MIDLAND, Mich., Oct. 25, 2010 (GLOBE NEWSWIRE) -- Chemical Financial Corporation (Nasdaq:CHFC) today announced 2010 third quarter net income of $8.9 million, or $0.32 per diluted share, compared to net income of $4.4 million, or $0.17 per diluted share, in the second quarter of 2010 and $2.5 million, or $0.10 per diluted share, in the third quarter of 2009. Net income was $15.6 million, or $0.60 per diluted share, for the nine months ended September 30, 2010, compared to $7.5 million, or $0.31 per diluted share, for the nine months ended September 30, 2009.

"We are pleased with our reported third quarter earnings, which benefited from higher net interest income, as well as a lower provision for loan losses, partially offset by higher expenses. The quarter's improvements were attributable, in part, to our acquisition of O.A.K. Financial Corporation (OAK), parent company of Byron Bank, which became accretive to earnings this quarter," said David B. Ramaker, Chairman, Chief Executive Officer and President. "The acquisition has given Chemical Financial Corporation a much larger presence in the attractive Grand Rapids market, which will serve our franchise well in the months and years ahead. During the quarter, we completed the integration of Byron Bank into Chemical Bank, which, we are happy to report, went smoothly for all stakeholders involved."

"The Michigan economy continues to struggle and has yet to show signs of sustainable growth. Consequently, credit quality concerns will remain paramount and key credit quality metrics will likely remain at elevated levels. Signs of stabilization in our loan portfolio resulted in a decline in the provision for loan losses from $12.7 million in the second quarter of 2010 to $8.6 million in the third quarter," Ramaker said.

"With modest loan demand and the challenges of the Michigan economy, we will continue to opportunistically pursue various strategies, including acquisitions, as a means to grow our core banking franchise. Our dedication to Michigan, capital strength, and focus on small and middle-market commercial lending, positions us well to take advantage of opportunities in the markets we serve," said Ramaker. 

The Company's return on average assets during the third quarter of 2010 was 0.67 percent, up from 0.36 percent in the second quarter of 2010 and 0.24 percent in the third quarter of 2009. The return on average equity was 6.3 percent in the third quarter of 2010, up from 3.3 percent in the second quarter of 2010 and 2.0 percent in the third quarter of 2009.

Included in the third quarter and year-to-date 2010 results were $1.1 million and $4.1 million, respectively, of merger-related costs related to the acquisition of OAK. The net impact of these costs reduced third quarter and year-to-date diluted earnings per share by $0.03 per share and $0.12 per share, respectively. As previously reported, the Company completed its acquisition of OAK on April 30, 2010. 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 $40 million as of the acquisition date.  Assets and liabilities acquired in the OAK transaction were recorded at fair value, with selected financial amounts and ratios reported separately for the "acquired" loan portfolio. The consolidation and systems conversion of Byron Bank into Chemical Bank was completed in the third quarter of 2010.

Higher net income in the third quarter of 2010, compared to the second quarter of 2010, was attributable primarily to a lower provision for loan losses, lower merger-related costs and one additional month of operating results of OAK being included in the third quarter. 

Net interest income was $45.9 million in the third quarter of 2010, up from $42.9 million in the second quarter of 2010 and $36.7 million in the third quarter of 2009. The net interest margin (on a tax-equivalent basis) in the third quarter of 2010 was 3.80 percent, down from 3.88 percent in the second quarter of 2010 and 3.83 percent in the third quarter of 2009. The increases in net interest income were primarily attributable to the acquisition of OAK, although they were also attributable to a decrease in the average cost of deposits related to maturing higher-cost customer certificates of deposit and maturing higher-cost wholesale funding. The decreases in net interest margin were primarily attributable to the Company's increased level of liquidity during the three and twelve months ended September 30, 2010, because funds were held in low yielding short-term deposits at the Federal Reserve Bank (FRB).

The Company recorded an $8.6 million provision for loan losses in the third quarter of 2010, compared to $12.7 million in the second quarter of 2010 and $14.2 million in the third quarter of 2009. Third quarter 2010 net loan charge-offs were $8.6 million, compared to $7.3 million in the second quarter of 2010 and $6.7 million in the third quarter of 2009. The third quarter of 2010 marked the first time in fifteen quarters that the provision for loan losses did not exceed net loan charge-offs.

