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Chemical Financial Corporation Reports Second Quarter 2009 Earnings

Company Release - 7/27/2009 7:51 AM ET

MIDLAND, Mich., July 27, 2009 (GLOBE NEWSWIRE) -- Chemical Financial Corporation (Nasdaq:CHFC) today announced 2009 second quarter net income of $2.3 million, or $0.10 per diluted share, versus net income of $9.6 million, or $0.40 per diluted share, in the second quarter of 2008.

Net income was $5.0 million, or $0.21 per diluted share, for the six months ended June 30, 2009, compared to net income of $19.3 million, or $0.81 per diluted share, for the six months ended June 30, 2008.

"Although we remain profitable, loan loss provisioning, credit related costs and increased FDIC premiums depressed second quarter earnings, as Michigan's ongoing recession continued to negatively impact virtually all segments of our customer base. In the quarter, we recorded a $15.2 million provision for loan losses, as we incurred net loan charge-offs of $7.8 million in the quarter and increased our allowance for loan losses an additional $7.4 million," said David B. Ramaker, Chairman, Chief Executive Officer & President. "This increase in our allowance for loan losses was precipitated primarily by an increase in nonperforming loans during the quarter."

"Our capital levels and liquidity bear witness to our financial strength and stability, which have enabled us to pursue quality opportunities for growth in consumer loans, real estate residential loan originations and deposits despite the challenging economic environment. Since the year began, our consumer lending portfolio has grown by $100 million, which is approximately a 30 percent annualized rate of growth. Extensive opportunities in indirect consumer lending due to a combination of an increased sales effort, new technology to support indirect loan application processing and a reduction in the number of competing lenders has facilitated this growth. Similarly, deposit growth has been strong, with total deposits up 8.4 percent in the past twelve months. As credit concerns ease and the economy recovers, the Company intends to increasingly deploy these deposits into loans, which we believe will translate into improved earnings performance."

"Due in part to our strong capital levels, which we are committed to maintaining, we remain well positioned to capitalize on other growth opportunities that may present themselves, and we will continue to take a strong leadership position in meeting the needs of the communities we serve," added Ramaker.

Net interest income was $37.0 million in the second quarter of 2009, an increase of $1.4 million, or 3.8 percent, from second quarter 2008 net interest income of $35.6 million and an increase of $0.4 million, or 1.1 percent, from first quarter 2009 net interest income of $36.6 million. These increases resulted primarily from improved income from growth in earning assets outpacing declines in net interest margin. The net interest margin (on a tax-equivalent basis) in the second quarter of 2009 was 4.00 percent, down slightly from 4.11 percent in the second quarter of 2008 and from 4.06 percent in the first quarter of 2009. The decrease in the net interest margin was largely attributable to a higher proportion of earning assets being invested in lower rate-yielding assets. In general, this shift in earning asset mix was attributable to a lack of quality business lending opportunities under current economic conditions and a reduction in the residential loan portfolio, which resulted in the Company investing funds received as the result of relationship-based deposit growth into lower earning asset classes, such as securities and overnight investments.

Total assets were $4.00 billion at June 30, 2009, up from $3.87 billion at December 31, 2008 and from $3.74 billion at June 30, 2008. At June 30, 2009, total loans were $2.98 billion, versus $2.98 billion at December 31, 2008 and $2.85 billion at June 30, 2008. As previously mentioned, in the current economic environment, the Company is challenged in finding adequate high quality commercial and retail loan opportunities to maintain and grow certain segments of its loan portfolio. The Company experienced a $66.4 million, or 7.9 percent, decline in the residential loan portfolio during the six months ended June 30, 2009. This decline was primarily attributable to the historically low fixed mortgage interest rates that have been prevalent throughout 2009. As adjustable rate portfolio loans refinanced into fixed rate products, the Company sold the majority of fixed rate loans it originated during the six months ended June 30, 2009 into the secondary market, while retaining servicing rights on the majority of the loans sold; resulting in an increase in mortgage banking revenue. Investment securities were $637 million at June 30, 2009, up substantially from $547 million at December 31, 2008 and up from $589 million at June 30, 2008.

