Chemical Financial Corporation Reports Fourth Quarter and Full Year 2014 Results


For further information
David T. Provost, CEO
Dennis Klaeser, CFO
989-839-5350
989-839-5350

Source: Chemical Financial Corporation

MIDLAND, MI, January 27, 2015 -- -- Chemical Financial Corporation (NASDAQ:CHFC) today announced 2014 fourth quarter net income of $15.3 million, or $0.46 per diluted share, compared to 2013 fourth quarter net income of $14.4 million, or $0.48 per diluted share, and 2014 third quarter net income of $16.8 million, or $0.51 per diluted share. For the twelve months ended December 31, 2014, net income was $62.1 million, or $1.97 per diluted share, compared to net income for the twelve months ended December 31, 2013 of $56.8 million, or $2.00 per diluted share.  The declines in diluted per share earnings for the three and twelve months ended December 31, 2014 were attributable to the higher number of outstanding shares resulting from the Corporation's September 2013 and June 2014 common equity offerings and nonrecurring transaction-related expenses incurred during 2014.

Nonrecurring transaction-related expenses for the three and twelve months ended December 31, 2014 were $4.1 million and $6.4 million, respectively, with $3.5 million and $5.8 million, respectively, attributable to the acquisition of Northwestern Bancorp, Inc. ("Northwestern") and $0.6 million for both the three and twelve months ended December 31, 2014, respectively, attributable to the pending acquisitions of Monarch Community Bancorp, Inc. ("Monarch") and Lake Michigan Financial Corporation ("Lake Michigan"). As previously reported, the Corporation completed its acquisition of Northwestern on October 31, 2014. Accordingly, the results of Northwestern's operations are included since the acquisition date. The acquisition of Northwestern resulted in increases in the Corporation's total assets of $815 million, total loans of $475 million, total deposits of $794 million, and goodwill of $60 million.

Excluding nonrecurring transaction-related expenses, net income in the fourth quarter of 2014 was $18.4 million, or $0.56 per diluted share, up 28% over net income of $14.4 million in the fourth quarter of 2013. Excluding nonrecurring transaction-related expenses, net income in 2014 was $66.7 million, or $2.11 per diluted share, up 17% over net income of $56.8 million in 2013.

"Driven by strong loan growth and two months of results from the Northwestern transaction, Chemical Financial Corporation posted fourth quarter 2014 net income, excluding nonrecurring transaction-related expenses, that was 28% higher than the prior year’s fourth quarter. This capped off a year which saw net income growth, excluding nonrecurring transaction-related expenses, of 17% over the prior year. While the addition of Northwestern played an important  role in overall earning-asset growth, organic loan growth of $565 million was the primary driver of our portfolio growth during the year," noted David B. Ramaker, Chairman, Chief Executive Officer and President. "Notably, the organic loan growth was not only broadly distributed geographically across our four regions and by loan type, but was also persistent throughout the course of the year. We attribute the portfolio growth to Michigan's improving economy, coupled with competitive share gains across our market footprint. Earnings also benefited from stable net interest margins, improved credit quality and increased wealth management revenue."

"In addition to executing on our core community banking strategy during 2014, we had a very successful year in executing our acquisition growth strategy. Over the course of the year, we identified and reached agreements with three like-minded, community-oriented institutions with whom we agreed to partner going forward. We are already seeing benefits from the addition of Northwestern to the Chemical family, and we look forward to adding Monarch and Lake Michigan to our family as we expect those transactions to close during the course of 2015," added Ramaker.

Net income, excluding nonrecurring transaction-related expenses, in the fourth quarter of 2014 was 28% higher than the fourth quarter of 2013 due to higher net interest income, higher noninterest income, a lower provision for loan losses and the impact of the acquisition of Northwestern, which were partially offset by higher operating expenses. Net income, excluding nonrecurring transaction-related expenses, in the fourth quarter of 2014 was 5% higher than the third quarter of 2014, with the increase primarily attributable to the impact of the Northwestern acquisition and higher net interest income from legacy operations of Chemical Bank, both of which were offset by higher legacy operating expenses.

The Corporation's return on average assets was 0.87% during the fourth quarter of 2014, compared to 0.93% in the fourth quarter of 2013 and 1.04% in the third quarter of 2014. The Corporation's return on average shareholders' equity was 7.5% in the fourth quarter of 2014, compared to 8.4% in both the fourth quarter of 2013 and the third quarter of 2014. Nonrecurring transaction-related expenses in the fourth quarter of 2014 reduced the Corporation's return on average assets by 18 basis points and return on average shareholders' equity by 153 basis points.

Net interest income was $58.2 million in the fourth quarter of 2014, $6.9 million, or 13.5%, higher than the fourth quarter of 2013 and $5.2 million, or 9.8%, higher than the third quarter of 2014. The increases in net interest income in the fourth quarter of 2014 over both the fourth quarter of 2013 and the third quarter of 2014 were attributable to a combination of the acquisition of Northwestern and organic loan growth. Excluding the $475 million of loans acquired in the acquisition of Northwestern, total loans grew $172 million, or 3.4%, in the fourth quarter of 2014 and $565 million, or 12.2%, over the twelve months ended December 31, 2014.

The net interest margin (on a tax-equivalent basis) was 3.62% in the fourth quarter of 2014, compared to 3.63% in the fourth quarter of 2013 and 3.59% in the third quarter of 2014. The positive impact on the net interest margin attributable to loan growth during the three and twelve months ended December 31, 2014 was offset by a reduction in the average yield on the loan portfolio. The average yield on the loan portfolio was 4.22% in the fourth quarter of 2014, compared to 4.42% in the fourth quarter of 2013 and 4.23% in the third quarter of 2014. The average yield of the investment securities portfolio was 2.02% in the fourth quarter of 2014, compared to 2.07% in the fourth quarter of 2013 and 2.19% in the third quarter of 2014. The reduction in the average yield of the investment securities portfolio in the fourth quarter of 2014 was attributable to the acquisition of Northwestern, in which the Corporation acquired $230 million in investment securities at an average yield of 0.98%. Modest changes in the mix of customer deposits and the repricing of matured customer certificates of deposit resulted in the Corporation's average cost of funds declining to 0.23% in the fourth quarter of 2014 from 0.30% in the fourth quarter of 2013 and 0.25% in the third quarter of 2014.

Net interest income was $212.6 million in 2014, $15.9 million, or 8.1%, higher than 2013, with the increase primarily attributable to loan growth in 2014. The acquisition of Northwestern and the favorable impact of interest-bearing deposits repricing lower during 2014 also contributed to increases in net interest income. These increases were partially offset by the unfavorable impact of interest-earning assets repricing during the year. The net interest margin (on a tax equivalent basis) was 3.59% in both 2014 and 2013.

The provision for loan losses was $1.5 million in the fourth quarter of 2014, compared to $2.0 million in the fourth quarter of 2013 and $1.5 million in the third quarter of 2014. The decrease in the provision for loan losses in the fourth quarter of 2014 compared to the fourth quarter of 2013 was due to continued improvement in the overall credit quality of the loan portfolio. The provision for loan losses was $6.1 million in 2014, compared to $11.0 million in 2013.

