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| 8-K - 8-K - TCF FINANCIAL CORP | a8-k2013q2.htm |
Exhibit 99.1
For further information:
David B. Ramaker, CEO
Lori A. Gwizdala, CFO
989-839-5350
Chemical Financial Corporation Reports Second Quarter of 2013 Results
MIDLAND, MI, July 17, 2013 -- -- Chemical Financial Corporation (NASDAQ:CHFC) today announced 2013 second quarter net income of $14.2 million, or $0.51 per diluted share, compared to 2013 first quarter net income of $13.2 million, or $0.48 per diluted share, and 2012 second quarter net income of $13.9 million, or $0.50 per diluted share. For the six months ended June 30, 2013, net income was $27.4 million, or $0.99 per diluted share, compared to net income for the six months ended June 30, 2012 of $26.2 million, or $0.95 per diluted share.
"We turned in a solid performance in the second quarter of 2013, largely attributable to strong loan growth and improving asset quality that resulted in lower credit-related costs," noted David B. Ramaker, Chairman, Chief Executive Officer and President of the Corporation. "On a go forward basis, we continue to look to these factors and a focused cost discipline to drive earnings growth, but also remain well positioned to capitalize on two longer-term trends: the anticipated rising rate environment and ongoing consolidation in Michigan's banking industry. In addition, we are well positioned to benefit from any broader economic recovery, as our community-focused, relationship-oriented approach and strong financial condition make Chemical Bank the financial institution of choice in the Michigan markets we serve," Ramaker added.
Net income of $14.2 million in the second quarter of 2013 was $1.0 million, or 7.3%, higher than the first quarter of 2013, with higher net interest income and lower operating expenses in the second quarter of 2013 partially offset by lower noninterest income.
Net income in the second quarter of 2013 was $0.3 million, or 2.4%, higher than the second quarter of 2012, attributable to a combination of higher net interest income, higher noninterest income and a lower provision for loan losses, all of which were partially offset by higher operating expenses. The Corporation had increases of $2.0 million in both net interest income and noninterest income in the second quarter of 2013 over the second quarter of 2012, while the provision for loan losses was $1.0 million lower in the second quarter of 2013, compared to the second quarter of 2012. Operating costs in the second quarter of 2013 were $4.8 million higher than the second quarter of 2012, which was partially attributable to the 21 branch banking offices acquired in December 2012 (branch acquisition transaction).
The Corporation's return on average assets was 0.97% during the second quarter of 2013, compared to 0.91% in the first quarter of 2013 and 1.04% in the second quarter of 2012. The Corporation's return on average shareholders' equity was 9.4% in the second quarter of 2013, compared to 9.0% in the first quarter of 2013 and 9.6% in the second quarter of 2012.
The net interest margin (on a tax-equivalent basis) was 3.60% in the second quarter of 2013, compared to 3.54% in the first quarter of 2013 and 3.80% in the second quarter of 2012. The decrease in the net interest margin from the second quarter of 2012 was primarily attributable to the branch acquisition transaction, in which the Corporation acquired $340 million in cash and $44 million in loans. The Corporation partially invested the cash acquired in the branch acquisition transaction in short-term investment securities and utilized the remainder to fund loan growth.
Net interest income was $48.4 million in the second quarter of 2013, $0.7 million higher than the first quarter of 2013 and $2.0 million higher than the second quarter of 2012. The increase in net interest income in the second quarter of 2013 over the first quarter of 2013 was largely attributable to the significant amount of loan growth in the second quarter of 2013. Total loans grew $151 million, or 3.6%, in the second quarter of 2013. The increase in net interest income in the second quarter of 2013 over the second quarter of 2012 resulted from a combination of loan portfolio growth and the further deployment of cash from the branch acquisition transaction.
The provision for loan losses was $3.0 million in both the second quarter of 2013 and first quarter of 2013, compared to $4.0 million in the second quarter of 2012. The provision for loan losses in the second quarter of 2013 was maintained at the same level as the first quarter of 2013, despite lower loan charge-offs and continued improvement in the credit quality of the loan portfolio, due to the significant growth in the loan portfolio during the quarter. Net loan charge-offs were $3.7 million, or 0.34% of average loans, in the second quarter of 2013, compared to $4.7 million, or 0.45% of average loans, in the first quarter of 2013 and $5.1 million, or 0.52% of average loans, in the second quarter of 2012.
1
Noninterest income was $15.9 million in the second quarter of 2013, compared to $16.2 million in the first quarter of 2013 and $13.9 million in the second quarter of 2012. Noninterest income in the second quarter of 2013 included gains from the redemption of a preferred stock investment security of $0.3 million and the sale of a closed branch office of $0.2 million, while the first quarter of 2013 included investment securities gains of $0.8 million and the second quarter of 2012 included nonrecurring income of $0.6 million from the partial insurance recovery of a 2008 branch cash loss. Excluding these gains and nonrecurring income (non-recurring gains), noninterest income in the second quarter of 2013 was approximately the same as the first quarter of 2013 and $2.1 million higher than the second quarter of 2012. While noninterest income, excluding non-recurring gains, was approximately the same in the second quarter of 2013, compared to the first quarter of 2013, an increase in wealth management revenue of $0.4 million was offset by a similar decrease in mortgage banking revenue.