Total deposits were $3.13 billion at June 30, 2009, up from $2.98 billion at December 31, 2008 and from $2.89 billion at June 30, 2008. The strong deposit growth over the past year was attributable, in part, to the Company's ongoing efforts to enhance and build customer relationships. Long-term wholesale borrowings, comprised of Federal Home Loan Bank advances, totaled $115 million at June 30, 2009, down $20 million, or 15 percent, from $135 million at December 31, 2008 and down $15 million, or 12 percent, from $130 million at June 30, 2008.

The provision for loan losses was $15.2 million in the second quarter of 2009, compared to $14.0 million in the first quarter of 2009 and $6.5 million in the second quarter of 2008. Net loan charge-offs were $7.8 million in the second quarter of 2009, down from $8.5 million in the first quarter of 2009, although up from $6.5 million in the second quarter of 2008.

At June 30, 2009, nonperforming assets totaled $142.8 million, up from $125.7 million at March 31, 2009 and $87.8 million at June 30, 2008. Nonperforming loans were $124.4 million at June 30, 2009, up from $105.0 million at March 31, 2009, with the increase attributable primarily to increases in the commercial, real estate commercial and real estate residential categories. At June 30, 2009, nonperforming loans as a percentage of total loans were 4.18 percent, up from 3.56 percent at March 31, 2009 and up from 2.52 percent at June 30, 2008.

The allowance for loan losses of $70.0 million at June 30, 2009 was 2.35 percent of total loans, up from 2.12 percent of total loans at March 31, 2009 and up from 1.39 percent of total loans at June 30, 2008. The allowance for loan losses as a percent of nonperforming loans was 56 percent at June 30, 2009, compared to 60 percent at March 31, 2009, and 55 percent at June 30, 2008. The Company's nonperforming loans at June 30, 2009 included commercial, real estate commercial and residential development construction loans, totaling $48.6 million, which have been analyzed and deemed to be adequately collateralized so as not to require a valuation allowance.

Total noninterest income was $11.0 million in the second quarter of 2009, up $1.1 million, or 11.2 percent, from the first quarter of 2009, although down $1.0 million, or 8.4 percent, from the second quarter of 2008. The increase in noninterest income in the second quarter of 2009, compared to the first quarter of 2009, was primarily attributable to increases in both service charges on deposit accounts and mortgage banking revenue. The decrease from the prior year was primarily attributable to the realization of a $1.7 million gain on the sale of MasterCard stock in the second quarter of 2008. As compared to the second quarter of 2008, in the second quarter of 2009 the Company saw strong increases in mortgage banking revenue, which were partially offset by declines in trust and investment services revenue due primarily to declines in the value of trust assets.

Operating expenses of $30.0 million in the second quarter of 2009 were up $0.8 million, or 2.8 percent, from the first quarter of 2009 and up $3.1 million, or 11.6 percent, from the second quarter of 2008. FDIC insurance premiums were $3.1 million in the second quarter of 2009, up from $1.2 million in the first quarter of 2009, and up substantially from $0.2 million in the second quarter of 2008. The premium in the second quarter of 2009 included a FDIC industry-wide special assessment of $1.8 million for the Company. The FDIC has notified banks that it is probable another special assessment may be assessed in the fourth quarter of 2009. Loan collection expenses and costs related to the Company's nonperforming assets totaled $2.3 million in the second quarter of 2009, compared to $2.2 million in the first quarter of 2009 and $1.1 million in the second quarter of 2008. Employee benefit costs were $0.8 million lower in the second quarter of 2009 than in the first quarter of 2009 due largely to an experience rated reduction in group health costs during the quarter.

