Chemical Financial Corporation Reports First Quarter 2013 Results

MIDLAND, Mich., April 15, 2013 (GLOBE NEWSWIRE) -- Chemical Financial Corporation (Nasdaq:CHFC) today announced 2013 first quarter net income of $13.2 million, or $0.48 per diluted share, compared to 2012 fourth quarter net income of $11.7 million, or $0.42 per diluted share, and 2012 first quarter net income of $12.4 million, or $0.45 per diluted share.

"Despite economic conditions that can best be described as tepid, we continue to post strong earnings growth as a result of the combination of lower credit-related costs and higher organic balance sheet growth," noted David B. Ramaker, Chairman, Chief Executive Officer and President of the Corporation. "While asset quality and loan loss metric improvements are expected to continue, we will increasingly look to the combination of asset growth and cost controls to drive future earnings growth. We are confident that our community-focused, relationship-oriented approach and strong financial condition will continue to make Chemical Bank the financial institution of choice for the businesses and residents in the Michigan markets we serve."

Net income of $13.2 million in the first quarter of 2013 was $1.5 million, or 13.5%, higher than the fourth quarter of 2012 largely due to a $2.0 million reduction in the provision for loan losses, which was driven by the continued improvement in the credit quality of the loan portfolio. Noninterest income increased in the first quarter of 2013 over the fourth quarter of 2012. Operating expenses were the same in both quarters. Higher operating expenses in the first quarter of 2013, largely attributable to the 21 branch banking offices acquired in December 2012 (branch acquisition transaction), were offset by lower performance-based compensation expense and the absence of acquisition-related expenses ($1.8 million incurred in the fourth quarter of 2012).

Net income in the first quarter of 2013 was $0.8 million, or 7.0%, higher than the first quarter of 2012, largely due to a reduction in the provision for loan losses of $2.0 million. The Corporation also recognized an increase of $1.5 million in net interest income and significant growth in noninterest income in the first quarter of 2013 over the first quarter of 2012. These increases were offset by higher operating costs in the first quarter of 2013, largely attributable to the branch acquisition transaction.

The Corporation's return on average assets was 0.91% during the first quarter of 2013, compared to 0.83% in the fourth quarter of 2012 and 0.92% in the first quarter of 2012. The Corporation's return on average shareholders' equity was 9.0% in the first quarter of 2013, compared to 7.7% in the fourth quarter of 2012 and 8.7% in the first quarter of 2012.

The net interest margin (on a tax-equivalent basis) was 3.54% in the first quarter of 2013, compared to 3.74% in the fourth quarter of 2012 and 3.76% in the first quarter of 2012. The decrease in the net interest margin in the first quarter of 2013 was primarily attributable to the branch acquisition transaction, in which the Corporation acquired $340 million in cash and $44 million in loans. The Corporation invested the cash acquired in the branch acquisition transaction in short-term investment securities and intends to deploy these assets into loans by growing its market share in the new markets.

Net interest income was $47.7 million in the first quarter of 2013, $0.3 million lower than the fourth quarter of 2012, although $1.5 million higher than the first quarter of 2012. The increase in net interest income in the first quarter of 2013 over the first quarter of 2012 resulted largely from the branch acquisition transaction. The increase in net interest income attributable to loan growth was largely offset by the net unfavorable impact of interest-earning assets and interest-bearing liabilities repricing during the twelve months ended March 31, 2013.

The provision for loan losses (provision) was $3.0 million in the first quarter of 2013, compared to $5.0 million in both the fourth quarter of 2012 and the first quarter of 2012. Net loan charge-offs were $4.7 million in the first quarter of 2013, compared to $5.2 million in the fourth quarter of 2012 and $5.5 million in the first quarter of 2012.

