Press Release
Chemical Financial Corporation Reports Fourth Quarter and Year End 2009 Results
MIDLAND, Mich., Jan. 25, 2010 (GLOBE NEWSWIRE) -- Chemical Financial Corporation (Nasdaq:CHFC) today announced fourth quarter 2009 net income of $2.52 million, or $0.11 per diluted share, versus net income of $2.47 million, or $0.10 per diluted share, in the third quarter of 2009 and $1.59 million, or $0.06 per diluted share, in the fourth quarter of 2008.
Net income was $10.0 million, or $0.42 per diluted share, for the twelve months ended December 31, 2009, compared to net income of $19.8 million, or $0.83 per diluted share, for the twelve months ended December 31, 2008.
"Although fourth quarter 2009 performance improved over last year's comparative quarter, we are not yet satisfied with the level of reported earnings," said David B. Ramaker, Chairman, Chief Executive Officer and President of Chemical Financial Corporation. "The primary contributing factors that led to the modest increase in net income were a lower provision for loan losses and higher noninterest income."
"Full year 2009 earnings were driven lower primarily by three factors: a higher provision for loan losses, higher credit related costs and higher FDIC insurance premiums. While we are encouraged by a decline in nonaccrual loans during the last three months of 2009, our focus remains on improving asset quality. We are pursuing every action available to lower nonperforming asset levels, and credit quality issues will continue to be a primary concern in 2010."
"On the other hand, our recently announced agreement to acquire O.A.K. Financial Corporation (OAK), which we anticipate will close in the second quarter of 2010, is reflective of our optimistic long-term outlook for Michigan, in general, and the Grand Rapids market, in particular. The acquisition will enhance our competitive position, branch distribution system and overall capabilities in the Grand Rapids region and increase the number of experienced banking professionals on the Chemical team," noted Ramaker. "When combined with our balance sheet, capital position and strong liquidity, we anticipate the merged organization will become a force in retaining and expanding current relationships, as well as forging new relationships, in the attractive western Michigan market."
Net interest income was $37.2 million in the fourth quarter of 2009, an increase of $0.6 million, or 1.5 percent, from third quarter 2009 net interest income of $36.7 million and a decrease of $1.3 million, or 3.4 percent, from fourth quarter 2008 net interest income of $38.5 million. The slight increase in net interest income in the fourth quarter of 2009, compared to the third quarter of 2009, was attributable to a decline in interest expense between the two quarters, even though average interest-bearing liabilities were $120 million, or 4.0 percent, higher in the fourth quarter. The decrease in net interest income as compared to the prior year's quarter was primarily attributable to a decrease in net interest margin. The net interest margin (on a tax-equivalent basis) in the fourth quarter of 2009 was 3.77 percent, down from 3.83 percent in the third quarter of 2009 and 4.38 percent in the fourth quarter of 2008. The decreases in net interest margin were partially attributable to the Corporation's decision to maintain a higher degree of liquidity coupled with the loss of interest on nonaccrual loans. For the year 2009, net interest income of $147.4 million increased $2.2 million over 2008, due primarily to balance sheet growth.
Total assets were $4.25 billion at December 31, 2009, down slightly from $4.27 billion at September 30, 2009 and up significantly from $3.87 billion at December 31, 2008. At December 31, 2009, total loans were $2.99 billion, versus $3.00 billion at September 30, 2009 and $2.98 billion at December 31, 2008. Investment securities were $724 million at December 31, 2009, up from $645 million at September 30, 2009 and $547 million at December 31, 2008, as additional liquidity from deposit growth was partially invested during 2009.
Total deposits were $3.42 billion at December 31, 2009, up slightly from $3.40 billion at September 30, 2009, and up significantly from $2.98 billion at December 31, 2008. The $439 million, or 15 percent, growth in deposits during 2009 occurred across almost all of the Corporation's deposit account categories, although most predominately in retail certificates of deposit, and has enabled the Corporation to reduce its long-term wholesale borrowings, while also providing additional liquidity to the balance sheet. Long-term wholesale borrowings, comprised of Federal Home Loan Bank advances, totaled $90 million at December 31, 2009, down from $115 million at September 30, 2009 and $135 million at December 31, 2008.
