MIDLAND, Mich., July 26, 2010 (GLOBE NEWSWIRE) -- Chemical Financial Corporation (Nasdaq:CHFC) today announced 2010 second quarter net income of $4.4 million, or $0.17 per diluted share, compared to net income of $2.3 million, or $0.10 per diluted share, in both the first quarter of 2010 and the second quarter of 2009. Net income was $6.7 million, or $0.27 per diluted share, for the six months ended June 30, 2010, compared to $5.0 million, or $0.21 per diluted share, for the six months ended June 30, 2009.

The Company's return on average assets during the second quarter of 2010 was 0.36 percent, up from 0.23 percent in the second quarter of 2009 and 0.22 percent in the first quarter of 2010. The return on average equity was 3.3 percent in the second quarter of 2010, up from 1.9 percent in the second quarter of 2009 and 2.0 percent in the first quarter of 2010.

Included in the second quarter and year-to-date 2010 results were $2.3 million and $3.0 million, respectively, of transaction costs related to the acquisition of O.A.K. Financial Corporation (OAK). The net impact of these costs reduced second quarter and year-to-date diluted earnings per share by $0.07 per share and $0.10 per share, respectively. As previously reported, the Company completed its acquisition of OAK, the parent company of Byron Bank, on April 30, 2010. Accordingly, results of OAK's operations are included since the acquisition date. The acquisition of OAK and Byron Bank resulted in increases in the Company's total assets of $820 million, total loans of $631 million, total deposits of $693 million (core deposits of $495 million) and goodwill of $39 million as of the acquisition date.

"The acquisition of Byron Bank will serve as a catalyst to drive Chemical Financial's growth in West Michigan and enhance operating earnings. The integration of Byron Bank is progressing as planned, and the Company remains on target for the integration of all systems in the third quarter of 2010," said David B. Ramaker, Chairman, Chief Executive Officer and President of Chemical Financial Corporation. "Our progress is due in large part to the similar cultures of the organizations and the combined efforts of the expanded Chemical Bank team."

"Higher earnings in the second quarter of 2010, compared to both the prior year comparable quarter and first quarter of 2010, were attributable primarily to a lower provision for loan losses. In addition, performance in the second quarter of 2010 was positively impacted by slightly higher noninterest income across a number of categories," added Ramaker. "While it is premature to say that credit quality challenges have peaked, we have been modestly encouraged by certain trends we are seeing in the portfolio."

"We continue to seek additional avenues for growth," said Ramaker. "We believe our capital strength and market focus has positioned us well, relative to many of our competitors, to take advantage of other opportunities which may arise in Michigan."

In accordance with generally accepted accounting principles, all assets and liabilities acquired in the OAK transaction were recorded at fair value, including a reduction for estimated credit losses in the loan portfolio (acquired portfolio), and without carryover of that portfolio's historical allowance for loan losses. The fair value amounts were based on the Company's best estimates based on the information available and will be finalized upon receipt of third-party valuation reports. Accordingly, selected financial amounts and ratios distinguish between the "originated" portfolio and the "acquired" portfolio. For the Company's originated portfolio, representing all loans other than those acquired in the OAK transaction, nonperforming loans totaled $142.9 million at June 30, 2010, an increase from $130.1 million at March 31, 2010 and $135.8 million at December 31, 2009. The increase from March 31, 2010 was largely attributable to higher nonaccrual loans, while the increase from December 31, 2009 was largely attributable to a higher level of loans that have been modified / restructured due to cash flow difficulties of the customer. Loans in the acquired portfolio that meet the Company's definition of nonperforming but for which the risk of loss has already been considered in connection with the Company's estimated fair value of loans at acquisition, totaled $10.1 million at June 30, 2010.

Nonperforming assets, excluding nonperforming loans included in the acquired portfolio, totaled $164.7 million at June 30, 2010, a $15.7 million increase from March 31, 2010, of which $3.4 million was attributable to other real estate and repossessed assets acquired in connection with the OAK transaction. At June 30, 2010, the Company's nonperforming assets included nonaccrual loans of $108.0 million, accruing loans contractually past due 90 days or more as to interest or principal payments of $8.3 million and troubled debt restructurings of commercial and real estate residential loans of $26.6 million, in the originated portfolio, and other real estate and repossessed assets of $21.7 million.