Noninterest income was $16.2 million in the first quarter of 2013, compared to $14.7 million in the fourth quarter of 2012 and $13.3 million in the first quarter of 2012. Noninterest income in the first quarter of 2013 included $0.8 million of investment securities gains that were attributable to the Corporation's sales of $32 million of available-for-sale investment securities. The proceeds from the sales of the investment securities were used to prepay all of the Corporation's Federal Home Loan Bank (FHLB) advances totaling $34.3 million. The Corporation incurred prepayment fees of $0.8 million in conjunction with the prepayment of the FHLB advances, with these prepayment fees included in other operating expenses. Net interest income for the remainder of 2013 will be positively impacted by the prepayment of the FHLB advances. During the first quarter of 2012, the Corporation recognized a gain of $1.3 million in noninterest income on the sale of its merchant card servicing business. Excluding the gains from the sales of the investment securities and merchant card servicing business (non-recurring gains), noninterest income in the first quarter of 2013 was $0.7 million higher than the fourth quarter of 2012 and $3.4 million higher than the first quarter of 2012. 

The increase in noninterest income of $0.7 million in the first quarter of 2013 (excluding non-recurring gains) over the fourth quarter of 2012 was primarily driven by an increase in revenue generated from customers' debit card usage of $0.7 million and an increase in wealth management revenue of $0.5 million. The increase in debit card revenue was partially attributable to the branch acquisition transaction. These increases were partially offset by a decrease in mortgage banking revenue of $0.5 million.

The increase in noninterest income of $3.4 million in the first quarter of 2013 over the first quarter of 2012 (excluding non-recurring gains) was attributable to increases across all major categories of noninterest income and was driven by growth in the volume of services provided and additional fees/revenue earned as a result of the branch acquisition transaction. Revenue generated from customers' debit card usage was $1.0 million higher, mortgage banking revenue was $0.8 million higher, service charges and fees on deposit accounts were $0.7 million higher and wealth management revenue was $0.5 million higher.

Operating expenses were $42.0 million in both the first quarter of 2013 and fourth quarter of 2012, compared to $37.0 million in the first quarter of 2012. As previously discussed, operating expenses in the first quarter of 2013 included $0.8 million of prepayment fees incurred to prepay the Corporation's FHLB advances. Operating expenses in the fourth quarter of 2012 included acquisition-related transaction expenses of $1.8 million. Excluding the prepayment fees and acquisition-related transaction expenses (non-recurring expenses), operating expenses in the first quarter of 2013 were $1.0 million higher than the fourth quarter of 2012 and $4.2 million higher than the first quarter of 2012.

The $1.0 million increase in operating expenses in the first quarter of 2013 over the fourth quarter of 2012 (excluding non-recurring expenses) was primarily attributable to incremental operating costs associated with the branch acquisition transaction. The incremental operating costs were partially offset by lower credit-related expenses and performance-based compensation. Credit-related expenses, comprised of loan collection costs and other real estate (ORE) net costs, of $1.0 million in the first quarter of 2013 were $0.2 million lower than the fourth quarter of 2012. Performance-based compensation expense of $1.3 million in the first quarter of 2013 was $1.1 million lower than the fourth quarter of 2012.

The $4.2 million increase in operating expenses in the first quarter of 2013 (excluding non-recurring expenses) over the first quarter of 2012 was primarily attributable to incremental operating costs associated with the branch acquisition transaction and a combination of merit and market-driven compensation increases provided to the Corporation's employees effective January 1, 2013. 

The Corporation's efficiency ratio was 64.4% in the first quarter of 2013, 63.0% in the fourth quarter of 2012 and 62.1% in the first quarter of 2012.

Total assets were $5.99 billion at March 31, 2013, up from $5.92 billion at December 31, 2012 and $5.45 billion at March 31, 2012. The increase in total assets during the twelve months ended March 31, 2013 was primarily attributable to the branch acquisition transaction that added $404 million in assets on the acquisition date. The Corporation has maintained significant amounts of funds at the Federal Reserve Bank (FRB), with $477 million in balances held at the FRB at March 31, 2013, compared to $514 million at December 31, 2012 and $353 million at March 31, 2012.

Total loans were $4.19 billion at March 31, 2013, up from $4.17 billion at December 31, 2012 and $3.84 billion at March 31, 2012.  During the three and twelve months ended March 31, 2013, total loans increased $17.5 million, or 0.4%, and $342 million, or 8.9%, respectively. The increase in loans during the twelve months ended March 31, 2013 was attributable to a combination of improving economic conditions, increased market share, and the acquisition of $44 million of loans in the branch acquisition transaction. The average yield on the loan portfolio was 4.69% in the first quarter of 2013, compared to 4.79% in the fourth quarter of 2012 and 5.10% in the first quarter of 2012.