The provision for loan losses was $15.6 million in the fourth quarter of 2009, compared to $14.2 million in the third quarter of 2009 and $18.0 million in the fourth quarter of 2008. Net loan charge-offs were $12.3 million in the fourth quarter of 2009, up from $6.7 million in the third quarter of 2009 and $7.4 million in the fourth quarter of 2008. As part of its ongoing credit portfolio monitoring program, the Corporation 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. The increase in net loan charge-offs in the fourth quarter of 2009, compared to the third quarter of 2009, occurred predominantly in the commercial, commercial real estate and construction loan categories and was attributable to a continued decline in the value of commercial real estate and residential development properties.
At December 31, 2009, nonperforming assets totaled $153.3 million, slightly lower than the $157.5 million reported at September 30, 2009 and up from the $113.3 million reported at December 31, 2008. Nonperforming loans were $135.8 million at December 31, 2009, compared to $138.5 million at September 30, 2009 and $93.3 million at December 31, 2008. Nonperforming loan totals at December 31, 2009 included modified residential real estate loans of $17.4 million, which increased $7.9 million during the quarter. Each of these modified loans was current in accordance with their modified terms at December 31, 2009. Beginning in the second quarter of 2009, the Corporation initiated a residential real estate loan modification program designed to help homeowners struggling to meet their Chemical Bank mortgage obligations stay in their homes. At December 31, 2009, nonperforming loans as a percentage of total loans were 4.54 percent, down slightly from 4.61 percent at September 30, 2009 and up substantially from 3.13 percent at December 31, 2008. Nonaccrual loans declined $13.6 million, or 11.3 percent, in the fourth quarter of 2009 to $106.6 million at December 31, 2009 from $120.2 million at September 30, 2009. Other real estate and repossessed assets declined to $17.5 million at December 31, 2009 from $19.1 million at September 30, 2009 and $19.9 million at December 31, 2008.
The allowance for loan losses was $80.8 million at December 31, 2009, up $3.4 million, or 4.3 percent, from $77.5 million at September 30, 2009 and up $23.8 million, or 41.7 percent, from $57.1 million at December 31, 2008. The allowance for loan losses at December 31, 2009 was 2.70 percent of total loans, up from 2.58 percent of total loans at September 30, 2009 and 1.91 percent of total loans at December 31, 2008. The allowance for loan losses as a percent of nonperforming loans was 60 percent at December 31, 2009, up from 56 percent at September 30, 2009, but down slightly from 61 percent at December 31, 2008.
Total noninterest income was $10.2 million in the fourth quarter of 2009, up $0.1 million from $10.1 million in the third quarter of 2009 and up $0.6 million, or 6.3 percent, from $9.6 million in the fourth quarter of 2008. The Corporation experienced modest declines in a number of noninterest income categories during the fourth quarter of 2009, compared to the third quarter of 2009, although they were slightly more than offset by increases in debit card and mortgage banking revenue. The increase in the fourth quarter of 2009 over the prior year's fourth quarter was primarily attributable to increases in mortgage banking revenue and other charges and fees for customer services, partially offset by declines in trust and investment services revenue.
