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Chemical Financial Corporation Reports Fourth Quarter 2008 Results

Company Release - 1/26/2009 7:34 AM ET

MIDLAND, Mich., Jan. 26, 2009 (GLOBE NEWSWIRE) -- Chemical Financial Corporation (Nasdaq:CHFC) today announced fourth quarter 2008 net income of $1.6 million, or $0.06 per diluted share, versus net income of $9.8 million, or $0.41 per diluted share, in the fourth quarter of 2007.

Net income was $19.8 million, or $0.83 per diluted share, for the twelve months ended December 31, 2008, compared to net income of $39.0 million, or $1.60 per diluted share, for the twelve months ended December 31, 2007.

"Although net interest income in the fourth quarter of 2008 increased over 15 percent from the prior year's quarter, increasing credit quality issues and associated costs produced a lower level of financial performance. During the fourth quarter of 2008, we recorded an $18 million provision for loan losses and incurred $2.6 million in other credit quality related costs. In light of these amounts and the credit quality issues facing the banking industry nationwide, we are encouraged by our continued profitability, but by no means satisfied with our reported results," said David B. Ramaker, Chairman, Chief Executive Officer and President of Chemical Financial Corporation.

"With the national economy and Michigan's economy in the midst of a significant recession, and the outlook uncertain, we continue to enhance our efforts to address credit quality issues. Opportunities remain for quality consumer and commercial loan growth, however, as national competitors continue to abandon lending to the Michigan market," noted Ramaker.

"Our balance sheet, capital position, and liquidity leave Chemical Financial Corporation well positioned to capture this growth by expanding our commercial and consumer relationships as well as capitalizing on other expansion opportunities that present themselves. Chemical Financial Corporation will continue to take a leadership role in meeting the financial needs of the communities we serve," added Ramaker.

Net interest income was $38.5 million in the fourth quarter of 2008, an increase of $5.1 million, or 15.2 percent, from fourth quarter 2007 net interest income of $33.4 million and an increase of $1.8 million, or 4.9 percent, from third quarter 2008 net interest income of $36.7 million. The increases in net interest income were attributable primarily to continued increases in net interest margin. The net interest margin (on a tax-equivalent basis) in the fourth quarter of 2008 was 4.38 percent, up substantially from 3.86 percent in the fourth quarter of 2007 and up from 4.20 percent in the third quarter of 2008. The increases in net interest margin were primarily attributable to decreases in rates paid on interest-bearing liabilities exceeding decreases in rates earned on interest-earning assets, as deposits repriced more rapidly than loans in the falling interest rate environment experienced in the past 12 months.

Total assets were $3.87 billion at December 31, 2008, up slightly from $3.79 billion at September 30, 2008 and up modestly from $3.75 billion at December 31, 2007. At December 31, 2008, total loans were $2.98 billion, versus $2.93 billion at September 30, 2008 and $2.80 billion at December 31, 2007. The Company had no Federal funds sold at December 31, 2008, versus $2 million at September 30, 2008 and $58 million at December 31, 2007. Due to the low yields on Federal funds sold in the current interest rate environment, all overnight investable liquidity, $50 million at year-end 2008, was held in cash at the Federal Reserve Bank in Chicago. Investment securities were $547 million at December 31, 2008, down from $566 million at September 30, 2008, and down from $595 million at December 31, 2007. During 2008, the Company utilized excess liquidity to fund loan growth.

Total deposits were $2.98 billion at December 31, 2008, up from $2.94 billion at September 30, 2008, and up from $2.88 billion at December 31, 2007. Long-term wholesale borrowings, comprised of Federal Home Loan Bank advances, totaled $135 million at December 31, 2008, up from $90 million at September 30, 2008, although down from $150 million at December 31, 2007.