Net loan charge-offs were $2.8 million, or 0.21% of average loans, in the fourth quarter of 2014, compared to $4.5 million, or 0.39% of average loans, in the fourth quarter of 2013 and $2.3 million, or 0.18% of average loans, in the third quarter of 2014. The reduction in net loan charge-offs in the fourth quarter of 2014, compared to the fourth quarter of 2013, was due to the continued improvement in the overall credit quality of the loan portfolio and characteristics of an improving economy in the State of Michigan. The increase in net loan charge-offs in the fourth quarter of 2014, compared to the third quarter of 2014, was primarily attributable to the third quarter of 2014 including $0.4 million in higher loan loss recoveries. Net loan charge-offs totaled $9.5 million, or 0.19% of average loans, in 2014, compared to $16.4 million, or 0.38% of average loans, in 2013.

The Corporation's nonperforming loans, consisting of nonaccrual loans, accruing loans past due 90 days or more as to principal or interest payments and nonperforming troubled debt restructurings, totaled $71.2 million at December 31, 2014, compared to $70.7 million at September 30, 2014 and $82.0 million at December 31, 2013. Nonperforming loans comprised 1.25% of total loans at December 31, 2014, compared to 1.40% at September 30, 2014 and 1.76% at December 31, 2013. The reduction in nonperforming loans during the twelve months ended December 31, 2014 was attributable to a combination of improving economic conditions, the migration of loans to other real estate owned and loan charge-offs. The reduction in nonperforming loans as a percentage of total loans during the fourth quarter of 2014 was due to none of the $475 million of loans acquired in the acquisition of Northwestern being considered nonperforming loans based on the Corporation's accounting treatment under generally accepted accounting principles (GAAP).

At December 31, 2014, the allowance for loan losses of the originated loan portfolio was $75.2 million, or 1.51% of originated loans, compared to $76.5 million, or 1.60% of originated loans, at September 30, 2014 and $78.6 million, or 1.81% of originated loans, at December 31, 2013. The decreases in the coverage of the Corporation's allowance for loan losses of the originated portfolio during the three and twelve months ended December 31, 2014 was due to growth in loans in the originated loan portfolio. The allowance for loan losses of the originated loan portfolio as a percentage of nonperforming loans was 106% at December 31, 2014, compared to 108% at September 30, 2014 and 96% at December 31, 2013.

Noninterest income was $18.2 million in the fourth quarter of 2014, compared to $13.6 million in the fourth quarter of 2013 and $15.4 million in the third quarter of 2014. Noninterest income in the fourth quarter of 2014 was $4.6 million higher than the fourth quarter of 2013, with the increase attributable to both additional revenue and fees for services resulting from the incremental operations associated with the acquisition of Northwestern and higher wealth management revenue and service charges and fees for customer services related to legacy operations. Mortgage banking revenue in the fourth quarter of 2013 included $0.5 million of expense related to an increase in the Corporation's reserve for losses on sold loans. Noninterest income in the the fourth quarter of 2014 was $2.9 million higher than the third quarter of 2014, with the increase primarily attributable to the acquisition of Northwestern.

Noninterest income was $63.1 million in 2014, compared to $60.4 million in 2013. Excluding nonrecurring income in 2013 of $1.6 million, noninterest income was $4.3 million, or 7.3%, higher in 2014 than 2013, with the increase attributable to increases in all major categories of noninterest income, except for mortgage banking revenue, that was partially driven by the acquisition of Northwestern. Wealth management revenue was $16.0 million in 2014, compared to $14.0 million in 2013, with the increase largely due to an increase in equity market performance that led to increased assets under management and the acquisition of Northwestern, which added approximately $1.0 billion of assets under management to the Corporation's Wealth Management department as of the acquisition date. Mortgage banking revenue was $5.0 million in 2014, compared to $5.3 million in 2013, with the decrease due primarily to declines in the volume of loans sold in the secondary market. The Corporation sold $149 million of residential mortgage loans in the secondary market in 2014, compared to $211 million in 2013.

Operating expenses were $52.6 million in the fourth quarter of 2014, compared to $42.4 million in the fourth quarter of 2013 and $42.7 million in the third quarter of 2014. Operating expenses included nonrecurring transaction-related expenses of $4.1 million in the fourth quarter of 2014 and $1.3 million in the third quarter of 2014. Excluding these nonrecurring transaction-related expenses, operating expenses in the fourth quarter of 2014 were $6.1 million, or 14%, higher than the fourth quarter of 2013 and $7.1 million, or 17%, higher than the third quarter of 2014. The increase in operating expenses in the fourth quarter of 2014, compared to the fourth quarter of 2013, was primarily attributable to incremental operating costs associated with the acquisition of Northwestern. The increase was also attributable to increased employee compensation costs resulting from merit increases and market-based salary adjustments that took effect at the beginning of 2014 and higher group health care costs which were partially offset by lower donations expense. The increase in operating expenses in the fourth quarter of 2014, compared to the  third quarter of 2014, was largely attributable to incremental operating costs associated with the acquisition of Northwestern in addition to higher group health care costs.

Operating expenses were $179.9 million in 2014, compared to $164.9 million in 2013. Operating expenses included nonrecurring transaction-related expenses of $6.4 million in 2014. Excluding these nonrecurring transaction-related expenses, operating expenses in 2014 were $8.6 million, or 5.2%, higher than 2013, due largely to a combination of incremental operating costs associated with the acquisition of Northwestern and increased employee compensation costs resulting from merit increases and market-based salary adjustments and higher group health care costs, in addition to higher expenses associated with occupancy, equipment and net other real estate costs related to legacy operations. These increases were partially offset by lower pension and donations expense.

The Corporation's efficiency ratio was 62.2% in the fourth quarter of 2014, 59.2% in the third quarter of 2014 and 63.7% in the fourth quarter of 2013. The Corporation's efficiency ratio was 61.6% for 2014 and 63.1% for 2013.

Total assets were $7.32 billion at December 31, 2014, compared to $6.60 billion at September 30, 2014 and $6.18 billion at December 31, 2013. The increase in total assets during the three months ended December 31, 2014 was attributable to the acquisition of Northwestern, which added $815 million of assets as of the acquisition date, while the increase in total assets during the twelve months ended December 31, 2014 was primarily attributable to the acquisition of Northwestern, in addition to an increase in deposits that was used to partially fund loan growth. Interest-bearing balances with the Federal Reserve Bank (FRB) totaled $8 million at December 31, 2014, compared to $248 million at September 30, 2014 and $180 million at December 31, 2013. The decrease in interest-bearing balances with the FRB during the three months ended December 31, 2014 was due to a decline in seasonal municipal deposit accounts and funding the $121 million all cash purchase price of Northwestern. The decrease in interest-bearing balances at the FRB during the twelve months ended December 31, 2014 was also attributable to the Corporation utilizing some of the liquidity from its excess funds held at the FRB and maturing investment securities to also fund loan growth. Investment securities were $1.07 billion at December 31, 2014, compared to $895 million at September 30, 2014 and $958 million at December 31, 2013. The increase in investment securities during the fourth quarter of 2014 was due to investment securities acquired in the acquisition of Northwestern.

