Attached files
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| 8-K - 8-K - TCF FINANCIAL CORP | chfc8-k2013q3.htm |
Exhibit 99.1
For further information:
David B. Ramaker, CEO
Lori A. Gwizdala, CFO
989-839-5350
Chemical Financial Corporation Reports Third Quarter of 2013 Results
MIDLAND, MI, October 28, 2013 -- -- Chemical Financial Corporation (NASDAQ:CHFC) today announced 2013 third quarter net income of $15.0 million, or $0.53 per diluted share, compared to 2013 second quarter net income of $14.2 million, or $0.51 per diluted share, and 2012 third quarter net income of $13.1 million, or $0.48 per diluted share. For the nine months ended September 30, 2013, net income was $42.4 million, or $1.53 per diluted share, an increase of 7.0% on a diluted per share basis compared to net income for the nine months ended September 30, 2012 of $39.3 million, or $1.43 per diluted share.
As previously announced, on September 18, 2013 the Corporation completed an underwritten public offering of 2,213,750 shares of its common stock, including 288,750 shares of common stock that were issued and sold upon the exercise in full of the underwriters' over-allotment option, at a price of $26.00 per share to the public. After the underwriting discount and other offering related expenses, the Corporation netted proceeds of approximately $54 million from the offering. The Corporation intends to use the net proceeds from the offering for general corporate purposes, which may include funding loan growth and long-term strategic opportunities that may arise in the future.
"Strong loan growth and cost discipline drove another solid earnings performance in the third quarter, with net income up over 5% from last quarter and over 14% from the third quarter of 2012. We are experiencing broad-based loan growth across all portfolio segments, attributable to a gradually improving economy and competitive gains, as we have continued to solidify Chemical Bank’s position as the financial institution of choice in the Michigan markets we serve. At the same time, asset quality continues to improve, and is reflected in lower credit-related costs, lower charge-offs, and improving portfolio metrics,” said David B. Ramaker, Chairman, Chief Executive Officer and President. "We were pleased by the market’s reception to our recently completed public stock offering and will continue to prudently deploy the Corporation’s capital on behalf of our shareholders. To that end, we continue to believe we are well positioned to take advantage of consolidation in Michigan’s banking industry,” Ramaker added.
Net income of $15.0 million in the third quarter of 2013 was $0.8 million, or 5.6%, higher than the second quarter of 2013, with higher net interest income and lower operating expenses in the third quarter of 2013 partially offset by lower noninterest income. Net income in the third quarter of 2013 was $1.9 million, or 14.4%, higher than the third 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's return on average assets was 1.00% during the third quarter of 2013, compared to 0.97% in the second quarter of 2013 and 0.96% in the third quarter of 2012. The Corporation's return on average shareholders' equity was 9.6% in the third quarter of 2013, compared to 9.4% in the second quarter of 2013 and 8.8% in the third quarter of 2012.
The net interest margin (on a tax-equivalent basis) was 3.58% in the third quarter of 2013, compared to 3.60% in the second quarter of 2013 and 3.76% in the third quarter of 2012. The slight decrease in the net interest margin in the third quarter of 2013, compared to the second quarter of 2013, was attributable to an increase in total assets resulting from seasonal deposits. The decrease in the net interest margin in the third quarter of 2013, compared to the third quarter of 2012, was primarily attributable to the acquisition of 21 branch banking offices in December 2012 (branch acquisition transaction), in which the Corporation acquired $339 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.
1
Net interest income was $49.3 million in the third quarter of 2013, $0.9 million higher than the second quarter of 2013 and $2.4 million higher than the third quarter of 2012. The increase in net interest income in the third quarter of 2013 over the second quarter of 2013 was largely attributable to continued loan growth in the third quarter of 2013. Total loans grew $187 million, or 4.3%, in the third quarter of 2013. The increase in net interest income in the third quarter of 2013 over the third quarter of 2012 was also largely attributable to loan growth of $504 million, or 12.5%, over the twelve months ended September 30, 2013.
The provision for loan losses was $3.0 million in both the third quarter of 2013 and the second quarter of 2013, compared to $4.5 million in the third quarter of 2012. The provision for loan losses in the third quarter of 2013 was maintained at the same level as the second quarter of 2013, despite continued improvement in the credit quality of the loan portfolio, due to the significant growth in the loan portfolio during the third quarter. The lower provision for loan losses in the third quarter of 2013, as compared to the third quarter of 2012, was attributable to a combination of lower loan charge-offs and continued improvement in the credit quality of the loan portfolio. Net loan charge-offs were $3.7 million, or 0.33% of average loans, in the third quarter of 2013, compared to $3.7 million, or 0.34% of average loans, in the second quarter of 2013 and $6.5 million, or 0.65% of average loans, in the third quarter of 2012.
Noninterest income was $14.6 million in the third quarter of 2013, compared to $15.9 million in the second quarter of 2013 and $12.7 million in the third quarter of 2012. Noninterest income in the third quarter of 2013 and the second quarter of 2013 included nonrecurring income of $0.2 million and $0.5 million, respectively. Excluding this nonrecurring income, noninterest income in the third quarter of 2013 was $1.0 million lower than the second quarter of 2013, with the decrease primarily attributable to a $0.6 million decline in mortgage banking revenue and a $0.5 million decline in wealth management revenue. Noninterest income, excluding nonrecurring income, in the third quarter of 2013 was $1.7 million higher than the third quarter of 2012, with the increase attributable to increases across all major categories of noninterest income other than mortgage banking revenue, that 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.
