in the fourth quarter of 2018 and 3.51% in the first quarter of 2018. Net interest margin (fully taxable equivalent (FTE)), a non-GAAP financial measure, was 3.42% in the first quarter of 2019, compared to 3.49% in the fourth quarter of 2018 and 3.56% in the first quarter of 2018.(1) The decrease in net interest margin (FTE), in the first quarter of 2019, compared to both the fourth quarter of 2018 and the first quarter of 2018, was primarily due to an increase in average deposit balances and cost of funds, partially offset by increases in average balances and yields earned on loans and investment securities. Average cost of funds was 1.13% in the first quarter of 2019, compared to 1.03% in the fourth quarter of 2018 and 0.64% in the first quarter of 2018. The average yield on the loan portfolio increased to 4.86% in the first quarter of 2019, compared to 4.80% in the fourth quarter of 2018 and 4.48% in the first quarter of 2018. Interest accretion from purchase accounting discounts on acquired loans contributed 22 basis points to the net interest margin (FTE), in the first quarter of 2019, compared to 23 basis points in the fourth quarter of 2018 and 29 basis points in the first quarter of 2018.

The provision for loan losses was $2.1 million in the first quarter of 2019, compared to $8.9 million in the fourth quarter of 2018 and $6.3 million in the first quarter of 2018. The decrease in total provision for loan losses in the first quarter of 2019, compared to the fourth quarter of 2018, was primarily the result of a decrease in originated loan growth, low loan charge-off rates and recoveries in the acquired loan portfolio. The decrease in the provision for loan losses in the first quarter of 2019, compared to the first quarter of 2018, was primarily the result of an improvement in overall credit quality.

Net loan charge-offs were $1.8 million, or 0.05% of average loans, in the first quarter of 2019, compared to $3.0 million, or 0.08% of average loans, in the fourth quarter of 2018 and $3.4 million, or 0.10% of average loans, in the first quarter of 2018.

Nonperforming loans totaled $89.3 million at March 31, 2019, compared to $85.4 million at December 31, 2018 and $61.8 million at March 31, 2018. Nonperforming loans comprised 0.58% of total loans at March 31, 2019, compared to 0.56% at December 31, 2018 and 0.43% at March 31, 2018. The increase in nonperforming loans as a percentage of total loans at March 31, 2019, compared to March 31, 2018, was primarily due to commercial and commercial real estate loan relationships that were downgraded to nonaccrual status during the second half of 2018. Each nonperforming loan is individually evaluated for impairment, and we have either established a specific reserve within the allowance for loan losses or charged the loan relationship down to the value of the underlying collateral.

The allowance for loan losses on the originated loan portfolio was $110.3 million, or 0.91% of originated loans, at March 31, 2019, compared to $109.6 million, or 0.93% of originated loans, at December 31, 2018 and $94.8 million, or 0.95% of originated loans, at March 31, 2018. The allowance for loan losses on the originated loan portfolio as a percentage of nonperforming loans decreased to 123.5% at March 31, 2019, compared to 128.2% at December 31, 2018 and 153.3% at March 31, 2018, primarily due to sustained low loan charge-off rates and stable overall credit quality. All acquired loans were recorded at their estimated fair value at each respective acquisition date without a carryover of the related allowance and, as of both March 31, 2019 and March 31, 2018, it was determined that no allowance was needed for the acquired loan portfolio. As of December 31, 2018, the allowance for loan losses on the acquired loan portfolio was $420 thousand.

Noninterest income was $24.9 million in the first quarter of 2019, compared to $32.0 million in the fourth quarter of 2018 and $40.6 million in the first quarter of 2018. Noninterest income in the first quarter of 2019 decreased, compared to the fourth quarter of 2018, primarily related to the change in fair value in loan servicing rights, included within net gain on sale of loans and other mortgage banking revenue, and a decrease of $1.6 million in electronic banking fees, included within other charges and fees for customer services. Noninterest income in the first quarter of 2019 decreased, compared to the first quarter of 2018, primarily due to the change in fair value in loan servicing rights, included within net gain on sale of loans and other mortgage banking revenue. Net gain on sale of loans and other mortgage banking revenue included a $7.6 million detriment to earnings due to a change in fair value in loan servicing rights in the first quarter of 2019, compared to a $2.8 million detriment in the fourth quarter of 2018 and a $3.8 million benefit in the first quarter of 2018. The change in fair value in loan servicing rights was a detriment of $0.09 to diluted earnings per share in the first quarter of 2019, compared to a detriment of $0.03 in the fourth quarter of 2018 and a $0.04 benefit in the first quarter of 2018.

Operating expenses were $109.0 million in the first quarter of 2019, compared to $108.4 million in the fourth quarter of 2018 and $101.6 million in the first quarter of 2018. Operating expenses, core, a non-GAAP financial measure that excludes the impact of merger expenses and federal historic tax credits, were $103.6 million for the first quarter of 2019, compared to $102.6 million for the fourth quarter of 2018 and $100.0 million for the first quarter of 2018.(1)  The $1.0 million increase in operating expenses, core, in the first quarter of 2019, compared to the fourth quarter of 2018, was primarily due to an increase in salaries, wages and employee benefits impacted by a decrease in the deferral of loan origination costs due to lower loan production and an increase in payroll taxes due to the beginning of a new tax year. The $3.6 million increase in operating expenses, core, in the first quarter of 2019, compared to the first quarter of 2018, was primarily due to an increase in salaries, wages and employee benefits impacted by increases in staff to support the strategic focus on commercial lending growth and an increase in outside processing and service fees due to the substantial enhancements to our core operating systems. First quarter of 2019 included $5.4 million of merger related expenses, resulting in a detriment of $0.06 to diluted earnings per share. Impairment related to federal historic tax credits, included within other operating expense in our Consolidated Statements of Income, totaled $5.8 million in the fourth quarter of 2018 and $1.6 million in the first quarter of 2018. Expense related to our efforts to implement upgrades to our core operating systems totaled $1.6 million in the fourth quarter of 2018 and $1.0 million in the first quarter of 2018.