Total loans were $5.69 billion at December 31, 2014, up from $5.04 billion at September 30, 2014 and $4.65 billion at December 31, 2013. Excluding the $475 million of loans acquired in the acquisition of Northwestern, loans increased $172 million, or 3.4%, and $565 million, or 12.2%, during the three and twelve months ended December 31, 2014, respectively. The increases in loans during the three and twelve months ended December 31, 2014 occurred across all loan categories and were largely attributable to a combination of improving economic conditions and increased market share. The increase in loans of $565 million during 2014 was attributable to increases in commercial loans of $133 million, or 11%, commercial real estate loans of $103 million, or 8%, real estate construction and land development loans of $47 million, or 43%, residential real estate loans of $43 million, or 5%, and consumer installment and home equity loans of $239 million, or 20%. As of the acquisition date, Northwestern added commercial loans of $46 million, commercial real estate loans of $223 million, real estate construction and land development loans of $14 million, residential real estate loans of $106 million and consumer installment and home equity loans of $86 million.

Total deposits were $6.08 billion at December 31, 2014, compared to $5.43 billion at September 30, 2014 and $5.12 billion at December 31, 2013. Excluding the $794 million of deposits acquired in the acquisition of Northwestern, the Corporation experienced growth in total deposits of $162 million, or 3.2%, during the twelve months ended December 31, 2014. Short-term borrowings were $389.5 million at December 31, 2014, compared to $323.1 million at September 30, 2014 and $327.4 million at December 31, 2013, with the increases during the three and twelve months ended December 31, 2014 attributable to $85 million of short-term borrowings in the form of federal funds sold and FHLB advances utilized by the Corporation to fund short-term liquidity needs.

At December 31, 2014, the Corporation's tangible equity to assets ratio and total risk-based capital ratio were 8.4% and 12.4%, respectively, compared to 10.5% and 15.0%, respectively, at September 30, 2014 and 9.4% and 14.0%, respectively, at December 31, 2013. The decreases in the Corporation's capital ratios at December 31, 2014, compared to both September 30, 2014 and December 31, 2013, were attributable to the Corporation’s all cash acquisition of Northwestern, which resulted in the addition of $73 million of intangible assets, including $60 million of goodwill, as of the date of acquisition. At December 31, 2014, the Corporation's book value was $24.32 per share, compared to $24.47 per share at September 30, 2014 and $23.38 per share at December 31, 2013. At December 31, 2014, the Corporation's tangible book value was $18.35 per share, compared to $20.68 per share at September 30, 2014 and $19.17 per share at December 31, 2013.

This press release contains references to financial measures which are not defined in generally accepted accounting principles ("GAAP"). Such non-GAAP financial measures include the Corporation's tangible equity to assets ratio, presentation of net interest income and net interest margin on a fully taxable equivalent basis (FTE), information presented excluding nonrecurring transaction-related expenses, including net income, diluted earnings per share, return on average assets, return on average shareholders' equity and operating expenses, and information presented on a pro-forma basis. These non-GAAP financial measures have been included as the Corporation believes they are helpful for investors to analyze and evaluate the Corporation's financial condition.

Chemical Financial Corporation will host a conference call to discuss its fourth quarter and full year 2014 results on Wednesday, January 28, 2015 at 11 a.m. EDT. Anyone interested may access the conference call on a live basis by dialing toll-free at 1-888-364-3108 and entering 5170765 for the conference ID. The call will also be broadcast live over the Internet hosted at Chemical's website at www.chemicalbankmi.com under the "Investor Info" section. A copy of the slide-show presentation and an audio replay of the call will remain available on Chemical's website for at least 14 days.

Chemical Financial Corporation is the second largest banking company headquartered and operating branch offices in Michigan. The Corporation operates through a single subsidiary bank, Chemical Bank, with 178 banking offices spread over 46 counties in Michigan. At December 31, 2014, the Corporation had total assets of $7.3 billion, and on a pro-forma basis including the Corporation's recently announced pending acquisitions of Monarch and Lake Michigan, the Corporation would have total assets of approximately $8.7 billion. Chemical Financial Corporation's common stock trades on The NASDAQ Stock Market under the symbol CHFC and is one of the issues comprising The NASDAQ Global Select Market. More information about the Corporation is available by visiting the investor relations section of its website at www.chemicalbankmi.com.

Forward-Looking Statements

This press release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy and the Corporation. Words and phrases such as "anticipates," "believes," "continue," "estimates," "expects," "forecasts," "intends," "is likely," "judgment," "look forward," "opinion," "plans," "predicts," "probable," "projects," "should," "strategic," "trend," "will," and variations of such words and phrases or similar expressions are intended to identify such forward-looking statements. Such statements are based upon current beliefs and expectations and involve substantial risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. All statements referencing future time periods are forward-looking.

Management's determination of the provision and allowance for loan losses; the carrying value of acquired loans, goodwill and mortgage servicing rights; the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment); and management's assumptions concerning pension and other postretirement benefit plans involve judgments that are inherently forward-looking. There can be no assurance that future loan losses will be limited to the amounts estimated. All of the information concerning interest rate sensitivity is forward-looking. The future effect of changes in the financial and credit markets and the national and regional economies on the banking industry, generally, and on the Corporation, specifically, are also inherently uncertain. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("risk factors") that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. The Corporation undertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

This press release may contain forward-looking statements regarding the Corporation's outlook or expectations with respect to the planned acquisitions of Monarch and Lake Michigan, the expected costs to be incurred in connection with the acquisitions, Monarch's and Lake Michigan's future performance and consequences of their integration into the Corporation and the impact of the transactions on the Corporation’s future performance.

Risk factors relating to both of these transactions and the integration of Monarch and Lake Michigan into the Corporation after closing include, without limitation:

Completion of the transactions is dependent on, among other things, receipt of regulatory approvals and shareholder approvals from Monarch and Lake Michigan shareholders, 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 transactions on the Corporation's financial statements will be affected by the timing of the transactions.

The transactions 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.

The integration of Monarch's and Lake Michigan's business and operations into the Corporation, which will include conversion of operating systems and procedures, may take longer than anticipated or be more costly than anticipated or have unanticipated adverse results relating to Monarch's, Lake Michigan's or the Corporation's existing businesses.

The Corporation's ability to achieve anticipated results from the transactions is dependent on the state of the economic and financial markets going forward. Specifically, the Corporation may incur more credit losses from Monarch’s and Lake Michigan's loan portfolios than expected and deposit attrition may be greater than expected.

In addition, risk factors include, but are not limited to, the risk factors described in Item 1A of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013. 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.

No Offer or Solicitation

This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to any merger agreement associated with the Monarch or Lake Michigan transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Additional Information about the Transactions

Chemical filed a registration statement on Form S-4 with the Securities and Exchange Commission (SEC) to register the securities that the Monarch shareholders will receive if the Monarch transaction is consummated. Chemical will file a registration statement on Form S-4 with the SEC to register securities that the Lake Michigan shareholders will receive if the Lake Michigan transaction is consummated. The registration statements contain or will contain a prospectus, a proxy statement for the meeting at which the Monarch or Lake Michigan shareholders will consider approval of the transaction, as applicable, and other relevant documents concerning the transactions. Investors are urged to read the applicable registration statement, the prospectus and proxy statement, and any other relevant documents when they become available because they will contain important information about Chemical, Monarch, Lake Michigan, and the transactions. Investors will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, by contacting Chemical Financial Corporation, 235 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, as applicable, Monarch Community Bancorp. Inc., 375 N. Willowbrook Road, Coldwater, Michigan 49036, Attention: Ms. Rebecca S. Crabill, Investor Relations, telephone 517-279-3956, or Lake Michigan Financial Corporation, 150 Central Avenue, Holland, Michigan 49423, Attention: Mr. James Luyk, Investor Relations, telephone 616-546-4078. INVESTORS SHOULD READ THE APPLICABLE PROSPECTUS AND PROXY STATEMENT AND OTHER DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY BEFORE MAKING A DECISION CONCERNING THE TRANSACTIONS.