The Company's return on average assets during the second quarter of 2009 was 0.23 percent, down from 0.28 percent in the first quarter of 2009 and down from 1.03 percent in the second quarter of 2008. The decrease in return on assets resulted in a decrease in return on average equity to 1.9 percent in the second quarter of 2009 from 7.6 percent in the second quarter of 2008. At June 30, 2009, the Company's book value stood at $20.23 per share versus $21.58 per share at June 30, 2008.

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 June 30, 2009, the Company had total assets of $4.0 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, 2008; 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 Second Quarter Operating Results
 -------------------------------------------------------------------------

 Consolidated Statements of Financial Position (Unaudited)
 Chemical Financial Corporation


 (In thousands, except per         June 30     Dec. 31       June 30
  share data)                        2009        2008         2008
 ---------------------------------------------------------------------
 Assets:
 Cash and cash equivalents:
  Cash and cash due from banks   $   88,210   $  168,650   $  110,050
  Federal funds sold                     --           --        8,000
  Interest-bearing deposits with
   unaffiliated banks and others    119,413        4,572        4,827
                                 -----------  -----------  -----------
     Total Cash and Cash
      Equivalents                   207,623      173,222      122,877
 Investment securities:
  Available-for-sale                492,096      449,947      477,910
  Held-to-maturity                  144,556       97,511      111,579
                                 -----------  -----------  -----------
     Total Investment Securities    636,652      547,458      589,489
 Other securities                    22,128       22,128       22,142
 Loans held for sale                 26,008        8,463        7,571

 Loans:
  Commercial                        560,187      587,554      539,086
  Real estate commercial            774,881      786,404      776,505
  Real estate construction          119,674      119,001      130,079
  Real estate residential           773,126      839,555      824,588
  Consumer                          749,032      649,163      580,203
                                 -----------  -----------  -----------
     Total Loans                  2,976,900    2,981,677    2,850,461
  Allowance for loan losses         (69,956)     (57,056)     (39,664)
                                 -----------  -----------  -----------
     Net Loans                    2,906,944    2,924,621    2,810,797

 Premises and equipment              52,578       53,036       49,164
 Goodwill                            69,908       69,908       69,908
 Other intangible assets              5,498        5,241        5,963
 Interest receivable and other
  assets                             71,417       70,236       59,943
                                 -----------  -----------  -----------
     Total Assets                $3,998,756   $3,874,313   $3,737,854
                                 ===========  ===========  ===========

 Liabilities:
 Deposits:
  Noninterest-bearing            $  551,060   $  524,464   $  552,550
  Interest-bearing                2,579,367    2,454,328    2,334,409
                                 -----------  -----------  -----------
     Total Deposits               3,130,427    2,978,792    2,886,959
 Interest payable and other
  liabilities                        36,329       35,214       21,207
 Short-term borrowings              233,674      233,738      185,472
 Federal Home Loan Bank
  advances - long-term              115,000      135,025      130,025
                                 -----------  -----------  -----------
     Total Liabilities            3,515,430    3,382,769    3,223,663

 Shareholders' Equity:
  Common stock, $1 par value
   per share                         23,890       23,881       23,823
  Surplus                           347,447      346,916      345,117
  Retained earnings                 124,496      133,578      147,092
  Accumulated other
   comprehensive loss               (12,507)     (12,831)      (1,841)
                                 -----------  -----------  -----------
     Total Shareholders' Equity     483,326      491,544      514,191
                                 -----------  -----------  -----------
     Total Liabilities and
      Shareholders' Equity       $3,998,756   $3,874,313   $3,737,854
                                 ===========  ===========  ===========

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

 Consolidated Statements of Income (Unaudited)
 Chemical Financial Corporation

                                     Three Months       Six Months
 (In thousands, except              Ended June 30     Ended June 30
  per share data)                   2009     2008     2009     2008
 ---------------------------------------------------------------------
 Interest Income:
 Interest and fees on loans       $42,997  $44,491  $85,790  $ 90,061
 Interest on investment
  securities:
  Taxable                           4,024    5,473    8,526    11,312
  Tax-exempt                          893      687    1,670     1,382
 Dividends on other securities        267      390      430       584
 Interest on federal funds sold        --      412       --     1,430
 Interest on deposits with
  unaffiliated banks and others       102       55      189       176
                                  -------- -------- -------- --------
     Total Interest Income         48,283   51,508   96,605   104,945