Operating expenses in the fourth quarter of 2009 were $28.8 million, down $0.8 million from the third quarter of 2009, and up $0.2 million from the fourth quarter of 2008. Fourth quarter 2009 operating expenses included $0.8 million of professional expenses related to the announced merger transaction and $2.8 million of credit related costs, which were $0.9 million higher than the third quarter of 2009. The merger related costs and higher credit related costs in the fourth quarter of 2009 were more than offset by reductions in employee benefit expenses and advertising and marketing costs and the reversal of contingent tax reserves recorded for the Michigan Single Business Tax which were no longer required. For the full year of 2009, total operating expenses were $117.6 million, an $8.5 million, or 7.8 percent, increase over total operating expenses of $109.1 million in 2008. The increase in operating expenses during 2009 was largely driven by higher FDIC premiums and credit related costs and $0.8 million of merger related expenses. FDIC premiums were $7.0 million in 2009, $6.1 million higher than in 2008, while loan collection costs of $9.1 million in 2009 were $2.8 million higher than in 2008. These increases in operating expenses were partially offset by reductions in a number of operating expense categories, including professional fees, intangible asset amortization and miscellaneous non-loan losses. The Corporation's efficiency ratio was 59.8 percent in the fourth quarter of 2009, down from 62.3 percent in the third quarter of 2009 and up from 58.7 percent in the fourth quarter of 2008. The decrease in the efficiency ratio from the third quarter of 2009 was attributable to the decrease in operating expenses.
The Corporation's return on average assets during the fourth quarter of 2009 was 0.24 percent, unchanged from the third quarter of 2009 and up from 0.17 percent in the fourth quarter of 2008. At December 31, 2009, the Corporation's book value stood at $19.85 per share versus $20.58 per share at December 31, 2008.
As previously disclosed, on January 8, 2010, the Corporation announced that it would acquire OAK in an all stock transaction in which each share of OAK will be exchanged for 1.306 shares of Chemical's common stock. Total projected shares to be issued in the transaction are 3.5 million, subject to adjustment in certain limited circumstances. The transaction is expected to be accretive to earnings in 2011. Excluding estimated acquisition-related and integration costs, the Corporation expects the transaction to be accretive to operating results in 2010.
Chemical Financial Corporation is the third-largest bank holding company headquartered in Michigan. The Corporation 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, 2009, the Corporation had total assets of $4.3 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 press release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy and Chemical Financial Corporation itself. This press release also contains forward-looking statements regarding Chemical's outlook or expectations with respect to the planned acquisition of OAK, the expected costs to be incurred in connection with the acquisition, OAK's future performance and consequences of its integration into Chemical and the impact of the transaction on Chemical's future performance. 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, the carrying value of goodwill and mortgage servicing rights and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary) and management's assumptions concerning pension and other post retirement 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 economy on the banking industry, generally, and on Chemical Financial Corporation, specifically, are also inherently uncertain. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("risk factors") that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. 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 risk factors described in Item 1A in OAK's Annual Report on Form 10-K for the year ended December 31, 2008; the timing and level of asset growth; changes in market interest rates; 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 current and future military actions, 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.
Risk factors also include, but are not limited to, risks and uncertainties related both to the proposed acquisition of OAK and to the integration of the acquired business into Chemical after closing, including:
Completion of the transaction is dependent on, among other things, receipt of regulatory and OAK shareholder approvals, the timing of which cannot be predicted with precision at this point and which may not be received at all. The impact of the completion of the transaction on Chemical's financial statements will be affected by the timing of the transaction, including in particular the ability to complete the acquisition in the second quarter of 2010.
The transaction may be more expensive to complete and the anticipated benefits, including anticipated cost savings and strategic gains, may be significantly harder or take longer to achieve than expected or may not be achieved in their entirety as a result of unexpected factors or events.
Chemical's ability to achieve anticipated results from the transaction is dependent on the state of the economic and financial markets going forward, which have been under significant stress recently. Specifically, Chemical may incur more credit losses from OAK's loan portfolio than expected and deposit attrition may be greater than expected.
The integration of OAK's business and operations into Chemical, which will include conversion of OAK's operating systems and procedures, may take longer than anticipated or be more costly than anticipated or have unanticipated adverse results relating to OAK's or Chemical's existing businesses.
ADDITIONAL INFORMATION ABOUT THE CHEMICAL/OAK TRANSACTION
Chemical will file a registration statement with the Securities and Exchange Commission (SEC) to register the securities that the OAK shareholders will receive if the merger is consummated. The registration statement will contain a prospectus and proxy statement and other relevant documents concerning the merger. Investors are urged to read the registration statement, the prospectus and proxy statement, and any other relevant documents when they become available because they will contain important information about Chemical, OAK, and the merger. Investors will be able to obtain the documents free of charge at the SEC's website, www.sec.gov.
