Chemical Financial Corporation Announces First Quarter Operating Results

Apr 16, 2001, 01:00 ET from Chemical Financial Corporation

    MIDLAND, Mich., April 16 /PRNewswire/ -- Alan W. Ott, Chairman of Chemical
 Financial Corporation (Nasdaq:   CHFC), today announced first quarter net
 operating income of $10,965,000, or $.51 per share, compared with net income
 of $9,628,000, or $.45 per share for the first quarter of 2000.  This
 represents an increase of 13.3% in operating earnings per share.  On the same
 basis, returns on average assets and average equity during the first quarter
 of 2001 were 1.46% and 12.7%, respectively, as compared with 1.32% and 11.6%
 for the first quarter of 2000.  Net operating income for the first quarter of
 2001 excluded pre-tax non-recurring expenses totaling $9,167,000, or
 $7,076,000 on an after-tax basis for merger related and consolidation costs
 incurred to complete the merger with Shoreline Financial Corporation and other
 internal company consolidations.  Including the merger related and
 consolidation charges, the Corporation reported net income for the first
 quarter of 2001 of $3,889,000, or $.18 per share.
     The growth in operating earnings in the first quarter of 2001, compared to
 the first quarter of 2000, resulted from increases in both net interest income
 and non-interest income.  Net interest income was up $1.29 million, or 4.6%.
 The growth in net interest income resulted primarily from an increase of 8.9%
 in total loans and lower costs of deposits and other funding sources.  Non-
 interest income was up 19%, primarily resulting from increased deposit account
 service charges and increased gains on the sale of residential mortgage loans
 in the secondary market.
     Total assets of the Corporation at March 31, 2001 were $3.1 billion, up
 3.4% over the $2.97 billion in total assets reported at March 31, 2000.  Total
 deposits at March 31, 2001 were $2.48 billion, up 0.9% over total deposits of
 $2.46 billion at March 31, 2000.  Total loans increased 8.9% during the latest
 twelve months, from $1.72 billion at March 31, 2000, to $1.87 billion in
 outstanding loans at March 31, 2001.
     During the first quarter of 2001, the Corporation provided $405,000 to the
 allowance for loan losses, while charging net losses of $24,000 against the
 allowance during the period.
     Shareholders' equity at March 31, 2001 was $362.4 million, or $16.91 per
 share, and represented 11.8% of total assets at the current quarter end.
     On January 9, 2001, the Corporation consummated its merger with Shoreline
 Financial Corporation, a one-bank holding company with $1.1 billion in assets,
 headquartered in Benton Harbor, Michigan.  The Corporation is operating
 Shoreline Bank as a separate subsidiary of the Corporation under the name
 Chemical Bank Shoreline.  The transaction was accounted for by the pooling-of-
 interests accounting method and, therefore, all prior year financial
 information has been restated to include Shoreline as if it had always been a
 subsidiary of the Corporation.
     In addition, the Corporation completed the consolidation of nine of its
 eleven banking subsidiaries into two during the first quarter of 2001.
     On March 23, 2001, the Corporation announced that two of its banking
 subsidiaries, Chemical Bank West and Chemical Bank Shoreline, entered into
 agreements to acquire four branch banking offices from Fifth Third Bank and
 Old Kent Bank.  Chemical Bank Shoreline will acquire branches located in
 Holland, Zeeland and Grand Haven, Michigan and Chemical Bank West, Cadillac,
 will acquire a branch in Fremont, Michigan.  The branches currently have
 combined deposits of approximately $150 million and combined loans of
 approximately $100 million.  The transaction is expected to be completed in
 the summer of 2001.
     Chemical Financial Corporation is the fourth largest bank holding company
 headquartered in Michigan.  The Company's four subsidiary banks operate 118
 "Chemical Bank" offices and 2 loan production offices spread over 30 counties
 in the lower peninsula of Michigan.  CFC Data Corp, Midland, is the Company's
 wholly owned data processing subsidiary.
     Chemical Financial Corporation common stock trades on the Nasdaq Stock
 Market under the symbol CHFC.
 