 Interest Expense:
 Interest on deposits               9,808   13,734   19,975    30,061
 Interest on short-term
  borrowings                          239      501      472     1,460
 Interest on Federal Home Loan
  Bank advances - long-term         1,258    1,637    2,590     3,402
                                  -------- -------- -------- --------
     Total Interest Expense        11,305   15,872   23,037    34,923
                                  -------- -------- -------- --------
     Net Interest Income           36,978   35,636   73,568    70,022
 Provision for loan losses         15,200    6,500   29,200     9,200
                                  -------- -------- -------- --------
     Net Interest Income after
      Provision for Loan Losses    21,778   29,136   44,368    60,822

 Noninterest Income:
 Service charges on deposit
  accounts                          4,781    5,007    9,256     9,781
 Trust and investment services
  revenue                           2,374    2,838    4,749     5,492
 Other charges and fees for
  customer services                 1,994    1,713    3,795     3,309
 Mortgage banking revenue           1,462      524    2,612     1,060
 Investment securities gains           95    1,716       95     1,716
 Other                                252      161      308       181
                                  -------- -------- -------- --------
     Total Noninterest Income      10,958   11,959   20,815    21,539

 Operating Expenses:
 Salaries, wages and employee
  benefits                         14,683   14,810   30,100    29,289
 Occupancy                          2,407    2,360    5,114     5,130
 Equipment                          2,364    2,133    4,706     4,320
 Other                             10,562    7,582   19,301    14,990
                                  -------- -------- -------- --------
     Total Operating Expenses      30,016   26,885   59,221    53,729
                                  -------- -------- -------- --------
 Income Before Income Taxes         2,720   14,210    5,962    28,632
     Federal Income Tax Expense       426    4,600      950     9,351
                                  -------- -------- -------- --------
 Net Income                       $ 2,294  $ 9,610  $ 5,012  $ 19,281
                                  ======== ======== ======== ========

 Net income per share:
  Basic                           $  0.10  $  0.40  $  0.21  $   0.81
  Diluted                            0.10     0.40     0.21      0.81

 Cash dividends per share           0.295    0.295    0.590     0.590

 Average shares outstanding:
  Basic                            23,890   23,823   23,890    23,823
  Diluted                          23,908   23,831   23,904    23,829


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

 Financial Summary (Unaudited)
 Chemical Financial Corporation

                          Three Months Ended       Six Months Ended
                                June 30                 June 30
 (Dollars in thousands)    2009        2008        2009        2008
 ---------------------------------------------------------------------
 Average Balances
 Total assets           $4,001,155  $3,757,238  $3,964,318  $3,774,361
 Total interest-earning
  assets                 3,776,766   3,530,750   3,737,963   3,546,177
 Total loans             2,968,039   2,827,260   2,964,528   2,813,105
 Total deposits          3,130,678   2,910,357   3,089,126   2,921,693
 Total interest-bearing
  liabilities            2,926,290   2,680,550   2,905,601   2,708,823
 Total shareholders'
  equity                   488,765     511,926     488,432     510,079


                         Three Months Ended       Six Months Ended
                               June 30                 June 30
                          2009        2008        2009        2008
 ---------------------------------------------------------------------
 Key Ratios (annualized
  where applicable)
 Net interest margin
  (taxable equivalent
  basis)                     4.00%       4.11%       4.03%       4.02%
 Efficiency ratio            61.7%       55.8%       61.9%       58.0%
 Return on average
  assets                     0.23%       1.03%       0.25%       1.03%
 Return on average
  shareholders' equity        1.9%        7.6%        2.1%        7.6%
 Average shareholders'
  equity as a percent
  of average assets          12.2%       13.6%       12.3%       13.5%
 Tangible shareholders'
  equity as a percent
  of total assets                                    10.5%       12.0%
 Total risk-based
  capital ratio                                      16.0%       17.3%