The proposed transaction will be submitted to the shareholders of OAK for their consideration and approval. In connection with the proposed transaction, OAK will be filing a proxy statement and other relevant documents to be distributed to the shareholders of OAK. Investors are urged to read the proxy statement regarding the proposed transaction when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. Investors will be able to obtain a free copy of the proxy statement, as well as other filings containing information about Chemical and OAK, free of charge from the SEC's website (www.sec.gov), by contacting Chemical Financial Corporation, 333 East Main Street, P.O. Box 569, Midland, MI 48640-0569, Attention: Ms. Lori A. Gwizdala, Investor Relations, telephone 800-867-9757 or by contacting O.A.K. Financial Corporation, 2445 84th Street, SW, Byron Center, MI 49315, Attention: Mr. James A. Luyk, Investor Relations, telephone 616-588-7419. INVESTORS SHOULD READ THE PROXY STATEMENT AND OTHER DOCUMENTS TO BE FILED WITH THE SEC CAREFULLY BEFORE MAKING A DECISION CONCERNING THE TRANSACTION.
OAK and its directors, executive officers, and certain other members of management and employees may be soliciting proxies from OAK shareholders in favor of the transaction. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of OAK shareholders in connection with the proposed transaction will be set forth in the proxy statement when it is filed with the SEC. You can find information about OAK's executive officers and directors in its most recent proxy statement filed with the SEC, which is available at the SEC's website (www.sec.gov). You can also obtain free copies of these documents from Chemical or OAK, as appropriate, using the contact information above.
Chemical Financial
Corporation Announces
Fourth Quarter Operating
Results
---------------------------
Consolidated Statements of
Financial Position
(Unaudited)
Chemical Financial
Corporation
December December
31 31
(In thousands, except per
share data) 2009 2008
--------------------------- ---------- ----------
Assets:
Cash and cash equivalents:
Cash and cash due from
banks $131,383 $168,650
Interest-bearing deposits
with unaffiliated banks
and others 229,326 4,572
Total Cash and Cash ---------- ----------
Equivalents 360,709 173,222
Investment securities:
Available-for-sale 592,521 449,947
Held-to-maturity 131,297 97,511
Total Investment ---------- ----------
Securities 723,818 547,458
Other securities 22,128 22,128
Loans held for sale 8,362 8,463
Loans:
Commercial 584,286 587,554
Real estate commercial 785,675 786,404
Real estate construction 121,305 119,001
Real estate residential 739,380 839,555
Consumer 762,514 649,163
---------- ----------
Total Loans 2,993,160 2,981,677
Allowance for loan losses (80,841) (57,056)
---------- ----------
Net Loans 2,912,319 2,924,621
Premises and equipment 53,934 53,036
Goodwill 69,908 69,908
Other intangible assets 5,408 5,241
Interest receivable and
other assets 94,126 70,236
---------- ----------
Total Assets $4,250,712 $3,874,313
========== ==========
Liabilities:
Deposits:
Noninterest-bearing $573,159 $524,464
Interest-bearing 2,844,966 2,454,328
---------- ----------
Total Deposits 3,418,125 2,978,792
Interest payable and other
liabilities 27,708 35,214
Short-term borrowings 240,568 233,738
Federal Home Loan Bank
advances 90,000 135,025
---------- ----------
Total Liabilities 3,776,401 3,382,769
Shareholders' Equity:
Preferred stock, no par
value per share -- --
Common stock, $1 par
value per share 23,891 23,881