Total noninterest income was $11.1 million in the third quarter of 2010, compared to $11.0 million in the second quarter of 2010 and $10.1 million in the third quarter of 2009. The increase in the third quarter of 2010, as compared to the second quarter of 2010, was primarily attributable to one additional month of OAK noninterest income. Service charges on deposit accounts, driven primarily by overdraft fees, were $0.4 million less in the third quarter of 2010, as compared to the second quarter of 2010, due to changes in regulatory requirements regarding the processing of electronic ATM and debit card transactions. This reduction was mostly offset with $0.3 million in higher mortgage banking revenue.

Operating expenses were $36.2 million in the third quarter of 2010, up from $34.6 million in the second quarter of 2010 and $29.6 million in the third quarter of 2009. The increase in operating expenses in the third quarter of 2010, as compared to the second quarter of 2010, was primarily attributable to one additional month of OAK operating expenses. Operating expenses in the third quarter of 2010 included $1.1 million of merger-related costs applicable to the OAK transaction, compared to $2.3 million in the second quarter of 2010. Acquisition-related costs of $0.1 million are expected to be incurred in the fourth quarter of 2010. Credit-related operating expenses remained elevated at $1.8 million in the third quarter of 2010, the same amount incurred in both the second quarter of 2010 and the third quarter of 2009. The Company's third quarter 2010 efficiency ratio was 62.3 percent, compared to 63.1 percent in the second quarter of 2010 and 62.3 percent in the third quarter of 2009.  

Total assets were $5.40 billion at September 30, 2010, up from $5.12 billion at June 30, 2010 and $4.27 billion at September 30, 2009. At September 30, 2010, total loans were $3.64 billion, compared to $3.65 billion at June 30, 2010 and $3.00 billion at September 30, 2009. Investment securities were $766 million at September 30, 2010, compared to $811 million at June 30, 2010 and $645 million at September 30, 2009. The increases in assets, loans and investment securities during the twelve months ended September 30, 2010 were primarily attributable to the acquisition of OAK.

Total deposits were $4.47 billion at September 30, 2010, compared to $4.20 billion at June 30, 2010 and $3.40 billion at September 30, 2009. The Company experienced an increase of $268 million, or 6.4 percent, in total deposits during the quarter ended September 30, 2010, with the majority attributable to a seasonal increase in municipal customer deposits of $223 million. The Company continues to maintain the majority of new funds generated from internal deposit growth in interest-bearing balances at the FRB, thereby further enhancing the Company's liquidity position, with $596 million in balances held at the FRB at September 30, 2010. The Company has used a portion of its liquidity to pay off maturing Federal Home Loan Bank (FHLB) advances and brokered deposits acquired in the OAK transaction in 2010 and intends to continue to pay off these wholesale funding sources as they mature. The Corporation has $27.5 million of FHLB advances and brokered deposits maturing during the fourth quarter of 2010. FHLB advances totaled $85.4 million at September 30, 2010, down from $86.6 million at June 30, 2010 and $115 million at September 30, 2009. Brokered deposits acquired in the OAK transaction totaled $152 million at September 30, 2010, compared to $169 million at June 30, 2010.

At September 30, 2010, the Company's tangible equity to assets ratio and total risk-based capital ratio were 8.4 percent and 13.7 percent, respectively, compared to 8.8 percent and 13.6 percent, respectively, at June 30, 2010. At September 30, 2010, the Company's book value stood at $20.44 per share, compared to $20.27 per share at June 30, 2010.

The credit quality of the Company's loan portfolio is showing signs of stabilization. At September 30, 2010, the Company's originated loan portfolio, representing all loans other than those acquired in the OAK transaction, had nonaccrual loans and loans past due 90 days or more totaling $119.4 million, compared to $116.3 million at June 30, 2010 and $128.9 million at September 30, 2009. The Company's nonperforming loans at September 30, 2010, also included commercial, real estate commercial and real estate residential loans that have been modified due to financial difficulties being experienced by the customer of $28.5 million, compared to $26.6 million at June 30, 2010 and $9.6 million at September 30, 2009. At September 30, 2010, these modified loans were current in accordance with their modified terms. Loans in the acquired portfolio that meet the Company's definition of nonperforming, but for which the risk of loss was recognized at acquisition, totaled $12.5 million at September 30, 2010, compared to $10.1 million at June 30, 2010.