Mortgage banking revenue of $1.0 million in the third quarter of 2013 was $0.6 million, or 37%, lower than the second quarter of 2013 and $0.4 million, or 29%, lower than the third quarter of 2012. The decreases in mortgage banking revenue in the third quarter of 2013, compared to both the second quarter of 2013 and the third quarter of 2012, were primarily attributable to declines in the volume of loans sold in the secondary market. The Corporation sold $45 million of residential mortgage loans in the secondary market in the third quarter of 2013, compared to $62 million in the second quarter of 2013 and $71 million in the third quarter of 2012. While there was a decline in the volume of loans sold in the secondary market, the Corporation experienced an increase in residential mortgage loan originations that it retained in its loan portfolio, with $98 million of residential mortgage loan originations retained in the third quarter of 2013, compared to $85 million in the second quarter of 2013 and $63 million in the third quarter of 2012.
Operating expenses were $39.5 million in the third quarter of 2013, compared to $41.0 million in the second quarter of 2013 and $36.7 million in the third quarter of 2012. The decrease in operating expenses of $1.5 million in the third quarter of 2013, compared to the second quarter of 2013, was primarily attributable to a $0.7 million decrease in credit-related expenses and decreases of $0.4 million in both employee benefit and advertising expenses. The decrease in credit-related expenses of $0.7 million in the third quarter of 2013, compared to the second quarter of 2013, was attributable to a combination of lower write-downs and lower costs to maintain other real estate properties. Operating expenses in the third quarter of 2012 included $0.6 million of nonrecurring costs associated with the branch acquisition transaction. Excluding these nonrecurring costs, the increase in operating expenses of $3.4 million in the third quarter of 2013 over the third 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 expenses, all of which were partially offset by lower credit-related expenses.
The Corporation's efficiency ratio was 61.0% in the third quarter of 2013, 63.3% in the second quarter of 2013 and 59.3% in the third quarter of 2012.
2
Total assets were $6.26 billion at September 30, 2013, compared to $5.81 billion at June 30, 2013 and $5.58 billion at September 30, 2012. The increase in total assets during the twelve months ended September 30, 2013 was attributable to a combination of the branch acquisition transaction, which added $404 million in assets on the acquisition date, and an increase in deposits that partially funded loan growth. The Corporation continues to keep its excess liquidity at the Federal Reserve Bank (FRB), with $357 million in balances held at the FRB at September 30, 2013, compared to $69 million at June 30, 2013 and $315 million at September 30, 2012. The increase in FRB balances during the three months ended September 30, 2013 was largely attributable to a seasonal increase in municipal deposits, in addition to the net proceeds raised from the Corporation's public stock offering.
Total loans were $4.52 billion at September 30, 2013, up from $4.34 billion at June 30, 2013 and $4.02 billion at September 30, 2012. During the three and twelve months ended September 30, 2013, total loans increased $187 million, or 4.3%, and $504 million, or 12.5%, respectively. The increases in loans during the three and twelve months ended September 30, 2013 occurred across all loan categories and were largely attributable to a combination of improving economic conditions and increased market share. The increase in loans of $187 million during the third quarter of 2013 was attributable to increases in commercial loans of $36.2 million, or 3.3%, commercial real estate loans of $43.3 million, or 3.7%, real estate construction and land development loans of $1.4 million, or 1.4%, residential real estate loans of $44.0 million, or 4.9%, and consumer installment and home equity loans of $61.9 million, or 5.8%. The average yield on the loan portfolio was 4.44% in the third quarter of 2013, compared to 4.56% in the second quarter of 2013 and 4.86% in the third quarter of 2012.
Investment securities were $988 million at September 30, 2013, compared to $1.01 billion at June 30, 2013 and $868 million at September 30, 2012. The average yield of the investment securities portfolio was 2.05% in the third quarter of 2013, compared to 2.08% in the second quarter of 2013 and 2.13% in the third quarter of 2012.
Total deposits were $5.19 billion at September 30, 2013, compared to $4.81 billion at June 30, 2013 and $4.60 billion at September 30, 2012. The increase in total deposits during the third quarter of 2013 was largely attributable to a seasonal increase in municipal deposits. The Corporation experienced an increase in total deposits of $592 million, or 12.9%, during the twelve months ended September 30, 2013, with the increase largely attributable to the branch acquisition transaction in which the Corporation acquired $404 million of deposits on the date of acquisition. The Corporation also experienced organic deposit growth of $247 million during the twelve months ended September 30, 2013, which was partially offset by the payoff of maturing brokered deposits acquired in the acquisition of O.A.K. Financial Corporation in 2010. 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 0.32% in the third quarter of 2013 from 0.34% in the second quarter of 2013 and 0.46% in the third quarter of 2012.