     Forward Looking Statements
     This press release contains forward-looking statements.  Forward-looking
 statements include expressions such as "anticipate," "believe," "expect,"
 "intend," and "view," which are necessarily statements of belief as to the
 expected outcomes of future events.  Actual results could materially differ
 from those presented.  Internal and external factors that might cause such a
 difference include, but are not limited to, the possibility that anticipated
 cost savings and revenue enhancements from the consolidations may not be fully
 realized within the expected time frame and that future circumstances could
 cause business decisions to be decided differently than now intended.  Actual
 results could materially differ from those contained in, or implied by such
 statements.  Chemical undertakes no obligation to revise these forward-looking
 statements or reflect events or conditions after the date of this release.
 
     Chemical Financial Corporation Announces First Quarter Operating Results
 
     Consolidated Balance Sheets (Unaudited)
     Chemical Financial Corporation and Subsidiaries
                                                           March 31,
     (In thousands)                                   2001           2000
     Assets
     Cash and demand deposits due from banks        $104,128       $104,904
     Federal funds sold                              146,375        113,595
     Interest-bearing deposits
      with unaffiliated banks                             66          6,252
 
     Investment securities taxable                   819,479        886,549
     Investment securities nontaxable                 64,015         65,221
          Total Investment Securities                883,494        951,770
 
     Commercial and agricultural loans               292,661        292,818
     Real estate construction loans                   91,207         66,477
     Real estate commercial loans                    318,278        267,944
     Real estate residential loans                   772,574        737,474
     Consumer loans                                  397,452        354,019
          Total Loans                              1,872,172      1,718,732
     Less: Allowance for loan losses                  27,264         26,260
          Net Loans                                1,844,908      1,692,472
 
     Premises and equipment                           37,870         38,938
     Intangible assets                                20,929         23,174
     Other assets                                     33,533         39,730
          Total Assets                            $3,071,303     $2,970,835
 
     Liabilities and Shareholders' Equity
     Noninterest-bearing deposits                   $376,504       $370,679
     Interest-bearing deposits                     2,101,166      2,084,907
          Total Deposits                           2,477,670      2,455,586
 
     Other borrowings                                 91,898         67,363
     Interest payable and other liabilities           25,190         27,727
     FHLB advances                                   114,185         88,456
          Total Liabilities                        2,708,943      2,639,132
 
     Shareholders' Equity:
        Common stock, $1 par value                    21,434         21,429
        Surplus                                      258,866        251,594
        Retained earnings                             74,270         65,841
        Accumulated other comprehensive income (loss)  7,790         (7,161)
          Total Shareholders' Equity                 362,360        331,703
          Total Liabilities and
           Shareholders' Equity                   $3,071,303     $2,970,835
 
     Chemical Financial Corporation Announces First Quarter Operating Results
 
     Consolidated Statements of Income (Unaudited)
     Chemical Financial Corporation and Subsidiaries
                                                       Three Months Ended
                                                            March 31,
     (In thousands)                                    2001          2000
     Interest Income
     Interest and fees on loans                      $38,204        $34,568
     Interest on investment securities:
          Taxable                                     12,554         12,987
          Nontaxable                                     888            872
               Total Interest on Securities           13,442         13,859
     Interest on federal funds sold                    1,847          1,573
     Interest on deposits with unaffiliated banks         59            220
               Total Interest Income                  53,552         50,220
 
     Interest Expense
     Interest on deposits                             21,414         19,872
     Interest on short-term borrowings                   958            758
     Interest on medium- and long-term borrowings      1,701          1,405
               Total Interest Expense                 24,073         22,035
               Net Interest Income                    29,479         28,185
     Provision for loan losses                           405            216
               Net Interest Income after
                    provision for loan losses         29,074         27,969
 
     Noninterest Income
     Trust services revenue                            1,622          1,595
     Service charges on deposit accounts               2,763          2,415
     Other charges and fees for customer services        727            627
     Gains on sales of loans and mortgage income         537            114
     Investment securities gains                         140             24
     Other                                             1,233          1,128
               Total Noninterest Income                7,022          5,903
 