Other real estate and repossessed assets totaled $22.7 million at September 30, 2010, compared to $21.7 million at June 30, 2010 and $19.1 million at September 30, 2009.

At September 30, 2010, the allowance for loan losses was $89.5 million, or 2.94 percent of originated loans, down slightly from 2.95 percent at June 30, 2010, although up from 2.58 percent at September 30, 2009. The allowance for loan losses as a percentage of nonperforming loans of the originated portfolio was 61 percent at September 30, 2010, down from 63 percent at June 30, 2010, although up from 56 percent at September 30, 2009. At September 30, 2010, nonperforming loans of the originated portfolio as a percentage of originated loans were 4.86 percent, up from 4.71 percent at June 30, 2010 and 4.61 percent at September 30, 2009.

Chemical Financial Corporation is the second-largest bank holding company headquartered in Michigan. The Company operates through a single subsidiary bank, Chemical Bank, with 142 banking offices spread over 32 counties in the lower peninsula of Michigan. At September 30, 2010, the Company had total assets of $5.4 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 Chemical 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 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 includes 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 Third Quarter Operating Results  
       
Consolidated Statements of Financial Position (Unaudited)  
Chemical Financial Corporation     
       
  September 30 December 31 September 30
(In thousands, except per share data) 2010 2009 2009
Assets:      
Cash and cash equivalents:    
Cash and cash due from banks  $ 118,441  $ 131,383  $ 90,215
Interest-bearing deposits with unaffiliated banks and others  600,909  229,326  375,489
Total cash and cash equivalents  719,350  360,709  465,704
Investment securities:      
Trading  1,471  --  --
Available-for-sale  608,823  592,521  512,413
Held-to-maturity  155,475  131,297  132,438
Total Investment Securities  765,769  723,818  644,851
Other securities  26,189  22,128  22,128
Loans held-for-sale  19,547  8,362  7,043
       
Loans:      
Commercial   794,739  584,286  575,062
Real estate commercial   1,077,760  785,675  782,640
Real estate construction   167,738  121,305  118,116
Real estate residential   747,135  739,380  753,744
Consumer   853,499  762,514  773,902
Total Loans  3,640,871  2,993,160  3,003,464
Allowance for loan losses  (89,521)  (80,841)  (77,491)
Net Loans  3,551,350  2,912,319  2,925,973
       
Premises and equipment  66,212  53,934  53,172
Goodwill  110,266  69,908  69,908
Other intangible assets  14,532  5,408  5,477
Interest receivable and other assets  127,093  94,126  74,107
Total Assets  $ 5,400,308  $ 4,250,712  $ 4,268,363
       
Liabilities:      
Deposits:      
Noninterest-bearing   $ 696,710  $ 573,159  $ 533,430
Interest-bearing   3,770,692  2,844,966  2,870,069
Total Deposits  4,467,402  3,418,125  3,403,499
Interest payable and other liabilities  31,744  27,708  36,891
Short-term borrowings  254,799  240,568  233,693
Federal Home Loan Bank advances   85,390  90,000  115,000
Total Liabilities  4,839,335  3,776,401  3,789,083
       
Shareholders' Equity:      
Preferred stock, no par value per share  --  --  --
Common stock, $1 par value per share  27,440  23,891  23,890
Additional paid-in capital  429,459  347,676  347,667
Retained earnings  115,187  115,391  119,920
Accumulated other comprehensive loss  (11,113)  (12,647)  (12,197)
Total Shareholders' Equity  560,973  474,311  479,280
Total Liabilities and Shareholders' Equity  $ 5,400,308  $ 4,250,712  $ 4,268,363
       
Chemical Financial Corporation Announces Third Quarter Operating Results        
         
Consolidated Statements of Income (Unaudited)        
Chemical Financial Corporation         
         