At June 30, 2010, the allowance for loan losses of $89.5 million was 2.95 percent of originated loans, up from 2.82 percent at March 31, 2010 and 2.35 percent at June 30, 2009. The allowance for loan losses as a percentage of nonperforming loans of the originated portfolio was 63 percent at June 30, 2010, down from 65 percent at March 31, 2010, although up from 56 percent at June 30, 2009. At June 30, 2010, nonperforming loans of the originated portfolio as a percentage of originated loans were 4.71 percent, up from 4.35 percent at March 31, 2010 and 4.18 percent at June 30, 2009.

Net interest income was $42.9 million in the second quarter of 2010, up from $37.0 million in the second quarter of 2009 and $36.4 million in the first quarter of 2010. The increases in net interest income were primarily attributable to the acquisition of OAK, although also due to a slight decrease in the average cost of deposits related to maturing higher-cost customer certificates of deposit and maturing higher-cost wholesale funding. The net interest margin (on a tax-equivalent basis) in the second quarter of 2010 was 3.88 percent, down from 4.00 percent in the second quarter of 2009, although up from 3.72 percent in the first quarter of 2010. The decrease in net interest margin from the prior year's second quarter was primarily attributable to the Company's decision to enhance its liquidity position and to modestly adjust its liability sensitive position by increasing the amount of variable rate investment securities held in its investment securities portfolio.

The Company recorded a $12.7 million provision for loan losses in the second quarter of 2010, compared to $15.2 million in the second quarter of 2009 and $14.0 million in the first quarter of 2010. Second quarter 2010 net loan charge-offs were $7.3 million, compared to $7.8 million in the second quarter of 2009 and $10.7 million in the first quarter of 2010.

Total noninterest income was $11.0 million in the second quarter of 2010 and the second quarter of 2009, compared to $9.4 million in the first quarter of 2010. The increase in the second quarter of 2010, as compared to the first quarter of 2010, was attributable to the OAK transaction and modest increases across a broad array of noninterest income categories.

Operating expenses were $34.6 million in the second quarter of 2010, up from $30.0 million in the second quarter of 2009 and $29.2 million in the first quarter of 2010. The increases in operating expenses were primarily attributable to OAK operating expenses and acquisition-related transaction costs. Operating expenses in the second quarter of 2010 included $2.3 million of acquisition-related transaction costs applicable to the OAK transaction, compared to $0.7 million in the first quarter of 2010 and $0.8 million in the fourth quarter of 2009. Additional acquisition-related transaction costs of $0.8 million and $0.2 million are expected to be incurred in the third and fourth quarters of 2010, respectively. Credit-related operating expenses remained elevated at $1.8 million in the second quarter of 2010, although were $0.45 million lower than in the second quarter of 2009 and approximately the same as the first quarter of 2010. The Company's second quarter 2010 efficiency ratio was 63.1 percent, compared to 61.7 percent in the second quarter of 2009 and 62.4 percent in the first quarter of 2010.

Total assets were $5.12 billion at June 30, 2010, up from $4.29 billion at March 31, 2010 and $4.00 billion at June 30, 2009. At June 30, 2010, total loans were $3.65 billion, up from $2.99 billion at March 31, 2010 and $2.98 billion at June 30, 2009. Investment securities were $811 million at June 30, 2010, up from $691 million at March 31, 2010 and $637 million at June 30, 2009. The increases in assets, loans and investment securities during the second quarter of 2010 were primarily attributable to the acquisition of OAK.

Total deposits were $4.20 billion at June 30, 2010, up from $3.47 billion at March 31, 2010 and $3.13 billion at June 30, 2009. In addition to the increase in deposits from the OAK acquisition, the Company experienced internal growth of $60 million in core business and consumer deposits during the quarter ended June 30, 2010. The Company has maintained a portion of these new funds in interest-bearing balances at the Federal Reserve Bank, thereby further enhancing the Company's liquidity position. The Company also used some of its liquidity to pay off maturing Federal Home Loan Bank (FHLB) advances during the twelve months ended June 30, 2010 and intends to continue to pay off maturing FHLB advances and brokered deposits acquired in the OAK transaction totaling $30.3 million during the remainder of 2010. FHLB advances totaled $86.6 million at June 30, 2010, up from $80 million at March 31, 2010 and down from $115 million at June 30, 2009.