Investment securities were $961 million at March 31, 2013, compared to $817 million at December 31, 2012 and $867 million at March 31, 2012. The average yield of the investment securities portfolio was 2.19% in the first quarter of 2013, compared to 2.21% in the fourth quarter of 2012 and 2.28% in the first quarter of 2012.

Total deposits were $5.01 billion at March 31, 2013, up from $4.92 billion at December 31, 2012 and $4.46 billion at March 31, 2012. The Corporation experienced an increase in total deposits of $546 million, or 12.2%, during the twelve months ended March 31, 2013, with the increase largely attributable to the branch acquisition transaction. The Corporation acquired $404 million of deposits on the date of acquisition. Remaining brokered deposits acquired in the Corporation's 2010 acquisition of Byron Bank were $44 million at March 31, 2013, compared to $62 million at December 31, 2012 and $94 million at March 31, 2012. The repricing of matured customer certificates of deposit and the decrease in interest rates on various interest-bearing deposit accounts to reflect lower market interest rates resulted in the Corporation's average cost of funds declining to 0.36% in the first quarter of 2013 from 0.41% in the fourth quarter of 2012 and 0.54% in the first quarter of 2012.

During the first quarter of 2013, the Corporation paid off all of its FHLB advances outstanding. FHLB advances totaled $34.3 million at December 31, 2012 and $42.1 million at March 31, 2012.

At March 31, 2013, the Corporation's tangible equity to assets ratio and total risk-based capital ratio were 8.1% and 13.3%, respectively, compared to 8.1% and 13.2%, respectively, at December 31, 2012 and 8.7% and 13.7%, respectively, at March 31, 2012. The decreases in the Corporation's equity ratios from March 31, 2012 to March 31, 2013 were attributable to an increase in average assets that resulted from the branch acquisition transaction.

At March 31, 2013, the Corporation's book value was $21.97 per share, compared to $21.69 per share at December 31, 2012 and $21.10 per share at March 31, 2012. At March 31, 2013, the Corporation's tangible book value was $17.34 per share, compared to $17.03 per share at December 31, 2012 and $16.84 per share at March 31, 2012.

The credit quality of the Corporation's loan portfolio continued to show improvement during the first quarter of 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 $86.4 million at March 31, 2013, compared to $90.9 million at December 31, 2012 and $98.5 million at March 31, 2012.  At March 31, 2013, nonperforming loans as a percentage of total loans were 2.06%, compared to 2.18% at December 31, 2012 and 2.56% at March 31, 2012.

Other real estate and repossessed assets totaled $18.2 million at March 31, 2013, compared to $18.5 million at December 31, 2012 and $25.9 million at March 31, 2012.

At March 31, 2013, the allowance for loan losses of the originated loan portfolio was $82.3 million, or 2.16% of originated loans, compared to $84.0 million, or 2.22% of originated loans, at December 31, 2012 and $85.6 million, or 2.54% of originated loans, at March 31, 2012. The allowance for loan losses of the originated loan portfolio as a percentage of nonperforming loans was 95% at March 31, 2013, compared to 92% at December 31, 2012 and 87% at March 31, 2012. The allowance for loan losses of the acquired loan portfolio was $0.5 million at both March 31, 2013 and December 31, 2012, compared to $2.2 million at March 31, 2012. Management believes that the Corporation's acquired loan portfolio totaling $374 million at March 31, 2013 was performing, overall, at or slightly better than original expectations.

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 156 banking offices spread over 38 counties in the lower peninsula of Michigan. At March 31, 2013, the Corporation had total assets of $6.0 billion. Chemical Financial Corporation's common stock trades on The NASDAQ Stock Market under the symbol CHFC and is one of the issues comprising The NASDAQ Global Select Market. 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 Chemical Financial Corporation (Corporation). Words such as "anticipates," "believes," "confident," "continue," "estimates," "expects," "focus," "forecasts," "intends," "is likely," "judgment," "opinion," "opportunities," "plans," "predicts," "projects," "should," "trend," "will," and variations of such words and 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. These statements include, among others, statements related to future levels of loan charge-offs, future levels of provisions for loan losses, real estate valuation, future levels of nonperforming assets, the rate of asset dispositions, future capital levels, future dividends, future growth and funding sources, future liquidity levels, future profitability levels, the effects on earnings of future changes in interest rates, the future level of other revenue sources, future economic trends and conditions, future initiatives to expand the Corporation's market share, expected cash flows from acquired loans, future effects of new or changed accounting standards, future opportunities for acquisitions, the impact of branch acquisition transactions on the Corporation's business, opportunities to increase top line revenues, the Corporation's ability to grow its core franchise, and future cost savings. 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. 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.

