Attached files

file filename
EX-99.2 - EXHIBIT 99.2 Q4 2017 EARNINGS PRESENTATION - TCF FINANCIAL CORPa2017q4earningscallprese.htm
8-K - 8-K CHFC Q4 AND YTD 2017 EARNINGS RELEASE - TCF FINANCIAL CORPchfc8-k2017q4.htm

Exhibit 99.1

For further information:
David T. Provost, CEO
Dennis L. Klaeser, CFO
989-839-5350

Chemical Financial Corporation reports fourth quarter 2017 net income of $9.4 million, representing $0.13 of earnings per diluted average share
Chemical Financial Corporation declares cash dividend on common stock of $0.28 per share
MIDLAND, MI, January 23, 2018 -- Chemical Financial Corporation ("Corporation" or "Chemical") (NASDAQ:CHFC) today announced 2017 fourth quarter net income of $9.4 million, or $0.13 per diluted share, compared to 2017 third quarter net income of $40.5 million, or $0.56 per diluted share, and 2016 fourth quarter net income of $47.2 million, or $0.66 per diluted share. For the year ended December 31, 2017, net income was $149.5 million, or $2.08 per diluted share, compared to net income for the year ended December 31, 2016 of $108.0 million, or $2.17 per diluted share. Net income, excluding significant items, a non-GAAP financial measure, which excludes the fourth quarter of 2017 charge to income tax expense of $46.7 million resulting from the revaluation of Corporation's net deferred tax assets completed following the signing of the Tax Cuts and Jobs Act in December 2017, merger and restructuring expenses of $2.6 million and fourth quarter of 2017 losses of $7.6 million on sales of investment securities as part of the Corporation's treasury and tax management objectives (which we collectively refer to herein as "significant items"), was $62.7 million, or $0.87 per diluted share, in the fourth quarter of 2017.(1) Third quarter of 2017 net income, excluding significant items (merger and restructuring expenses of $21.2 million) was $54.2 million, or $0.76 per diluted share, and fourth quarter of 2016 net income, excluding significant items (merger expenses of $18.0 million and a $7.4 million net gain on the sale of branches) was $54.1 million, or $0.75 per diluted share.(1) Net income for the full year 2017, excluding significant items was $219.6 million, or $3.06 per diluted share, compared to $143.7 million, or $2.88 per diluted share for the full year 2016.(1) In addition, on January 23, 2018, the Board of Directors of the Corporation declared a first quarter of 2018 dividend on its common stock of $0.28 per share. The first quarter of 2018 dividend will be payable on March 16, 2018, to shareholders of record on March 2, 2018.
"We are pleased with our results for the quarter, including improved efficiency resulting from our restructuring efforts, high quality loan growth, maintaining a stable net interest margin and making headway on new commercial banker hires," noted David T. Provost, Chief Executive Officer of the Corporation and Thomas C. Shafer, Vice Chairman of the Corporation and Chief Executive Office of Chemical Bank. "We believe the efforts that we have undergone put us in a solid position for a successful 2018. We look forward to further growth in our markets to be achieved through investments in expanding our commercial lending and banking teams in high growth areas, key management and operation staff adds to support our customer service enhancements and enhancing our core systems."

The Corporation's return on average assets was 0.20% during the fourth quarter of 2017, compared to 0.86% in the third quarter of 2017, and 1.09% in the fourth quarter of 2016. The Corporation's return on average shareholders' equity was 1.4% in the fourth quarter of 2017, compared to 6.1% in the third quarter of 2017, and 7.4% in the fourth quarter of 2016. The Corporation's return on average assets, excluding significant items, a non-GAAP financial measure, was 1.31% in the fourth quarter of 2017, compared to 1.15% in the third quarter of 2017, and 1.25% in the fourth quarter of 2016.(1) The Corporation's return on average shareholders' equity, excluding significant items, a non-GAAP financial measure, was 9.4% in the fourth quarter of 2017, compared to 8.2% in the third quarter of 2017, and 8.4% in the fourth quarter of 2016.(1) The Corporation's return on average tangible shareholders' equity was 2.5% in the fourth quarter of 2017, compared to 10.9% in the third quarter of 2017, and 13.4% in the fourth quarter of 2016. The Corporation's return on average tangible equity, excluding significant items, a non-GAAP financial measure, was 16.5% in the fourth quarter of 2017, compared to 14.6% during the third quarter of 2017, and 15.3% in the fourth quarter of 2016.(1) 