At September 30, 2013, the Corporation's tangible equity to assets ratio and total risk-based capital ratio were 8.9% and 14.2%, respectively, compared to 8.5% and 13.1%, respectively, at June 30, 2013 and 8.8% and 13.6%, respectively, at September 30, 2012. At September 30, 2013, the Corporation's book value was $22.61 per share, compared to $22.14 per share at June 30, 2013 and $21.75 per share at September 30, 2012. At September 30, 2013, the Corporation's tangible book value was $18.36 per share, compared to $17.53 per share at June 30, 2013 and $17.52 per share at September 30, 2012.
The credit quality of the Corporation's loan portfolio continued its improvement during the third quarter of 2013, with nonperforming loans declining $3.5 million, or 4.4%. 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 $75.8 million at September 30, 2013, compared to $79.3 million at June 30, 2013 and $90.9 million at September 30, 2012. Nonperforming loans comprised 1.68% of total loans at September 30, 2013, compared to 1.83% at June 30, 2013 and 2.26% at September 30, 2012. The reduction in nonperforming loans during the three and twelve months ended September 30, 2013 was attributable to a combination of improving economic conditions and loan charge-offs.
Other real estate and repossessed assets declined $1.7 million, or 11.9%, during the third quarter of 2013 to $12.0 million at September 30, 2013, compared to $13.7 million at June 30, 2013 and $19.5 million at September 30, 2012. The reduction in other real estate and repossessed assets during the three and twelve months ended September 30, 2013 was primarily attributable to sales of other real estate properties.
3
At September 30, 2013, the allowance for loan losses of the originated loan portfolio was $81.0 million, or 1.92% of originated loans, compared to $81.7 million, or 2.05% of originated loans, at June 30, 2013 and $84.2 million, or 2.33% of originated loans, at September 30, 2012. The allowance for loan losses of the originated loan portfolio as a percentage of nonperforming loans was 107% at September 30, 2013, compared to 103% at June 30, 2013 and 93% at September 30, 2012. The allowance for loan losses of the acquired loan portfolio was $0.5 million at September 30, 2013, June 30, 2013 and September 30, 2012. Management believes that the Corporation's acquired loan portfolio totaling $309 million at September 30, 2013 was overall performing 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 September 30, 2013, the Corporation had total assets of $6.3 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.
4
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 changes in regulatory requirements, 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 performance and cash flows from acquired loans, future effects of new or changed accounting standards, future opportunities for acquisitions, 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.
5
Chemical Financial Corporation Announces Third Quarter Operating Results
Consolidated Statements of Financial Position (Unaudited)
Chemical Financial Corporation
September 30, 2013 | June 30, 2013 | December 31, 2012 | September 30, 2012 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Cash and cash due from banks | $ | 135,839 | $ | 137,586 | $ | 142,467 | $ | 123,519 | ||||||||
Interest-bearing deposits with the Federal Reserve Bank | 357,271 | 69,371 | 513,668 | 315,201 | ||||||||||||
Total cash and cash equivalents | 493,110 | 206,957 | 656,135 | 438,720 | ||||||||||||
Investment securities: | ||||||||||||||||
Available-for-sale | 705,146 | 734,052 | 586,809 | 646,578 | ||||||||||||
Held-to-maturity | 282,579 | 274,715 | 229,977 | 221,536 | ||||||||||||
Total investment securities | 987,725 | 1,008,767 | 816,786 | 868,114 | ||||||||||||
Loans held-for-sale | 7,907 | 9,180 | 17,665 | 15,075 | ||||||||||||
Loans: | ||||||||||||||||
Commercial | 1,128,122 | 1,091,894 | 1,002,722 | 951,938 | ||||||||||||
Commercial real estate | 1,215,631 | 1,172,347 | 1,161,861 | 1,117,073 | ||||||||||||