The efficiency ratio is a measure of operating expenses as a percentage of net interest income and noninterest income. The efficiency ratio was 58.1% in the first quarter of 2019, compared to 55.4% in the fourth quarter of 2018 and 52.8% in the first quarter of 2018. The adjusted efficiency ratio, a non-GAAP financial measure, which excludes, as applicable, the significant items defined above, amortization of intangibles, impairment of federal income tax credits, the net interest income FTE adjustment and gains from sale of investment securities, was 51.7% in the first quarter of 2019, compared to 50.4% in the fourth quarter of 2018 and 51.6% in the first quarter of 2018.(1)

The effective tax rate was 17.8% in the first quarter of 2019, compared to 6.6% in the fourth quarter of 2018 and 15.3% in the first quarter of 2018. The tax rate for the fourth quarter of 2018 and first quarter of 2018 benefited from federal historic tax credits of $5.8 million and $1.5 million, respectively. The income tax benefit from the tax credits placed into service was partially offset by the impairment recorded on the same tax credits included within other operating expenses. The effective tax rate for the fourth quarter of 2018 also benefited from adjustments to tax provisional amounts related to the one year measurement period provided by Staff Accounting Bulletin No. 118 in order to finalize items that were not available in the enactment period associated with the passing of the Tax Cuts and Jobs Act and by certain changes in estimates associated with the filing of our final 2017 tax return.

Total assets were $21.80 billion at March 31, 2019, compared to $21.50 billion at December 31, 2018 and $19.76 billion at March 31, 2018. The increase in total assets during the first quarter of 2019 and the twelve months ended March 31, 2019 was primarily attributable to net loan growth and additions to the investment securities portfolio.

Total loans were $15.32 billion at March 31, 2019, an increase of $54.3 million, from total loans of $15.27 billion at December 31, 2018 and an increase of $1.11 billion, from total loans of $14.22 billion at March 31, 2018. Originated loan growth was $297.5 million during the first quarter of 2019, compared to $699.3 million in the fourth quarter of 2018 and $265.1 million in the first quarter of 2018. Growth in the originated loan portfolio was partially offset by run-off in the acquired loan portfolio of $243.2 million in the first quarter of 2019, compared to $225.8 million in the fourth quarter of 2018 and $201.6 million in the first quarter of 2018.

The investment securities portfolio totaled $3.92 billion at March 31, 2019, an increase of $277.6 million, compared to $3.65 billion at December 31, 2018, and an increase of $949.6 million, compared to $2.97 billion at March 31, 2018. The increase in the investment securities portfolio in both the first quarter of 2019 and the twelve months ended March 31, 2019 reflects our long-term plan to increase our investment securities portfolio as a percentage of total assets.

Total deposits increased to $16.06 billion at March 31, 2019, compared to $15.59 billion at December 31, 2018 and $13.97 billion at March 31, 2018. The increase in deposits during the first quarter of 2019 was primarily due to an increase in customer deposits of $419.3 million, with increases across all categories, and an increase in brokered deposits of $49.4 million. The increase in deposits during the twelve months ended March 31, 2019 was primarily due to increases of $1.71 billion in customer deposits and $383.1 million in brokered deposits. Collateralized customer deposits were $413.2 million at March 31, 2019, compared to $382.7 million at December 31, 2018 and $490.1 million at March 31, 2018. Loans, as a percentage of deposits plus collateralized customer deposits, were 93.0% at March 31, 2019, compared to 95.6% at December 31, 2018 and 98.3% at March 31, 2018.

Short-term borrowings were $1.74 billion at March 31, 2019, compared to $2.04 billion at December 31, 2018 and $2.05 billion at March 31, 2018. Short-term borrowings include short-term FHLB advances that we used to fund our short-term liquidity needs. Long-term borrowings were $426.0 million at both March 31, 2019 and December 31, 2018, compared to $372.9 million at March 31, 2018.

Shareholders' equity to total assets ratio was 13.3% at March 31, 2019, compared to 13.2% at December 31, 2018 and 13.7% at March 31, 2018. Tangible shareholders' equity to tangible assets ratio, a non-GAAP financial measure, and total risk-based capital ratio were 8.5% and 11.7% (estimated), respectively, at March 31, 2019, compared to 8.3% and 11.5%, respectively, at December 31, 2018 and 8.3% and 11.2%, respectively, at March 31, 2018.(1)  Book value was $40.50 per share at March 31, 2019, compared to $39.69 per share at December 31, 2018 and $37.91 per share at March 31, 2018. Tangible book value, a non-GAAP financial measure, was $24.39 per share at March 31, 2019, compared to $23.54 per share at December 31, 2018 and $21.68 per share at March 31, 2018.(1)

(1)Please refer to the section entitled "Non-GAAP Financial Measures" in this press release and to the financial tables entitled "Reconciliation of Non-GAAP Financial Measures" for a reconciliation to the most directly comparable GAAP financial measures.

Conference Call Details

Chemical Financial Corporation will host a conference call to discuss first quarter of 2019 operating results on Wednesday, April 24, 2019, at 10:30 a.m. ET. Anyone interested may access the conference call on a live basis by dialing toll-free at 888-378-4398 and entering 911188 for the conference ID. The call will also be broadcast live over the Internet hosted at Chemical Financial Corporation's website at www.chemicalbank.com under the "Investor Information" section. A copy of the slide-show presentation can be accessed on Chemical Financial Corporation's website and an audio replay of the call will remain available on Chemical Financial Corporation's website for at least 14 days.