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, 2012. These and other factors are representative of the risk factors that may emerge and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.

 
 
Chemical Financial Corporation Announces First Quarter Operating Results
       
Consolidated Statements of Financial Position (Unaudited)      
Chemical Financial Corporation       
       
  March 31 December 31 March 31
  2013 2012 2012
  (In thousands, except per share data)
Assets      
Cash and cash equivalents:      
Cash and cash due from banks  $ 101,501  $ 142,467  $ 120,435
Interest-bearing deposits with the Federal Reserve Bank  477,225  513,668  353,243
Total cash and cash equivalents  578,726  656,135  473,678
Investment securities:      
Available-for-sale  703,622  586,809  676,007
Held-to-maturity  257,749  229,977  191,297
Total investment securities  961,371  816,786  867,304
Loans held-for-sale  14,850  17,665  25,080
       
Loans:      
Commercial   1,038,115  1,002,722  903,935
Commercial real estate   1,162,383  1,161,861  1,095,793
Real estate construction and land development   98,007  100,237  101,157
Residential mortgage  872,454  883,835  861,301
Consumer installment and home equity  1,014,302  1,019,080  880,912
Total loans  4,185,261  4,167,735  3,843,098
Allowance for loan losses  (82,834)  (84,491)  (87,785)
Net loans  4,102,427  4,083,244  3,755,313
       
Premises and equipment  73,501  75,458  66,661
Goodwill  120,164  120,164  113,414
Other intangible assets  14,902  15,388  10,939
Interest receivable and other assets  124,587  132,412  139,130
Total Assets  $ 5,990,528  $ 5,917,252  $ 5,451,519
       
Liabilities      
Deposits:      
Noninterest-bearing   $ 1,086,986  $ 1,085,857  $ 914,523
Interest-bearing   3,920,372  3,835,586  3,546,861
Total deposits  5,007,358  4,921,443  4,461,384
Interest payable and other liabilities  30,931  54,716  32,809
Short-term borrowings  347,484  310,463  335,082
Federal Home Loan Bank (FHLB) advances   --  34,289  42,120
Total liabilities  5,385,773  5,320,911  4,871,395
       
Shareholders' Equity:      
Preferred stock, no par value per share  --  --  --
Common stock, $1 par value per share  27,532  27,499  27,491
Additional paid-in capital  433,648  433,195  431,549
Retained earnings  174,209  166,766  145,195
Accumulated other comprehensive loss  (30,634)  (31,119)  (24,111)
Total shareholders' equity  604,755  596,341  580,124
Total Liabilities and Shareholders' Equity  $ 5,990,528  $ 5,917,252  $ 5,451,519
 
 
Chemical Financial Corporation Announces First Quarter Operating Results
     
Consolidated Statements of Income (Unaudited)    
Chemical Financial Corporation     
     
  Three Months Ended
  March 31
  2013 2012
  (In thousands, except per share data)
Interest Income    
Interest and fees on loans  $ 47,905  $ 48,256
Interest on investment securities:    
Taxable  2,438  2,565
Tax-exempt  1,564  1,485
Dividends on nonmarketable equity securities  151  130
Interest on deposits with the Federal Reserve Bank  321  228
Total Interest Income  52,379  52,664
     
Interest Expense    
Interest on deposits  4,566  6,102
Interest on short-term borrowings  114  104
Interest on Federal Home Loan Bank advances   47  263
Total Interest Expense  4,727  6,469
Net Interest Income   47,652  46,195
Provision for loan losses  3,000  5,000
Net Interest Income after Provision for Loan Losses  44,652  41,195
     