The increase in noninterest income of $2.1 million in the second quarter of 2013 over the second quarter of 2012 (excluding non-recurring gains) was attributable to increases across all major categories of noninterest income and was partially driven by growth in the volume of services provided and additional fees and revenue earned as a result of the branch acquisition transaction. Service charges and fees on deposit accounts and revenue generated from customers' debit card usage were both $0.5 million higher in the second quarter of 2013. In addition, wealth management revenue and mortgage banking revenue were $0.7 million and $0.2 million, respectively, higher in the second quarter of 2013.
Operating expenses were $41.0 million in the second quarter of 2013, compared to $42.0 million in the first quarter of 2013 and $36.2 million in the second quarter of 2012. Operating expenses in the first quarter of 2013 included $0.8 million of prepayment fees incurred to prepay the Corporation's FHLB advances, while the second quarter of 2012 included acquisition-related transaction expenses of $0.5 million. Excluding the prepayment fees and acquisition-related transaction expenses (non-recurring expenses), operating expenses in the second quarter of 2013 were $0.2 million lower than the first quarter of 2013 and $5.3 million higher than the second quarter of 2012.
The decrease in operating expenses of $0.2 million in the second quarter of 2013 compared to the first quarter of 2013 (excluding non-recurring expenses) was attributable to decreases in credit-related expenses, employee payroll taxes and occupancy expenses, which were partially offset by higher performance-based compensation. Credit-related expenses, comprised of loan collection costs and other real estate (ORE) net costs, in the second quarter of 2013 were $0.8 million lower than the first quarter of 2013. Employee payroll taxes, which are historically the highest in the first quarter of the year, declined $0.3 million in the second quarter of 2013 and occupancy expenses also declined $0.3 million from the first quarter of 2013. Performance-based compensation expense was $1.3 million higher than the first quarter of 2013.
The increase in operating expenses of $5.3 million in the second quarter of 2013 (excluding non-recurring expenses) over the second quarter of 2012 was primarily attributable to incremental operating costs associated with the branch acquisition transaction, merit and market-driven compensation increases provided to the Corporation's employees effective January 1, 2013, and higher performance-based compensation expense.
The Corporation's efficiency ratio was 63.3% in the second quarter of 2013, 64.4% in the first quarter of 2013 and 58.7% in the second quarter of 2012.
Total assets were $5.81 billion at June 30, 2013, compared to $5.99 billion at March 31, 2013 and $5.35 billion at June 30, 2012. The increase in total assets during the twelve months ended June 30, 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 $69 million in balances held at the FRB at June 30, 2013, compared to $477 million at March 31, 2013 and $120 million at June 30, 2012. The decrease in FRB balances during the three months ended June 30, 2013 was largely attributable to growth in the Corporation's loan and investment securities portfolios.
Total loans were $4.34 billion at June 30, 2013, up from $4.19 billion at March 31, 2013 and $3.96 billion at June 30, 2012. During the three and twelve months ended June 30, 2013, total loans increased $151 million, or 3.6%, and $374 million, or 9.4%, respectively. The increases in loans during the three and twelve months ended June 30, 2013 occurred across all loan categories and were largely attributable to a combination of improving economic conditions and increased market share. The average yield on the loan portfolio was 4.56% in the second quarter of 2013, compared to 4.69% in the first quarter of 2013 and 4.96% in the second quarter of 2012.
Investment securities were $1.01 billion at June 30, 2013, compared to $961 million at March 31, 2013 and $893 million at June 30, 2012. The average yield of the investment securities portfolio was 2.08% in the second quarter of 2013, compared to 2.19% in the first quarter of 2013 and 2.17% in the second quarter of 2012.
2
Total deposits were $4.81 billion at June 30, 2013, compared to $5.01 billion at March 31, 2013 and $4.38 billion at June 30, 2012. The slight decline in total deposits during the second quarter of 2013, compared to the first quarter of 2013, was largely attributable to the seasonality of deposits with municipalities. The Corporation experienced an increase in total deposits of $431 million, or 9.8%, during the twelve months ended June 30, 2013, with the increase primarily 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 $25 million at June 30, 2013, compared to $44 million at March 31, 2013 and $84 million at June 30, 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 0.34% in the second quarter of 2013 from 0.36% in the first quarter of 2013 and 0.51% in the second quarter of 2012.
At June 30, 2013, the Corporation's tangible equity to assets ratio and total risk-based capital ratio were 8.5% and 13.1%, respectively, compared to 8.1% and 13.3%, respectively, at March 31, 2013 and 9.0% and 13.6%, respectively, at June 30, 2012. The decreases in the Corporation's equity ratios from June 30, 2012 to June 30, 2013 and March 31, 2013 were attributable to an increase in average assets that resulted from the branch acquisition transaction.