At June 30, 2010, the Company's tangible equity to assets ratio and total risk-based capital ratio were 8.8 percent and 13.6 percent, respectively, compared to 9.5 percent and 15.5 percent, respectively, at March 31, 2010. The declines in the Company's regulatory capital ratios during the second quarter of 2010 were primarily attributable to the purchase price of OAK exceeding the fair value of the net assets acquired. At June 30, 2010, the Company's book value stood at $20.27 per share, compared to $19.76 per share at March 31, 2010.

Chemical Financial Corporation is the third-largest bank holding company headquartered in Michigan. The Company operates through a single subsidiary bank, Chemical Bank, with 143 banking offices spread over 32 counties in the lower peninsula of Michigan. At June 30, 2010, the Company had total assets of $5.1 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.

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 Chemical Financial Corporation (Chemical Financial or Company) itself. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "is likely," "judgment," "plans," "predicts," "projects," "should," "will," variations of such words and similar expressions are intended to identify such forward-looking statements. 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, 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 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, 2009; 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 capital levels and 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 acquisition of OAK and to the integration of the acquired business into Chemical Financial including:

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 Financial'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 Financial may incur more credit losses from OAK's loan portfolio than expected and deposit attrition may be greater than expected.

The complete integration of OAK's business and operations into Chemical Financial, 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 Financial's existing businesses.
Chemical Financial Corporation Announces Second Quarter Operating Results
       
Consolidated Statements of Financial Position (Unaudited)      
Chemical Financial Corporation       
       
(In thousands, except per share data) June 30 2010 December 31 2009 June 30 2009
Assets:      
Cash and cash equivalents:      
Cash and cash due from banks  $ 126,741  $ 131,383  $ 88,210
Interest-bearing deposits with unaffiliated banks and others  270,217  229,326  119,413
Total cash and cash equivalents  396,958  360,709  207,623
Investment securities:      
Trading  1,389  --  --
Available-for-sale  644,550  592,521  492,096
Held-to-maturity  165,296  131,297  144,556
Total Investment Securities  811,235  723,818  636,652
Other securities  27,448  22,128  22,128
Loans held-for-sale  10,871  8,362  26,008
       
Loans:      
Commercial   769,287  584,286  560,187
Real estate commercial   1,081,860  785,675  774,881
Real estate construction   179,004  121,305  119,674
Real estate residential   768,156  739,380  773,126
Consumer   849,654  762,514  749,032
Total Loans  3,647,961  2,993,160  2,976,900
Allowance for loan losses  (89,502)  (80,841)  (69,956)
Net Loans  3,558,459  2,912,319  2,906,944
       
Premises and equipment  68,611  53,934  52,578
Goodwill  109,149  69,908  69,908
Other intangible assets  15,023  5,408  5,498
Interest receivable and other assets  122,762  94,126  71,417
Total Assets  $ 5,120,516  $ 4,250,712  $ 3,998,756
       
Liabilities:      
Deposits:      
Noninterest-bearing   $ 680,751  $ 573,159  $ 551,060
Interest-bearing   3,518,431  2,844,966  2,579,367
Total Deposits  4,199,182  3,418,125  3,130,427
Interest payable and other liabilities  36,378  27,708  36,329
Short-term borrowings  242,271  240,568  233,674
Federal Home Loan Bank advances   86,635  90,000  115,000
Total Liabilities  4,564,466  3,776,401  3,515,430
       
Shareholders' Equity:      
Preferred stock, no par value per share  --  --  --
Common stock, $1 par value per share  27,434  23,891  23,890
Additional paid-in capital  429,021  347,676  347,447
Retained earnings  111,804  115,391  124,496
Accumulated other comprehensive loss  (12,209)  (12,647)  (12,507)
Total Shareholders' Equity  556,050  474,311  483,326
Total Liabilities and Shareholders' Equity  $ 5,120,516  $ 4,250,712  $ 3,998,756
 