Real estate construction and land development | 102,034 | 100,629 | 100,237 | 90,882 | ||||||||||||
Residential mortgage | 942,777 | 898,816 | 883,835 | 880,295 | ||||||||||||
Consumer installment and home equity | 1,134,107 | 1,072,185 | 1,019,080 | 978,971 | ||||||||||||
Total loans | 4,522,671 | 4,335,871 | 4,167,735 | 4,019,159 | ||||||||||||
Allowance for loan losses | (81,532 | ) | (82,184 | ) | (84,491 | ) | (84,694 | ) | ||||||||
Net loans | 4,441,139 | 4,253,687 | 4,083,244 | 3,934,465 | ||||||||||||
Premises and equipment | 73,690 | 73,379 | 75,458 | 67,796 | ||||||||||||
Goodwill | 120,164 | 120,164 | 120,164 | 113,414 | ||||||||||||
Other intangible assets | 13,865 | 14,354 | 15,388 | 10,243 | ||||||||||||
Interest receivable and other assets | 120,636 | 119,723 | 132,412 | 132,594 | ||||||||||||
Total Assets | $ | 6,258,236 | $ | 5,806,211 | $ | 5,917,252 | $ | 5,580,421 | ||||||||
Liabilities | ||||||||||||||||
Deposits: | ||||||||||||||||
Noninterest-bearing | $ | 1,162,599 | $ | 1,107,453 | $ | 1,085,857 | $ | 952,126 | ||||||||
Interest-bearing | 4,028,706 | 3,706,732 | 3,835,586 | 3,646,746 | ||||||||||||
Total deposits | 5,191,305 | 4,814,185 | 4,921,443 | 4,598,872 | ||||||||||||
Interest payable and other liabilities | 36,019 | 35,460 | 54,716 | 34,738 | ||||||||||||
Short-term borrowings | 357,595 | 346,995 | 310,463 | 311,471 | ||||||||||||
Federal Home Loan Bank (FHLB) advances | — | — | 34,289 | 37,237 | ||||||||||||
Total liabilities | 5,584,919 | 5,196,640 | 5,320,911 | 4,982,318 | ||||||||||||
Shareholders' Equity | ||||||||||||||||
Preferred stock, no par value per share | — | — | — | — | ||||||||||||
Common stock, $1 par value per share | 29,778 | 27,538 | 27,499 | 27,498 | ||||||||||||
Additional paid-in capital | 487,176 | 434,479 | 433,195 | 432,627 | ||||||||||||
Retained earnings | 191,538 | 182,619 | 166,766 | 160,884 | ||||||||||||
Accumulated other comprehensive loss | (35,175 | ) | (35,065 | ) | (31,119 | ) | (22,906 | ) | ||||||||
Total shareholders' equity | 673,317 | 609,571 | 596,341 | 598,103 | ||||||||||||
Total Liabilities and Shareholders' Equity | $ | 6,258,236 | $ | 5,806,211 | $ | 5,917,252 | $ | 5,580,421 | ||||||||
6
Chemical Financial Corporation Announces Third Quarter Operating Results
Consolidated Statements of Income (Unaudited)
Chemical Financial Corporation
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Interest Income | ||||||||||||||||
Interest and fees on loans | $ | 49,017 | $ | 48,322 | $ | 144,951 | $ | 144,472 | ||||||||
Interest on investment securities: | ||||||||||||||||
Taxable | 2,714 | 2,458 | 7,737 | 7,610 | ||||||||||||
Tax-exempt | 1,587 | 1,457 | 4,738 | 4,407 | ||||||||||||
Dividends on nonmarketable equity securities | 150 | 128 | 701 | 638 | ||||||||||||
Interest on deposits with the Federal Reserve Bank | 110 | 136 | 611 | 505 | ||||||||||||
Total interest income | 53,578 | 52,501 | 158,738 | 157,632 | ||||||||||||
Interest Expense | ||||||||||||||||
Interest on deposits | 4,160 | 5,238 | 12,990 | 16,999 | ||||||||||||
Interest on short-term borrowings | 124 | 105 | 359 | 317 | ||||||||||||
Interest on FHLB advances | — | 248 | 47 | 765 | ||||||||||||
Total interest expense | 4,284 | 5,591 | 13,396 | 18,081 | ||||||||||||
Net Interest Income | 49,294 | 46,910 | 145,342 | 139,551 | ||||||||||||
Provision for loan losses | 3,000 | 4,500 | 9,000 | 13,500 | ||||||||||||
Net interest income after provision for loan losses | 46,294 | 42,410 | 136,342 | 126,051 | ||||||||||||
Noninterest Income | ||||||||||||||||
Service charges and fees on deposit accounts | 5,690 | 5,028 | 16,420 | 14,546 | ||||||||||||
Wealth management revenue | 3,369 | 2,745 | 10,693 | 8,835 | ||||||||||||
Other charges and fees for customer services | 4,272 | 3,435 | 13,226 | 10,484 | ||||||||||||
Mortgage banking revenue | 1,038 | 1,457 | 4,699 | 4,059 | ||||||||||||
Gain on sale of investment securities | — | — | 1,104 | — | ||||||||||||
Gain on sale of merchant card services | — | — | — | 1,280 | ||||||||||||
Other | 275 | 54 | 689 | 784 | ||||||||||||