At June 30, 2013, the Corporation's book value was $22.14 per share, compared to $21.97 per share at March 31, 2013 and $21.42 per share at June 30, 2012. At June 30, 2013, the Corporation's tangible book value was $17.53 per share, compared to $17.34 per share at March 31, 2013 and $17.17 per share at June 30, 2012.
The credit quality of the Corporation's loan portfolio continued to show significant improvement during the second quarter of 2013, with nonperforming loans declining $7.1 million, or 8.2%. 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 $79.3 million at June 30, 2013, compared to $86.4 million at March 31, 2013 and $92.8 million at June 30, 2012. At June 30, 2013, nonperforming loans as a percentage of total loans were 1.83%, compared to 2.06% at March 31, 2013 and 2.34% at June 30, 2012. The reduction in nonperforming loans during the three and twelve months ended June 30, 2013 was attributable to a combination of improving economic conditions and reduced loan charge-offs.
Other real estate and repossessed assets declined $4.5 million, or 25%, during the second quarter of 2013 to $13.7 million at June 30, 2013, compared to $18.2 million at March 31, 2013 and $23.5 million at June 30, 2012. The reduction in other real estate and repossessed assets during the three and twelve months ended June 30, 2013 was attributable to sales of other real estate properties due partially to improving economic conditions.
At June 30, 2013, the allowance for loan losses of the originated loan portfolio was $81.7 million, or 2.05% of originated loans, compared to $82.3 million, or 2.16% of originated loans, at March 31, 2013 and $84.5 million, or 2.40% of originated loans, at June 30, 2012. The allowance for loan losses of the originated loan portfolio as a percentage of nonperforming loans was 103% at June 30, 2013, compared to 95% at March 31, 2013 and 91% at June 30, 2012. The allowance for loan losses of the acquired loan portfolio was $0.5 million at both June 30, 2013 and March 31, 2013, compared to $2.2 million at June 30, 2012. Management believes that the Corporation's acquired loan portfolio totaling $345 million at June 30, 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 June 30, 2013, the Corporation had total assets of $5.8 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," "look," "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.
3
Chemical Financial Corporation Announces Second Quarter Operating Results
Consolidated Statements of Financial Position (Unaudited)
Chemical Financial Corporation
June 30, 2013 | March 31, 2013 | December 31, 2012 | June 30, 2012 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Cash and cash due from banks | $ | 137,586 | $ | 101,501 | $ | 142,467 | $ | 122,010 | ||||||||
Interest-bearing deposits with the Federal Reserve Bank | 69,371 | 477,225 | 513,668 | 119,813 | ||||||||||||
Total cash and cash equivalents | 206,957 | 578,726 | 656,135 | 241,823 | ||||||||||||
Investment securities: | ||||||||||||||||
Available-for-sale | 734,052 | 703,622 | 586,809 | 680,231 | ||||||||||||
Held-to-maturity | 274,715 | 257,749 | 229,977 | 213,034 | ||||||||||||
Total investment securities | 1,008,767 | 961,371 | 816,786 | 893,265 | ||||||||||||
Loans held-for-sale | 9,180 | 14,850 | 17,665 | 12,625 | ||||||||||||
Loans: | ||||||||||||||||
Commercial | 1,091,894 | 1,038,115 | 1,002,722 | 915,352 | ||||||||||||
Commercial real estate | 1,172,347 | 1,162,383 | 1,161,861 | 1,119,655 | ||||||||||||
Real estate construction and land development | 100,629 | 98,007 | 100,237 | 94,227 | ||||||||||||
Residential mortgage | 898,816 | 872,454 | 883,835 | 873,214 | ||||||||||||
Consumer installment and home equity | 1,072,185 | 1,014,302 | 1,019,080 | 959,894 | ||||||||||||
Total loans | 4,335,871 | 4,185,261 | 4,167,735 | 3,962,342 | ||||||||||||