About Chemical Financial Corporation

Chemical Financial Corporation is the largest banking company headquartered and operating branch offices in Michigan. We operate through our subsidiary bank, Chemical Bank, with 212 banking offices located primarily in Michigan, northeast Ohio and northern Indiana. At March 31, 2019, we had total consolidated assets of $21.80 billion. Chemical Financial Corporation's common stock trades on The NASDAQ Stock Market under the symbol CHFC and is one of the issuers comprising The NASDAQ Global Select Market and the S&P MidCap 400 Index. More information about Chemical Financial Corporation is available by visiting the "Investor Information" section of our website at www.chemicalbank.com

Non-GAAP Financial Measures

This press release contains references to financial measures that are not defined in generally accepted accounting principles ("GAAP"). Such non-GAAP financial measures include net income (excluding significant items), diluted earnings per share (excluding significant items), return on average assets, return on average shareholders' equity and return on average tangible shareholders' equity (each excluding significant items), tangible book value per share, tangible shareholders' equity to tangible assets, the presentation of net interest income and net interest margin on a FTE basis, core operating expenses, operating expenses-efficiency ratio, and the adjusted efficiency ratio.

Management used non-GAAP financial measures as follows; in the preparation of our operating budgets, monthly financial performance reporting, and in our presentation to investors of our performance. We believe these non-GAAP financial measures are helpful for investors to analyze and evaluate our financial condition. However, these non-GAAP financial measures have inherent limitations and should not be considered in isolation or as a substitute for GAAP measures. In addition, because non-GAAP measures are not standardized, it may not be possible to compare the non-GAAP historical measures in this press release with other companies' non-GAAP financial measures. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measure may be found in the financial tables included with this press release.

Forward-Looking Statements

Statements included in this press release which are not historical in nature are intended to be, and hereby are identified as, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not limited to, statements regarding our loan pipeline, future loan growth, increases in net interest income, and the belief that we are in a solid position for a successful 2019. Words and phrases such as "anticipates," "believes,"  "plans," "continue," "estimates," "expects," "forecasts," "future," "intends," "is likely," "judgment," "look ahead," "look forward," "on schedule," "opinion," "opportunity," "potential," "predicts," "probable," "projects," "should," "strategic," "trend," "will," and variations of such words and phrases or similar expressions are intended to identify such forward-looking statements.

Management's determination of the provision and allowance for loan losses; the carrying value of acquired loans, goodwill and loan servicing rights; 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); and management's assumptions concerning pension and other postretirement benefit plans involve judgments that are inherently forward-looking. The future effect of changes in the financial and credit markets and the national and regional economies on the banking industry, generally, and on Chemical, specifically, are also inherently uncertain.

Forward-looking statements are subject to risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence, which could cause actual results to differ materially from anticipated results. Such risks, uncertainties and assumptions, include, among others, the following:

  • our inability to attract and retain new commercial lenders and other bankers as well as key operations staff in light of competition for experienced employees in the banking industry;
  • operational and regulatory challenges associated with our information technology systems and policies and procedures in light of our rapid growth and systems conversion in 2018;
  • our inability to grow deposits;
  • our ability to execute on our strategy to expand investments and commercial lending;
  • our inability to efficiently manage our operating expenses;
  • the possibility that our previously announced merger with TCF Financial Corporation ("TCF") does not close when expected or at all because required regulatory, shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all;
  • the occurrence of any event, change or other circumstance that could give rise to the right of Chemical, TCF or both to terminate the merger agreement;
  • the outcome of pending or threatened litigation or of matters before regulatory agencies, whether currently existing or commencing in the future, including litigation related to our proposed merger with TCF;
  • potential difficulty in maintaining relationships with clients, employees or business partners as a result of our proposed merger with TCF;
  • the possibility that the anticipated benefits of our proposed merger with TCF, including anticipated cost savings and strategic gains, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy, competitive factors in the areas where Chemical and TCF do business, or as a result of other unexpected factors or events;
  • the impact of purchase accounting with respect to the proposed merger with TCF, or any change in the assumptions used regarding the assets purchased and liabilities assumed to determine their fair value;
  • diversion of management's attention from ongoing business operations and opportunities as a result of the proposed merger with TCF;
  • potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed merger with TCF;
  • economic conditions (both generally and in our markets) may be less favorable than expected, which could result in, among other things, a deterioration in credit quality, a reduction in demand for credit and a decline in real estate values;
  • a general decline in the real estate and lending markets, particularly in our market areas, could negatively affect our financial results;
  • increased cybersecurity risk, including potential network breaches, business disruptions, or financial losses;
  • increases in competitive pressure in the banking and financial services industry;
  • increased capital requirements, other regulatory requirements or enhanced regulatory supervision;
  • our inability to sustain revenue and earnings growth;
  • the timing of when historic tax credits are placed into service could impact operating expenses;
  • our inability to efficiently manage operating expenses;
  • current or future restrictions or conditions imposed by our regulators on our operations may make it more difficult for us to achieve our goals;
  • legislative or regulatory changes, including changes in accounting standards and compliance requirements, may adversely affect us;
  • changes in the interest rate environment may reduce margins or the volumes or values of the loans we make or have acquired; and
  • economic, governmental, or other factors may prevent the projected population, residential, and commercial growth in the markets in which we operate.

Additional factors that could cause results to differ materially from those described above can be found in the risk factors described in Item 1A of Chemical’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2018 and Quarterly Reports on Form 10-Q. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. Chemical disclaims any obligation to update or revise any forward-looking statements contained in this press release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by law.