Surplus 347,676 346,916
Retained earnings 115,391 133,578
Accumulated other
comprehensive loss (12,647) (12,831)
---------- ----------
Total Shareholders'
Equity 474,311 491,544
---------- ----------
Total Liabilities and
Shareholders' Equity $4,250,712 $3,874,313
========== ==========
Chemical Financial Corporation
Announces Fourth Quarter
Operating Results
------------------------------
Consolidated Statements of
Income (Unaudited)
Chemical Financial Corporation
Three Months Twelve Months
Ended Ended
December 31 December 31
(In thousands, except per
share data) 2009 2008 2009 2008
------------------------------ -------- ------- -------- --------
Interest Income:
Interest and fees on loans $43,309 $45,357 $172,388 $180,629
Interest on investment
securities:
Taxable 3,332 5,148 15,385 21,793
Tax-exempt 964 762 3,596 2,882
Dividends on other securities 259 372 821 1,167
Interest on federal funds sold -- 56 -- 1,666
Interest on deposits with
unaffiliated banks and others 196 8 541 199
-------- ------- -------- --------
Total Interest Income 48,060 51,703 192,731 208,336
Interest Expense:
Interest on deposits 9,583 11,716 39,500 54,763
Interest on short-term
borrowings 183 281 906 2,223
Interest on Federal Home Loan
Bank advances 1,081 1,195 4,881 6,097
-------- ------- -------- --------
Total Interest Expense 10,847 13,192 45,287 63,083
-------- ------- -------- --------
Net Interest Income 37,213 38,511 147,444 145,253
Provision for loan losses 15,600 18,000 59,000 49,200
-------- ------- -------- --------
Net Interest Income after
Provision for Loan Losses 21,613 20,511 88,444 96,053
Noninterest Income:
Service charges on deposit
accounts 4,911 4,951 19,116 20,048
Trust and investment services
revenue 2,218 2,517 9,273 10,625
Other charges and fees for
customer services 1,970 1,658 7,736 6,894
Mortgage banking revenue 960 428 4,412 1,836
Investment securities gains -- -- 95 1,722
Other-than-temporary
impairment writedown of
investment security -- -- -- (444)
Other 153 50 487 516
-------- ------- -------- --------
Total Noninterest Income 10,212 9,604 41,119 41,197
Operating Expenses:
Salaries, wages and employee
benefits 14,353 14,863 60,218 59,227
Occupancy 2,748 2,619 10,359 10,221
Equipment 2,582 2,564 9,723 9,230
Other 9,124 8,583 37,310 30,430
-------- ------- -------- --------
Total Operating Expenses 28,807 28,629 117,610 109,108
-------- ------- -------- --------
Income Before Income Taxes 3,018 1,486 11,953 28,142
Federal Income Tax Expense
(Benefit) 500 (100) 1,950 8,300
-------- ------- -------- --------
Net Income $2,518 $1,586 $10,003 $19,842
======== ======= ======== ========
Net income per common share:
Basic $0.11 $0.06 $0.42 $0.83
Diluted 0.11 0.06 0.42 0.83
Cash dividends per common
share 0.295 0.295 1.180 1.180
Average common shares
outstanding:
Basic 23,890 23,878 23,890 23,840
Diluted 23,914 23,894 23,909 23,853
Chemical Financial Corporation
Announces Fourth Quarter Operating
Results
-----------------------------------
Financial Summary (Unaudited)
Chemical Financial Corporation
Three Months Ended Twelve Months Ended
December 31 December 31
(Dollars in thousands) 2009 2008 2009 2008
----------------------------------- ---------- ---------- ---------- ----------
Average Balances
Total assets $4,221,031 $3,807,132 $4,066,229 $3,784,617
Total interest-earning assets 4,014,422 3,567,966 3,847,006 3,550,611
Total loans 3,005,554 2,959,360 2,980,126 2,866,102
Total deposits 3,363,967 2,930,089 3,195,411 2,924,361