The provision for loan losses was $18.0 million in the fourth quarter of 2008, compared to $22.0 million in the third quarter of 2008 and $4.5 million in the fourth quarter of 2007. Included in the third quarter 2008 provision was $10.1 million attributable to a previously disclosed fraudulent loan transaction. Net loan charge-offs were $7.3 million in the fourth quarter of 2008, down from $15.3 million in the third quarter of 2008, but up substantially from $3.4 million in the fourth quarter of 2007. The declines in both the provision and loan charge-offs in the fourth quarter of 2008, as compared to the third quarter of 2008, were attributable to the fraudulent loan transaction that was reported in the third quarter of 2008. At December 31, 2008, nonperforming assets totaled $113.3 million, up from $98.4 million at September 30, 2008 and up from $74.5 million at December 31, 2007. Nonperforming loans were $93.3 million at December 31, 2008, compared to $82.7 million at September 30, 2008 and $63.4 million at December 31, 2007. At December 31, 2008, nonperforming loans as a percentage of total loans were 3.13 percent, up from 2.83 percent at September 30, 2008 and up from 2.26 percent at December 31, 2007.

The allowance for loan losses was $57.1 million at December 31, 2008, up 22.9 percent from $46.4 million at September 30, 2008. The allowance at December 31, 2008 was 1.91 percent of total loans, up from 1.58 percent of total loans at September 30, 2008 and up from 1.41 percent of total loans at December 31, 2007. The allowance for loan losses as a percent of nonperforming loans was 61 percent at December 31, 2008, up from 56 percent at September 30, 2008, but down slightly from 62 percent at December 31, 2007. As part of Chemical Financial Corporation's ongoing credit portfolio monitoring program, the Company makes regular, periodic assessments of the quality of each nonperforming credit, the financial condition of the borrower and the value of any underlying collateral to identify potential loss exposure on nonperforming loans.

Total noninterest income was $9.6 million in the fourth quarter of 2008, down $0.5 million, or 4.5 percent, from $10.1 million in the third quarter of 2008 and down $1.2 million, or 11.3 percent, from $10.8 million in the fourth quarter of 2007. The decrease in the fourth quarter of 2008 was primarily attributable to decreases in trust and investment services revenue, service charges on deposit accounts and other income. The decrease in trust and investment services revenue resulted from declines in U.S. equity markets, which reduced the market value of the assets under management. Operating expenses in the fourth quarter of 2008 were $28.6 million, up $1.9 million, or 7.0 percent, from the third quarter of 2008, and up $3.1 million, or 12.2 percent, from $25.5 million in the fourth quarter of 2007. The increase in the fourth quarter of 2008 was attributable to higher operating costs incurred across the company's expense base, although largely due to increases in other credit-related costs. Credit related costs, included in other operating expenses, were $2.6 million in the fourth quarter of 2008, compared to $1.1 million in the third quarter of 2008 and $0.9 million in the fourth quarter of 2007. The Company's efficiency ratio was 58.7 percent in the fourth quarter of 2008, up from 56.5 percent in the third quarter of 2008 and from 56.9 percent in the fourth quarter of 2007. The increase in the efficiency ratio from the prior year's quarter was attributable to the increase in operating expenses.

The Company's return on average assets during the fourth quarter of 2008 was 0.17 percent, up from (0.11) percent in the third quarter of 2008, but down from 1.04 percent in the fourth quarter of 2007. At December 31, 2008, the Company's book value stood at $20.58 per share versus $21.35 per share at December 31, 2007.

Net income for the twelve months ended December 31, 2008 of $19.8 million was 49 percent lower than net income for the twelve months ended December 31, 2007. Costs attributable to declining credit quality along with the previously disclosed fraud loss were the primary cause of the decline in net income. Although net interest income increased by over $15 million, or 11.7 percent, this increase was insufficient to overcome the substantial increase in the provision for loan losses. The provision for loan losses in the twelve months ended December 31, 2008 totaled $49.2 million, more than four times the $11.5 million provision incurred in 2007. Noninterest income declined by 4.8 percent in 2008 from the prior year, due primarily to declines in other income and trust and investment services revenue, while operating expenses increased by 4.2 percent, due primarily to increases in credit-related costs, which are reported in other operating expenses.

As previously announced on January 21, 2009, the Company declared its first quarter 2009 cash dividend of $0.295 per share, unchanged from the prior quarter's dividend level.

Chemical Financial Corporation is the third-largest bank holding company headquartered in Michigan. The Company operates through a single subsidiary bank, Chemical Bank, with 129 banking offices spread over 31 counties in the lower peninsula of Michigan. At December 31, 2008, the Company had total assets of $3.87 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.