 

 
 
Chemical Financial Corporation Announces 2019 First Quarter Operating Results 
 
 
Consolidated Statements of Financial Position (Unaudited)
Chemical Financial Corporation
(In thousands, except per share data)
      
 March 31,
 2019
 December 31,
 2018
 March 31,
 2018
      
Assets     
Cash and cash equivalents:     
Cash and cash due from banks$206,372  $228,527  $174,173 
Interest-bearing deposits with the Federal Reserve Bank and other banks and federal funds sold311,204  267,312  379,320 
Total cash and cash equivalents517,576  495,839  553,493 
Investment securities:     
Carried at fair value3,301,054  3,021,832  2,297,123 
Held-to-maturity622,519  624,099  676,847 
Total investment securities3,923,573  3,645,931  2,973,970 
Loans held-for-sale23,535  85,030  31,636 
Loans:     
Total loans15,324,048  15,269,779  14,218,747 
Allowance for loan losses(110,284) (109,984) (94,762)
Net loans15,213,764  15,159,795  14,123,985 
Premises and equipment122,452  123,442  126,251 
Loan servicing rights64,701  71,013  68,837 
Goodwill1,134,568  1,134,568  1,134,568 
Core deposit intangibles27,195  28,556  32,833 
Interest receivable and other assets772,949  754,167  711,937 
Total Assets$21,800,313  $21,498,341  $19,757,510 
Liabilities     
Deposits:     
Noninterest-bearing$3,835,427  $3,809,252  $3,801,125 
Interest-bearing12,226,572  11,784,030  10,166,692 
Total deposits16,061,999  15,593,282  13,967,817 
Collateralized customer deposits413,199  382,687  490,107 
Short-term borrowings1,740,000  2,035,000  2,050,000 
Long-term borrowings426,035  426,002  372,908 
Interest payable and other liabilities261,571  225,110  171,975 
Total liabilities18,902,804  18,662,081  17,052,807 
Shareholders' Equity     
Preferred stock, no par value per share     
Common stock, $1 par value per share71,551  71,460  71,350 
Additional paid-in capital2,209,860  2,209,761  2,201,803 
Retained earnings654,605  616,149  472,604 
Accumulated other comprehensive loss(38,507) (61,110) (41,054)
Total shareholders' equity2,897,509  2,836,260  2,704,703 
Total Liabilities and Shareholders' Equity$21,800,313  $21,498,341  $19,757,510 


 
Chemical Financial Corporation Announces 2019 First Quarter Operating Results
 
 
Consolidated Statements of Income (Unaudited)
Chemical Financial Corporation
(In thousands, except per share data)
 Three Months Ended
 March 31,
 2019
 December 31,
 2018
 March 31,
 2018
Interest Income     
Interest and fees on loans$183,292  $180,983  $156,818 
Interest on investment securities:     
Taxable20,501  18,746  12,419 
Tax-exempt7,170  6,554  5,556 
Dividends on nonmarketable equity securities1,738  2,419  1,901 
Interest on deposits with the Federal Reserve Bank and other banks and federal funds sold1,280  1,401  1,240 
Total interest income213,981  210,103  177,934 
Interest Expense     
Interest on deposits38,998  34,106  15,917 
Interest on collateralized customer deposits627  721  524 
Interest on short-term borrowings9,178  9,426  8,166 
Interest on long-term borrowings2,354  2,398  1,464 
Total interest expense51,157  46,651  26,071 
Net Interest Income162,824  163,452  151,863 
Provision for loan losses2,059  8,894  6,256 
Net interest income after provision for loan losses160,765  154,558  145,607 
Noninterest Income     
Service charges and fees on deposit accounts7,967  8,654  9,434 
Wealth management revenue5,872  6,457  6,311 
Other charges and fees for customer services4,824  6,506  4,783 
Net gain on sale of loans and other mortgage banking revenue894  3,977  12,535 
Net gain on sale of investment securities87  221   
Other5,213  6,232  7,491 
Total noninterest income24,857  32,047  40,554 
Operating Expenses     
Salaries, wages and employee benefits60,017  56,828  55,557 
Occupancy8,277  7,360  8,011 
Equipment and software6,979  7,641  7,659 
Outside processing and service fees11,726  11,698  10,356 
Merger expenses5,424     
Other16,592  24,839  20,027 
Total operating expenses109,015  108,366  101,610 
Income before income taxes76,607  78,239  84,551 
Income tax expense13,665  5,200  12,955 
Net Income$62,942  $73,039  $71,596 
Earnings Per Common Share:     
Weighted average common shares outstanding-basic71,474  71,445  71,231 
Weighted average common shares outstanding-diluted72,141  72,079  71,906 
Basic earnings per share$0.88  $1.02  $1.01 
Diluted earnings per share0.87  1.01  0.99 
Diluted earnings per share, excluding significant items (non-GAAP)1.02  1.04  0.95 
Cash Dividends Declared Per Common Share0.34  0.34  0.28 
Key Ratios (annualized where applicable):     
Return on average assets1.17% 1.39% 1.47%
Return on average tangible shareholders' equity, excluding significant items (non-GAAP)17.2% 18.3% 18.2%
Net interest margin (tax-equivalent basis) (non-GAAP)3.42% 3.49% 3.56%
Efficiency ratio - GAAP58.1% 55.4% 52.8%
Efficiency ratio - adjusted (non-GAAP)51.7% 50.4% 51.6%


 
Chemical Financial Corporation Announces 2019 First Quarter Operating Results
 
 
Selected Quarterly Information (Unaudited)
Chemical Financial Corporation
(Dollars in thousands, except per share data)
          
 1st
Quarter
2019
 4th
Quarter
2018
 3rd
Quarter
2018
 2nd
Quarter
2018
 1st
Quarter
2018
Summary of Operations         
Interest income$213,981
  $210,103  $198,377  $189,582  $177,934 
Interest expense 51,157  46,651  38,896  32,045  26,071 
Net interest income 162,824  163,452  159,481  157,537  151,863 
Provision for loan losses 2,059  8,894  6,028  9,572  6,256 
Net interest income after provision for loan losses 160,765  154,558  153,453  147,965  145,607 
Noninterest income 24,857  32,047  37,917  38,018  40,554 
Operating expenses, excluding merger expenses and impairment of income tax credits (non-GAAP) 103,591  102,594  106,499  102,845  99,976 
Merger expenses 5,424         
Impairment of income tax credits   5,772  3,162  1,716  1,634 
Income before income taxes 76,607  78,239  81,709  81,422  84,551 
Income tax expense 13,665  5,200  11,312  12,434  12,955 
Net income$62,942  $73,039  $70,397  $68,988  $71,596 
Significant items, net of tax 10,326  2,233  (735) 23  (2,964)
Net income, excluding significant items$73,268  $75,272  $69,662  $69,011  $68,632 
          