Allowance for loan losses | (82,184 | ) | (82,834 | ) | (84,491 | ) | (86,711 | ) | ||||||||
Net loans | 4,253,687 | 4,102,427 | 4,083,244 | 3,875,631 | ||||||||||||
Premises and equipment | 73,379 | 73,501 | 75,458 | 67,382 | ||||||||||||
Goodwill | 120,164 | 120,164 | 120,164 | 113,414 | ||||||||||||
Other intangible assets | 14,354 | 14,902 | 15,388 | 10,607 | ||||||||||||
Interest receivable and other assets | 119,723 | 124,587 | 132,412 | 137,034 | ||||||||||||
Total Assets | $ | 5,806,211 | $ | 5,990,528 | $ | 5,917,252 | $ | 5,351,781 | ||||||||
Liabilities | ||||||||||||||||
Deposits: | ||||||||||||||||
Noninterest-bearing | $ | 1,107,453 | $ | 1,086,986 | $ | 1,085,857 | $ | 974,412 | ||||||||
Interest-bearing | 3,706,732 | 3,920,372 | 3,835,586 | 3,409,132 | ||||||||||||
Total deposits | 4,814,185 | 5,007,358 | 4,921,443 | 4,383,544 | ||||||||||||
Interest payable and other liabilities | 35,460 | 30,931 | 54,716 | 41,323 | ||||||||||||
Short-term borrowings | 346,995 | 347,484 | 310,463 | 299,748 | ||||||||||||
Federal Home Loan Bank (FHLB) advances | — | — | 34,289 | 38,177 | ||||||||||||
Total liabilities | 5,196,640 | 5,385,773 | 5,320,911 | 4,762,792 | ||||||||||||
Shareholders' Equity | ||||||||||||||||
Preferred stock, no par value per share | — | — | — | — | ||||||||||||
Common stock, $1 par value per share | 27,538 | 27,532 | 27,499 | 27,497 | ||||||||||||
Additional paid-in capital | 434,479 | 433,648 | 433,195 | 432,098 | ||||||||||||
Retained earnings | 182,619 | 174,209 | 166,766 | 153,558 | ||||||||||||
Accumulated other comprehensive loss | (35,065 | ) | (30,634 | ) | (31,119 | ) | (24,164 | ) | ||||||||
Total shareholders' equity | 609,571 | 604,755 | 596,341 | 588,989 | ||||||||||||
Total Liabilities and Shareholders' Equity | $ | 5,806,211 | $ | 5,990,528 | $ | 5,917,252 | $ | 5,351,781 | ||||||||
4
Chemical Financial Corporation Announces Second Quarter Operating Results
Consolidated Statements of Income (Unaudited)
Chemical Financial Corporation
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Interest Income | ||||||||||||||||
Interest and fees on loans | $ | 48,029 | $ | 47,894 | $ | 95,934 | $ | 96,150 | ||||||||
Interest on investment securities: | ||||||||||||||||
Taxable | 2,585 | 2,587 | 5,023 | 5,152 | ||||||||||||
Tax-exempt | 1,587 | 1,465 | 3,151 | 2,950 | ||||||||||||
Dividends on nonmarketable equity securities | 400 | 380 | 551 | 510 | ||||||||||||
Interest on deposits with the Federal Reserve Bank | 180 | 141 | 501 | 369 | ||||||||||||
Total interest income | 52,781 | 52,467 | 105,160 | 105,131 | ||||||||||||
Interest Expense | ||||||||||||||||
Interest on deposits | 4,264 | 5,659 | 8,830 | 11,761 | ||||||||||||
Interest on short-term borrowings | 121 | 108 | 235 | 212 | ||||||||||||
Interest on FHLB advances | — | 254 | 47 | 517 | ||||||||||||
Total interest expense | 4,385 | 6,021 | 9,112 | 12,490 | ||||||||||||
Net Interest Income | 48,396 | 46,446 | 96,048 | 92,641 | ||||||||||||
Provision for loan losses | 3,000 | 4,000 | 6,000 | 9,000 | ||||||||||||
Net interest income after provision for loan losses | 45,396 | 42,446 | 90,048 | 83,641 | ||||||||||||
Noninterest Income | ||||||||||||||||
Service charges and fees on deposit accounts | 5,535 | 5,013 | 10,730 | 9,518 | ||||||||||||
Wealth management revenue | 3,879 | 3,169 | 7,324 | 6,090 | ||||||||||||
Other charges and fees for customer services | 4,303 | 3,684 | 8,954 | 7,049 | ||||||||||||
Mortgage banking revenue | 1,649 | 1,417 | 3,661 | 2,602 | ||||||||||||
Gain on sale of investment securities | 257 | — | 1,104 | — | ||||||||||||
Gain on sale of merchant card services | — | — | — | 1,280 | ||||||||||||
Other | 325 | 661 | 414 | 730 | ||||||||||||
Total noninterest income | 15,948 | 13,944 | 32,187 | 27,269 | ||||||||||||
Operating Expenses | ||||||||||||||||