Total noninterest income | 14,644 | 12,719 | 46,831 | 39,988 | ||||||||||||
Operating Expenses | ||||||||||||||||
Salaries, wages and employee benefits | 24,065 | 20,738 | 72,062 | 61,846 | ||||||||||||
Occupancy | 3,406 | 3,137 | 10,449 | 9,264 | ||||||||||||
Equipment and software | 3,354 | 3,406 | 10,251 | 9,651 | ||||||||||||
Other | 8,720 | 9,442 | 29,781 | 29,132 | ||||||||||||
Total operating expenses | 39,545 | 36,723 | 122,543 | 109,893 | ||||||||||||
Income before income taxes | 21,393 | 18,406 | 60,630 | 56,146 | ||||||||||||
Federal income tax expense | 6,400 | 5,300 | 18,200 | 16,800 | ||||||||||||
Net Income | $ | 14,993 | $ | 13,106 | $ | 42,430 | $ | 39,346 | ||||||||
Net Income Per Common Share: | ||||||||||||||||
Basic | $ | 0.54 | $ | 0.48 | $ | 1.54 | $ | 1.43 | ||||||||
Diluted | 0.53 | 0.48 | 1.53 | 1.43 | ||||||||||||
Cash Dividends Declared Per Common Share | 0.22 | 0.21 | 0.64 | 0.61 | ||||||||||||
Key Ratios (annualized where applicable): | ||||||||||||||||
Return on average assets | 1.00 | % | 0.96 | % | 0.96 | % | 0.97 | % | ||||||||
Return on average shareholders' equity | 9.6 | % | 8.8 | % | 9.3 | % | 9.0 | % | ||||||||
Net interest margin | 3.58 | % | 3.76 | % | 3.58 | % | 3.77 | % | ||||||||
Efficiency ratio | 61.0 | % | 59.3 | % | 62.9 | % | 60.0 | % | ||||||||
7
Chemical Financial Corporation Announces Third Quarter Operating Results
Financial Summary (Unaudited)
Chemical Financial Corporation
(Dollars in Thousands)
Three Months Ended | ||||||||||||||||||||||||||||
Sept 30, 2013 | June 30, 2013 | March 31, 2013 | Dec 31, 2012 | Sept 30, 2012 | June 30, 2012 | March 31, 2012 | ||||||||||||||||||||||
Average Balances | ||||||||||||||||||||||||||||
Total assets | $ | 5,966,988 | $ | 5,859,822 | $ | 5,924,820 | $ | 5,576,422 | $ | 5,433,491 | $ | 5,360,598 | $ | 5,396,420 | ||||||||||||||
Total interest-earning assets | 5,621,542 | 5,530,262 | 5,579,789 | 5,251,531 | 5,105,101 | 5,044,629 | 5,061,882 | |||||||||||||||||||||
Total loans | 4,424,332 | 4,249,708 | 4,152,570 | 4,077,918 | 3,987,928 | 3,901,321 | 3,824,604 | |||||||||||||||||||||
Total deposits | 4,960,270 | 4,878,214 | 4,950,956 | 4,590,370 | 4,464,582 | 4,383,628 | 4,416,273 | |||||||||||||||||||||
Total interest-bearing liabilities | 4,167,915 | 4,126,751 | 4,221,638 | 3,926,582 | 3,823,954 | 3,817,753 | 3,903,986 | |||||||||||||||||||||
Total shareholders' equity | 620,911 | 606,607 | 599,406 | 600,794 | 591,683 | 582,873 | 574,261 | |||||||||||||||||||||
Key Ratios (annualized where applicable) | ||||||||||||||||||||||||||||
Net interest margin (taxable equivalent basis) | 3.58 | % | 3.60 | % | 3.54 | % | 3.74 | % | 3.76 | % | 3.80 | % | 3.76 | % | ||||||||||||||
Efficiency ratio | 61.0 | % | 63.3 | % | 64.4 | % | 63.0 | % | 59.3 | % | 58.7 | % | 62.1 | % | ||||||||||||||
Return on average assets | 1.00 | % | 0.97 | % | 0.91 | % | 0.83 | % | 0.96 | % | 1.04 | % | 0.92 | % | ||||||||||||||
Return on average shareholders' equity | 9.6 | % | 9.4 | % | 9.0 | % | 7.7 | % | 8.8 | % | 9.6 | % | 8.7 | % | ||||||||||||||
Average shareholders' equity as a percent of average assets | 10.4 | % | 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 | 8.9 | % | 8.5 | % | 8.1 | % | 8.1 | % | 8.8 | % | 9.0 | % | 8.7 | % | ||||||||||||||
Total risk-based capital ratio | 14.2 | % | 13.1 | % | 13.3 | % | 13.2 | % | 13.6 | % | 13.6 | % | 13.7 | % | ||||||||||||||
Sept 30, 2013 | June 30, 2013 | March 31, 2013 | Dec 31, 2012 | Sept 30, 2012 | June 30, 2012 | March 31, 2012 | ||||||||||||||||||||||
Credit Quality Statistics | ||||||||||||||||||||||||||||
Originated Loans | $ | 4,213,728 | $ | 3,990,633 | $ | 3,810,989 | $ | 3,775,140 | $ | 3,606,547 | $ | 3,515,110 | $ | 3,370,279 | ||||||||||||||
Acquired Loans | 308,943 | 345,238 | 374,272 | 392,595 | 412,612 | 447,232 | 472,819 | |||||||||||||||||||||
Nonperforming Assets: | ||||||||||||||||||||||||||||
Nonperforming loans | 75,818 | 79,342 | 86,417 | 90,854 | 90,877 | 92,811 | 98,548 | |||||||||||||||||||||
Other real estate / repossessed assets (ORE) | 12,033 | 13,659 | 18,194 | 18,469 | 19,467 | 23,509 | 25,944 | |||||||||||||||||||||