Noninterest Income    
Service charges and fees on deposit accounts  5,195  4,505
Wealth management revenue  3,445  2,921
Other charges and fees for customer services  4,651  3,365
Mortgage banking revenue  2,012  1,185
Gain on sale of investment securities  847  --
Gain on sale of merchant card services  --  1,280
Other   89  69
Total Noninterest Income  16,239  13,325
     
Operating Expenses    
Salaries, wages and employee benefits  23,369  20,569
Occupancy   3,663  3,154
Equipment and software  3,450  3,118
Other  11,475  10,130
Total Operating Expenses  41,957  36,971
Income Before Income Taxes  18,934  17,549
Federal income tax expense   5,700  5,175
Net Income   $ 13,234  $ 12,374
     
Net income per common share:    
Basic  $ 0.48  $ 0.45
Diluted  0.48  0.45
     
Key Ratios:    
Return on average assets 0.91% 0.92%
Return on average shareholders' equity 9.0% 8.7%
Net interest margin  3.54% 3.76%
Efficiency ratio  64.4% 62.1%
 
 
Chemical Financial Corporation Announces First Quarter Operating Results
           
Financial Summary (Unaudited)          
Chemical Financial Corporation           
  Three Months Ended
  March 31  Dec 31  Sept 30  June 30  March 31
  2013 2012 2012 2012 2012
  (Dollars in thousands)
Average Balances           
Total assets  $ 5,924,820  $ 5,576,422  $ 5,433,491  $ 5,360,598  $ 5,396,420
Total interest-earning assets  5,579,789  5,251,531  5,105,101  5,044,629  5,061,882
Total loans  4,152,570  4,077,918  3,987,928  3,901,321  3,824,604
Total deposits  4,950,956  4,590,370  4,464,582  4,383,628  4,416,273
Total interest-bearing liabilities  4,221,638  3,926,582  3,823,954  3,817,753  3,903,986
Total shareholders' equity  599,406  600,794  591,683  582,873  574,261
           
Key Ratios (annualized where applicable)          
Net interest margin (taxable equivalent basis) 3.54% 3.74% 3.76% 3.80% 3.76%
Efficiency ratio  64.4% 63.0% 59.3% 58.7% 62.1%
Return on average assets 0.91% 0.83% 0.96% 1.04% 0.92%
Return on average shareholders' equity 9.0% 7.7% 8.8% 9.6% 8.7%
Average shareholders' equity as a  percent of average assets 10.1% 10.8% 10.9% 10.9% 10.6%
Capital ratios (period end):          
Tangible shareholders' equity as a percent of total assets 8.1% 8.1% 8.8% 9.0% 8.7%
Total risk-based capital ratio 13.3% 13.2% 13.6% 13.6% 13.7%
           
  March 31  Dec 31  Sept 30  June 30  March 31
  2013 2012 2012 2012 2012
Credit Quality Statistics          
Originated Loans  $ 3,810,989  $ 3,775,140  $ 3,606,547  $ 3,515,110  $ 3,370,279
Acquired Loans  374,272  392,595  412,612  447,232  472,819
Nonperforming Assets:          
Nonperforming loans   86,417  90,854  90,877  92,811  98,548
Other real estate and repossessed assets (ORE)  18,194  18,469  19,467  23,509  25,944
Total nonperforming assets  104,611  109,323  110,344  116,320  124,492
           
Performing troubled debt restructurings  30,723  31,369  30,406  26,383  27,177
           
Allowance for loan losses-originated as a percent of:          
Total originated loans 2.16% 2.22% 2.33% 2.40% 2.54%
Nonperforming loans 95% 92% 93% 91% 87%
           
Nonperforming loans as a percent of total loans 2.06% 2.18% 2.26% 2.34% 2.56%
Nonperforming assets as a percent of:          
Total loans plus ORE 2.49% 2.61% 2.73% 2.92% 3.22%
Total assets 1.75% 1.85% 1.98% 2.17% 2.28%
           
Net loan charge-offs (year-to-date):          
Originated  4,657  20,142  14,939  10,622  5,548
Acquired  --  2,200  2,200  --  --
Total loan charge-offs (year-to-date)  4,657  22,342  17,139  10,622  5,548
Net loan charge-offs as a percent of average loans (year-to-date, annualized) 0.45% 0.57% 0.59% 0.55% 0.58%
           