Per Common Share Data         
Net income:         
Basic$0.88  $1.02  $0.99  $0.97  $1.01 
Diluted 0.87  1.01  0.98  0.96  0.99 
Diluted, excluding significant items (non-GAAP) 1.02  1.04  0.97  0.96  0.95 
Cash dividends declared 0.34  0.34  0.34  0.28  0.28 
Book value - period-end 40.50  39.69  39.04  38.52  37.91 
Tangible book value - period-end (non-GAAP) 24.39  23.54  22.87  22.33  21.68 
Market value - period-end 41.16  36.61  53.40  55.67  54.68 
          
Key Ratios (annualized where applicable)        
Net interest margin (taxable equivalent basis) (non-GAAP) 3.42% 3.49% 3.48% 3.59% 3.56%
Efficiency ratio - adjusted (non-GAAP) 51.7% 50.4% 52.8% 51.2% 51.6%
Return on average assets 1.17% 1.39% 1.37% 1.39% 1.47%
Return on average assets, excluding significant items (non-GAAP) 1.36% 1.44% 1.36% 1.39% 1.41%
Return on average shareholders' equity 8.8% 10.4% 10.2% 10.2% 10.7%
Return on average tangible shareholders' equity (non-GAAP) 14.8% 17.8% 17.5% 17.8% 19.0%
Return on average tangible shareholders' equity, excluding significant items (non-GAAP) 17.2% 18.3% 17.3% 17.8% 18.2%
Average shareholders' equity as a percent of average assets 13.3% 13.4% 13.5% 13.6% 13.7%
Capital ratios (period end):                 
Tangible shareholders' equity as a percent of tangible assets (non-GAAP) 8.5% 8.3% 8.3% 8.3% 8.3%
Total risk-based capital ratio (1) 11.7% 11.5% 11.7% 11.4% 11.2%

(1) Estimated at March 31, 2019.


 
Chemical Financial Corporation Announces 2019 First Quarter Operating Results
 
 
Average Balances, Fully Tax Equivalent (FTE) Interest and Effective Yields and Rates(1) (Unaudited)
Chemical Financial Corporation
(Dollars in thousands)
 Three Months Ended
 March 31, 2019 December 31, 2018 March 31, 2018
 Average
Balance
 Interest
(FTE)
 Effective
Yield/
Rate (1)
 Average
Balance
 Interest
(FTE)
 Effective
Yield/
Rate (1)
 Average
Balance
 Interest
(FTE)
 Effective
Yield/
Rate (1)
Assets                 
Interest-earning assets:                 
Loans (1)(2)$15,323,704  $184,058  4.86% $15,058,271  $181,765 4.80% $14,224,926  $157,568 4.48%
Taxable investment securities2,631,161  20,501  3.12  2,399,177   18,746  3.13  1,781,995   12,419  2.79 
Tax-exempt investment
securities(1)
1,154,348  9,066  3.14  1,075,377   8,286  3.08  1,010,092   7,033  2.79 
Other interest-earning assets193,326  1,738  3.65  193,333   2,419  4.97  180,084   1,901  4.28 
Interest-bearing deposits with the FRB and other banks and federal funds sold221,116  1,280  2.35  230,142   1,401  2.41  262,910   1,240  1.91 
Total interest-earning assets19,523,655  216,643  4.48  18,956,300   212,617  4.46  17,460,007   180,161  4.17 
Less: allowance for loan losses(110,852)     (105,767)     (92,648)    
Other assets:                 
Cash and cash due from banks186,849      191,985      226,660     
Premises and equipment123,470      123,993      126,742     
Interest receivable and other assets1,791,876      1,789,195      1,737,116     
Total assets$21,514,998      $20,955,706      $19,457,877     
Liabilities and shareholders' equity                
Interest-bearing liabilities:                 
Interest-bearing checking deposits$3,375,841  $6,721  0.81% $3,072,237  $4,791  0.62% $2,767,267  $1,225  0.18%
Savings deposits4,532,107  11,257  1.01  4,436,212   10,209  0.91  4,047,004   4,937  0.49 
Time deposits4,287,346  21,020  1.99  4,029,519   19,106  1.88  3,262,568   9,755  1.21 
Collateralized customer deposits359,230  627  0.71  383,457   721  0.75  409,077   524  0.52 
Short-term borrowings1,653,222  9,178  2.25  1,693,750   9,426  2.21  2,055,556   8,166  1.61 
Long-term borrowings426,011  2,354  2.24  428,425   2,398  2.22  372,886   1,464  1.59 
Total interest-bearing liabilities14,633,757  51,157  1.42  14,043,600   46,651  1.32  12,914,358   26,071  0.82 
Noninterest-bearing deposits3,753,929      3,892,517       3,688,581      
Total deposits and borrowed funds18,387,686  51,157  1.13  17,936,117   46,651  1.03  16,602,939   26,071  0.64 
Interest payable and other liabilities271,597      221,091      186,613     
Shareholders' equity2,855,715      2,798,498      2,668,325     
Total liabilities and shareholders' equity$21,514,998      $20,955,706      $19,457,877     
Net Interest Spread (Average yield earned on interest-earning assets minus average rate paid on interest-bearing liabilities) 3.06%     3.14%     3.35%
Net Interest Income (FTE)  $165,486      $165,966     $154,090  
Net Interest Margin (Net Interest Income (FTE) divided by total average interest-earning assets) 3.42%     3.49%     3.56%
Reconciliation to Reported Net Interest Income                
Net interest income, fully taxable equivalent (non-GAAP) $165,486      $165,966     $154,090  
Adjustments for taxable equivalent interest (1):                
Loans  (766)      (782)      (750)  
Tax-exempt investment securities  (1,896)      (1,732)      (1,477)  
Total taxable equivalent interest adjustments (2,662)      (2,514)      (2,227)  
Net interest income (GAAP)  $162,824      $163,452     $151,863  
Net interest margin (GAAP)  3.38%      3.42%      3.51%  

(1) Fully taxable equivalent (FTE) basis using a federal income tax rate of 21%. The presentation of net interest income on a FTE basis is not in accordance with GAAP, but is customary in the banking industry.