Total nonperforming assets | 87,851 | 93,001 | 104,611 | 109,323 | 110,344 | 116,320 | 124,492 | |||||||||||||||||||||
Performing troubled debt restructurings | 34,071 | 32,657 | 30,723 | 31,369 | 30,406 | 26,383 | 27,177 | |||||||||||||||||||||
Allowance for loan losses - originated as a percent of: | ||||||||||||||||||||||||||||
Total originated loans | 1.92 | % | 2.05 | % | 2.16 | % | 2.22 | % | 2.33 | % | 2.40 | % | 2.54 | % | ||||||||||||||
Nonperforming loans | 107 | % | 103 | % | 95 | % | 92 | % | 93 | % | 91 | % | 87 | % | ||||||||||||||
Nonperforming loans as a percent of total loans | 1.68 | % | 1.83 | % | 2.06 | % | 2.18 | % | 2.26 | % | 2.34 | % | 2.56 | % | ||||||||||||||
Nonperforming assets as a percent of: | ||||||||||||||||||||||||||||
Total loans plus ORE | 1.94 | % | 2.14 | % | 2.49 | % | 2.61 | % | 2.73 | % | 2.92 | % | 3.22 | % | ||||||||||||||
Total assets | 1.40 | % | 1.60 | % | 1.75 | % | 1.85 | % | 1.98 | % | 2.17 | % | 2.28 | % | ||||||||||||||
Net loan charge-offs (year-to-date): | ||||||||||||||||||||||||||||
Originated | $ | 11,959 | $ | 8,307 | $ | 4,657 | $ | 20,142 | $ | 14,939 | $ | 10,622 | $ | 5,548 | ||||||||||||||
Acquired | — | — | — | 2,200 | 2,200 | — | — | |||||||||||||||||||||
Total loan charge-offs (year-to-date) | 11,959 | 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) | 0.37 | % | 0.40 | % | 0.45 | % | 0.57 | % | 0.59 | % | 0.55 | % | 0.58 | % | ||||||||||||||
Sept 30, 2013 | 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 | $ | 120,164 | $ | 113,414 | $ | 113,414 | $ | 113,414 | ||||||||||||||
Core deposit intangibles (CDI) | 10,466 | 10,933 | 11,417 | 11,910 | 6,777 | 7,144 | 7,512 | |||||||||||||||||||||
Mortgage servicing rights (MSR) | 3,399 | 3,421 | 3,485 | 3,478 | 3,466 | 3,463 | 3,427 | |||||||||||||||||||||
Amortization of CDI (quarter only) | 467 | 484 | 493 | 467 | 367 | 368 | 367 | |||||||||||||||||||||
8
Chemical Financial Corporation Announces Third Quarter Operating Results
Average Balances, Tax Equivalent Interest and Effective Yields and Rates (Unaudited)*
Chemical Financial Corporation
Three Months Ended September 30, 2013 | Nine Months Ended September 30, 2013 | |||||||||||||||||||||
Average Balance | Tax Equivalent Interest | Effective Yield/Rate | Average Balance | Tax Equivalent Interest | Effective Yield/Rate | |||||||||||||||||
Assets | (Dollars in thousands) | |||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Loans** | $ | 4,432,538 | $ | 49,525 | 4.44 | % | $ | 4,289,024 | $ | 146,396 | 4.56 | % | ||||||||||
Taxable investment securities | 759,431 | 2,714 | 1.43 | 720,675 | 7,737 | 1.43 | ||||||||||||||||
Tax-exempt investment securities | 242,664 | 2,423 | 3.99 | 229,486 | 7,234 | 4.20 | ||||||||||||||||
Other interest-earning assets | 25,572 | 150 | 2.33 | 25,572 | 701 | 3.66 | ||||||||||||||||
Interest-bearing deposits with the Federal Reserve Bank | 161,337 | 110 | 0.27 | 312,593 | 611 | 0.26 | ||||||||||||||||
Total interest-earning assets | 5,621,542 | 54,922 | 3.88 | 5,577,350 | 162,679 | 3.90 | ||||||||||||||||
Less: allowance for loan losses | 82,714 | 83,839 | ||||||||||||||||||||
Other Assets: | ||||||||||||||||||||||
Cash and cash due from banks | 130,598 | 121,116 | ||||||||||||||||||||
Premises and equipment | 73,874 | 74,092 | ||||||||||||||||||||
Interest receivable and other assets | 223,688 | 228,645 | ||||||||||||||||||||
Total assets | $ | 5,966,988 | $ | 5,917,364 | ||||||||||||||||||
Liabilities and shareholders' equity | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing demand deposits | $ | 1,094,526 | $ | 262 | 0.09 | % | $ | 1,076,468 | $ | 745 | 0.09 | % | ||||||||||
Savings deposits | 1,355,289 | 304 | 0.09 | 1,348,890 | 901 | 0.09 | ||||||||||||||||
Time deposits | 1,367,792 | 3,594 | 1.04 | 1,405,756 | 11,344 | 1.08 | ||||||||||||||||
Short-term borrowings | 350,308 | 124 | 0.14 | 338,203 | 359 | 0.14 | ||||||||||||||||
FHLB advances | — | — | — | 2,587 | 47 | 2.43 | ||||||||||||||||
Total interest-bearing liabilities | 4,167,915 | 4,284 | 0.41 | 4,171,904 | 13,396 | 0.43 | ||||||||||||||||