Total interest-bearing liabilities 3,156,993 2,738,703 3,002,050 2,711,413
Total shareholders' equity 475,384 503,758 483,034 509,100
Three Months Ended Twelve Months Ended
December 31 December 31
2009 2008 2009 2008
----------------------------------- ---------- ---------- ---------- ----------
Key Ratios (annualized where
applicable)
Net interest margin (taxable
equivalent basis) 3.77% 4.38% 3.91% 4.16%
Efficiency ratio 59.8% 58.7% 61.4% 57.8%
Return on average assets 0.24% 0.17% 0.25% 0.52%
Return on average shareholders'
equity 2.1% 1.3% 2.1% 3.9%
Average shareholders' equity as a
percent of average assets 11.3% 13.2% 11.9% 13.5%
Tangible shareholders' equity as a
percent of total assets 9.6% 11.0%
Total risk-based capital ratio 15.5% 16.4%
Dec 31 Sept 30 June 30 March 31 Dec 31
2009 2009 2009 2009 2008
----------------------------------- -------- ---------- ---------- ---------- ----------
Credit Quality Statistics
Nonaccrual loans $106,589 $120,186 $109,944 $94,737 $76,466
Loans 90 or more days past due and
still accruing 11,733 8,699 10,502 10,240 16,862
Loans modified under troubled debt
restructurings 17,433 9,567 3,981 -- --
Total nonperforming loans 135,755 138,452 124,427 104,977 93,328
Repossessed assets (RA) 17,540 19,067 18,344 20,688 19,923
Total nonperforming assets 153,295 157,519 142,771 125,665 113,251
Net loan charge-offs (year-to-date) 35,215 22,965 16,300 8,494 31,566
Allowance for loan losses as a
percent of total loans 2.70% 2.58% 2.35% 2.12% 1.91%
Allowance for loan losses as a
percent of nonperforming loans 60% 56% 56% 60% 61%
Nonperforming loans as a percent of
total loans 4.54% 4.61% 4.18% 3.56% 3.13%
Nonperforming assets as a percent
of total loans plus RA 5.09% 5.21% 4.77% 4.23% 3.77%
Nonperforming assets as a percent
of total assets 3.61% 3.69% 3.57% 3.16% 2.92%
Net loan charge-offs as a percent
of average loans (year-to-date,
annualized) 1.18% 1.03% 1.10% 1.15% 1.10%
Dec 31 Sept 30 June 30 March 31 Dec 31
2009 2009 2009 2009 2008
----------------------------------- -------- ---------- ---------- ---------- ----------
Additional Data - Intangibles
Goodwill $69,908 $69,908 $69,908 $69,908 $69,908
Core deposit intangibles 2,331 2,480 2,629 2,847 3,050
Mortgage servicing rights (MSR) 3,077 2,997 2,869 2,377 2,191
Amortization of core deposit
intangibles (quarter only) 149 149 217 203 216
Chemical Financial
Corporation Announces Fourth
Quarter Operating Results
-----------------------------
Nonperforming Assets
(Unaudited)
Chemical Financial
Corporation
Dec 31 Sept 30 June 30 March 31 Dec 31
(Dollars in thousands) 2009 2009 2009 2009 2008
----------------------------- -------- -------- -------- -------- --------
Nonaccrual loans:
Commercial $19,309 $21,379 $20,371 $16,419 $16,324
Real estate commercial 49,419 58,930 50,067 41,826 27,344
Real estate construction 15,184 18,196 17,935 18,504 15,310
Real estate residential 15,508 15,739 15,905 12,803 12,175
Consumer 7,169 5,942 5,666 5,185 5,313
-------- -------- -------- -------- --------
Total nonaccrual loans 106,589 120,186 109,944 94,737 76,466
Accruing loans contractually
past due 90 days or more as
to interest or principal
payments:
Commercial 1,371 1,073 1,201 2,581 1,652
Real estate commercial 3,971 2,138 1,542 4,352 9,995
Real estate construction 1,990 675 259 538 759
Real estate residential 3,614 3,839 6,236 1,699 3,369
Consumer 787 974 1,264 1,070 1,087
-------- -------- -------- -------- --------
Total accruing loans
contractually past due 90
days or more as to
interest or principal
payments 11,733 8,699 10,502 10,240 16,862