(2) Nonaccrual loans and loans held-for-sale are included in average balances reported and are included in the calculation of yields. Tax equivalent interest also includes net loan fees.


 
Chemical Financial Corporation Announces 2019 First Quarter Operating Results
 
 
Noninterest Income and Operating Expenses Information (Unaudited)
Chemical Financial Corporation
(Dollars in thousands)
 
 1st
Quarter
2019
 4th
Quarter
2018
 3rd
Quarter
2018
 2nd
Quarter
2018
 1st
Quarter
2018
  
  
Noninterest income         
Service charges and fees on deposit accounts$7,967  $8,654  $9,319  $9,690  $9,434 
Wealth management revenue5,872  6,457  6,040  7,188  6,311 
Other fees for customer services(1)1,372  1,379  1,067  1,050  1,164 
Electronic banking fees(1)3,452  5,127  4,282  3,749  3,619 
Net gain on sale of loans and other mortgage banking revenue(2)8,540  6,804  8,905  8,874  8,783 
Change in fair value in loan servicing rights(2)(7,646) (2,827) 932  (30) 3,752 
Gain (loss) on sale of investment securities87  221    3   
Bank-owned life insurance(3)1,709  273  1,167  1,669  891 
Other(3)3,504  5,959  6,205  5,825  6,600 
Total noninterest income$24,857  $32,047  $37,917  $38,018  $40,554 

(1) Included within the line item "Other charges and fees for customer services" in the Consolidated Statements of Income.
(2) Included within the line item "Net gain on sale of loans and other mortgage banking revenue" in the Consolidated Statements of Income.
(3) Included within the line item "Other" noninterest income in the Consolidated Statements of Income.

 1st
Quarter
2019
 4th
Quarter
2018
 3rd
Quarter
2018
 2nd
Quarter
2018
 1st
Quarter
2018
  
  
Operating expenses         
Salaries and wages(1)$50,131  $48,486  $49,182  $47,810  $45,644 
Employee benefits(1)9,886  8,342  7,712  8,338  9,913 
Occupancy8,277  7,360  8,620  7,679  8,011 
Equipment and software6,979  7,641  8,185  8,276  7,659 
Outside processing and service fees11,726  11,698  12,660  10,673  10,356 
FDIC insurance premiums(2)3,323  3,583  4,823  4,473  5,629 
Professional fees(2)2,743  3,758  3,399  3,004  2,458 
Intangible asset amortization(2)1,361  1,426  1,426  1,425  1,439 
Credit-related expenses(2)660  829  1,239  1,467  1,306 
Merger expenses5,424         
Impairment of income tax credit(2)  5,772  3,162  1,716  1,634 
Other(2)8,505  9,471  9,253  9,700  7,561 
Total operating expenses$109,015  $108,366  $109,661  $104,561  $101,610 

(1) Included within the line item "Salaries, wages and employee benefits" in the Consolidated Statements of Income.
(2) Included within the line item "Other" operating expenses in the Consolidated Statements of Income.


 
Chemical Financial Corporation Announces 2019 First Quarter Operating Results
 
 
Composition of Loans and Deposits and Additional Information on Intangible Assets (Unaudited)
Chemical Financial Corporation
(Dollars in Thousands)
              
     Loan
Growth(1)
       Loan
Growth
 Mar 31,
 2019
 Dec 31,
 2018
 Three
Months
Ended
March 31,
2019
 Sep 30,
 2018
 Jun 30,
 2018
 Mar 31,
 2018
 Twelve
Months
Ended
March 31,
2019
              
Composition of Loans             
Commercial loan portfolio:             
Commercial$4,054,072  $4,002,568  5.1% $3,719,922  $3,576,438  $3,427,285  18.3%
Commercial real estate:             
Owner-occupied2,050,430  2,059,557  (1.8) 1,897,934  1,863,563  1,832,824  11.9 
Non-owner occupied2,736,320  2,785,020  (7.0) 2,739,700  2,728,103  2,680,801  2.1 
Vacant land48,419  67,510  (113.1) 73,987  79,606  74,751  (35.2)
Total commercial real estate4,835,169  4,912,087  (6.3) 4,711,621  4,671,272  4,588,376  5.4 
Real estate construction622,590  597,212  17.0  622,147  618,985  559,780  11.2 
Subtotal - commercial loans9,511,831  9,511,867    9,053,690  8,866,695  8,575,441  10.9 
Consumer loan portfolio:             
Residential mortgage3,549,617  3,458,666  10.5  3,391,987  3,325,277  3,264,620  8.7 
Consumer installment1,504,441  1,521,074  (4.4) 1,560,265  1,587,327  1,572,240  (4.3)
Home equity758,159  778,172  (10.3) 790,310  800,394  806,446  (6.0)
Subtotal - consumer loans5,812,217  5,757,912  3.8  5,742,562  5,712,998  5,643,306  3.0 
Total loans$15,324,048  $15,269,779  1.4% $14,796,252  $14,579,693  $14,218,747  7.8%
(1) Annualized                         