     Operating Expenses
     Salaries and employee benefits                   11,515         11,304
     Occupancy and equipment                           3,427          3,338
     Other                                             4,839          5,074
     Merger related/consolidation                      9,167              0
               Total Operating Expenses               28,948         19,716
     Income Before Income Taxes                        7,148         14,156
               Federal income taxes                    3,259          4,528
     Net Income                                       $3,889         $9,628
 
     Net income per share:
          Basic                                        $0.18          $0.45
          Diluted                                       0.18           0.45
          Diluted - operating income                    0.51           0.45
 
     Cash dividends per share                           0.24           0.22
 
     Average shares outstanding:
          Basic                                       21,421         21,422
          Diluted                                     21,468         21,505
 
     Chemical Financial Corporation Announces First Quarter Operating Results
 
     Financial Summary
     Chemical Financial Corporation and Subsidiaries
 
                                                       Three Months Ended
                                                            March 31,
                                                       2001         2000
     Average Balances (thousands)
     Total assets                                 $3,044,151     $2,941,999
     Total earning assets                          2,862,056      2,758,977
     Total loans                                   1,855,018      1,705,312
     Total deposits                                2,458,811      2,406,898
     Total shareholders' equity                      350,500        332,425
     Shareholders' equity/assets                        11.5%          11.3%
 
     At Period End (thousands)
 
     Credit Quality Statistics
     Nonaccrual loans                                 $6,954         $3,270
     Loans 90 or more days past due
          and still accruing                             981            872
     Restructured loans                                    0             22
     Total nonperforming loans                         7,935          4,164
     Repossessed assets acquired (RAA)                 1,018            415
     Total nonperforming assets                        8,953          4,579
     Net loans charged off                                24            130
 
     Allowance for loan losses ratio                    1.46%          1.53%
     Allowance for loan losses as a
          percent of nonperforming loans                 344%           630%
     Nonperforming loans as a
          percent of total loans                        0.42%          0.24%
     Nonperforming assets as a
          percent of total loans plus RAA               0.48%          0.27%
     Net loans charged off as a
          percent of average loans (annualized)         0.00%          0.03%
 
     Performance Ratios (annualized)
     Net interest margin (FTE)                          4.27%          4.21%
     Return on average assets                           0.52%          1.32%
     Return on average assets
          - net operating income (1)                    1.46%          1.32%
     Return on average shareholders' equity              4.5%          11.6%
     Return on average shareholders' equity
          - net operating income (1)                    12.7%          11.6%
 
     Chemical Financial Corporation Announces First Quarter Operating Results
 
     Selected Quarterly Information
     Chemical Financial Corporation and Subsidiaries
 
                         1st Qtr.   4th Qtr.    3rd Qtr.   2nd Qtr.    1st Qtr.
                          2001       2000        2000        2000        2000
     Summary of Operations
          (thousands)
     Interest income     $53,552    $54,536    $53,867     $51,956     $50,220
     Interest expense     24,073     25,594     25,141      23,185      22,035
     Net interest income  29,479     28,942     28,726      28,771      28,185
     Provision for
      loan losses            405        857        290         224         216
     Net interest income
      after provision
       for loan losses    29,074     28,085     28,436      28,547      27,969
     Noninterest income    7,022      6,491      6,496       6,595       5,903
     Noninterest expense
      before special
       charge             19,781     19,316     19,362      19,606      19,716
     Special charge:
       Before tax          9,167          -          -           -           -
       After tax           7,076          -          -           -           -
     Income taxes          3,259      5,079      5,051       5,063       4,528
     Net income            3,889     10,181     10,519      10,473       9,628
     Net operating
      income (1)          10,965     10,181     10,519      10,473       9,628
 
     Per Common Share Data
     Net income:
      Basic                $0.18      $0.48      $0.49       $0.49       $0.45
      Diluted               0.18       0.48       0.48        0.49        0.45
      Diluted - net
       operating income (1) 0.51       0.48       0.48        0.49        0.45
     Dividends              0.24       0.22       0.22        0.22        0.22
     Book value            16.91      16.72      16.18       15.74       15.48
 
     (1)  Net operating income is based on net income that excludes merger
 related and consolidation costs incurred in connection with the merger with
 Shoreline Financial Corporation and the Corporation's internal consolidation
 of nine of its eleven bank charters into two.
 