Salaries, wages and employee benefits | 24,628 | 20,539 | 47,997 | 41,108 | ||||||||||||
Occupancy | 3,380 | 2,973 | 7,043 | 6,127 | ||||||||||||
Equipment and software | 3,447 | 3,127 | 6,897 | 6,245 | ||||||||||||
Other | 9,586 | 9,560 | 21,061 | 19,690 | ||||||||||||
Total operating expenses | 41,041 | 36,199 | 82,998 | 73,170 | ||||||||||||
Income before income taxes | 20,303 | 20,191 | 39,237 | 37,740 | ||||||||||||
Federal income tax expense | 6,100 | 6,325 | 11,800 | 11,500 | ||||||||||||
Net Income | $ | 14,203 | $ | 13,866 | $ | 27,437 | $ | 26,240 | ||||||||
Net Income Per Common Share: | ||||||||||||||||
Basic | $ | 0.52 | $ | 0.50 | $ | 1.00 | $ | 0.95 | ||||||||
Diluted | 0.51 | 0.50 | 0.99 | 0.95 | ||||||||||||
Key Ratios: | ||||||||||||||||
Return on average assets | 0.97 | % | 1.04 | % | 0.94 | % | 0.98 | % | ||||||||
Return on average shareholders' equity | 9.4 | % | 9.6 | % | 9.2 | % | 9.1 | % | ||||||||
Net interest margin | 3.60 | % | 3.80 | % | 3.58 | % | 3.78 | % | ||||||||
Efficiency ratio | 63.3 | % | 58.7 | % | 63.8 | % | 60.4 | % | ||||||||
5
Chemical Financial Corporation Announces Second Quarter Operating Results
Financial Summary (Unaudited)
Chemical Financial Corporation
(Dollars in Thousands)
Three Months Ended | ||||||||||||||||||||||||
June 30, 2013 | March 31, 2013 | Dec 31, 2012 | Sept 30, 2012 | June 30, 2012 | March 31, 2012 | |||||||||||||||||||
Average Balances | ||||||||||||||||||||||||
Total assets | $ | 5,859,822 | $ | 5,924,820 | $ | 5,576,422 | $ | 5,433,491 | $ | 5,360,598 | $ | 5,396,420 | ||||||||||||
Total interest-earning assets | 5,530,262 | 5,579,789 | 5,251,531 | 5,105,101 | 5,044,629 | 5,061,882 | ||||||||||||||||||
Total loans | 4,249,708 | 4,152,570 | 4,077,918 | 3,987,928 | 3,901,321 | 3,824,604 | ||||||||||||||||||
Total deposits | 4,878,214 | 4,950,956 | 4,590,370 | 4,464,582 | 4,383,628 | 4,416,273 | ||||||||||||||||||
Total interest-bearing liabilities | 4,126,751 | 4,221,638 | 3,926,582 | 3,823,954 | 3,817,753 | 3,903,986 | ||||||||||||||||||
Total shareholders' equity | 606,607 | 599,406 | 600,794 | 591,683 | 582,873 | 574,261 | ||||||||||||||||||
Key Ratios (annualized where applicable) | ||||||||||||||||||||||||
Net interest margin (taxable equivalent basis) | 3.60 | % | 3.54 | % | 3.74 | % | 3.76 | % | 3.80 | % | 3.76 | % | ||||||||||||
Efficiency ratio | 63.3 | % | 64.4 | % | 63.0 | % | 59.3 | % | 58.7 | % | 62.1 | % | ||||||||||||
Return on average assets | 0.97 | % | 0.91 | % | 0.83 | % | 0.96 | % | 1.04 | % | 0.92 | % | ||||||||||||
Return on average shareholders' equity | 9.4 | % | 9.0 | % | 7.7 | % | 8.8 | % | 9.6 | % | 8.7 | % | ||||||||||||
Average shareholders' equity as a percent of average assets | 10.4 | % | 10.1 | % | 10.8 | % | 10.9 | % | 10.9 | % | 10.6 | % | ||||||||||||
Capital ratios (period end): | ||||||||||||||||||||||||
Tangible shareholders' equity as a percent of total assets | 8.5 | % | 8.1 | % | 8.1 | % | 8.8 | % | 9.0 | % | 8.7 | % | ||||||||||||
Total risk-based capital ratio | 13.1 | % | 13.3 | % | 13.2 | % | 13.6 | % | 13.6 | % | 13.7 | % | ||||||||||||
June 30, 2013 | March 31, 2013 | Dec 31, 2012 | Sept 30, 2012 | June 30, 2012 | March 31, 2012 | |||||||||||||||||||
Credit Quality Statistics | ||||||||||||||||||||||||
Originated Loans | $ | 3,990,633 | $ | 3,810,989 | $ | 3,775,140 | $ | 3,606,547 | $ | 3,515,110 | $ | 3,370,279 | ||||||||||||
Acquired Loans | 345,238 | 374,272 | 392,595 | 412,612 | 447,232 | 472,819 | ||||||||||||||||||
Nonperforming Assets: | ||||||||||||||||||||||||
Nonperforming loans | 79,342 | 86,417 | 90,854 | 90,877 | 92,811 | 98,548 | ||||||||||||||||||
Other real estate and repossessed assets (ORE) | 13,659 | 18,194 | 18,469 | 19,467 | 23,509 | 25,944 | ||||||||||||||||||
Total nonperforming assets | 93,001 | 104,611 | 109,323 | 110,344 | 116,320 | 124,492 | ||||||||||||||||||