Monarch and Lake Michigan, and their respective directors, executive officers, and certain other members of management and employees, may be soliciting proxies from Monarch or Lake Michigan shareholders, as applicable, in favor of the transactions. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of Monarch or Lake Michigan shareholders in connection with the proposed transactions will be set forth in the applicable prospectus and proxy statement when it is filed with the SEC. Free copies of this document may be obtained as described above.

 

Chemical Financial Corporation Announces Fourth Quarter and Full Year 2014 Operating Results

 

 

Consolidated Statements of Financial Position (Unaudited)

Chemical Financial Corporation

 

 

 

December 31, 2014

 

September 30, 2014

 

December 31, 2013

 

 

(In thousands, except per share data)

Assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

Cash and cash due from banks

 

$

144,892

 

 

$

134,116

 

 

$

130,811

 

Interest-bearing deposits with the Federal Reserve Bank and other banks

 

38,128

 

 

248,022

 

 

179,977

 

Total cash and cash equivalents

 

183,020

 

 

382,138

 

 

310,788

 

Investment securities:

 

 

 

 

 

 

 

 

 

Available-for-sale

 

748,864

 

 

576,211

 

 

684,570

 

Held-to-maturity

 

316,413

 

 

318,562

 

 

273,905

 

Total investment securities

 

1,065,277

 

 

894,773

 

 

958,475

 

Loans held-for-sale

 

9,128

 

 

9,347

 

 

5,219

 

Loans:

 

 

 

 

 

 

 

 

 

Commercial

 

1,354,881

 

 

1,239,946

 

 

1,176,307

 

Commercial real estate

 

1,557,648

 

 

1,322,646

 

 

1,232,658

 

Real estate construction and land development

 

171,495

 

 

136,216

 

 

109,861

 

Residential mortgage

 

1,110,390

 

 

984,049

 

 

960,423

 

Consumer installment and home equity

 

1,493,816

 

 

1,358,063

 

 

1,168,372

 

Total loans

 

5,688,230

 

 

5,040,920

 

 

4,647,621

 

Allowance for loan losses

 

(75,683

)

 

(77,006

)

 

(79,072

)

Net loans

 

5,612,547

 

 

4,963,914

 

 

4,568,549

 

Premises and equipment

 

97,496

 

 

80,127

 

 

75,308

 

Goodwill

 

180,128

 

 

120,164

 

 

120,164

 

Other intangible assets

 

33,080

 

 

11,958

 

 

13,424

 

Interest receivable and other assets

 

141,467

 

 

134,564

 

 

132,781

 

Total Assets

 

$

7,322,143

 

 

$

6,596,985

 

 

$

6,184,708

 

Liabilities

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

1,591,661

 

 

$

1,344,716

 

 

$

1,227,768

 

Interest-bearing

 

4,487,310

 

 

4,087,211

 

 

3,894,617

 

Total deposits

 

6,078,971

 

 

5,431,927

 

 

5,122,385

 

Interest payable and other liabilities

 

56,572

 

 

40,366

 

 

38,395

 

Short-term borrowings

 

389,467

 

 

323,086

 

 

327,428

 

Total liabilities

 

6,525,010

 

 

5,795,379

 

 

5,488,208

 

Shareholders' Equity

 

 

 

 

 

 

 

 

 

Preferred stock, no par value per share

 

 

 

 

 

 

Common stock, $1 par value per share

 

32,774

 

 

32,763

 

 

29,790

 

Additional paid-in capital

 

565,166

 

 

564,127

 

 

488,177

 

Retained earnings

 

231,646

 

 

224,222

 

 

199,053

 

Accumulated other comprehensive loss

 

(32,453

)

 

(19,506

)

 

(20,520

)

Total shareholders' equity

 

797,133

 

 

801,606

 

 

696,500

 

Total Liabilities and Shareholders' Equity

 

$

7,322,143

 

 

$

6,596,985

 

 

$

6,184,708

 

Chemical Financial Corporation Announces Fourth Quarter and Full Year 2014 Operating Results

 

 

Consolidated Statements of Income (Unaudited)

Chemical Financial Corporation

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31,

 

December 31,

 

 

2014

 

 

2013

 

 

2014

 

 

2013

 

 

 

(In thousands, except per share data)

Interest Income

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

57,140

 

 

$

50,639

 

 

$

209,429

 

 

$

195,590

 

Interest on investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

2,322

 

 

2,497

 

 

9,147

 

 

10,234

 

Tax-exempt

 

1,841

 

 

1,656

 

 

7,054

 

 

6,394

 

Dividends on nonmarketable equity securities

 

415

 

 

404

 

 

1,224

 

 

1,105

 

Interest on deposits with the Federal Reserve Bank and other banks

 

89

 

 

127

 

 

407

 

 

738

 

Total interest income

 

61,807

 

 

55,323

 

 

227,261

 

 

214,061

 

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

3,414

 

 

3,893

 

 

14,254

 

 

16,883

 

Interest on short-term borrowings

 

107

 

 

125

 

 

414

 

 

484

 

Interest on long-term FHLB advances and subordinated debt

 

42

 

 

 

 

42

 

 

47

 

Total interest expense

 

3,563

 

 

4,018

 

 

14,710

 

 

17,414

 

Net Interest Income

 

58,244

 

 

51,305

 

 

212,551

 

 

196,647

 

Provision for loan losses

 

1,500

 

 

2,000

 

 

6,100

 

 

11,000

 

Net interest income after provision for loan losses

 

56,744

 

 

49,305

 

 

206,451

 

 

185,647

 

Noninterest Income

 

 

 

 

 

 

 

 

 

 

 

 

Service charges and fees on deposit accounts

 

6,386

 

 

5,519

 

 

22,414

 

 

21,939

 

Wealth management revenue

 

4,696

 

 

3,296

 

 

16,015

 

 

13,989

 

Other charges and fees for customer services

 

5,366

 

 

3,925

 

 

18,928

 

 

17,151

 

Mortgage banking revenue

 

1,590

 

 

637

 

 

5,041

 

 

5,336

 

Gain on sale of investment securities

 

 

 

29

 

 

 

 

1,133

 

Other

 

189

 

 

172

 

 

697

 

 

861

 

Total noninterest income

 

18,227

 

 

13,578

 

 

63,095

 

 

60,409

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages and employee benefits

 

30,189

 

 

24,357

 

 

104,118

 

 

96,419

 

Occupancy

 

4,201

 

 

3,485

 

 

15,842

 

 

13,934

 

Equipment and software

 

4,272

 

 

3,483

 

 

15,297

 

 

13,734

 

Other

 

13,954

 

 

11,080

 

 

44,668

 

 

40,861

 