 
Chemical Financial Corporation Announces Second Quarter Operating Results
         
Consolidated Statements of Income (Unaudited)        
Chemical Financial Corporation         
         
  Three Months Ended June 30 Six Months Ended June 30
(In thousands, except per share data) 2010 2009 2010 2009
Interest Income:        
Interest and fees on loans  $ 48,278  $ 42,997  $ 89,996  $ 85,790
Interest on investment securities:        
Taxable  2,964  4,024  6,088  8,526
Tax-exempt  1,221  893  2,203  1,670
Dividends on other securities  295  267  377  430
Interest on deposits with unaffiliated banks and others  204  102  420  189
Total Interest Income  52,962  48,283  99,084  96,605
         
Interest Expense:        
Interest on deposits  9,202  9,808  17,902  19,975
Interest on short-term borrowings  161  239  321  472
Interest on Federal Home Loan Bank advances   708  1,258  1,582  2,590
Total Interest Expense  10,071  11,305  19,805  23,037
Net Interest Income   42,891  36,978  79,279  73,568
Provision for loan losses  12,700  15,200  26,700  29,200
Net Interest Income after Provision for Loan Losses  30,191  21,778  52,579  44,368
         
Noninterest Income:        
Service charges on deposit accounts  5,091  4,781  9,482  9,256
Trust and investment services revenue  2,603  2,374  4,895  4,749
Other charges and fees for customer services  2,333  1,994  4,341  3,795
Mortgage banking revenue  915  1,462  1,633  2,612
Investment securities gains   --  95  --  95
Other   58  252  89  308
Total Noninterest Income  11,000  10,958  20,440  20,815
         
Operating Expenses:        
Salaries, wages and employee benefits  17,214  14,683  31,721  30,100
Occupancy   2,734  2,407  5,571  5,114
Equipment  3,698  2,364  6,412  4,706
Other  11,004  10,562  20,135  19,301
Total Operating Expenses  34,650  30,016  63,839  59,221
Income Before Income Taxes  6,541  2,720  9,180  5,962
Federal Income Tax Expense   2,150  426  2,500  950
Net Income   $ 4,391  $ 2,294  $ 6,680  $ 5,012
         
Net income per common share:        
Basic  $ 0.17  $ 0.10  $ 0.27  $ 0.21
Diluted  0.17  0.10  0.27  0.21
         
Cash dividends declared per common share  0.20  0.295  0.400  0.590
         
Average common shares outstanding:        
Basic  26,270  23,890  25,093  23,890
Diluted  26,300  23,908  25,117  23,904
 
 
Chemical Financial Corporation Announces Second Quarter Operating Results
             
Financial Summary (Unaudited)            
Chemical Financial Corporation             
             
      Three Months Ended June 30 Six Months Ended June 30
(Dollars in thousands)     2010 2009 2010 2009
Average Balances             
Total assets      $ 4,841,022  $ 4,001,155  $ 4,562,212  $ 3,964,318
Total interest-earning assets      4,534,743  3,776,766  4,294,427  3,737,963
Total loans      3,435,677  2,968,039  3,211,238  2,964,528
Total deposits      3,941,357  3,130,678  3,697,946  3,089,126
Total interest-bearing liabilities      3,626,955  2,926,290  3,426,803  2,905,601
Total shareholders' equity      528,428  488,765  501,502  488,432
             
      Three Months Ended June 30 Six Months Ended June 30
      2010 2009 2010 2009
Key Ratios (annualized where applicable)            
Net interest margin (taxable equivalent basis)     3.88% 4.00% 3.81% 4.03%
Efficiency ratio      63.1% 61.7% 62.7% 61.9%
Return on average assets     0.36% 0.23% 0.30% 0.25%
Return on average shareholders' equity     3.3% 1.9% 2.7% 2.1%
Average shareholders' equity as a percent of average assets     10.9% 12.2% 11.0% 12.3%
Tangible shareholders' equity as a percent of total assets         8.8% 10.5%
Total risk-based capital ratio         13.6% 16.0%
             