Performing troubled debt restructurings | 32,657 | 30,723 | 31,369 | 30,406 | 26,383 | 27,177 | ||||||||||||||||||
Allowance for loan losses-originated as a percent of: | ||||||||||||||||||||||||
Total originated loans | 2.05 | % | 2.16 | % | 2.22 | % | 2.33 | % | 2.40 | % | 2.54 | % | ||||||||||||
Nonperforming loans | 103 | % | 95 | % | 92 | % | 93 | % | 91 | % | 87 | % | ||||||||||||
Nonperforming loans as a percent of total loans | 1.83 | % | 2.06 | % | 2.18 | % | 2.26 | % | 2.34 | % | 2.56 | % | ||||||||||||
Nonperforming assets as a percent of: | ||||||||||||||||||||||||
Total loans plus ORE | 2.14 | % | 2.49 | % | 2.61 | % | 2.73 | % | 2.92 | % | 3.22 | % | ||||||||||||
Total assets | 1.60 | % | 1.75 | % | 1.85 | % | 1.98 | % | 2.17 | % | 2.28 | % | ||||||||||||
Net loan charge-offs (year-to-date): | ||||||||||||||||||||||||
Originated | $ | 8,307 | $ | 4,657 | $ | 20,142 | $ | 14,939 | $ | 10,622 | $ | 5,548 | ||||||||||||
Acquired | — | — | 2,200 | 2,200 | — | — | ||||||||||||||||||
Total loan charge-offs (year-to-date) | 8,307 | 4,657 | 22,342 | 17,139 | 10,622 | 5,548 | ||||||||||||||||||
Net loan charge-offs as a percent of average loans (year-to-date, annualized) | 0.40 | % | 0.45 | % | 0.57 | % | 0.59 | % | 0.55 | % | 0.58 | % | ||||||||||||
June 30, 2013 | March 31, 2013 | Dec 31, 2012 | Sept 30, 2012 | June 30, 2012 | March 31, 2012 | |||||||||||||||||||
Additional Data - Intangibles | ||||||||||||||||||||||||
Goodwill | $ | 120,164 | $ | 120,164 | $ | 120,164 | $ | 113,414 | $ | 113,414 | $ | 113,414 | ||||||||||||
Core deposit intangibles (CDI) | 10,933 | 11,417 | 11,910 | 6,777 | 7,144 | 7,512 | ||||||||||||||||||
Mortgage servicing rights (MSR) | 3,421 | 3,485 | 3,478 | 3,466 | 3,463 | 3,427 | ||||||||||||||||||
Amortization of CDI (quarter only) | 484 | 493 | 467 | 367 | 368 | 367 | ||||||||||||||||||
6
Chemical Financial Corporation Announces Second Quarter Operating Results
Average Balances, Tax Equivalent Interest and Effective Yields and Rates (Unaudited)*
Chemical Financial Corporation
Three Months Ended June 30, 2013 | |||||||||||
Average Balance | Tax Equivalent Interest | Effective Yield/Rate | |||||||||
Assets | (Dollars in thousands) | ||||||||||
Interest-earning assets: | |||||||||||
Loans** | $ | 4,264,009 | $ | 48,510 | 4.56 | % | |||||
Taxable investment securities | 734,767 | 2,585 | 1.41 | ||||||||
Tax-exempt investment securities | 229,773 | 2,423 | 4.22 | ||||||||
Other interest-earning assets | 25,572 | 400 | 6.27 | ||||||||
Interest-bearing deposits with the Federal Reserve Bank | 276,141 | 180 | 0.26 | ||||||||
Total interest-earning assets | 5,530,262 | 54,098 | 3.92 | ||||||||
Less: allowance for loan losses | 83,850 | ||||||||||
Other Assets: | |||||||||||
Cash and cash due from banks | 114,988 | ||||||||||
Premises and equipment | 73,802 | ||||||||||
Interest receivable and other assets | 224,620 | ||||||||||
Total assets | $ | 5,859,822 | |||||||||
Liabilities and shareholders' equity | |||||||||||
Interest-bearing liabilities: | |||||||||||
Interest-bearing demand deposits | $ | 1,032,580 | $ | 231 | 0.09 | % | |||||
Savings deposits | 1,353,769 | 301 | 0.09 | ||||||||
Time deposits | 1,398,716 | 3,732 | 1.07 | ||||||||
Short-term borrowings | 341,686 | 121 | 0.14 | ||||||||
FHLB advances | — | — | — | ||||||||
Total interest-bearing liabilities | 4,126,751 | 4,385 | 0.43 | ||||||||
Noninterest-bearing deposits | 1,093,149 | — | — | ||||||||
Total deposits and borrowed funds | 5,219,900 | 4,385 | 0.34 | ||||||||
Interest payable and other liabilities | 33,315 | ||||||||||
Shareholders' equity | 606,607 | ||||||||||
Total liabilities and shareholders' equity | $ | 5,859,822 | |||||||||
Net Interest Spread (Average yield earned on interest-earning assets minus average rate paid on interest-bearing liabilities) | 3.49 | % | |||||||||