Total operating expenses

 

52,616

 

 

42,405

 

 

179,925

 

 

164,948

 

Income before income taxes

 

22,355

 

 

20,478

 

 

89,621

 

 

81,108

 

Federal income tax expense

 

7,050

 

 

6,100

 

 

27,500

 

 

24,300

 

Net Income

 

$

15,305

 

 

$

14,378

 

 

$

62,121

 

 

$

56,808

 

Earnings Per Common Share:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding for basic earnings per share

 

32,767

 

 

29,786

 

 

31,367

 

 

28,183

 

Weighted average common shares outstanding for diluted earnings per share, including common stock equivalents

 

33,033

 

 

30,032

 

 

31,588

 

 

28,352

 

Basic earnings per common share

 

$

0.47

 

 

$

0.48

 

 

$

1.98

 

 

$

2.02

 

Diluted earnings per common share

 

$

0.46

 

 

$

0.48

 

 

$

1.97

 

 

$

2.00

 

Cash Dividends Declared Per Common Share

 

$

0.24

 

 

$

0.23

 

 

$

0.94

 

 

$

0.87

 

Key Ratios (annualized where applicable):

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.87

%

 

0.93

%

 

0.96

%

 

0.95

%

Return on average shareholders' equity

 

7.5

%

 

8.4

%

 

8.2

%

 

9.1

%

Net interest margin

 

3.62

%

 

3.63

%

 

3.59

%

 

3.59

%

Efficiency ratio

 

62.2

%

 

63.7

%

 

61.6

%

 

63.1

%

Chemical Financial Corporation Announces Fourth Quarter and Full Year 2014 Operating Results

 

 

Financial Summary (Unaudited)

Chemical Financial Corporation

(Dollars in Thousands)

 

 

 

4th Quarter 2014

 

3rd Quarter 2014

 

2nd Quarter 2014

 

1st Quarter 2014

 

4th Quarter 2013

 

3rd Quarter 2013

 

2nd Quarter 2013

 

1st Quarter 2013

Average Balances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

7,007,879

 

 

$

6,412,460

 

 

$

6,253,574

 

 

$

6,210,569

 

 

$

6,117,217

 

 

$

5,966,988

 

 

$

5,859,822

 

 

$

5,924,820

 

Total interest-earning assets

 

6,558,147

 

 

6,046,991

 

 

5,907,549

 

 

5,860,429

 

 

5,782,141

 

 

5,621,542

 

 

5,530,262

 

 

5,579,789

 

Total loans

 

5,418,743

 

 

4,962,948

 

 

4,824,299

 

 

4,692,430

 

 

4,588,448

 

 

4,424,332

 

 

4,249,708

 

 

4,152,570

 

Total deposits

 

5,808,187

 

 

5,249,317

 

 

5,151,581

 

 

5,142,276

 

 

5,065,671

 

 

4,960,270

 

 

4,878,214

 

 

4,950,956

 

Total interest-bearing liabilities

 

4,632,769

 

 

4,237,626

 

 

4,250,158

 

 

4,276,677

 

 

4,211,647

 

 

4,167,915

 

 

4,126,751

 

 

4,221,638

 

Total shareholders' equity

 

804,328

 

 

794,711

 

 

714,355

 

 

701,878

 

 

678,487

 

 

620,911

 

 

606,607

 

 

599,406

 

Key Ratios (annualized where applicable)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (taxable equiv basis)

 

3.62

%

 

3.59

%

 

3.59

%

 

3.53

%

 

3.63

%

 

3.58

%

 

3.60

%

 

3.54

%

Efficiency ratio

 

62.2

%

 

59.2

%

 

60.9

%

 

64.5

%

 

63.7

%

 

61.0

%

 

63.3

%

 

64.4

%

Return on average assets

 

0.87

%

 

1.04

%

 

1.04

%

 

0.90

%

 

0.93

%

 

1.00

%

 

0.97

%

 

0.91

%

Return on average shareholders' equity

 

7.5

%

 

8.4

%

 

9.1

%

 

8.0

%

 

8.4

%

 

9.6

%

 

9.4

%

 

9.0

%

Average shareholders' equity as a percent of average assets

 

11.5

%

 

12.4

%

 

11.4

%

 

11.3

%

 

11.1

%

 

10.4

%

 

10.4

%

 

10.1

%

Capital ratios (period end):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible shareholders' equity as a percent of total assets

 

8.4

%

 

10.5

%

 

11.0

%

 

9.3

%

 

9.4

%

 

8.9

%

 

8.5

%

 

8.1

%

Total risk-based capital ratio

 

12.4

%

 

15.0

%

 

15.3

%

 

13.8

%

 

14.0

%

 

14.2

%

 

13.1

%

 

13.3

%

 

 

 

4th Quarter 2014

 

3rd Quarter 2014

 

2nd Quarter 2014

 

1st Quarter 2014

 

4th Quarter 2013

 

3rd Quarter 2013

 

2nd Quarter 2013

 

1st Quarter 2013

Credit Quality Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated Loans

 

$

4,990,067

 

 

$

4,777,614

 

 

$

4,624,409

 

 

$

4,464,465

 

 

$

4,352,924

 

 

$

4,213,728

 

 

$

3,990,633

 

 

$

3,810,989

 

Acquired Loans

 

698,163

 

 

263,306

 

 

274,395

 

 

288,824

 

 

294,697

 

 

308,943

 

 

345,238

 

 

374,272

 

Nonperforming Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans (NPLs)

 

71,184

 

 

70,742

 

 

73,735

 

 

76,544

 

 

81,984

 

 

75,818

 

 

79,342

 

 

86,417

 

   Other real estate / repossessed assets (ORE)

 

14,205

 

 

10,354

 

 

10,392

 

 

10,056

 

 

9,776

 

 

12,033

 

 

13,659

 

 

18,194

 

Total nonperforming assets

 

85,389

 

 

81,096

 

 

84,127

 

 

86,600

 

 

91,760

 

 

87,851

 

 

93,001

 

 

104,611

 

Performing troubled debt restructurings

 

45,664

 

 

44,588

 

 

44,133

 

 

41,823

 

 

39,571

 

 

34,071

 

 

32,657

 

 

30,723

 

Allowance for loan losses - originated as a percent of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total originated loans

 

1.51

%

 

1.60

%

 

1.67

%

 

1.75

%

 

1.81

%

 

1.92

%

 

2.05

%

 

2.16

%

Nonperforming loans

 

106

%

 

108

%

 

105

%

 

102

%

 

96

%

 

107

%

 

103

%

 

95

%

NPLs as a percent of total loans

 

1.25

%

 

1.40

%

 

1.51

%

 

1.61

%

 

1.76

%

 

1.68

%

 

1.83

%

 

2.06

%

Nonperforming assets as a percent of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans plus ORE

 

1.50

%

 

1.61

%

 

1.71

%

 

1.82

%

 

1.97

%

 

1.94

%

 

2.14

%

 

2.49

%

Total assets

 

1.17

%

 

1.23

%

 

1.35

%

 

1.37

%

 

1.48

%

 

1.40

%

 

1.60

%

 

1.75

%

Net loan charge-offs (year-to-date):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated

 

$

9,489

 

 

$

6,666

 

 

$

4,379

 

 

$

2,199

 

 