Safe Harbor Statement

This report 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 itself. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "is likely," "judgment," "plans," "predicts," "projects," "should," "will," variations of such words and similar expressions are intended to identify such forward-looking statements. Management's determination of the provision and allowance for loan losses involves judgments that are inherently forward-looking. 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. Chemical Financial 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 in Chemical Financial Corporation's Annual Report on Form 10-K for the year ended December 31, 2007, the timing and level of asset growth; changes in banking laws and regulations; changes in tax laws; changes in prices, levies and assessments; the impact of technological advances and issues; governmental and regulatory policy changes; opportunities for acquisitions and the effective completion of acquisitions and integration of acquired entities; the possibility that anticipated cost savings and revenue enhancements from acquisitions, restructurings, reorganizations and bank consolidations may not be realized fully or at all or within expected time frames; the local and global effects of the ongoing war on terrorism and other military actions, including actions in Iraq; and current uncertainties and fluctuations in the financial markets and stocks of financial services providers due to concerns about credit availability and concerns about the Michigan economy in particular. 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
 Fourth Quarter Operating Results
 ---------------------------------------------------------------------

 Consolidated Statements of Financial Position (Unaudited)
 Chemical Financial Corporation

 (In thousands,
  except per                                December 31    December 31
  share data)                                   2008           2007
 -----------------------------------------  -----------    -----------
 Assets:
 Cash and cash equivalents:
     Cash and cash due from banks           $   168,650    $   125,285
     Federal funds sold                              --         58,000
     Interest-bearing deposits with
      unaffiliated banks                          4,572          6,228
                                            -----------    -----------
       Total Cash and Cash Equivalents          173,222        189,513
 Investment securities:
     Available for sale                         449,947        503,271
     Held to maturity                            97,511         91,243
                                            -----------    -----------
       Total Investment Securities              547,458        594,514
 Other securities                                22,128         22,135
 Loans held for sale                              8,463          7,883

 Loans:
     Commercial                                 587,554        515,319
     Real estate commercial                     786,404        760,399
     Real estate construction                   119,001        134,828
     Real estate residential                    839,555        838,545
     Consumer                                   649,163        550,343
                                            -----------    -----------
       Total Loans                            2,981,677      2,799,434
 Allowance for loan losses                     (57,056)       (39,422)
                                            -----------    -----------
       Net Loans                              2,924,621      2,760,012

 Premises and equipment                          53,036         49,930
 Goodwill                                        69,908         69,908
 Other intangible assets                          5,241          6,876
 Interest receivable and other assets            70,236         53,542
                                            -----------    -----------
       Total Assets                         $ 3,874,313    $ 3,754,313
                                            ===========    ===========

 Liabilities:
 Deposits:
     Noninterest-bearing                    $   524,464    $   535,705
     Interest-bearing                         2,454,328      2,339,884
                                            -----------    -----------
       Total Deposits                         2,978,792      2,875,589
 Interest payable and other liabilities          35,214         22,848
 Short-term borrowings                          233,738        197,363
 Federal Home Loan Bank advances --
  long-term                                     135,025        150,049
                                            -----------    -----------
       Total Liabilities                      3,382,769      3,245,849

 Shareholders' Equity:
     Common stock, $1 par value per share        23,881         23,815
     Surplus                                    346,916        344,579
     Retained earnings                          133,578        141,867
     Accumulated other comprehensive loss      (12,831)        (1,797)
                                            -----------    -----------
       Total Shareholders' Equity               491,544        508,464
                                            -----------    -----------
       Total Liabilities
        and Shareholders' Equity            $ 3,874,313    $ 3,754,313
                                            ===========    ===========


 Chemical Financial Corporation Announces
 Fourth Quarter Operating Results
 --------------------------------------------------------------------
 Consolidated Statements of Income (Unaudited)
 Chemical Financial Corporation

 (In thousands,             Three Months Ended   Twelve Months Ended
 except per                    December 31           December 31
 share data)                2008        2007       2008       2007
 -----------------------  ---------   ---------  ---------  ---------
 Interest Income:
 Interest and fees
  on loans                 $ 45,357    $ 47,630   $180,629   $191,480
 Interest on investment
  securities:
     Taxable                  5,148       6,260     21,793     24,927
     Tax-exempt                 762         701      2,882      2,719
 Dividends on other
  securities                    372         361      1,167      1,116
 Interest on federal
  funds sold                     56         640      1,666      5,135
 Interest on deposits
  with unaffiliated
  banks                           8         134        199        517
                          ---------   ---------  ---------  ---------
       Total Interest
        Income               51,703      55,726    208,336    225,894