  June 30 2010 March 31 2010 Dec 31 2009 Sept 30 2009 June 30 2009 March 31 2009
Credit Quality Statistics            
Originated Loans  $ 3,034,515          
Acquired Loans  613,446          
Originated Portfolio:            
Nonaccrual loans  107,981  $ 100,882  $ 106,589  $ 120,186  $ 109,944  $ 94,737
Loans 90 or more days past due and still accruing 8,301 7,204 11,733 8,699 10,502 10,240
Troubled debt restructurings - commercial loans 7,791 6,243  --  --  --  --
Troubled debt restructurings - real estate residential loans 18,856  15,799  17,433  9,567  3,981  --
Total nonperforming loans - originated portfolio  142,929  130,128  135,755  138,452  124,427  104,977
Other real estate and repossessed assets (ORE) 21,724 18,813 17,540 19,067 18,344 20,688
Total nonperforming assets  164,653  148,941  153,295  157,519  142,771  125,665
Acquired portfolio - total nonperforming loans  10,050  --  --  --  --  --
Net loan charge-offs (year-to-date) 18,039 10,686 35,215 22,965 16,300 8,494
             
             
Allowance for loan losses as a percent of total originated loans 2.95% 2.82% 2.70% 2.58% 2.35% 2.12%
Allowance for loan losses as a percent of nonperforming originated loans 63% 65% 60% 56% 56% 60%
Nonperforming originated loans as a percent of total originated loans 4.71% 4.35% 4.54% 4.61% 4.18% 3.56%
Nonperforming assets as a percent of total originated loans plus ORE 5.39% 4.95% 5.09% 5.21% 4.77% 4.23%
Nonperforming assets as a percent of total assets 3.22% 3.47% 3.61% 3.69% 3.57% 3.16%
Net loan charge-offs as a percent of average loans (year-to-date, annualized) 1.12% 1.43% 1.18% 1.03% 1.10% 1.15%
             
  June 30 2010 March 31 2010 Dec 31 2009 Sept 30 2009 June 30 2009 March 31 2009
Additional Data - Intangibles            
Goodwill  $ 109,149  $ 69,908  $ 69,908  $ 69,908  $ 69,908  $ 69,908
Core deposit intangibles  10,791  2,183  2,331  2,480  2,629  2,847
Mortgage servicing rights (MSR)  3,641  3,059  3,077  2,997  2,869  2,377
Other intangible assets  591  --  --  --  --  --
Amortization of core deposit intangibles (quarter only)  337  148  149  149  217  203
 
 
Chemical Financial Corporation Announces Second Quarter Operating Results
             
Nonperforming Assets (Unaudited)            
Chemical Financial Corporation             
             
(Dollars in thousands) June 30 2010 March 31 2010 Dec 31 2009 Sept 30 2009 June 30 2009 March 31 2009
Originated Portfolio:            
Nonaccrual loans:            
Commercial  $ 21,643  $ 18,382  $ 19,309  $ 21,379  $ 20,371  $ 16,419
Real estate commercial 57,085 51,865  49,419  58,930  50,067  41,826
Real estate construction 13,397 15,870  15,184  18,196  17,935  18,504
Real estate residential 12,499 10,913  15,508  15,739  15,905  12,803
Consumer 3,357 3,852  7,169  5,942  5,666  5,185
Total nonaccrual loans 107,981 100,882  106,589  120,186  109,944  94,737
             
Accruing loans contractually past due 90 days or more as to interest or principal payments:            
Commercial 2,108 2,576  1,371  1,073  1,201  2,581
Real estate commercial 2,030 1,483  3,971  2,138  1,542  4,352
Real estate construction 436 988  1,990  675  259  538
Real estate residential 2,842 1,636  3,614  3,839  6,236  1,699
Consumer 885 521  787  974  1,264  1,070
             
Total accruing loans contractually past due 90 days or more as to interest or principal payments 8,301 7,204  11,733  8,699  10,502  10,240
Troubled debt restructurings - commercial loans 7,791 6,243  --  --  --  --
Troubled debt restructurings - real estate residential loans 18,856 15,799  17,433  9,567  3,981  --
Total nonperforming loans 142,929 130,128  135,755  138,452  124,427  104,977
Other real estate and repossessed assets 21,724 18,813 17,540 19,067 18,344 20,688
Total nonperforming assets  $ 164,653  $ 148,941  $ 153,295  $ 157,519  $ 142,771  $ 125,665
             
Nonperforming loans - Acquired portfolio (1):            
Nonaccrual loans  $ 7,692          
Troubled debt restructurings  2,358          
   $ 10,050          
             
(1) Represents the fair value of those loans acquired in the OAK transaction that met the Company's definition of a nonperforming loan at June 30, 2010, but for which the risk of credit loss was already considered in the fair value estimate at the acquisition date.
 