$

16,419

 

 

$

11,959

 

 

$

8,307

 

 

$

4,657

 

Acquired

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loan charge-offs (year-to-date)

 

9,489

 

 

6,666

 

 

4,379

 

 

2,199

 

 

16,419

 

 

11,959

 

 

8,307

 

 

4,657

 

Net loan charge-offs as a percent of average loans (year-to-date, annualized)

 

0.19

%

 

0.18

%

 

0.18

%

 

0.19

%

 

0.38

%

 

0.37

%

 

0.40

%

 

0.45

%

 

 

 

Dec 31, 2014

 

Sept 30, 2014

 

June 30, 2014

 

Mar 31, 2014

 

Dec 31, 2013

 

Sept 30, 2013

 

June 30, 2013

 

Mar 31, 2013

Additional Data - Intangibles

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

$

180,128

 

 

$

120,164

 

 

$

120,164

 

 

$

120,164

 

 

$

120,164

 

 

$

120,164

 

 

$

120,164

 

 

$

120,164

 

Core deposit intangibles (CDI)

 

20,863

 

 

8,665

 

 

9,110

 

 

9,556

 

 

10,001

 

 

10,466

 

 

10,933

 

 

11,417

 

Mortgage servicing rights (MSR)

 

12,217

 

 

3,293

 

 

3,344

 

 

3,316

 

 

3,423

 

 

3,399

 

 

3,421

 

 

3,485

 

Amortization of CDI (quarter only)

 

693

 

 

445

 

 

446

 

 

445

 

 

465

 

 

467

 

 

484

 

 

493

 

Chemical Financial Corporation Announces Fourth Quarter and Full Year 2014 Operating Results

 

 

Average Balances, Tax Equivalent Interest and Effective Yields and Rates (Unaudited)*

Chemical Financial Corporation

 

 

 

Three Months Ended December 31, 2014

 

Three Months Ended December 31, 2013

 

 

Average

Balance

 

Tax

Equivalent

Interest

 

Effective

Yield/Rate

 

Average

Balance

 

Tax

Equivalent

Interest

 

Effective

Yield/Rate

Assets

 

(Dollars in thousands)

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans**

 

$

5,426,664

 

 

$

57,680

 

 

4.22

%

 

$

4,595,248

 

 

$

51,167

 

 

4.42

%

Taxable investment securities

 

712,516

 

 

2,322

 

 

1.30

 

 

725,658

 

 

2,497

 

 

1.38

 

Tax-exempt investment securities

 

306,446

 

 

2,832

 

 

3.70

 

 

247,256

 

 

2,542

 

 

4.11

 

Other interest-earning assets

 

27,139

 

 

415

 

 

6.07

 

 

25,572

 

 

404

 

 

6.27

 

Interest-bearing deposits with the Federal Reserve Bank and other banks

 

85,382

 

 

89

 

 

0.41

 

 

188,407

 

 

127

 

 

0.27

 

Total interest-earning assets

 

6,558,147

 

 

63,338

 

 

3.84

 

 

5,782,141

 

 

56,737

 

 

3.90

 

Less: allowance for loan losses

 

(77,053

)

 

 

 

 

 

 

 

(81,558

)

 

 

 

 

 

 

Other assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash due from banks

 

134,309

 

 

 

 

 

 

 

 

122,589

 

 

 

 

 

 

 

Premises and equipment

 

93,111

 

 

 

 

 

 

 

 

74,258

 

 

 

 

 

 

 

Interest receivable and other assets

 

299,365

 

 

 

 

 

 

 

 

219,787

 

 

 

 

 

 

 

Total assets

 

$

7,007,879

 

 

 

 

 

 

 

 

$

6,117,217

 

 

 

 

 

 

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

 

$

1,368,314

 

 

$

329

 

 

0.10

%

 

$

1,145,924

 

 

$

266

 

 

0.09

%

Savings deposits

 

1,613,338

 

 

367

 

 

0.09

 

 

1,382,324

 

 

309

 

 

0.09

 

Time deposits

 

1,306,712

 

 

2,718

 

 

0.83

 

 

1,347,393

 

 

3,318

 

 

0.98

 

Short-term borrowings

 

337,681

 

 

107

 

 

0.13

 

 

336,006

 

 

125

 

 

0.15

 

Long-term FHLB advances and subordinated debt obligations

 

6,724

 

 

42

 

 

2.48

 

 

 

 

 

 

 

Total interest-bearing liabilities

 

4,632,769

 

 

3,563

 

 

0.31

 

 

4,211,647

 

 

4,018

 

 

0.38

 

Noninterest-bearing deposits

 

1,519,823

 

 

 

 

 

 

1,190,030

 

 

 

 

 

Total deposits and borrowed funds

 

6,152,592

 

 

3,563

 

 

0.23

 

 

5,401,677

 

 

4,018

 

 

0.30

 

Interest payable and other liabilities

 

50,959

 

 

 

 

 

 

 

 

37,053

 

 

 

 

 

 

 

Shareholders' equity

 

804,328

 

 

 

 

 

 

 

 

678,487

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

7,007,879

 

 

 

 

 

 

 

 

$

6,117,217

 

 

 

 

 

 

 

Net Interest Spread (Average yield earned on interest-earning assets minus average rate paid on interest-bearing liabilities)

 

 

 

 

 

 

 

3.53

%

 

 

 

 

 

 

 

3.52

%

Net Interest Income (FTE)

 

 

 

 

$

59,775

 

 

 

 

 

 

 

 

$

52,719

 

 

 

 

Net Interest Margin (Net Interest Income (FTE) divided by total average interest-earning assets)

 

 

 

 

 

 

 

3.62

%

 

 

 

 

 

 

 

3.63

%

 

*

Fully taxable equivalent (FTE) basis using a federal income tax rate of 35%.

**

Nonaccrual loans and loans held-for-sale are included in average balances reported and are included in the calculation of yields. Also, tax equivalent interest includes net loan fees.

Chemical Financial Corporation Announces Fourth Quarter and Full Year 2014 Operating Results

 

 

Average Balances, Tax Equivalent Interest and Effective Yields and Rates (Unaudited)*

Chemical Financial Corporation

 

 

 

Twelve Months Ended December 31, 2014

 

Twelve Months Ended December 31, 2013

 

 

Average

Balance

 

Tax

Equivalent

Interest

 

Effective

Yield/Rate

 

Average

Balance

 

Tax

Equivalent

Interest

 

Effective

Yield/Rate

Assets

 

(Dollars in thousands)

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans**

 

$

4,982,986

 

 

$

211,608

 

 

4.25

%

 

$

4,366,209

 

 

$

197,563

 

 

4.52

%

Taxable investment securities

 

667,978

 

 

9,147

 

 

1.37

 

 

721,932

 

 

10,234

 

 

1.42

 

Tax-exempt investment securities

 

279,709

 

 

10,850

 

 

3.88

 

 

233,965

 

 

9,776

 

 

4.18

 

Other interest-earning assets

 

25,967

 

 

1,224

 

 

4.71

 

 

25,572

 

 

1,105

 

 

4.32

 

Interest-bearing deposits with the Federal Reserve Bank and other banks

 

138,424

 

 

407

 

 

0.29

 

 

281,291

 

 

738

 

 

0.26

 