 Interest Expense:
 Interest on deposits        11,716      18,944     54,763     81,234
 Interest on short-term
  borrowings                    281       1,596      2,223      7,327
 Interest on Federal
  Home Loan Bank
  advances - long-term        1,195       1,764      6,097      7,244
                          ---------   ---------  ---------  ---------
       Total Interest
        Expense              13,192      22,304     63,083     95,805
                          ---------   ---------  ---------  ---------
       Net Interest
        Income               38,511      33,422    145,253    130,089
 Provision for loan
  losses                     18,000       4,475     49,200     11,500
                          ---------   ---------  ---------  ---------
       Net Interest
        Income after
        Provision
         for Loan Losses     20,511      28,947     96,053    118,589

 Noninterest Income:
 Service charges on
  deposit accounts            4,951       5,306     20,048     20,549
 Trust and investment
  services revenue            2,517       2,906     10,625     11,325
 Other charges and fees
  for customer services       1,658       1,759      6,894      6,772
 Mortgage banking
  revenue                       428         470      1,836      2,117
 Investment securities
  net gains                      --          --      1,278          4
 Other                           50         391        516      2,521
                          ---------   ---------  ---------  ---------
       Total Noninterest
        Income                9,604      10,832     41,197     43,288

 Operating Expenses:
 Salaries, wages and
  employee benefits          14,863      14,033     59,227     59,008
 Occupancy                    2,619       2,451     10,221     10,172
 Equipment                    2,564       2,301      9,230      8,722
 Other                        8,583       6,737     30,430     26,769
                          ---------   ---------  ---------  ---------
       Total Operating
        Expenses             28,629      25,522    109,108    104,671
                          ---------   ---------  ---------  ---------
 Income Before
   Income Taxes               1,486      14,257     28,142     57,206
       Federal Income
        Tax Expense
        (Benefit)              (100)      4,411      8,300     18,197
                          ---------   ---------  ---------  ---------
 Net Income                $  1,586    $  9,846   $ 19,842   $ 39,009
                          =========   =========  =========  =========
 Net income per share:
     Basic                 $   0.06    $   0.41   $   0.83   $   1.60
     Diluted                   0.06        0.41       0.83       1.60

 Cash dividends
  per share                   0.295       0.285      1.180      1.140

 Average shares
  outstanding:
     Basic                   23,878      23,884     23,840     24,360
     Diluted                 23,894      23,893     23,853     24,371

 Chemical Financial Corporation Announces
 Fourth Quarter Operating Results
 --------------------------------------------------------------------

 Financial Summary (Unaudited)
 Chemical Financial Corporation

                             Three Months           Twelve Months
                                Ended                   Ended
 (Dollars in                 December 31             December 31
  thousands)              2008        2007        2008        2007
 -----------------     ----------  ----------  ----------  ----------
 Average Balances
 Total assets          $3,807,132  $3,741,603  $3,784,617  $3,785,034
 Total
  interest-earning
  assets                3,567,966   3,510,614   3,550,611   3,551,867
 Total loans            2,966,308   2,814,004   2,873,151   2,805,880
 Total deposits         2,930,089   2,883,060   2,924,361   2,923,004
 Total
  interest-bearing
  liabilities           2,738,703   2,677,572   2,711,413   2,718,814
 Total
  shareholders'
  equity                  503,758     502,260     509,100     505,915


                             Three Months           Twelve Months
                                Ended                   Ended
                             December 31             December 31
                          2008        2007        2008        2007
 -----------------     ----------  ----------  ----------  ----------
 Key Ratios
  (annualized
  where applicable)
 Net interest
  margin (taxable
  equivalent basis)         4.38%       3.86%       4.16%       3.73%
 Efficiency ratio           58.7%       56.9%       57.8%       59.6%
 Return on average
  assets                    0.17%       1.04%       0.52%       1.03%
 Return on average
  shareholders'
  equity                     1.3%        7.8%        3.9%        7.7%
 Average
  shareholders'
  equity as a
  percent of
  average assets            13.2%       13.4%       13.5%       13.4%
 Tangible
  shareholders'
  equity as a
  percent of total
  assets                                            11.0%       11.7%
 Total risk-based
  capital ratio                                     16.4%       17.3%