1


Net interest income was $145.9 million in the fourth quarter of 2017, $2.3 million, or 1.6%, higher than the third quarter of 2017, and $13.5 million, or 10.2%, higher than the fourth quarter of 2016. The higher net interest income in the fourth quarter of 2017, compared to both the third quarter of 2017 and the fourth quarter of 2016 was primarily attributable to increases in average loans and investment securities. The Corporation experienced net loan growth of $321.9 million during the fourth quarter of 2017 and $1.16 billion during the year ended December 31, 2017.
The net interest margin was 3.39% in the fourth quarter of 2017, compared to 3.40% in the third quarter of 2017 and 3.48% in the fourth quarter of 2016. The net interest margin, on a tax-equivalent basis, a non-GAAP financial measure, was 3.47% in the fourth quarter of 2017, compared to 3.48% in the third quarter of 2017, and 3.56% in the fourth quarter of 2016.(1) The average yield on the loan portfolio was 4.31% in both the fourth and third quarters of 2017, compared to 4.18% in the fourth quarter of 2016. Interest accretion from purchase accounting discounts on acquired loans contributed 22 basis points to the Corporation's net interest margin, on a tax-equivalent basis, in the fourth quarter of 2017, compared to 23 basis points in the third quarter of 2017, and 14 basis points in the fourth quarter of 2016. The Corporation's average cost of funds was 0.56% in the fourth quarter of 2017, compared to 0.53% in the third quarter of 2017, and 0.33% in the fourth quarter of 2016.
Net interest income was $557.6 million for the year ended December 31, 2017, $176.5 million, or 46.3%, higher than the year ended December 31, 2016. The average balance of loans outstanding during the year ended December 31, 2017 were up $4.30 billion compared to the prior year, with the increase driven by $4.88 billion of loans added on August 31, 2016 from the Corporation's merger with Talmer Bancorp Inc. ("Talmer"), and $1.16 billion of originated loan growth during 2017. The net interest margin was 3.40% in 2017 and 3.51% in 2016. The net interest margin, on a tax equivalent basis, a non-GAAP financial measure, was 3.48% in 2017, compared to 3.60% in 2016.(1) 
The provision for loan losses was $7.5 million in the fourth quarter of 2017, compared to $5.5 million in the third quarter of 2017 and $6.3 million in the fourth quarter of 2016. The increase in the provision for loan losses in the fourth quarter of 2017, compared to the third quarter of 2017 and the fourth quarter of 2016, was primarily the result of an increase in originated loan growth. The provision for loan losses was $23.3 million for the year ended December 31, 2017, compared to $14.9 million for the year ended December 31, 2016, with the increase primarily due to an increase in originated loan growth. All acquired loans were recorded at their estimated fair value at each respective acquisition date without a carryover of the related allowance and, as of December 31, 2017, no allowance was determined to be needed for this population of loans.
Net loan charge-offs were $1.4 million, or 0.04% of average loans, in the fourth quarter of 2017, compared to $3.5 million, or 0.10% of average loans, in the third quarter of 2017 and $1.8 million, or 0.06% of average loans, in the fourth quarter of 2016. The decrease in net loan charge-offs in the fourth quarter of 2017, compared to the third quarter of 2017, was primarily due to one commercial loan relationship charge-off in the third quarter of 2017 and an increase in recoveries on commercial real estate loans in the fourth quarter of 2017. The decrease in net loan charge-offs in the fourth quarter of 2017, compared to the fourth quarter of 2016, was primarily attributable to an increase in net recoveries on commercial real estate loans in the fourth quarter of 2017. Net loan charge-offs totaled $9.7 million, or 0.07% of average loans, during the year ended December 31, 2017, compared to $9.9 million, or 0.11% of average loans, during the year ended December 31, 2016.
The Corporation's nonperforming loans totaled $63.1 million at December 31, 2017, compared to $54.3 million at September 30, 2017 and $44.3 million at December 31, 2016. Nonperforming loans comprised 0.45% of total loans at December 31, 2017, compared to 0.39% at September 30, 2017, and 0.34% at December 31, 2016. The increase in nonperforming loans as a percentage of total loans at December 31, 2017, compared to December 31, 2016, was primarily due to previously accruing commercial troubled debt restructurings downgraded to nonaccrual status.
The allowance for loan losses for the originated loan portfolio was $91.9 million, or 0.94% of originated loans at December 31, 2017, compared to $85.2 million, or 0.93% of originated loans, at September 30, 2017 and $78.3 million, or 1.05% of originated loans, at December 31, 2016. The increase in the allowance for loan losses for