 

SOURCE Chemical Financial Corporation
    MIDLAND, Mich., April 16 /PRNewswire/ -- Alan W. Ott, Chairman of Chemical
 Financial Corporation (Nasdaq:   CHFC), today announced first quarter net
 operating income of $10,965,000, or $.51 per share, compared with net income
 of $9,628,000, or $.45 per share for the first quarter of 2000.  This
 represents an increase of 13.3% in operating earnings per share.  On the same
 basis, returns on average assets and average equity during the first quarter
 of 2001 were 1.46% and 12.7%, respectively, as compared with 1.32% and 11.6%
 for the first quarter of 2000.  Net operating income for the first quarter of
 2001 excluded pre-tax non-recurring expenses totaling $9,167,000, or
 $7,076,000 on an after-tax basis for merger related and consolidation costs
 incurred to complete the merger with Shoreline Financial Corporation and other
 internal company consolidations.  Including the merger related and
 consolidation charges, the Corporation reported net income for the first
 quarter of 2001 of $3,889,000, or $.18 per share.
     The growth in operating earnings in the first quarter of 2001, compared to
 the first quarter of 2000, resulted from increases in both net interest income
 and non-interest income.  Net interest income was up $1.29 million, or 4.6%.
 The growth in net interest income resulted primarily from an increase of 8.9%
 in total loans and lower costs of deposits and other funding sources.  Non-
 interest income was up 19%, primarily resulting from increased deposit account
 service charges and increased gains on the sale of residential mortgage loans
 in the secondary market.
     Total assets of the Corporation at March 31, 2001 were $3.1 billion, up
 3.4% over the $2.97 billion in total assets reported at March 31, 2000.  Total
 deposits at March 31, 2001 were $2.48 billion, up 0.9% over total deposits of
 $2.46 billion at March 31, 2000.  Total loans increased 8.9% during the latest
 twelve months, from $1.72 billion at March 31, 2000, to $1.87 billion in
 outstanding loans at March 31, 2001.
     During the first quarter of 2001, the Corporation provided $405,000 to the
 allowance for loan losses, while charging net losses of $24,000 against the
 allowance during the period.
     Shareholders' equity at March 31, 2001 was $362.4 million, or $16.91 per
 share, and represented 11.8% of total assets at the current quarter end.
     On January 9, 2001, the Corporation consummated its merger with Shoreline
 Financial Corporation, a one-bank holding company with $1.1 billion in assets,
 headquartered in Benton Harbor, Michigan.  The Corporation is operating
 Shoreline Bank as a separate subsidiary of the Corporation under the name
 Chemical Bank Shoreline.  The transaction was accounted for by the pooling-of-
 interests accounting method and, therefore, all prior year financial
 information has been restated to include Shoreline as if it had always been a
 subsidiary of the Corporation.
     In addition, the Corporation completed the consolidation of nine of its
 eleven banking subsidiaries into two during the first quarter of 2001.
     On March 23, 2001, the Corporation announced that two of its banking
 subsidiaries, Chemical Bank West and Chemical Bank Shoreline, entered into
 agreements to acquire four branch banking offices from Fifth Third Bank and
 Old Kent Bank.  Chemical Bank Shoreline will acquire branches located in
 Holland, Zeeland and Grand Haven, Michigan and Chemical Bank West, Cadillac,
 will acquire a branch in Fremont, Michigan.  The branches currently have
 combined deposits of approximately $150 million and combined loans of
 approximately $100 million.  The transaction is expected to be completed in
 the summer of 2001.
     Chemical Financial Corporation is the fourth largest bank holding company
 headquartered in Michigan.  The Company's four subsidiary banks operate 118
 "Chemical Bank" offices and 2 loan production offices spread over 30 counties
 in the lower peninsula of Michigan.  CFC Data Corp, Midland, is the Company's
 wholly owned data processing subsidiary.
     Chemical Financial Corporation common stock trades on the Nasdaq Stock
 Market under the symbol CHFC.
 