     Deposit
Growth(1)
       Deposit
Growth
 Mar 31,
 2019
 Dec 31,
 2018
 Three
Months
Ended
March 31,
2019
 Sep 30,
 2018
 Jun 30,
 2018
 Mar 31,
 2018
 Twelve
Months
Ended
March 31,
2019
Composition of Deposits             
Noninterest-bearing demand$3,835,427  $3,809,252  2.7% $4,015,323  $3,894,259  $3,801,125  0.9%
Savings and money market accounts4,197,044  4,092,082  10.3  4,220,658  3,841,540  3,774,975  11.2 
Interest-bearing checking3,418,864  3,316,278  12.4  3,037,289  2,514,232  2,701,055  26.6 
Brokered deposits1,034,929  985,522  20.1  915,348  1,087,959  651,846  58.8 
Other time deposits3,575,735  3,390,148  21.9  3,256,234  3,213,546  3,038,816  17.7 
Total deposits$16,061,999  $15,593,282  12.0% $15,444,852  $14,551,536  $13,967,817  15.0%
(1) Annualized                         


 March 31,
 2019
 December 31,
 2018
 September 30,
 2018
 June 30,
 2018
 March 31,
 2018
          
Additional Data - Intangibles         
Goodwill$1,134,568  $1,134,568  $1,134,568  $1,134,568  $1,134,568 
Loan servicing rights64,701  71,013  72,707  70,364  68,837 
Core deposit intangibles (CDI)27,195  28,556  29,981  31,407  32,833 


 
Chemical Financial Corporation Announces 2019 First Quarter Operating Results
 
 
Nonperforming Assets (Unaudited)
Chemical Financial Corporation
(Dollars in thousands)
                    
 Mar 31,
 2019
 Dec 31,
 2018
 Sep 30,
 2018
 Jun 30,
 2018
 Mar 31,
 2018
Nonperforming Assets         
Nonperforming Loans (1):         
Nonaccrual loans:         
Commercial$33,715  $30,139  $25,328  $20,741  $20,000 
Commercial real estate:         
Owner-occupied18,234  16,056  14,936  16,103  19,855 
Non-owner occupied19,430  23,021  8,991  9,168  5,489 
Vacant land2,153  3,337  4,711  3,135  4,829 
Total commercial real estate39,817  42,414  28,638  28,406  30,173 
Real estate construction3,663  12  28,477  5,704  77 
Residential mortgage7,665  7,988  9,611  7,974  7,621 
Consumer installment1,191  1,276  1,350  945  922 
Home equity3,273  3,604  3,269  2,972  3,039 
Total nonaccrual loans(1)89,324  85,433  96,673  66,742  61,832 
Other real estate and repossessed assets9,106  6,256  6,584  5,828  7,719 
Total nonperforming assets$98,430  $91,689  $103,257  $72,570  $69,551 
Accruing loans contractually past due 90 days or more as to interest or principal payments, excluding acquired loans accounted for under ASC 310-30:
Commercial$544  $  $632  $472  $322 
Commercial real estate:         
Owner-occupied  52  47  461   
Non-owner occupied  887       
Vacant land      16   
Total commercial real estate  939  47  477   
Real estate construction    38     
Residential mortgage         
Consumer installment         
Home equity  488  475  713  913 
Total accruing loans contractually past due 90 days or more as to interest or principal payments$544  $1,427  $1,192  $1,662  $1,235 

(1) Acquired loans, accounted for under Accounting Standards Codification 310-30, that are not performing in accordance with contractual terms are not reported as nonperforming loans because these loans are recorded in pools at their net realizable value based on the principal and interest we expect to collect on these loans.


 
Chemical Financial Corporation Announces 2019 First Quarter Operating Results
 
 
Summary of Allowance and Loan Loss Experience (Unaudited)
Chemical Financial Corporation
(Dollars in thousands)
 
 1st
Quarter
2019
 4th
Quarter
2018
 3rd
Quarter
2018
 2nd
Quarter
2018
 1st
Quarter
2018
 
Allowance for loan losses - originated loan portfolio
 Allowance for loan losses - beginning of period$109,564  $103,071  $100,015  $94,762  $91,887 
Provision for loan losses2,479  9,444  5,058  9,572  6,256 
Net loan (charge-offs) recoveries:        
Commercial(287) (627) (564) (517) (1,252)
Commercial real estate:        
  Owner-occupied(532) (153) 255  (1,656) 341 
  Non-owner occupied219
  (544) 392  92  (456)
  Vacant land(13)   2  (921) (448)
Total commercial real estate(326) (697) 649  (2,485) (563)
Real estate construction        26 
Residential mortgage(76) (243) (773) (88) (53)
Consumer installment(1,133) (1,293) (1,410) (994) (997)
Home equity63  (91) 96  (235) (542)
Net loan charge-offs(1,759) (2,951) (2,002) (4,319) (3,381)
Allowance for loan losses - end of period110,284  109,564 103,071  100,015  94,762 
Allowance for loan losses - acquired loan portfolio  
Allowance for loan losses - beginning of period420  970       
Provision for loan losses(420) (550) 970     
Allowance for loan losses - end of period  420  970     
Total allowance for loan losses$110,284  $109,984  $104,041  $100,015  $94,762 
Net loan charge-offs as a percent of average loans (annualized)0.05% 0.08% 0.05% 0.12% 0.10%


 March 31,
 2019
 December 31,
 2018
 September 30,
 2018
 June 30,
 2018
 March 31,
 2018
Originated loans$12,142,274  $11,844,756  $11,145,442  $10,696,533  $10,012,516 
Acquired loans3,181,774  3,425,023  3,650,810  3,883,160  4,206,231 
Total loans$15,324,048  $15,269,779  $14,796,252  $14,579,693  $14,218,747 
          
Allowance for loan losses (originated loan portfolio) as a percent of:
Total originated loans0.91% 0.93% 0.93% 0.94% 0.95%
Nonperforming loans123.5% 128.2% 106.6% 149.9% 153.3%
Credit mark as a percent of unpaid principal balance on acquired loans1.5% 1.7% 1.7% 1.8% 1.8%


 
Chemical Financial Corporation Announces 2019 First Quarter Operating Results
 
 
Reconciliation of Non-GAAP Financial Measures (Unaudited)
Chemical Financial Corporation
(Amounts in thousands)
 