                       June 30   March 31   Dec 31   Sept 30  June 30
                         2009      2009      2008      2008     2008
 ---------------------------------------------------------------------
 Credit Quality
  Statistics
 Nonaccrual loans      $109,944  $ 94,737  $ 76,466  $69,719  $61,635
 Loans 90 or more
  days past due and
  still accruing         10,502    10,240    16,862   13,012   10,288
 Loans modified under
  troubled debt
  restructuring           3,981        --        --       --       --
 Total nonperforming
  loans                 124,427   104,977    93,328   82,731   71,923
 Repossessed assets
  (RA)                   18,344    20,688    19,923   15,699   15,897
 Total nonperforming
  assets                142,771   125,665   113,251   98,430   87,820
 Net loan charge-offs
  (year-to-date)         16,300     8,494    31,566   24,210    8,958

 Allowance for loan
  losses as a percent
  of total loans          2.35%     2.12%     1.91%    1.58%    1.39%
 Allowance for loan
  losses as a percent
  of nonperforming
  loans                     56%       60%       61%      56%      55%
 Nonperforming loans
  as a percent of
  total loans             4.18%     3.56%     3.13%    2.83%    2.52%
 Nonperforming assets
  as a percent of
  total loans plus RA     4.77%     4.23%     3.77%    3.34%    3.06%
 Nonperforming assets
  as a percent of
  total assets            3.57%     3.16%     2.92%    2.60%    2.35%
 Net loan charge-offs
  as a percent of
  average loans
  (year-to-date,
  annualized)             1.10%     1.15%     1.10%    1.14%    0.64%


                       June 30   March 31   Dec 31   Sept 30  June 30
                         2009      2009      2008      2008     2008
 ---------------------------------------------------------------------
 Additional Data -
  Intangibles
 Goodwill               $69,908   $69,908   $69,908  $69,908  $69,908
 Core deposit
  intangibles             2,629     2,847     3,050    3,266    3,609
 Mortgage servicing
  rights (MSR)            2,869     2,377     2,191    2,328    2,354
 Amortization of core
  deposit intangibles
  (quarter only)            217       203       216      343      453


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

 Nonperforming Assets (Unaudited)
 Chemical Financial Corporation

 (Dollars in          June 30  March 31    Dec 31   Sept 30   June 30
  thousands)            2009      2009      2008      2008     2008
 ---------------------------------------------------------------------
 Nonaccrual loans:
    Commercial       $ 20,371  $ 16,419  $ 16,324  $ 13,320  $ 10,918
    Real estate
     commercial        50,067    41,826    27,344    24,230    17,915
    Real estate
     construction      17,935    18,504    15,310    14,513    15,157
    Real estate
     residential       15,905    12,803    12,175    12,869    11,955
    Consumer            5,666     5,185     5,313     4,787     5,690
                     -------------------------------------------------
    Total nonaccrual
     loans            109,944    94,737    76,466    69,719    61,635
 Accruing loans
  contractually past
  due 90 days or more
  as to interest or
  principal payments:
    Commercial          1,201     2,581     1,652     1,735     3,130
    Real estate
     commercial         1,542     4,352     9,995     6,586     2,948
    Real estate
     construction         259       538       759     1,096       676
    Real estate
     residential        6,236     1,699     3,369     2,910     2,746
    Consumer            1,264     1,070     1,087       685       788
                     -------------------------------------------------
    Total accruing
     loans contract-
     ually past due
     90 days or more
     as to interest
     or principal
     payments          10,502    10,240    16,862    13,012    10,288
 Loans modified under
  troubled debt
  restructuring         3,981        --        --        --        --
                     -------------------------------------------------
 Total nonperforming
  loans               124,427   104,977    93,328    82,731    71,923
 Other real estate
  and repossessed
  assets               18,344    20,688    19,923    15,699    15,897
                     -------------------------------------------------
 Total nonperforming
  assets             $142,771  $125,665  $113,251  $ 98,430  $ 87,820
                     -------------------------------------------------