  March 31  Dec 31  Sept 30  June 30  March 31
  2013 2012 2012 2012 2012
Additional Data - Intangibles          
Goodwill  $ 120,164  $ 120,164  $ 113,414  $ 113,414  $ 113,414
Core deposit intangibles  11,417  11,910  6,777  7,144  7,512
Mortgage servicing rights (MSR)  3,485  3,478  3,466  3,463  3,427
Amortization of core deposit intangibles (quarter only)  493  467  367  368  367
 
 
Chemical Financial Corporation Announces First Quarter Operating Results
       
Average Balances, Tax Equivalent Interest and Effective Yields and Rates (Unaudited)*
       
  Three Months Ended March 31, 2013
    Tax  
  Average  Equivalent Effective
  Balance Interest Yield/Rate
Assets (Dollars in thousands)
Interest-earning assets:      
Loans**  $ 4,167,614  $ 48,361  4.69%
Taxable investment securities 666,809 2,438  1.46
Tax-exempt investment securities 215,727 2,388  4.43
Other interest-earning assets 25,572 151  2.39
Interest-bearing deposits with the Federal Reserve Bank 504,067 321  0.26
Total interest-earning assets 5,579,789 53,659  3.89
Less: allowance for loan losses 84,978    
Other Assets:      
Cash and cash due from banks 117,620    
Premises and equipment 74,608    
Interest receivable and other assets 237,781    
Total assets  $ 5,924,820    
       
Liabilities and shareholders' equity      
Interest-bearing liabilities:      
Interest-bearing demand deposits  $ 1,102,386  $ 252  0.09%
Savings deposits 1,337,415 296  0.09
Time deposits 1,451,681 4,018  1.12
Short-term borrowings 322,308 114  0.14
FHLB advances 7,848 47  2.43
Total interest-bearing liabilities 4,221,638 4,727  0.45
Noninterest-bearing deposits 1,059,474  --   -- 
Total deposits and borrowed funds 5,281,112 4,727  0.36
Interest payable and other liabilities 44,302    
Shareholders' equity 599,406    
Total liabilities and shareholders' equity  $ 5,924,820    
Net Interest Spread (Average yield earned on interest-earning assets minus average rate paid on interest-bearing liabilities)      3.44%
Net Interest Income (FTE)    $ 48,932  
Net Interest Margin (Net Interest Income (FTE) divided by  total average interest-earning assets)      3.54%
       
* Taxable equivalent 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 First Quarter Operating Results
           
Nonperforming Assets (Unaudited)          
Chemical Financial Corporation           
           
  March 31 Dec 31 Sept 30 June 30 March 31
  2013 2012 2012 2012 2012
  (Dollars in thousands)
Nonperforming Loans:          
Nonaccrual loans:          
Commercial  $ 12,186  $ 14,601  $ 15,217  $ 12,673  $ 11,443
Commercial real estate   35,849  37,660  41,311  41,691  46,870
Real estate construction and land development  4,273  5,401  6,664  3,485  3,809
Residential mortgage  10,407  10,164  11,307  12,613  12,687
Consumer installment and home equity  3,536  3,472  3,825  3,994  4,344
Total nonaccrual loans  66,251  71,298  78,324  74,456  79,153
Accruing loans contractually past due 90 days or more as to interest or principal payments:          
Commercial  4  --  273  300  1,005
Commercial real estate   177  87  247  269  75
Real estate construction and land development  --  --  --  --  --
Residential mortgage  196  1,503  431  840  333
Consumer installment and home equity  874  769  1,147  1,157  1,233
Total accruing loans contractually past due 90 days or more as to interest or principal payments  1,251  2,359  2,098  2,566  2,646
Nonperforming troubled debt restructurings:          
Commercial loan portfolio  14,587  13,876  6,553  11,691  11,258
Consumer loan portfolio  4,328  3,321  3,902  4,098  5,491
Total nonperforming troubled debt restructurings  18,915  17,197  10,455  15,789  16,749
Total nonperforming loans  86,417  90,854  90,877  92,811  98,548
Other real estate and repossessed assets  18,194  18,469  19,467  23,509  25,944
Total nonperforming assets  $ 104,611  $ 109,323  $ 110,344  $ 116,320  $ 124,492
 