2


the originated portfolio reflects organic growth in the loan portfolio and an increase in the allowance coverage needed for loans that are individually evaluated for impairment. The allowance for loan losses for the originated loan portfolio as a percentage of nonperforming loans was 145.6% at December 31, 2017, compared to 156.9% at September 30, 2017, and 176.5% at December 31, 2016. The third quarter of 2017 allowance for loan losses for the acquired loan portfolio of $0.6 million was reversed during the fourth quarter of 2017, due to improvement identified in the quarterly re-estimation of cash flows.
Noninterest income was $32.3 million in the fourth quarter of 2017, compared to $32.1 million in the third quarter of 2017, and $54.3 million in the fourth quarter of 2016. Noninterest income in the fourth quarter of 2017 was slightly higher than the third quarter of 2017, primarily due to increases in net gain on sale of loans and other mortgage banking revenue and interest rate swap fee income, included within other income, partially offset by $7.6 million of losses on sale of investment securities incurred in the fourth quarter of 2017, as part of the Corporation's treasury and tax management objectives. Noninterest income in the fourth quarter of 2017 was lower than the fourth quarter of 2016 primarily due to the losses on sales of investment securities recognized in the fourth quarter of 2017, a decrease in net gain on sale of loans and other mortgage banking revenue, and the fourth quarter of 2016 gain on sale of branches. Net gain on sale of loans and other mortgage banking revenue included a $13 thousand detriment to earnings due to a change in fair value in loan servicing rights in the fourth quarter of 2017, compared to a $4.0 million detriment in the third quarter of 2017, and a benefit of $6.3 million in the fourth quarter of 2016. Noninterest income was $144.0 million for the year ended December 31, 2017, compared to $122.4 million in 2016, which increased primarily due to incremental revenue resulting from the merger with Talmer.
Operating expenses were $100.0 million in the fourth quarter of 2017, compared to $119.5 million in the third quarter of 2017, and $114.3 million in the fourth quarter of 2016. Operating expenses included merger and restructuring expenses of $2.6 million in the fourth quarter of 2017, $21.2 million in the third quarter of 2017, and $18.0 million in the fourth quarter of 2016. Fourth quarter of 2017 included $6.2 million of impairment related to federal historic tax credits placed into service during the quarter, included within other operating expense, compared to $3.1 million in the third quarter of 2017. Core operating expenses, a non-GAAP financial measure, which excludes merger and restructuring expenses and the impairment of federal historic tax credits, were $91.3 million in the fourth quarter of 2017, a decrease of $3.9 million, compared to $95.2 million in the third quarter of 2017, primarily due to the impact of the Corporation's restructuring efforts that began in the third quarter of 2017.(1)
Operating expenses were $422.0 million for the year ended December 31, 2017, compared to $338.4 million in 2016. Operating expenses included merger and restructuring expenses of $28.4 million in 2017 and $61.1 million in 2016. The year ended December 31, 2017 also included $9.3 million of impairment related to federal historic tax credits placed into service, included within other operating expenses. Core operating expenses, a non-GAAP financial measure, which excludes merger and restructuring expenses and the impairment of federal historic tax credits, were $384.3 million in 2017, compared to $277.3 million in 2016, with the increase due primarily to incremental expenses resulting from the merger with Talmer.(1) 
The Corporation's effective tax rate was 86.6% in the fourth quarter of 2017, compared to 20.2% in the third quarter of 2017 and 28.7% in the fourth quarter of 2016. The tax rate for the fourth quarter of 2017 was impacted by the $46.7 million charge to income tax expense as a result of the revaluation of Corporation's net deferred tax assets and the benefit of federal historic tax credits placed into service during the quarter. The tax rate for the third quarter of 2017 benefited from a federal historic tax credit placed into service during the quarter. The income tax benefit from the tax credits placed into service were partially offset by the impairment recorded on the same tax credits included within other operating expenses. The effective tax rate for the year ended December 31, 2017 was 41.7%, compared to 28.0% for 2016. Excluding the impact of the revaluation of net deferred tax assets in the fourth quarter of 2017 and the benefit of federal historic tax credits placed into service, the effective tax rate for the year ended December 31, 2017 was 27.1%.
The efficiency ratio is a measure of operating expenses as a percentage of net interest income and noninterest income. The Corporation's efficiency ratio was 56.1% in the fourth quarter of 2017, 68.0% in the third quarter of 2017, and 61.2% in the fourth quarter of 2016. The Corporation's efficiency ratio was 60.1% for the year ended