Noninterest-bearing deposits | 1,142,663 | — | — | 1,098,733 | — | — | ||||||||||||||||
Total deposits and borrowed funds | 5,310,578 | 4,284 | 0.32 | 5,270,637 | 13,396 | 0.34 | ||||||||||||||||
Interest payable and other liabilities | 35,499 | 37,673 | ||||||||||||||||||||
Shareholders' equity | 620,911 | 609,054 | ||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 5,966,988 | $ | 5,917,364 | ||||||||||||||||||
Net Interest Spread (Average yield earned on interest-earning assets minus average rate paid on interest-bearing liabilities) | 3.47 | % | 3.47 | % | ||||||||||||||||||
Net Interest Income (FTE) | $ | 50,638 | $ | 149,283 | ||||||||||||||||||
Net Interest Margin (Net Interest Income (FTE) divided by total average interest-earning assets) | 3.58 | % | 3.58 | % | ||||||||||||||||||
* | 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. |
9
Chemical Financial Corporation Announces Third Quarter Operating Results
Nonperforming Assets (Unaudited)
Chemical Financial Corporation
Sept 30, 2013 | 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 | $ | 11,809 | $ | 11,052 | $ | 12,186 | $ | 14,601 | $ | 15,217 | $ | 12,673 | $ | 11,443 | ||||||||||||||
Commercial real estate | 28,623 | 28,498 | 35,849 | 37,660 | 41,311 | 41,691 | 46,870 | |||||||||||||||||||||
Real estate construction | 183 | 183 | 168 | 1,217 | 933 | 408 | 61 | |||||||||||||||||||||
Land development | 2,954 | 3,434 | 4,105 | 4,184 | 5,731 | 3,077 | 3,748 | |||||||||||||||||||||
Residential mortgage | 8,029 | 9,241 | 10,407 | 10,164 | 11,307 | 12,613 | 12,687 | |||||||||||||||||||||
Consumer installment | 665 | 552 | 699 | 739 | 876 | 1,182 | 1,278 | |||||||||||||||||||||
Home equity | 3,023 | 3,064 | 2,837 | 2,733 | 2,949 | 2,812 | 3,066 | |||||||||||||||||||||
Total nonaccrual loans | 55,286 | 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 | 281 | 1 | 4 | — | 273 | 300 | 1,005 | |||||||||||||||||||||
Commercial real estate | — | 78 | 177 | 87 | 247 | 269 | 75 | |||||||||||||||||||||
Real estate construction | — | — | — | — | — | — | — | |||||||||||||||||||||
Land development | — | — | — | — | — | — | — | |||||||||||||||||||||
Residential mortgage | 692 | 164 | 196 | 1,503 | 431 | 840 | 333 | |||||||||||||||||||||
Consumer installment | — | — | — | — | — | — | — | |||||||||||||||||||||
Home equity | 686 | 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 | 1,659 | 932 | 1,251 | 2,359 | 2,098 | 2,566 | 2,646 | |||||||||||||||||||||
Nonperforming troubled debt restructurings: | ||||||||||||||||||||||||||||
Commercial loan portfolio | 15,744 | 19,140 | 14,587 | 13,876 | 6,553 | 11,691 | 11,258 | |||||||||||||||||||||
Consumer loan portfolio | 3,129 | 3,246 | 4,328 | 3,321 | 3,902 | 4,098 | 5,491 | |||||||||||||||||||||
Total nonperforming troubled debt restructurings | 18,873 | 22,386 | 18,915 | 17,197 | 10,455 | 15,789 | 16,749 | |||||||||||||||||||||
Total nonperforming loans | 75,818 | 79,342 | 86,417 | 90,854 | 90,877 | 92,811 | 98,548 | |||||||||||||||||||||
Other real estate and repossessed assets | 12,033 | 13,659 | 18,194 | 18,469 | 19,467 | 23,509 | 25,944 | |||||||||||||||||||||
Total nonperforming assets | $ | 87,851 | $ | 93,001 | $ | 104,611 | $ | 109,323 | $ | 110,344 | $ | 116,320 | $ | 124,492 | ||||||||||||||
10
Chemical Financial Corporation Announces Third Quarter Operating Results
Summary of Loan Loss Experience (Unaudited)
Chemical Financial Corporation
Three Months Ended | ||||||||||||||||||||||||||||
Sept 30, 2013 | 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 | $ | 81,684 | $ | 82,334 | $ | 83,991 | $ | 84,194 | $ | 84,511 | $ | 85,585 | $ | 86,733 | ||||||||||||||
Provision for loan losses - originated | 3,000 | 3,000 | 3,000 | 5,000 | 4,000 | 4,000 | 4,400 | |||||||||||||||||||||
Loans charged off: | ||||||||||||||||||||||||||||
Commercial | (971 | ) | (703 | ) | (1,359 | ) | (1,623 | ) | (551 | ) | (974 | ) | (1,079 | ) | ||||||||||||||
Commercial real estate | (1,266 | ) | (2,453 | ) | (2,060 | ) | (1,532 | ) | (1,952 | ) | (2,178 | ) | (2,268 | ) | ||||||||||||||