  Three Months Ended Nine Months Ended
  September 30 September 30
(In thousands, except per share data) 2010 2009 2010 2009
Interest Income:        
Interest and fees on loans  $ 51,485  $ 43,289  $ 141,481  $ 129,079
Interest on investment securities:        
Taxable  2,718  3,527  8,806  12,053
Tax-exempt  1,391  962  3,594  2,632
Dividends on other securities  81  132  458  562
Interest on deposits with unaffiliated banks and others  323  156  743  345
Total Interest Income  55,998  48,066  155,082  144,671
         
Interest Expense:        
Interest on deposits  9,314  9,942  27,216  29,917
Interest on short-term borrowings  168  251  489  723
Interest on Federal Home Loan Bank advances   623  1,210  2,205  3,800
Total Interest Expense  10,105  11,403  29,910  34,440
Net Interest Income   45,893  36,663  125,172  110,231
Provision for loan losses  8,600  14,200  35,300  43,400
Net Interest Income after Provision for Loan Losses  37,293  22,463  89,872  66,831
         
Noninterest Income:        
Service charges on deposit accounts  4,680  4,949  14,162  14,205
Trust and investment services revenue  2,521  2,306  7,416  7,055
Other charges and fees for customer services  2,555  1,971  6,896  5,766
Mortgage banking revenue  1,204  840  2,837  3,452
Investment securities gains   82  --  82  95
Other   77  26  166  334
Total Noninterest Income  11,119  10,092  31,559  30,907
         
Operating Expenses:        
Salaries, wages and employee benefits  18,015  15,765  49,650  45,865
Occupancy   2,903  2,497  8,474  7,611
Equipment  3,698  2,435  10,110  7,141
Other  11,600  8,885  31,821  28,186
Total Operating Expenses  36,216  29,582  100,055  88,803
Income Before Income Taxes  12,196  2,973  21,376  8,935
Federal Income Tax Expense   3,325  500  5,825  1,450
Net Income   $ 8,871  $ 2,473  $ 15,551  $ 7,485
         
Net income per common share:        
Basic  $ 0.32  $ 0.10  $ 0.60  $ 0.31
Diluted  0.32  0.10  0.60  0.31
         
Cash dividends declared per common share  0.20  0.295  0.60  0.885
         
Average common shares outstanding:        
Basic  27,438  23,890  25,883  23,890
Diluted  27,471  23,912  25,911  23,907
         
         
Chemical Financial Corporation Announces Third Quarter Operating Results
               
Financial Summary (Unaudited)          
Chemical Financial Corporation           
        Three Months Ended Nine Months Ended
        September 30 September 30
(Dollars in thousands)       2010 2009 2010 2009
Average Balances               
Total assets      $ 5,264,545  $ 4,111,923  $ 4,799,067  $ 4,014,060
Total interest-earning assets    4,925,102  3,894,124  4,506,962  3,790,588
Total loans      3,664,925  2,985,388  3,364,129  2,971,557
Total deposits      4,326,096  3,235,959  3,909,630  3,138,608
Total interest-bearing liabilities    3,946,563  3,036,864  3,601,960  2,949,836
Total shareholders' equity    557,927  480,064  520,517  485,612
               
        Three Months Ended Nine Months Ended
        September 30 September 30
        2010 2009 2010 2009
Key Ratios (annualized where applicable)        
Net interest margin (taxable equivalent basis) 3.80% 3.83% 3.80% 3.96%
Efficiency ratio      62.3% 62.3% 62.6% 62.0%
Return on average assets   0.67% 0.24% 0.43% 0.25%
Return on average shareholders' equity 6.3% 2.0% 4.0% 2.1%
Average shareholders' equity as a percent of average assets 10.6% 11.7% 10.8% 12.1%
Tangible shareholders' equity as a percent of total assets   8.4% 9.7%
Total risk-based capital ratio       13.7% 15.7%
               