3


December 31, 2017 and 67.2% for 2016. The Corporation's adjusted efficiency ratio, a non-GAAP financial measure, which excludes significant items, amortization of intangibles, impairment of income tax credits, the net interest income FTE adjustment, the change in fair value on loan servicing rights, and losses/gains from sale of investment securities and closed branch locations, was 47.4% in the fourth quarter of 2017, 51.2% in the third quarter of 2017 and 53.7% in the fourth quarter of 2016. The Corporation's adjusted efficiency ratio was 51.9% for the year ended December 31, 2017 and 54.4% for 2016.(1) 
Total assets were $19.28 billion at December 31, 2017, compared to $19.35 billion at September 30, 2017, and $17.36 billion at December 31, 2016. The decrease in total assets during the fourth quarter of 2017 was primarily attributable to a decrease in interest-bearing deposits with the Federal Reserve Bank and a reduction in net deferred tax assets, included within interest receivable and other assets, as a result of the revaluation of the net deferred tax assets, partially offset by loan growth.
Total loans were $14.16 billion at December 31, 2017, up $321.9 million, or 2.3%, from total loans of $13.83 billion at September 30, 2017, and up $1.16 billion, or 9.0%, from total loans of $12.99 billion at December 31, 2016. Originated loan growth was $591.3 million in the fourth quarter of 2017, compared to $496.5 million in the third quarter of 2017, and $702.5 million in the fourth quarter of 2016. The growth in the originated loan portfolio was partially offset by run-off in the acquired loan portfolio of $269.4 million in the fourth quarter of 2017, compared to $330.5 million in the third quarter of 2017, and $427.5 million in the fourth quarter of 2016.
Investment securities available-for-sale were $1.96 billion at December 31, 2017, a decrease of $66.1 million, from $2.03 billion at September 30, 2017. The decrease was primarily the result of the sale of approximately $400 million of securities in a loss position sold late in the fourth quarter of 2017 as part of treasury and tax management objectives set into place associated with the passing the Tax Cuts and Jobs Act in December of 2017, partially offset by reinvesting a portion of the proceeds in new securities prior to year end. The sale of these securities late in the fourth quarter of 2017 resulted in a loss on sale of investment securities of $7.6 million.
Total deposits were $13.64 billion at December 31, 2017, compared to $13.81 billion at September 30, 2017, and $12.87 billion at December 31, 2016. The decrease in deposits during the fourth quarter of 2017 was primarily due to a decline in interest-bearing demand deposits. The Corporation experienced net run-off in customer deposits of $163.1 million during the fourth quarter of 2017 primarily due to a seasonal decline in municipal deposits; however, the Corporation experienced net organic growth in customer deposits of $862.6 million for the year ended December 31, 2017.
Securities sold under agreements to repurchase with customers were $415.2 million at December 31, 2017, compared to $414.6 million at September 30, 2017, and $343.0 million at December 31, 2016. Short-term borrowings were $2.00 billion at December 31, 2017, compared to $1.90 billion at September 30, 2017, and $0.83 billion at December 31, 2016, and consisted of short-term FHLB advances utilized by the Corporation to fund short-term liquidity needs. Long-term borrowings were $372.9 million at December 31, 2017, compared to $397.8 million at September 30, 2017, and $597.8 million at December 31, 2016. The increase in short-term borrowings during the year ended December 31, 2017 was primarily utilized to fund loan growth and increase the investment securities portfolio.
The Corporation's shareholders' equity to total assets ratio was 13.8% at December 31, 2017, compared to 13.8% at September 30, 2017, and 14.9% at December 31, 2016. The Corporation's tangible shareholders' equity to assets ratio, a non-GAAP financial measure, and total risk-based capital ratio, were 8.3% and 10.9% (estimated), respectively, at December 31, 2017, compared to 8.3% and 11.2%, respectively, at September 30, 2017, and 8.8% and 11.5%, respectively, at December 31, 2016.(1) The Corporation's book value was $37.48 per share at December 31, 2017, compared to $37.57 per share at September 30, 2017 and $36.57 per share at December 31, 2016. The Corporation's tangible book value, a non-GAAP financial measure, was $21.21 per share at December 31, 2017, compared to $21.36 per share at September 30, 2017, and $20.20 per share at December 31, 2016.(1) 

4


(1) Please refer to the section entitled "Non-GAAP Financial Measures" in this press release and to the financial tables entitled "Reconciliation of Non-GAAP Financial Measures" for a reconciliation to the most directly comparable GAAP financial measures.