                      Dec 31    Sept 30  June 30    Mar 31    Dec 31
                       2008      2008      2008      2008      2007
 ------------------  --------  --------  --------  --------  --------
 Credit Quality
  Statistics
 Nonaccrual loans    $ 76,466  $ 69,719  $ 61,635  $ 61,360  $ 55,596
 Loans 90 or more
  days past due and
  still accruing       16,862    13,012    10,288    10,570     7,764
 Total
  nonperforming
  loans                93,328    82,731    71,923    71,930    63,360
 Repossessed
  assets (RA)          19,923    15,699    15,897    12,664    11,132
 Total
  nonperforming
  assets              113,251    98,430    87,820    84,594    74,492
 Net loan
  charge-offs
  (year-to-date)       31,566    24,210     8,958     2,460     6,176

 Allowance for
  loan losses as
  a percent of
  total loans           1.91%     1.58%     1.39%     1.42%     1.41%
 Allowance for
  loan losses as
  a percent of
  nonperforming
  loans                   61%       56%       55%       55%       62%
 Nonperforming
  loans as a
  percent of
  total loans           3.13%     2.83%     2.52%     2.58%     2.26%
 Nonperforming
  assets as a
  percent of total
  loans plus RA         3.77%     3.34%     3.06%     3.02%     2.65%
 Nonperforming
  assets as a
  percent of total
  assets                2.92%     2.60%     2.35%     2.23%     1.98%
 Net loan
  charge-offs as a
  percent of
  average loans
  (year-to-date,
  annualized)           1.10%     1.14%     0.64%     0.35%     0.22%


                      Dec 31    Sept 30   June 30   Mar 31    Dec 31
                       2008      2008      2008      2008      2007
 ------------------  --------  --------  --------  --------  --------
 Additional Data -
  Intangibles
 Goodwill            $ 69,908  $ 69,908  $ 69,908  $ 69,908  $ 69,908
 Core deposit
  intangibles           3,050     3,266     3,609     4,062     4,593
 Mortgage servicing
  rights (MSR)          2,191     2,328     2,354     2,280     2,283
 Amortization of
  core deposit
  intangibles
  (quarter only)          216       343       453       531       431


 Chemical Financial Corporation Announces
 Fourth Quarter Operating Results
 --------------------------------------------------------------------

 Nonperforming Assets (Unaudited)
 Chemical Financial Corporation

 (Dollars in          Dec 31    Sept 30  June 30    March 31  Dec 31
  thousands)           2008      2008      2008      2008      2007
 ------------------  --------  --------  --------  --------  --------
 Nonaccrual loans:
   Commercial        $ 16,324  $ 13,320  $ 10,918  $ 11,595  $ 10,961
   Real estate
    commercial         27,344    24,230    17,915    19,235    19,672
   Real estate
    construction       15,310    14,513    15,157    17,206    12,979
   Real estate
    residential        12,175    12,869    11,955     9,267     8,516
   Consumer             5,313     4,787     5,690     4,057     3,468
                     --------  --------  --------  --------  --------
   Total
    nonaccrual loans   76,466    69,719    61,635    61,360    55,596
 Accruing loans
  contractually
  past due 90 days
  or more as to
  interest
  or principal
  payments:
   Commercial           1,652     1,735     3,130     1,631     1,958
   Real estate
    commercial          9,995     6,586     2,948     2,865     4,170
   Real estate
    construction          759     1,096       676       392        --
   Real estate
    residential         3,369     2,910     2,746     4,742     1,470
   Consumer             1,087       685       788       940       166
                     --------  --------  --------  --------  --------

   Total accruing
    loans
    contractually
    past due 90
    days or more as
    to interest or
    principal
    payments           16,862    13,012    10,288    10,570     7,764
                     --------  --------  --------  --------  --------
 Total nonperforming
  loans                93,328    82,731    71,923    71,930    63,360
 Other real estate
  and repossessed
  assets               19,923    15,699    15,897    12,664    11,132
                     --------  --------  --------  --------  --------
 Total nonperforming
  assets             $113,251  $ 98,430  $ 87,820  $ 84,594  $ 74,492
                     --------  --------  --------  --------  --------