 
Chemical Financial Corporation Announces Second Quarter Operating Results
             
Summary of Loan Loss Experience (Unaudited)            
Chemical Financial Corporation             
             
  Three Months Ended
(Dollars in thousands) June 30 2010 March 31 2010 Dec 31 2009 Sept 30 2009 June 30 2009 March 31 2009
Allowance for loan losses at beginning of period  $ 84,155  $ 80,841  $ 77,491  $ 69,956  $ 62,562  $ 57,056
Provision for loan losses 12,700 14,000 15,600 14,200 15,200 14,000
             
Originated portfolio:            
Loans charged off:            
Commercial  (1,438)  (1,365)  (3,636)  (1,786)  (3,289)  (3,290)
Real estate commercial  (2,108)  (2,289)  (3,009)  (1,703)  (1,930)  (2,589)
Real estate construction  (643)  (644)  (3,633)  (874)  (762)  (1,700)
Real estate residential  (1,747)  (3,173)  (1,070)  (1,346)  (1,043)  (235)
Consumer  (2,361)  (4,427)  (1,998)  (1,996)  (1,544)  (1,253)
Total loan charge-offs  (8,297)  (11,898)  (13,346)  (7,705)  (8,568)  (9,067)
Recoveries of loans previously charged off:            
Commercial  171  373  220  349  130  205
Real estate commercial  29  170  91  91  226  87
Real estate construction  1  --  261  46  --  --
Real estate residential  175  185  174  231  127  82
Consumer  568  484  350  323  279  199
Total loan recoveries  944  1,212  1,096  1,040  762  573
Net loan charge-offs  (7,353)  (10,686)  (12,250)  (6,665)  (7,806)  (8,494)
Allowance for loan losses at end of period  $ 89,502  $ 84,155  $ 80,841  $ 77,491  $ 69,956  $ 62,562
 
 
Chemical Financial Corporation Announces Second Quarter Operating Results
             
Selected Quarterly Information (Unaudited)            
Chemical Financial Corporation             
             
(Dollars in thousands, except per share data) 2nd Qtr. 2010 1st Qtr. 2010 4th Qtr. 2009 3rd Qtr. 2009 2nd Qtr. 2009 1st Qtr. 2009
Summary of Operations            
Interest income  $ 52,962  $ 46,122  $ 48,060  $ 48,066  $ 48,283  $ 48,322
Interest expense  10,071  9,734  10,847  11,403  11,305  11,732
Net interest income 42,891 36,388 37,213 36,663 36,978 36,590
Provision for loan losses  12,700  14,000  15,600  14,200  15,200  14,000
Net interest income after provision for loan losses  30,191  22,388  21,613  22,463  21,778  22,590
Noninterest income  11,000  9,440  10,212  10,092  10,958  9,857
Operating expenses   34,650  29,189  28,807  29,582  30,016  29,205
Income before income taxes  6,541  2,639  3,018  2,973  2,720  3,242
Federal income tax expense  2,150  350  500  500  426  524
Net income   $ 4,391  $ 2,289  $ 2,518  $ 2,473  $ 2,294  $ 2,718
             
Net interest margin 3.88% 3.72% 3.77% 3.83% 4.00% 4.06%
             
Per Common Share Data            
Net income:            
 Basic  $ 0.17  $ 0.10  $ 0.11  $ 0.10  $ 0.10  $ 0.11
 Diluted  0.17  0.10  0.11  0.10  0.10  0.11
Cash dividends  0.200  0.200  0.295  0.295  0.295  0.295
Book value - period-end  20.27  19.76  19.85  20.06  20.23  20.40
Market value - period-end  21.78  23.62  23.58  21.79  19.91  20.81
CONTACT:  Chemical Financial Corporation          David B. Ramaker, CEO          Lori A. Gwizdala, CFO          989-839-5350