  Sept 30  June 30  March 31 Dec 31 Sept 30  June 30  March 31
  2010 2010 2010 2009 2009 2009 2009
Credit Quality Statistics          
Originated Loans  $ 3,045,872  $ 3,034,515          
Acquired Loans  594,999  613,446          
Originated Portfolio:          
 Nonaccrual loans  112,832  107,981  $ 100,882  $ 106,589  $ 120,186  $ 109,944  $ 94,737
 Loans 90 or more days past due and still accruing 6,526 8,301 7,204 11,733 8,699 10,502 10,240
 Troubled debt restructurings - commercial loans 9,834 7,791 6,243  --  --  --  --
 Troubled debt restructurings - real estate residential loans 18,712 18,856  15,799  17,433  9,567  3,981  --
 Total nonperforming loans - originated portfolio  147,904  142,929  130,128  135,755  138,452  124,427  104,977
Other real estate and repossessed assets (ORE) 22,704 21,724 18,813 17,540 19,067 18,344 20,688
Total nonperforming assets  170,608  164,653  148,941  153,295  157,519  142,771  125,665
Acquired portfolio - total nonperforming loans  12,500  10,050  --  --  --  --  --
Net loan charge-offs (year-to-date) 26,620 18,039 10,686 35,215 22,965 16,300 8,494
               
Allowance for loan losses as a percent of total originated loans 2.94% 2.95% 2.82% 2.70% 2.58% 2.35% 2.12%
Allowance for loan losses as a percent of nonperforming originated loans 61% 63% 65% 60% 56% 56% 60%
Nonperforming originated loans as a percent of total originated loans 4.86% 4.71% 4.35% 4.54% 4.61% 4.18% 3.56%
Nonperforming assets as a percent of total originated loans plus ORE 5.56% 5.39% 4.95% 5.09% 5.21% 4.77% 4.23%
Nonperforming assets as a percent of total assets 3.16% 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) 1.06% 1.12% 1.43% 1.18% 1.03% 1.10% 1.15%
               
  Sept 30  June 30  March 31 Dec 31 Sept 30  June 30  March 31
  2010 2010 2010 2009 2009 2009 2009
Additional Data - Intangibles          
Goodwill  $ 110,266  $ 109,149  $ 69,908  $ 69,908  $ 69,908  $ 69,908  $ 69,908
Core deposit intangibles  10,352  10,791  2,183  2,331  2,480  2,629  2,847
Mortgage servicing rights (MSR)  3,718  3,641  3,059  3,077  2,997  2,869  2,377
Other intangible assets  462  591  --  --  --  --  --
Amortization of core deposit intangibles (quarter only)  439  337  148  149  149  217  203
               
               
Chemical Financial Corporation Announces Third Quarter Operating Results
               
Nonperforming Assets (Unaudited)              
Chemical Financial Corporation               
               
  Sept 30 June 30 March 31 Dec 31 Sept 30 June 30 March 31
(Dollars in thousands) 2010 2010 2010 2009 2009 2009 2009
Originated Portfolio:              
 Nonaccrual loans:              
 Commercial  $ 19,440  $ 21,643  $ 18,382  $ 19,309  $ 21,379  $ 20,371  $ 16,419
 Real estate commercial  59,353 57,085 51,865  49,419  58,930  50,067  41,826
 Real estate construction  16,085 13,397 15,870  15,184  18,196  17,935  18,504
 Real estate residential  13,485 12,499 10,913  15,508  15,739  15,905  12,803
 Consumer  4,469 3,357 3,852  7,169  5,942  5,666  5,185
 Total nonaccrual loans  112,832 107,981 100,882  106,589  120,186  109,944  94,737
               
 Accruing loans contractually past due 90 days or more as to interest or principal payments:        
 Commercial  909 2,108 2,576  1,371  1,073  1,201  2,581
 Real estate commercial  2,265 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  2,316 2,842 1,636  3,614  3,839  6,236  1,699
 Consumer  1,036 885 521  787  974  1,264  1,070
 Total accruing loans contractually past due 90 days or more as to interest or principal payments  6,526 8,301 7,204  11,733  8,699  10,502  10,240
 Troubled debt restructurings - commercial loans  9,834 7,791 6,243  --  --  --  --
 Troubled debt restructurings - real estate residential loans  18,712 18,856 15,799  17,433  9,567  3,981  --
 Total nonperforming loans  147,904 142,929 130,128  135,755  138,452  124,427  104,977
Other real estate and repossessed assets  22,704 21,724 18,813 17,540 19,067 18,344 20,688
Total nonperforming assets  $ 170,608  $ 164,653  $ 148,941  $ 153,295  $ 157,519  $ 142,771  $ 125,665
               
Nonperforming loans - Acquired portfolio (1):            
Nonaccrual loans  $  8,974  $ 7,692          
Past due 90 days & over  1,539  --          
Troubled debt restructurings  1,987  2,358          
   $ 12,500  $ 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, but for which the risk of credit loss was already considered in the fair value estimate at the acquisition date.
 