Total interest-earning assets

 

6,095,064

 

 

233,236

 

 

3.83

 

 

5,628,969

 

 

219,416

 

 

3.90

 

Less: allowance for loan losses

 

(78,126

)

 

 

 

 

 

 

 

(83,264

)

 

 

 

 

 

 

Other assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash due from banks

 

126,142

 

 

 

 

 

 

 

 

121,488

 

 

 

 

 

 

 

Premises and equipment

 

79,278

 

 

 

 

 

 

 

 

74,134

 

 

 

 

 

 

 

Interest receivable and other assets

 

250,786

 

 

 

 

 

 

 

 

223,265

 

 

 

 

 

 

 

Total assets

 

$

6,473,144

 

 

 

 

 

 

 

 

$

5,964,592

 

 

 

 

 

 

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

 

$

1,234,347

 

 

$

1,197

 

 

0.10

%

 

$

1,093,975

 

 

$

1,011

 

 

0.09

%

Savings deposits

 

1,472,092

 

 

1,325

 

 

0.09

 

 

1,357,317

 

 

1,210

 

 

0.09

 

Time deposits

 

1,307,058

 

 

11,732

 

 

0.90

 

 

1,391,045

 

 

14,662

 

 

1.05

 

Short-term borrowings

 

334,785

 

 

414

 

 

0.12

 

 

337,649

 

 

484

 

 

0.14

 

Long-term FHLB advances and subordinated debt obligations

 

1,695

 

 

42

 

 

2.48

 

 

1,935

 

 

47

 

 

2.43

 

Total interest-bearing liabilities

 

4,349,977

 

 

14,710

 

 

0.34

 

 

4,181,921

 

 

17,414

 

 

0.42

 

Noninterest-bearing deposits

 

1,325,925

 

 

 

 

 

 

1,121,745

 

 

 

 

 

Total deposits and borrowed funds

 

5,675,902

 

 

14,710

 

 

0.26

 

 

5,303,666

 

 

17,414

 

 

0.33

 

Interest payable and other liabilities

 

43,031

 

 

 

 

 

 

 

 

34,371

 

 

 

 

 

 

 

Shareholders' equity

 

754,211

 

 

 

 

 

 

 

 

626,555

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

6,473,144

 

 

 

 

 

 

 

 

$

5,964,592

 

 

 

 

 

 

 

Net Interest Spread (Average yield earned on interest-earning assets minus average rate paid on interest-bearing liabilities)

 

 

 

 

 

 

 

3.49

%

 

 

 

 

 

 

 

3.48

%

Net Interest Income (FTE)

 

 

 

 

$

218,526

 

 

 

 

 

 

 

 

$

202,002

 

 

 

 

Net Interest Margin (Net Interest Income (FTE) divided by total average interest-earning assets)

 

 

 

 

 

 

 

3.59

%

 

 

 

 

 

 

 

3.59

%

 

*

Fully taxable equivalent (FTE) basis using a federal income tax rate of 35%.

**

Nonaccrual loans and loans held-for-sale are included in average balances reported and are included in the calculation of yields. Also, tax equivalent interest includes net loan fees.

 

Chemical Financial Corporation Announces Fourth Quarter and Full Year 2014 Operating Results

 

 

Nonperforming Assets (Unaudited)

Chemical Financial Corporation

 

 

 

Dec 31, 2014

 

Sept 30, 2014

 

June 30, 2014

 

Mar 31, 2014

 

Dec 31, 2013

 

Sept 30, 2013

 

June 30, 2013

 

Mar 31, 2013

 

 

(In thousands)

Nonperforming Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

16,418

 

 

$

18,213

 

 

$

18,773

 

 

$

18,251

 

 

$

18,374

 

 

$

11,809

 

 

$

11,052

 

 

$

12,186

 

Commercial real estate

 

24,966

 

 

23,858

 

 

25,361

 

 

27,568

 

 

28,598

 

 

28,623

 

 

28,498

 

 

35,849

 

Real estate construction

 

162

 

 

162

 

 

160

 

 

160

 

 

371

 

 

183

 

 

183

 

 

168

 

Land development

 

225

 

 

1,467

 

 

2,184

 

 

2,267

 

 

2,309

 

 

2,954

 

 

3,434

 

 

4,105

 

Residential mortgage

 

6,706

 

 

6,693

 

 

6,325

 

 

6,589

 

 

8,921

 

 

8,029

 

 

9,241

 

 

10,407

 

Consumer installment

 

500

 

 

527

 

 

536

 

 

806

 

 

676

 

 

665

 

 

552

 

 

699

 

Home equity

 

1,667

 

 

2,116

 

 

2,296

 

 

2,046

 

 

2,648

 

 

3,023

 

 

3,064

 

 

2,837

 

Total nonaccrual loans

 

50,644

 

 

53,036

 

 

55,635

 

 

57,687

 

 

61,897

 

 

55,286

 

 

56,024

 

 

66,251

 

Accruing loans contractually past due 90 days or more as to interest or principal payments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

170

 

 

16

 

 

15

 

 

43

 

 

536

 

 

281

 

 

1

 

 

4

 

Commercial real estate

 

 

 

87

 

 

69

 

 

730

 

 

190

 

 

 

 

78

 

 

177

 

Real estate construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage

 

557

 

 

380

 

 

376

 

 

 

 

537

 

 

692

 

 

164

 

 

196

 

Consumer installment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity

 

1,346

 

 

1,779

 

 

1,075

 

 

622

 

 

734

 

 

686

 

 

689

 

 

874

 

Total accruing loans contractually past due 90 days or more as to interest or principal payments

 

2,073

 

 

2,262

 

 

1,535

 

 

1,395

 

 

1,997

 

 

1,659

 

 

932

 

 

1,251

 

Nonperforming troubled debt restructurings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loan portfolio

 

15,271

 

 

11,797

 

 

11,049

 

 

11,218

 

 

13,414

 

 

15,744

 

 

19,140

 

 

14,587

 

Consumer loan portfolio

 

3,196

 

 

3,647

 

 

5,516

 

 

6,244

 

 

4,676

 

 

3,129

 

 

3,246

 

 

4,328

 

Total nonperforming troubled debt restructurings

 

18,467

 

 

15,444

 

 

16,565

 

 

17,462

 

 

18,090

 

 

18,873

 

 

22,386

 

 

18,915

 

Total nonperforming loans

 

71,184

 

 

70,742

 

 

73,735

 

 

76,544

 

 

81,984

 

 

75,818

 

 

79,342

 

 

86,417

 

Other real estate and repossessed assets

 

14,205

 

 

10,354

 

 

10,392

 

 

10,056

 

 

9,776

 

 

12,033

 

 

13,659

 

 

18,194

 

Total nonperforming assets

 

$

85,389

 

 

$

81,096

 

 

$

84,127

 

 

$

86,600

 

 

$

91,760

 

 

$

87,851

 

 

$

93,001

 

 

$

104,611

 

Chemical Financial Corporation Announces Fourth Quarter and Full Year 2014 Operating Results

 

 

Summary of Loan Loss Experience (Unaudited)

Chemical Financial Corporation

 

 

 

Twelve Months Ended Dec 31, 2014

 

Three Months Ended

 

Twelve Months Ended Dec 31, 2013

 