Real estate construction | — | — | — | (70 | ) | — | — | — | ||||||||||||||||||||
Land development | (400 | ) | (65 | ) | (97 | ) | (1,168 | ) | (51 | ) | (45 | ) | (32 | ) | ||||||||||||||
Residential mortgage | (493 | ) | (1,060 | ) | (734 | ) | (1,224 | ) | (1,357 | ) | (1,140 | ) | (1,717 | ) | ||||||||||||||
Consumer installment | (1,074 | ) | (895 | ) | (849 | ) | (1,222 | ) | (1,050 | ) | (1,259 | ) | (1,074 | ) | ||||||||||||||
Home equity | (226 | ) | (185 | ) | (375 | ) | (282 | ) | (435 | ) | (576 | ) | (377 | ) | ||||||||||||||
Total loan charge-offs | (4,430 | ) | (5,361 | ) | (5,474 | ) | (7,121 | ) | (5,396 | ) | (6,172 | ) | (6,547 | ) | ||||||||||||||
Recoveries of loans previously charged off: | ||||||||||||||||||||||||||||
Commercial | 356 | 644 | 160 | 278 | 135 | 140 | 191 | |||||||||||||||||||||
Commercial real estate | 18 | 667 | 50 | 1,202 | 325 | 298 | 421 | |||||||||||||||||||||
Real estate construction | — | — | — | — | — | — | — | |||||||||||||||||||||
Land development | — | 15 | 1 | — | — | — | 2 | |||||||||||||||||||||
Residential mortgage | 84 | 37 | 161 | 104 | 237 | 199 | 22 | |||||||||||||||||||||
Consumer installment | 288 | 321 | 402 | 305 | 359 | 387 | 345 | |||||||||||||||||||||
Home equity | 32 | 27 | 43 | 29 | 23 | 74 | 18 | |||||||||||||||||||||
Total loan recoveries | 778 | 1,711 | 817 | 1,918 | 1,079 | 1,098 | 999 | |||||||||||||||||||||
Net loan charge-offs - originated | (3,652 | ) | (3,650 | ) | (4,657 | ) | (5,203 | ) | (4,317 | ) | (5,074 | ) | (5,548 | ) | ||||||||||||||
Allowance for loan losses - originated, at end of period | 81,032 | 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 | 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 | 500 | 2,200 | 2,200 | |||||||||||||||||||||
Total allowance for loan losses | $ | 81,532 | $ | 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) | 0.33 | % | 0.34 | % | 0.45 | % | 0.51 | % | 0.65 | % | 0.52 | % | 0.58 | % | ||||||||||||||
11
Chemical Financial Corporation Announces Third Quarter Operating Results
Selected Quarterly Information (Unaudited)
Chemical Financial Corporation
3rd Qtr. 2013 | 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 | $ | 53,578 | $ | 52,781 | $ | 52,379 | $ | 53,126 | $ | 52,501 | $ | 52,467 | $ | 52,664 | ||||||||||||||
Interest expense | 4,284 | 4,385 | 4,727 | 5,132 | 5,591 | 6,021 | 6,469 | |||||||||||||||||||||
Net interest income | 49,294 | 48,396 | 47,652 | 47,994 | 46,910 | 46,446 | 46,195 | |||||||||||||||||||||
Provision for loan losses | 3,000 | 3,000 | 3,000 | 5,000 | 4,500 | 4,000 | 5,000 | |||||||||||||||||||||
Net interest income after provision for loan losses | 46,294 | 45,396 | 44,652 | 42,994 | 42,410 | 42,446 | 41,195 | |||||||||||||||||||||
Noninterest income | 14,644 | 15,948 | 16,239 | 14,676 | 12,719 | 13,944 | 13,325 | |||||||||||||||||||||
Operating expenses | 39,545 | 41,041 | 41,957 | 42,008 | 36,723 | 36,199 | 36,971 | |||||||||||||||||||||
Income before income taxes | 21,393 | 20,303 | 18,934 | 15,662 | 18,406 | 20,191 | 17,549 | |||||||||||||||||||||
Federal income tax expense | 6,400 | 6,100 | 5,700 | 4,000 | 5,300 | 6,325 | 5,175 | |||||||||||||||||||||
Net income | $ | 14,993 | $ | 14,203 | $ | 13,234 | $ | 11,662 | $ | 13,106 | $ | 13,866 | $ | 12,374 | ||||||||||||||
Net interest margin | 3.58 | % | 3.60 | % | 3.54 | % | 3.74 | % | 3.76 | % | 3.80 | % | 3.76 | % | ||||||||||||||
Per Common Share Data | ||||||||||||||||||||||||||||
Net income: | ||||||||||||||||||||||||||||
Basic | $ | 0.54 | $ | 0.52 | $ | 0.48 | $ | 0.42 | $ | 0.48 | $ | 0.50 | $ | 0.45 | ||||||||||||||
Diluted | 0.53 | 0.51 | 0.48 | 0.42 | 0.48 | 0.50 | 0.45 | |||||||||||||||||||||
Cash dividends declared | 0.22 | 0.21 | 0.21 | 0.21 | 0.21 | 0.20 | 0.20 | |||||||||||||||||||||
Book value - period-end | 22.61 | 22.14 | 21.97 | 21.69 | 21.75 | 21.42 | 21.10 | |||||||||||||||||||||
Tangible book value - period-end | 18.36 | 17.53 | 17.34 | 17.03 | 17.52 | 17.17 | 16.84 | |||||||||||||||||||||
Market value - period-end | 27.92 | 25.99 | 26.38 | 23.76 | 24.20 | 21.50 | 23.44 | |||||||||||||||||||||
12