Net Interest Income (FTE) | $ | 49,713 | |||||||||
Net Interest Margin (Net Interest Income (FTE) divided by total average interest-earning assets) | 3.60 | % | |||||||||
* | 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. |
7
Chemical Financial Corporation Announces Second Quarter Operating Results
Nonperforming Assets (Unaudited)
Chemical Financial Corporation
June 30, 2013 | March 31, 2013 | Dec 31, 2012 | Sept 30, 2012 | June 30, 2012 | March 31, 2012 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Nonperforming Loans: | |||||||||||||||||||||||||
Nonaccrual loans: | |||||||||||||||||||||||||
Commercial | $ | 11,052 | $ | 12,186 | $ | 14,601 | $ | 15,217 | $ | 12,673 | $ | 11,443 | |||||||||||||
Commercial real estate | 28,498 | 35,849 | 37,660 | 41,311 | 41,691 | 46,870 | |||||||||||||||||||
Real estate construction | 183 | 168 | 1,217 | 933 | 408 | 61 | |||||||||||||||||||
Land development | 3,434 | 4,105 | 4,184 | 5,731 | 3,077 | 3,748 | |||||||||||||||||||
Residential mortgage | 9,241 | 10,407 | 10,164 | 11,307 | 12,613 | 12,687 | |||||||||||||||||||
Consumer installment | 552 | 699 | 739 | 876 | 1,182 | 1,278 | |||||||||||||||||||
Home equity | 3,064 | 2,837 | 2,733 | 2,949 | 2,812 | 3,066 | |||||||||||||||||||
Total nonaccrual loans | 56,024 | 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 | 1 | 4 | — | 273 | 300 | 1,005 | |||||||||||||||||||
Commercial real estate | 78 | 177 | 87 | 247 | 269 | 75 | |||||||||||||||||||
Real estate construction | — | — | — | — | — | — | |||||||||||||||||||
Land development | — | — | — | — | — | — | |||||||||||||||||||
Residential mortgage | 164 | 196 | 1,503 | 431 | 840 | 333 | |||||||||||||||||||
Consumer installment | — | — | — | — | — | — | |||||||||||||||||||
Home equity | 689 | 874 | 769 | 1,147 | 1,157 | 1,233 | |||||||||||||||||||
Total accruing loans contractually past due 90 days or more as to interest or principal payments | 932 | 1,251 | 2,359 | 2,098 | 2,566 | 2,646 | |||||||||||||||||||
Nonperforming troubled debt restructurings: | |||||||||||||||||||||||||
Commercial loan portfolio | 19,140 | 14,587 | 13,876 | 6,553 | 11,691 | 11,258 | |||||||||||||||||||
Consumer loan portfolio | 3,246 | 4,328 | 3,321 | 3,902 | 4,098 | 5,491 | |||||||||||||||||||
Total nonperforming troubled debt restructurings | 22,386 | 18,915 | 17,197 | 10,455 | 15,789 | 16,749 | |||||||||||||||||||
Total nonperforming loans | 79,342 | 86,417 | 90,854 | 90,877 | 92,811 | 98,548 | |||||||||||||||||||
Other real estate and repossessed assets | 13,659 | 18,194 | 18,469 | 19,467 | 23,509 | 25,944 | |||||||||||||||||||
Total nonperforming assets | $ | 93,001 | $ | 104,611 | $ | 109,323 | $ | 110,344 | $ | 116,320 | $ | 124,492 | |||||||||||||
8
Chemical Financial Corporation Announces Second Quarter Operating Results
Summary of Loan Loss Experience (Unaudited)
Chemical Financial Corporation
Three Months Ended | ||||||||||||||||||||||||
June 30, 2013 | March 31, 2013 | Dec 31, 2012 | Sept 30, 2012 | June 30, 2012 | March 31, 2012 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Allowance for loan losses - originated loan portfolio | ||||||||||||||||||||||||
Allowance for loan losses - originated, at beginning of period | $ | 82,334 | $ | 83,991 | $ | 84,194 | $ | 84,511 | $ | 85,585 | $ | 86,733 | ||||||||||||
Provision for loan losses - originated | 3,000 | 3,000 | 5,000 | 4,000 | 4,000 | 4,400 | ||||||||||||||||||
Loans charged off: | ||||||||||||||||||||||||
Commercial | (703 | ) | (1,359 | ) | (1,623 | ) | (551 | ) | (974 | ) | (1,079 | ) | ||||||||||||
Commercial real estate | (2,453 | ) | (2,060 | ) | (1,532 | ) | (1,952 | ) | (2,178 | ) | (2,268 | ) | ||||||||||||
Real estate construction | — | — | (70 | ) | — | — | — | |||||||||||||||||
Land development | (65 | ) | (97 | ) | (1,168 | ) | (51 | ) | (45 | ) | (32 | ) | ||||||||||||