 1st
Quarter
2019
 4th
Quarter
2018
 3rd
Quarter
2018
 2nd
Quarter
2018
 1st
Quarter
2018
     
Non-GAAP Operating Results    
Net Income         
Net income, as reported$62,942  $73,039  $70,397  $68,988  $71,596 
Merger expenses 5,424             
Loan servicing rights change in fair value (gains) losses 7,646   2,827   (932)  30   (3,752)
Significant items 13,070   2,827   (932)  30   (3,752)
Income tax benefit(1) (2,744)  (594)  197   (7)  788 
Significant items, net of tax 10,326   2,233   (735)  23   (2,964)
Net income, excluding significant items$73,268  $75,272  $69,662  $69,011  $68,632 
Diluted Earnings Per Share        
Diluted earnings per share, as reported$0.87  $1.01  $0.98  $0.96  $0.99 
Effect of significant items, net of tax 0.15   0.03   (0.01)     (0.04)
Diluted earnings per share, excluding significant items$1.02  $1.04  $0.97  $0.96  $0.95 
Return on Average Assets         
Return on average assets, as reported 1.17%  1.39%  1.37%  1.39%  1.47%
Effect of significant items, net of tax 0.19   0.05   (0.01)     (0.06)
Return on average assets, excluding significant items 1.36%  1.44%  1.36%  1.39%  1.41%
Return on Average Shareholders' Equity      
Return on average shareholders' equity, as reported 8.8%  10.4%  10.2%  10.2%  10.7%
Effect of significant items, net of tax 1.5   0.4   (0.1)     (0.4)
Return on average shareholders' equity, excluding significant items 10.3%  10.8%  10.1%  10.2%  10.3%
Return on Average Tangible Shareholders' Equity      
Average shareholders' equity$2,855,715 $2,798,498  $2,769,101 $2,707,346 $2,668,325
Average goodwill and core deposit intangibles, net of tax 1,153,275  1,154,469   1,155,679  1,156,877  1,158,084
Average tangible shareholders' equity$1,702,440 $1,644,029  $1,613,422 $1,550,469 $1,510,241
Return on average tangible shareholders' equity 14.8%  17.8%  17.5%  17.8%  19.0%
Effect of significant items, net of tax 2.4   0.5   (0.2)     (0.8)
Return on average tangible shareholders' equity, excluding significant items 17.2%  18.3%  17.3%  17.8%  18.2%

(1) Assumes significant items are deductible at an income tax rate of 21%.


 
Chemical Financial Corporation Announces 2019 First Quarter Operating Results
 
 
Reconciliation of Non-GAAP Financial Measures (Unaudited)
Chemical Financial Corporation
(Amounts in thousands, except per share data)
 
 1st
Quarter
2019
 4th
Quarter
2018
 3rd
Quarter
2018
 2nd
Quarter
2018
 1st
Quarter
2018
Efficiency Ratio and Operating Expense, Core        
Net interest income$162,824  $163,452  $159,481  $157,537  $151,863 
Noninterest income24,857  32,047  37,917  38,018  40,554 
Total revenue - GAAP187,681  195,499  197,398  195,555  192,417 
Net interest income FTE adjustment2,662  2,514  2,386  2,331  2,227 
Loan servicing rights change in fair value (gains) losses7,646  2,827  (932) 30  (3,752)
Losses (gains) from sale of investment securities(87) (221)   (3)  
Total revenue - Non-GAAP$197,902  $200,619  $198,852  $197,913  $190,892 
Operating expenses - GAAP$109,015  $108,366  $109,661  $104,561  $101,610 
Merger expenses(5,424)        
Impairment of income tax credits  (5,772) (3,162) (1,716) (1,634)
Operating expense, core - Non-GAAP103,591  102,594  106,499  102,845  99,976 
Amortization of intangibles(1,361) (1,426) (1,426) (1,425) (1,439)
Operating expenses, efficiency ratio - Non-GAAP$102,230  $101,168  $105,073  $101,420  $98,537 
Efficiency ratio - GAAP58.1% 55.4% 55.6% 53.5% 52.8%
Efficiency ratio - adjusted Non-GAAP51.7% 50.4% 52.8% 51.2% 51.6%


 Mar 31,
 2019
 Dec 31,
 2018
 Sep 30,
 2018
 Jun 30,
 2018
 Mar 31,
 2018
Tangible Book Value         
Shareholders' equity, as reported$2,897,509  $2,836,260  $2,788,924  $2,750,999  $2,704,703 
Goodwill and core deposit intangibles, net of tax(1,152,705) (1,153,877) (1,155,083) (1,156,307) (1,157,505)
Tangible shareholders' equity$1,744,804  $1,682,383  $1,633,841  $1,594,692  $1,547,198 
Common shares outstanding71,551  71,460  71,438  71,418  71,350 
Book value per share (shareholders' equity, as reported, divided by common shares outstanding)$40.50  $39.69  $39.04  $38.52  $37.91 
Tangible book value per share (tangible shareholders' equity divided by common shares outstanding)$24.39  $23.54  $22.87  $22.33  $21.68 
Tangible Shareholders' Equity to Tangible Assets      
Total assets, as reported$21,800,313  $21,498,341  $20,905,489  $20,282,603  $19,757,510 
Goodwill and core deposit intangibles, net of tax(1,152,705) (1,153,877) (1,155,083) (1,156,307) (1,157,505)
Tangible assets$20,647,608  $20,344,464  $19,750,406  $19,126,296  $18,600,005 
Shareholders' equity to total assets13.3% 13.2% 13.3% 13.6% 13.7%
Tangible shareholders' equity to tangible assets8.5% 8.3% 8.3% 8.3% 8.3%
               

For further information:
David T. Provost, CEO
Dennis L. Klaeser, CFO
800-867-9757

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Source: Chemical Financial Corporation