     Forward Looking Statements
     This press release contains forward-looking statements.  Forward-looking
 statements include expressions such as "anticipate," "believe," "expect,"
 "intend," and "view," which are necessarily statements of belief as to the
 expected outcomes of future events.  Actual results could materially differ
 from those presented.  Internal and external factors that might cause such a
 difference include, but are not limited to, the possibility that anticipated
 cost savings and revenue enhancements from the consolidations may not be fully
 realized within the expected time frame and that future circumstances could
 cause business decisions to be decided differently than now intended.  Actual
 results could materially differ from those contained in, or implied by such
 statements.  Chemical undertakes no obligation to revise these forward-looking
 statements or reflect events or conditions after the date of this release.
 
     Chemical Financial Corporation Announces First Quarter Operating Results
 
     Consolidated Balance Sheets (Unaudited)
     Chemical Financial Corporation and Subsidiaries
                                                           March 31,
     (In thousands)                                   2001           2000
     Assets
     Cash and demand deposits due from banks        $104,128       $104,904
     Federal funds sold                              146,375        113,595
     Interest-bearing deposits
      with unaffiliated banks                             66          6,252
 
     Investment securities taxable                   819,479        886,549
     Investment securities nontaxable                 64,015         65,221
          Total Investment Securities                883,494        951,770
 
     Commercial and agricultural loans               292,661        292,818
     Real estate construction loans                   91,207         66,477
     Real estate commercial loans                    318,278        267,944
     Real estate residential loans                   772,574        737,474
     Consumer loans                                  397,452        354,019
          Total Loans                              1,872,172      1,718,732
     Less: Allowance for loan losses                  27,264         26,260
          Net Loans                                1,844,908      1,692,472
 
     Premises and equipment                           37,870         38,938
     Intangible assets                                20,929         23,174
     Other assets                                     33,533         39,730
          Total Assets                            $3,071,303     $2,970,835
 
     Liabilities and Shareholders' Equity
     Noninterest-bearing deposits                   $376,504       $370,679
     Interest-bearing deposits                     2,101,166      2,084,907
          Total Deposits                           2,477,670      2,455,586
 
     Other borrowings                                 91,898         67,363
     Interest payable and other liabilities           25,190         27,727
     FHLB advances                                   114,185         88,456
          Total Liabilities                        2,708,943      2,639,132
 
     Shareholders' Equity:
        Common stock, $1 par value                    21,434         21,429
        Surplus                                      258,866        251,594
        Retained earnings                             74,270         65,841
        Accumulated other comprehensive income (loss)  7,790         (7,161)
          Total Shareholders' Equity                 362,360        331,703
          Total Liabilities and
           Shareholders' Equity                   $3,071,303     $2,970,835
 
     Chemical Financial Corporation Announces First Quarter Operating Results
 
     Consolidated Statements of Income (Unaudited)
     Chemical Financial Corporation and Subsidiaries
                                                       Three Months Ended
                                                            March 31,
     (In thousands)                                    2001          2000
     Interest Income
     Interest and fees on loans                      $38,204        $34,568
     Interest on investment securities:
          Taxable                                     12,554         12,987
          Nontaxable                                     888            872
               Total Interest on Securities           13,442         13,859
     Interest on federal funds sold                    1,847          1,573
     Interest on deposits with unaffiliated banks         59            220
               Total Interest Income                  53,552         50,220
 
     Interest Expense
     Interest on deposits                             21,414         19,872
     Interest on short-term borrowings                   958            758
     Interest on medium- and long-term borrowings      1,701          1,405
               Total Interest Expense                 24,073         22,035
               Net Interest Income                    29,479         28,185
     Provision for loan losses                           405            216
               Net Interest Income after
                    provision for loan losses         29,074         27,969
 
     Noninterest Income
     Trust services revenue                            1,622          1,595
     Service charges on deposit accounts               2,763          2,415
     Other charges and fees for customer services        727            627
     Gains on sales of loans and mortgage income         537            114
     Investment securities gains                         140             24
     Other                                             1,233          1,128
               Total Noninterest Income                7,022          5,903
 
     Operating Expenses
     Salaries and employee benefits                   11,515         11,304
     Occupancy and equipment                           3,427          3,338
     Other                                             4,839          5,074
     Merger related/consolidation                      9,167              0
               Total Operating Expenses               28,948         19,716
     Income Before Income Taxes                        7,148         14,156
               Federal income taxes                    3,259          4,528
     Net Income                                       $3,889         $9,628
 