Three Months Ended

 

 

 

Dec 31, 2014

 

Sept 30, 2014

 

June 30, 2014

 

Mar 31, 2014

 

 

Dec 31, 2013

 

Sept 30, 2013

 

June 30, 2013

 

Mar 31, 2013

 

 

(In thousands)

Allowance for loan losses - originated loan portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Allowance for loan losses - beginning of period

 

$

78,572

 

 

$

76,506

 

 

$

77,293

 

 

$

77,973

 

 

$

78,572

 

 

$

83,991

 

 

$

81,032

 

 

$

81,684

 

 

$

82,334

 

 

$

83,991

 

Provision for loan losses

 

6,100

 

 

1,500

 

 

1,500

 

 

1,500

 

 

1,600

 

 

11,000

 

 

2,000

 

 

3,000

 

 

3,000

 

 

3,000

 

Net loan charge-offs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

(2,269

)

 

(932

)

 

(535

)

 

(569

)

 

(233

)

 

(2,321

)

 

(448

)

 

(615

)

 

(59

)

 

(1,199

)

Commercial real estate

 

(2,056

)

 

(620

)

 

(412

)

 

(783

)

 

(241

)

 

(6,277

)

 

(1,233

)

 

(1,248

)

 

(1,786

)

 

(2,010

)

Real estate construction

 

(113

)

 

 

 

(13

)

 

 

 

(100

)

 

(37

)

 

(37

)

 

 

 

 

 

 

Land development

 

648

 

 

363

 

 

16

 

 

127

 

 

142

 

 

(753

)

 

(207

)

 

(400

)

 

(50

)

 

(96

)

Residential mortgage

 

(1,626

)

 

(277

)

 

(304

)

 

(341

)

 

(704

)

 

(2,532

)

 

(527

)

 

(409

)

 

(1,023

)

 

(573

)

Consumer installment

 

(2,915

)

 

(813

)

 

(689

)

 

(612

)

 

(801

)

 

(2,643

)

 

(836

)

 

(786

)

 

(574

)

 

(447

)

Home equity

 

(1,158

)

 

(544

)

 

(350

)

 

(2

)

 

(262

)

 

(1,856

)

 

(1,172

)

 

(194

)

 

(158

)

 

(332

)

Net loan charge-offs

 

(9,489

)

 

(2,823

)

 

(2,287

)

 

(2,180

)

 

(2,199

)

 

(16,419

)

 

(4,460

)

 

(3,652

)

 

(3,650

)

 

(4,657

)

Allowance for loan losses - end of period

 

75,183

 

 

75,183

 

 

76,506

 

 

77,293

 

 

77,973

 

 

78,572

 

 

78,572

 

 

81,032

 

 

81,684

 

 

82,334

 

Allowance for loan losses - acquired loan portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses - beginning of period

 

500

 

 

500

 

 

500

 

 

500

 

 

500

 

 

500

 

 

500

 

 

500

 

 

500

 

 

500

 

Provision for loan losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loan charge-offs - (commercial)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses - end of period

 

500

 

 

500

 

 

500

 

 

500

 

 

500

 

 

500

 

 

500

 

 

500

 

 

500

 

 

500

 

Total allowance for loan losses

 

$

75,683

 

 

$

75,683

 

 

$

77,006

 

 

$

77,793

 

 

$

78,473

 

 

$

79,072

 

 

$

79,072

 

 

$

81,532

 

 

$

82,184

 

 

$

82,834

 

Net loan charge-offs as a percent of average loans (quarterly amounts annualized)

 

0.19%

 

0.21%

 

0.18%

 

0.18%

 

0.19%

 

0.38%

 

0.39%

 

0.33%

 

0.34%

 

0.45%

Chemical Financial Corporation Announces Fourth Quarter and Full Year 2014 Operating Results

 

 

Selected Quarterly Information (Unaudited)

Chemical Financial Corporation

 

 

 

4th Quarter 2014

 

3rd Quarter 2014

 

2nd Quarter 2014

 

1st Quarter 2014

 

4th Quarter 2013

 

3rd Quarter 2013

 

2nd Quarter 2013

 

1st Quarter 2013

 

 

(Dollars in thousands, except per share data)

Summary of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

61,807

 

 

$

56,629

 

 

$

55,180

 

 

$

53,645

 

 

$

55,323

 

 

$

53,578

 

 

$

52,781

 

 

$

52,379

 

Interest expense

 

3,563

 

 

3,561

 

 

3,720

 

 

3,866

 

 

4,018

 

 

4,284

 

 

4,385

 

 

4,727

 

Net interest income

 

58,244

 

 

53,068

 

 

51,460

 

 

49,779

 

 

51,305

 

 

49,294

 

 

48,396

 

 

47,652

 

Provision for loan losses

 

1,500

 

 

1,500

 

 

1,500

 

 

1,600

 

 

2,000

 

 

3,000

 

 

3,000

 

 

3,000

 

Net interest income after provision for loan losses

 

56,744

 

 

51,568

 

 

49,960

 

 

48,179

 

 

49,305

 

 

46,294

 

 

45,396

 

 

44,652

 

Noninterest income

 

18,227

 

 

15,351

 

 

15,801

 

 

13,716

 

 

13,578

 

 

14,644

 

 

15,948

 

 

16,239

 

Operating expenses

 

52,616

 

 

42,702

 

 

42,425

 

 

42,182

 

 

42,405

 

 

39,545

 

 

41,041

 

 

41,957

 

Income before income taxes

 

22,355

 

 

24,217

 

 

23,336

 

 

19,713

 

 

20,478

 

 

21,393

 

 

20,303

 

 

18,934

 

Federal income tax expense

 

7,050

 

 

7,450

 

 

7,100

 

 

5,900

 

 

6,100

 

 

6,400

 

 

6,100

 

 

5,700

 

Net income

 

$

15,305

 

 

$

16,767

 

 

$

16,236

 

 

$

13,813

 

 

$

14,378

 

 

$

14,993

 

 

$

14,203

 

 

$

13,234

 

Net interest margin

 

3.62

%

 

3.59

%

 

3.59

%

 

3.53

%

 

3.63

%

 

3.58

%

 

3.60

%

 

3.54

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Common Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.47

 

 

$

0.51

 

 

$

0.54

 

 

$

0.46

 

 

$

0.48

 

 

$

0.54

 

 

$

0.52

 

 

$

0.48

 

Diluted

 

0.46

 

 

0.51

 

 

0.54

 

 

0.46

 

 

0.48

 

 

0.53

 

 

0.51

 

 

0.48

 

Cash dividends declared

 

0.24

 

 

0.24

 

 

0.23

 

 

0.23

 

 

0.23

 

 

0.22

 

 

0.21

 

 

0.21

 

Book value - period-end

 

24.32

 

 

24.47

 

 

24.22

 

 

23.63

 

 

23.38

 

 

22.61

 

 

22.14

 

 

21.97

 

Tangible book value - period-end

 

18.35

 

 

20.68

 

 

20.42

 

 

19.44

 

 

19.17

 

 

18.36

 

 

17.53

 

 

17.34

 

Market value - period-end

 

30.64

 

 

26.89

 

 

28.08

 

 

32.45

 

 

31.67

 

 

27.92

 

 

25.99

 

 

26.38