 Chemical Financial Corporation Announces
 Fourth Quarter Operating Results
 --------------------------------------------------------------------

 Summary of Loan Loss Experience (Unaudited)
 Chemical Financial Corporation

                                    Three Months Ended
                     ------------------------------------------------
 (Dollars in          Dec 31   Sept 30   June 30    Mar 31    Dec 31
  thousands)           2008      2008      2008      2008      2007
 ------------------  --------  --------  --------  --------  --------
 Allowance for loan
  losses at
  beginning
  of period          $ 46,412  $ 39,664  $ 39,662  $ 39,422  $ 38,386
 Provision for
  loan losses          18,000    22,000     6,500     2,700     4,475

 Loans charged off:
   Commercial         (3,254)  (11,468)   (1,474)     (591)     (550)
   Real estate
    commercial        (1,581)     (673)   (3,373)   (1,304)   (1,415)
   Real estate
    construction        (954)     (923)   (1,070)      (16)     (850)
   Real estate
    residential       (1,063)     (749)     (358)     (245)     (306)
   Consumer           (1,918)   (1,776)     (612)     (540)     (596)
                     --------  --------  --------  --------  --------
   Total loan
    charge-offs       (8,770)  (15,589)   (6,887)   (2,696)   (3,717)
 Recoveries of
  loans previously
  charged off:
   Commercial           1,094        74       228        77        90
   Real estate
    commercial             11        68        32        20         1
   Real estate
    construction           --        --        --        29        30
   Real estate
    residential            83        50         5        22        12
   Consumer               226       145       124        88       145
                     --------  --------  --------  --------  --------
   Total loan
    recoveries          1,414       337       389       236       278
                     --------  --------  --------  --------  --------
   Net loan
    charge-offs       (7,356)  (15,252)   (6,498)   (2,460)   (3,439)
                     --------  --------  --------  --------  --------
 Allowance for loan
  losses at end
  of period          $ 57,056  $ 46,412  $ 39,664  $ 39,662  $ 39,422
                     --------  --------  --------  --------  --------


 Chemical Financial Corporation Announces
 Fourth Quarter Operating Results
 --------------------------------------------------------------------

 Selected Quarterly Information (Unaudited)
 Chemical Financial Corporation

 (In thousands,
 except per share     4th Qtr  3rd Qtr.  2nd Qtr.  1st Qtr.  4th Qtr.
 data)                 2008      2008      2008      2008      2007
 ------------------  --------  --------  --------  --------  --------
 Summary of
  Operations
 Interest income     $ 51,703  $ 51,688  $ 51,508  $ 53,437  $ 55,726
 Interest expense      13,192    14,968    15,872    19,051    22,304
                     --------  --------  --------  --------  --------
 Net interest
  income               38,511    36,720    35,636    34,386    33,422
 Provision for
  loan losses          18,000    22,000     6,500     2,700     4,475
                     --------  --------  --------  --------  --------
 Net interest
  income after
  provision for
  loan losses          20,511    14,720    29,136    31,686    28,947
 Noninterest income     9,604    10,054    11,959     9,580    10,832
 Operating expenses    28,629    26,750    26,885    26,844    25,522
                     --------  --------  --------  --------  --------
 Income (Loss)
  Before Income
  Taxes                1,486    (1,976)    14,210    14,422    14,257
 Federal Income
  Tax Expense
  (Benefit)             (100)     (951)     4,600     4,751     4,411
                     --------  --------  --------  --------  --------
 Net Income (Loss)   $  1,586  $(1,025)  $  9,610  $  9,671  $  9,846

 ------------------  --------  --------  --------  --------  --------
 Per Common
  Share Data
 Net income (loss):
   Basic             $   0.06  $ (0.04)  $   0.40  $   0.41  $   0.41
   Diluted               0.06    (0.04)      0.40      0.41      0.41
 Cash dividends         0.295     0.295     0.295     0.295     0.285
 Book value -
  period-end            20.58     21.19     21.58     21.60     21.35
 Market value -
  period-end            27.88     31.14     20.40     23.84     23.79
CONTACT:  Chemical Financial Corporation
          Lori A. Gwizdala, CFO
          989 839 5358