 
Chemical Financial Corporation Announces First Quarter Operating Results
           
Summary of Loan Loss Experience (Unaudited)          
Chemical Financial Corporation           
           
  Three Months Ended
  March 31 Dec 31 Sept 30 June 30 March 31
  2013 2012 2012 2012 2012
  (Dollars in thousands)
Allowance for loan losses - originated loan portfolio          
Allowance for loan losses - originated, at beginning of period  $ 83,991  $ 84,194  $ 84,511  $ 85,585  $ 86,733
Provision for loan losses - originated 3,000  5,000  4,000 4,000 4,400
Loans charged off:          
Commercial  (1,359)  (1,623)  (551)  (974)  (1,079)
Commercial real estate  (2,060)  (1,532)  (1,952)  (2,178)  (2,268)
Real estate construction and land development  (97)  (1,238)  (51)  (45)  (32)
Residential mortgage  (734)  (1,224)  (1,357)  (1,140)  (1,717)
Consumer installment and home equity  (1,224)  (1,504)  (1,485)  (1,835)  (1,451)
Total loan charge-offs  (5,474)  (7,121)  (5,396)  (6,172)  (6,547)
Recoveries of loans previously charged off:          
Commercial  160  278  135  140  191
Commercial real estate  50  1,202  325  298  421
Real estate construction and land development  1  --  --  --  2
Residential mortgage  161  104  237  199  22
Consumer installment and home equity  445  334  382  461  363
Total loan recoveries  817  1,918  1,079  1,098  999
Net loan charge-offs - originated  (4,657)  (5,203)  (4,317)  (5,074)  (5,548)
Allowance for loan losses - originated, at end of period  82,334  83,991  84,194  84,511  85,585
           
Allowance for loan losses - acquired loan portfolio          
Allowance for loan losses - acquired, at beginning of period  500  500  2,200  2,200  1,600
Provision for loan losses - acquired  --  --  500  --  600
Net loan charge-offs - acquired (commercial)  --  --  (2,200)  --  --
Allowance for loan losses - acquired, at end of period  500  500  500  2,200  2,200
           
Total allowance for loan losses  $ 82,834  $ 84,491  $ 84,694  $ 86,711  $ 87,785
 
 
Chemical Financial Corporation Announces First Quarter Operating Results
           
Selected Quarterly Information (Unaudited)          
Chemical Financial Corporation           
           
  1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
  2013 2012 2012 2012 2012
  (Dollars in thousands, except per share data)
Summary of Operations          
Interest income  $ 52,379  $ 53,126  $ 52,501  $ 52,467  $ 52,664
Interest expense  4,727  5,132  5,591  6,021  6,469
Net interest income  47,652  47,994  46,910  46,446  46,195
Provision for loan losses  3,000  5,000  4,500  4,000  5,000
Net interest income after provision for loan losses  44,652  42,994  42,410  42,446  41,195
Noninterest income  16,239  14,676  12,719  13,944  13,325
Operating expenses   41,957  42,008  36,723  36,199  36,971
Income before income taxes  18,934  15,662  18,406  20,191  17,549
Federal income tax expense  5,700  4,000  5,300  6,325  5,175
Net income   $ 13,234  $ 11,662  $ 13,106  $ 13,866  $ 12,374
           
Net interest margin 3.54% 3.74% 3.76% 3.80% 3.76%
 
Per Common Share Data          
Net income:          
 Basic  $ 0.48  $ 0.42  $ 0.48  $ 0.50  $ 0.45
 Diluted 0.48  0.42  0.48  0.50 0.45
Cash dividends declared  0.21  0.21  0.21  0.20  0.20
Book value - period-end  21.97  21.69  21.75  21.42  21.10
Tangible book value - period-end  17.34  17.03  17.52  17.17  16.84
Market value - period-end  26.38  23.76  24.20  21.50  23.44
CONTACT: David B. Ramaker, CEO         Lori A. Gwizdala, CFO         989-839-5350

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