Residential mortgage | (1,060 | ) | (734 | ) | (1,224 | ) | (1,357 | ) | (1,140 | ) | (1,717 | ) | ||||||||||||
Consumer installment | (895 | ) | (849 | ) | (1,222 | ) | (1,050 | ) | (1,259 | ) | (1,074 | ) | ||||||||||||
Home equity | (185 | ) | (375 | ) | (282 | ) | (435 | ) | (576 | ) | (377 | ) | ||||||||||||
Total loan charge-offs | (5,361 | ) | (5,474 | ) | (7,121 | ) | (5,396 | ) | (6,172 | ) | (6,547 | ) | ||||||||||||
Recoveries of loans previously charged off: | ||||||||||||||||||||||||
Commercial | 644 | 160 | 278 | 135 | 140 | 191 | ||||||||||||||||||
Commercial real estate | 667 | 50 | 1,202 | 325 | 298 | 421 | ||||||||||||||||||
Real estate construction | — | — | — | — | — | — | ||||||||||||||||||
Land development | 15 | 1 | — | — | — | 2 | ||||||||||||||||||
Residential mortgage | 37 | 161 | 104 | 237 | 199 | 22 | ||||||||||||||||||
Consumer installment | 321 | 402 | 305 | 359 | 387 | 345 | ||||||||||||||||||
Home equity | 27 | 43 | 29 | 23 | 74 | 18 | ||||||||||||||||||
Total loan recoveries | 1,711 | 817 | 1,918 | 1,079 | 1,098 | 999 | ||||||||||||||||||
Net loan charge-offs - originated | (3,650 | ) | (4,657 | ) | (5,203 | ) | (4,317 | ) | (5,074 | ) | (5,548 | ) | ||||||||||||
Allowance for loan losses - originated, at end of period | 81,684 | 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 | 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 | 500 | 2,200 | 2,200 | ||||||||||||||||||
Total allowance for loan losses | $ | 82,184 | $ | 82,834 | $ | 84,491 | $ | 84,694 | $ | 86,711 | $ | 87,785 | ||||||||||||
Net loan charge-offs as a percent of average loans (quarter only, annualized) | 0.34 | % | 0.45 | % | 0.51 | % | 0.65 | % | 0.52 | % | 0.58 | % | ||||||||||||
9
Chemical Financial Corporation Announces Second Quarter Operating Results
Selected Quarterly Information (Unaudited)
Chemical Financial Corporation
2nd Qtr. 2013 | 1st Qtr. 2013 | 4th Qtr. 2012 | 3rd Qtr. 2012 | 2nd Qtr. 2012 | 1st Qtr. 2012 | ||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||||
Summary of Operations | |||||||||||||||||||||||||
Interest income | $ | 52,781 | $ | 52,379 | $ | 53,126 | $ | 52,501 | $ | 52,467 | $ | 52,664 | |||||||||||||
Interest expense | 4,385 | 4,727 | 5,132 | 5,591 | 6,021 | 6,469 | |||||||||||||||||||
Net interest income | 48,396 | 47,652 | 47,994 | 46,910 | 46,446 | 46,195 | |||||||||||||||||||
Provision for loan losses | 3,000 | 3,000 | 5,000 | 4,500 | 4,000 | 5,000 | |||||||||||||||||||
Net interest income after provision for loan losses | 45,396 | 44,652 | 42,994 | 42,410 | 42,446 | 41,195 | |||||||||||||||||||
Noninterest income | 15,948 | 16,239 | 14,676 | 12,719 | 13,944 | 13,325 | |||||||||||||||||||
Operating expenses | 41,041 | 41,957 | 42,008 | 36,723 | 36,199 | 36,971 | |||||||||||||||||||
Income before income taxes | 20,303 | 18,934 | 15,662 | 18,406 | 20,191 | 17,549 | |||||||||||||||||||
Federal income tax expense | 6,100 | 5,700 | 4,000 | 5,300 | 6,325 | 5,175 | |||||||||||||||||||
Net income | $ | 14,203 | $ | 13,234 | $ | 11,662 | $ | 13,106 | $ | 13,866 | $ | 12,374 | |||||||||||||
Net interest margin | 3.60 | % | 3.54 | % | 3.74 | % | 3.76 | % | 3.80 | % | 3.76 | % | |||||||||||||
Per Common Share Data | |||||||||||||||||||||||||
Net income: | |||||||||||||||||||||||||
Basic | $ | 0.52 | $ | 0.48 | $ | 0.42 | $ | 0.48 | $ | 0.50 | $ | 0.45 | |||||||||||||
Diluted | 0.51 | 0.48 | 0.42 | 0.48 | 0.50 | 0.45 | |||||||||||||||||||
Cash dividends declared | 0.21 | 0.21 | 0.21 | 0.21 | 0.20 | 0.20 | |||||||||||||||||||
Book value - period-end | 22.14 | 21.97 | 21.69 | 21.75 | 21.42 | 21.10 | |||||||||||||||||||
Tangible book value - period-end | 17.53 | 17.34 | 17.03 | 17.52 | 17.17 | 16.84 | |||||||||||||||||||
Market value - period-end | 25.99 | 26.38 | 23.76 | 24.20 | 21.50 | 23.44 | |||||||||||||||||||
10