Loans modified under troubled
debt restructurings 17,433 9,567 3,981 -- --
-------- -------- -------- -------- --------
Total nonperforming loans 135,755 138,452 124,427 104,977 93,328
Other real estate and
repossessed assets 17,540 19,067 18,344 20,688 19,923
-------- -------- -------- -------- --------
Total nonperforming assets $153,295 $157,519 $142,771 $125,665 $113,251
-------- -------- -------- -------- --------
Chemical Financial Corporation Announces Fourth
Quarter Operating Results
-----------------------------------------------
Summary of Loan Loss
Experience (Unaudited)
Chemical Financial
Corporation
Three Months Ended
--------------------------------------------
March
Dec 31 Sept 30 June 30 31 Dec 31
(Dollars in thousands) 2009 2009 2009 2009 2008
---------------------------- -------- ------- ------- ------- -------
Allowance for loan losses at
beginning of period $77,491 $69,956 $62,562 $57,056 $46,412
Provision for loan losses 15,600 14,200 15,200 14,000 18,000
Loans charged off:
Commercial (3,636) (1,786) (3,289) (3,290) (3,254)
Real estate commercial (3,009) (1,703) (1,930) (2,589) (1,645)
Real estate construction (3,633) (874) (762) (1,700) (954)
Real estate residential (1,070) (1,346) (1,043) (235) (1,106)
Consumer (1,998) (1,996) (1,544) (1,253) (1,811)
-------- ------- ------- ------- -------
Total loan charge-offs (13,346) (7,705) (8,568) (9,067) (8,770)
Recoveries of loans
previously charged off:
Commercial 220 349 130 205 1,094
Real estate commercial 91 91 226 87 11
Real estate construction 261 46 -- -- --
Real estate residential 174 231 127 82 83
Consumer 350 323 279 199 226
-------- ------- ------- ------- -------
Total loan recoveries 1,096 1,040 762 573 1,414
-------- ------- ------- ------- -------
Net loan charge-offs (12,250) (6,665) (7,806) (8,494) (7,356)
-------- ------- ------- ------- -------
Allowance for loan losses at
end of period $80,841 $77,491 $69,956 $62,562 $57,056
-------- ------- ------- ------- -------
Chemical Financial Corporation Announces Fourth
Quarter Operating Results
-----------------------------------------------------
Selected Quarterly Information
(Unaudited)
Chemical Financial
Corporation
4th 3rd 2nd 1st 4th
Qtr. Qtr. Qtr. Qtr. Qtr.
(In thousands, except per
share data) 2009 2009 2009 2009 2008
-------------------------- ------- ------- ------- ------- -------
Summary of Operations
Interest income $48,060 $48,066 $48,283 $48,322 $51,703
Interest expense 10,847 11,403 11,305 11,732 13,192
------- ------- ------- ------- -------
Net interest income 37,213 36,663 36,978 36,590 38,511
Provision for loan losses 15,600 14,200 15,200 14,000 18,000
------- ------- ------- ------- -------
Net interest income after
provision for loan losses 21,613 22,463 21,778 22,590 20,511
Noninterest income 10,212 10,092 10,958 9,857 9,604
Operating expenses 28,807 29,582 30,016 29,205 28,629
------- ------- ------- ------- -------
Income before income taxes 3,018 2,973 2,720 3,242 1,486
Federal income tax expense
(benefit) 500 500 426 524 (100)
------- ------- ------- ------- -------
Net income $2,518 $2,473 $2,294 $2,718 $1,586
======= ======= ======= ======= =======
--------------------------
Per Common Share Data
Net income:
Basic $0.11 $0.10 $0.10 $0.11 $0.06
Diluted 0.11 0.10 0.10 0.11 0.06
Cash dividends 0.295 0.295 0.295 0.295 0.295
Book value - period-end 19.85 20.06 20.23 20.40 20.58
Market value - period-end 23.58 21.79 19.91 20.81 27.88
CONTACT: Chemical Financial Corporation
David B. Ramaker, CEO
Lori A. Gwizdala, CFO
989-839-5350