     Net income per share:
          Basic                                        $0.18          $0.45
          Diluted                                       0.18           0.45
          Diluted - operating income                    0.51           0.45
 
     Cash dividends per share                           0.24           0.22
 
     Average shares outstanding:
          Basic                                       21,421         21,422
          Diluted                                     21,468         21,505
 
     Chemical Financial Corporation Announces First Quarter Operating Results
 
     Financial Summary
     Chemical Financial Corporation and Subsidiaries
 
                                                       Three Months Ended
                                                            March 31,
                                                       2001         2000
     Average Balances (thousands)
     Total assets                                 $3,044,151     $2,941,999
     Total earning assets                          2,862,056      2,758,977
     Total loans                                   1,855,018      1,705,312
     Total deposits                                2,458,811      2,406,898
     Total shareholders' equity                      350,500        332,425
     Shareholders' equity/assets                        11.5%          11.3%
 
     At Period End (thousands)
 
     Credit Quality Statistics
     Nonaccrual loans                                 $6,954         $3,270
     Loans 90 or more days past due
          and still accruing                             981            872
     Restructured loans                                    0             22
     Total nonperforming loans                         7,935          4,164
     Repossessed assets acquired (RAA)                 1,018            415
     Total nonperforming assets                        8,953          4,579
     Net loans charged off                                24            130
 
     Allowance for loan losses ratio                    1.46%          1.53%
     Allowance for loan losses as a
          percent of nonperforming loans                 344%           630%
     Nonperforming loans as a
          percent of total loans                        0.42%          0.24%
     Nonperforming assets as a
          percent of total loans plus RAA               0.48%          0.27%
     Net loans charged off as a
          percent of average loans (annualized)         0.00%          0.03%
 
     Performance Ratios (annualized)
     Net interest margin (FTE)                          4.27%          4.21%
     Return on average assets                           0.52%          1.32%
     Return on average assets
          - net operating income (1)                    1.46%          1.32%
     Return on average shareholders' equity              4.5%          11.6%
     Return on average shareholders' equity
          - net operating income (1)                    12.7%          11.6%
 
     Chemical Financial Corporation Announces First Quarter Operating Results
 
     Selected Quarterly Information
     Chemical Financial Corporation and Subsidiaries
 
                         1st Qtr.   4th Qtr.    3rd Qtr.   2nd Qtr.    1st Qtr.
                          2001       2000        2000        2000        2000
     Summary of Operations
          (thousands)
     Interest income     $53,552    $54,536    $53,867     $51,956     $50,220
     Interest expense     24,073     25,594     25,141      23,185      22,035
     Net interest income  29,479     28,942     28,726      28,771      28,185
     Provision for
      loan losses            405        857        290         224         216
     Net interest income
      after provision
       for loan losses    29,074     28,085     28,436      28,547      27,969
     Noninterest income    7,022      6,491      6,496       6,595       5,903
     Noninterest expense
      before special
       charge             19,781     19,316     19,362      19,606      19,716
     Special charge:
       Before tax          9,167          -          -           -           -
       After tax           7,076          -          -           -           -
     Income taxes          3,259      5,079      5,051       5,063       4,528
     Net income            3,889     10,181     10,519      10,473       9,628
     Net operating
      income (1)          10,965     10,181     10,519      10,473       9,628
 
     Per Common Share Data
     Net income:
      Basic                $0.18      $0.48      $0.49       $0.49       $0.45
      Diluted               0.18       0.48       0.48        0.49        0.45
      Diluted - net
       operating income (1) 0.51       0.48       0.48        0.49        0.45
     Dividends              0.24       0.22       0.22        0.22        0.22
     Book value            16.91      16.72      16.18       15.74       15.48
 
     (1)  Net operating income is based on net income that excludes merger
 related and consolidation costs incurred in connection with the merger with
 Shoreline Financial Corporation and the Corporation's internal consolidation
 of nine of its eleven bank charters into two.
 
 SOURCE  Chemical Financial Corporation