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

 Summary of Loan Loss Experience (Unaudited)
 Chemical Financial Corporation

                                    Three Months Ended
                     -------------------------------------------------
 (Dollars in          June 30   March 31   Dec 31   Sept 30   June 30
  thousands)            2009      2009      2008      2008      2008
 ---------------------------------------------------------------------
 Allowance for loan
  losses at beginning
  of period          $ 62,562  $ 57,056  $ 46,412  $ 39,664  $ 39,662
 Provision for loan
  losses               15,200    14,000    18,000    22,000     6,500

 Loans charged off:
    Commercial         (3,289)   (3,290)   (3,254)  (11,468)   (1,474)
    Real estate
     commercial        (1,930)   (2,589)   (1,645)     (673)   (3,373)
    Real estate
     construction        (762)   (1,700)     (954)     (923)   (1,070)
    Real estate
     residential       (1,043)     (235)   (1,106)     (749)     (358)
    Consumer           (1,544)   (1,253)   (1,811)   (1,776)     (612)
                     -------------------------------------------------
    Total loan
     charge-offs       (8,568)   (9,067)   (8,770)  (15,589)   (6,887)
 Recoveries of loans
  previously charged
  off:
    Commercial            130       205     1,094        74       228
    Real estate
     commercial           226        87        11        68        32
    Real estate
     construction          --        --        --        --        --
    Real estate
     residential          127        82        83        50         5
    Consumer              279       199       226       145       124
                     -------------------------------------------------
    Total loan
     recoveries           762       573     1,414       337       389
                     -------------------------------------------------
    Net loan charge-
     offs              (7,806)   (8,494)   (7,356)  (15,252)   (6,498)
                     -------------------------------------------------
 Allowance for loan
  losses at end of
  period             $ 69,956  $ 62,562  $ 57,056  $ 46,412  $ 39,664
                     -------------------------------------------------


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

 Selected Quarterly Information (Unaudited)
 Chemical Financial Corporation

 (In thousands,
  except per share    2nd Qtr.  1st Qtr.  4th Qtr.  3rd Qtr.  2nd Qtr.
  data)                2009       2009      2008      2008      2008
 ---------------------------------------------------------------------
 Summary of Operations
 Interest income     $ 48,283  $ 48,322  $ 51,703  $ 51,688  $ 51,508
 Interest expense      11,305    11,732    13,192    14,968    15,872
                     -------------------------------------------------
 Net interest income   36,978    36,590    38,511    36,720    35,636
 Provision for loan
  losses               15,200    14,000    18,000    22,000     6,500
                     -------------------------------------------------
 Net interest income
  after provision for
  loan losses          21,778    22,590    20,511    14,720    29,136
 Noninterest income    10,958     9,857     9,604    10,054    11,959
 Operating expenses    30,016    29,205    28,629    26,750    26,885
                     -------------------------------------------------
 Income (loss) lefore
  income taxes          2,720     3,242     1,486    (1,976)   14,210
 Federal income tax
  expense (benefit)       426       524      (100)     (951)    4,600
                     -------------------------------------------------
 Net income (loss)   $  2,294  $  2,718  $  1,586  $ (1,025) $  9,610
                     =================================================

 ---------------------------------------------------------------------
 Per Common Share
  Data
 Net income (loss):
    Basic            $   0.10  $   0.11  $   0.06  $  (0.04) $   0.40
    Diluted              0.10      0.11      0.06     (0.04)     0.40
 Cash dividends         0.295     0.295     0.295     0.295     0.295
 Book value - period-
  end                   20.23     20.40     20.58     21.19     21.58
 Market value -
  period-end            19.91     20.81     27.88     31.14     20.40
CONTACT:  Chemical Financial Corporation
          David B. Ramaker, CEO
          Lori A. Gwizdala, CFO
          989-839-5350