 
Chemical Financial Corporation Announces Third Quarter Operating Results
               
Summary of Loan Loss Experience (Unaudited)        
Chemical Financial Corporation           
               
  Three Months Ended
  Sept 30 June 30 March 31 Dec 31 Sept 30 June 30 March 31
(Dollars in thousands) 2010 2010 2010 2009 2009 2009 2009
Allowance for loan losses at beginning of period  $ 89,502  $ 84,155  $ 80,841  $ 77,491  $ 69,956  $ 62,562  $ 57,056
Provision for loan losses  8,600 12,700 14,000 15,600 14,200 15,200 14,000
               
Originated portfolio:          
Loans charged off:            
Commercial  (2,830)  (1,438)  (1,365)  (3,636)  (1,786)  (3,289)  (3,290)
Real estate commercial  (2,586)  (2,108)  (2,289)  (3,009)  (1,703)  (1,930)  (2,589)
Real estate construction  (146)  (643)  (644)  (3,633)  (874)  (762)  (1,700)
Real estate residential  (1,767)  (1,747)  (3,173)  (1,070)  (1,346)  (1,043)  (235)
Consumer  (1,916)  (2,361)  (4,427)  (1,998)  (1,996)  (1,544)  (1,253)
Total loan charge-offs  (9,245)  (8,297)  (11,898)  (13,346)  (7,705)  (8,568)  (9,067)
Recoveries of loans previously charged off:        
Commercial  212  171  373  220  349  130  205
Real estate commercial  38  29  170  91  91  226  87
Real estate construction  19  1  --  261  46  --  --
Real estate residential  109  175  185  174  231  127  82
Consumer  286  568  484  350  323  279  199
Total loan recoveries  664  944  1,212  1,096  1,040  762  573
Net loan charge-offs  (8,581)  (7,353)  (10,686)  (12,250)  (6,665)  (7,806)  (8,494)
Allowance for loan losses at end of period  $ 89,521  $ 89,502  $ 84,155  $ 80,841  $ 77,491  $ 69,956  $ 62,562
 
 
Chemical Financial Corporation Announces Third Quarter Operating Results
               
Selected Quarterly Information (Unaudited)              
Chemical Financial Corporation               
               
  3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
(Dollars in thousands, except per share data) 2010 2010 2010 2009 2009 2009 2009
Summary of Operations              
Interest income  $ 55,998  $ 52,962  $ 46,122  $ 48,060  $ 48,066  $ 48,283  $ 48,322
Interest expense  10,105  10,071  9,734  10,847  11,403  11,305  11,732
Net interest income  45,893 42,891 36,388 37,213 36,663 36,978 36,590
Provision for loan losses  8,600  12,700  14,000  15,600  14,200  15,200  14,000
 Net interest income after provision for loan losses  37,293  30,191  22,388  21,613  22,463  21,778  22,590
Noninterest income  11,119  11,000  9,440  10,212  10,092  10,958  9,857
Operating expenses   36,216  34,650  29,189  28,807  29,582  30,016  29,205
Income before income taxes  12,196  6,541  2,639  3,018  2,973  2,720  3,242
Federal income tax expense  3,325  2,150  350  500  500  426  524
Net income   $ 8,871  $ 4,391  $ 2,289  $ 2,518  $ 2,473  $ 2,294  $ 2,718
               
Net interest margin 3.80% 3.88% 3.72% 3.77% 3.83% 4.00% 4.06%
               
Per Common Share Data              
Net income:              
 Basic  $ 0.32  $ 0.17  $ 0.10  $ 0.11  $ 0.10  $ 0.10  $ 0.11
 Diluted  0.32  0.17  0.10  0.11  0.10  0.10  0.11
Cash dividends  0.200  0.200  0.200  0.295  0.295  0.295  0.295
Book value - period-end  20.44  20.27  19.76  19.85  20.06  20.23  20.40
Market value - period-end  20.64  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