Conference Call Details
Chemical Financial Corporation will host a conference call to discuss its fourth quarter and full year 2017 operating results on Wednesday, January 24, 2018 at 10:30 am ET. Anyone interested may access the conference call on a live basis by dialing toll-free at 1-888-523-1194 and entering 462654 for the conference ID. The call will also be broadcast live over the Internet hosted at Chemical Financial Corporation's website at www.chemicalbank.com under the "Investor Info" section. A copy of the slide-show presentation and an audio replay of the call will remain available on Chemical Financial Corporation's website for at least 14 days.
About Chemical Financial Corporation
Chemical Financial Corporation is the largest banking company headquartered and operating branch offices in Michigan. The Corporation operates through its subsidiary bank, Chemical Bank, with 212 banking offices located in Michigan, northeast Ohio and northern Indiana. At December 31, 2017, the Corporation had total assets of $19.28 billion. Chemical Financial Corporation's common stock trades on The NASDAQ Stock Market under the symbol CHFC and is one of the issuers comprising The NASDAQ Global Select Market and the S&P MidCap 400 Index. More information about the Corporation is available by visiting the "Investor Info" section of its website at www.chemicalbank.com.
Non-GAAP Financial Measures
This press release contains references to financial measures which are not defined in generally accepted accounting principles ("GAAP"). Such non-GAAP financial measures including measures that exclude significant items, net income, diluted earnings per share, return on average assets and return on average shareholders' equity, the Corporation's tangible equity to tangible assets ratio, tangible book value per share, presentation of net interest income and net interest margin on a fully taxable equivalent (FTE) basis, core operating expenses (which excludes merger and restructuring expenses and impairment of income tax credits), operating expenses-efficiency ratio (which excludes merger and restructuring expenses, impairment of federal historic tax credits and amortization of intangibles), and the adjusted efficiency ratio (which excludes significant items, impairment of federal historic tax credits, loan servicing rights change in fair value gains (losses), amortization of intangibles, net interest income FTE adjustments, (losses) gains from sale of investment securities and closed branch locations).
These non-GAAP financial measures have been included as the Corporation believes they are helpful for investors to analyze and evaluate the Corporation's financial condition. However, these non-GAAP financial measures have inherent limitations and should not be considered in isolation or as a substitute for GAAP measures. In addition, because non-GAAP measures are not standardized, it may not be possible to compare the non-GAAP historical measures in this press release with other companies non-GAAP financial measures. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measure may be found in the financial tables included with this press release.

5


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 the Corporation. Words and phrases such as "anticipates," "believes," "continue," "estimates," "expects," "forecasts," "future," "intends," "is likely," "judgment," "look ahead," "look forward," "on schedule," "opinion," "opportunity," "plans," "potential," "predicts," "probable," "projects," "should," "strategic," "trend," "will," and variations of such words and phrases or similar expressions are intended to identify such forward-looking statements. These statements include, among others, statements related to our belief that the efforts that we have undergone will put the Corporation in a solid position for a successful 2018, statements about growth in the Corporation's markets to be achieved through investments and expanding commercial lending and banking teams, and our expectations regarding operating expenses related to our restructuring efforts. 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. All of the information concerning interest rate sensitivity is forward-looking. 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.
Forward-looking statements are based upon current beliefs and expectations and involve substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Accordingly, such 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, without limitation, a downturn in the economy, particularly in our markets, volatile credit and financial markets both domestic and foreign, potential deterioration in real estate value, regulatory changes, excessive loan losses, the Corporation's inability to attract and retain new commercial lenders and other bankers as well as key operations staff in light of competition for experienced employees in the banking industry, the Corporation's inability to execute on its strategy to expand investments and commercial lending, the Corporation's inability to grow its deposits while reducing the number of physical branches that is operates, and negative reactions to the restructuring efforts by Chemical Bank's customers, employees and other counterparties.
In addition, 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, 2016. 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.

6


Chemical Financial Corporation Announces Fourth Quarter and Full Year 2017 Operating Results
 
Consolidated Statements of Financial Position (Unaudited)
Chemical Financial Corporation
(In thousands, except per share data)
 
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
Assets
 
 
 
 
 
 
Cash and cash equivalents:
 
 
 
 
 
 
Cash and cash due from banks
 
$
226,003

 
$
223,498

 
$
237,758

Interest-bearing deposits with the Federal Reserve Bank and other banks and federal funds sold
 
229,988

 
485,713

 
236,644

Total cash and cash equivalents
 
455,991

 
709,211

 
474,402

Investment securities:
 
 
 
 
 
 
Available-for-sale
 
1,963,546

 
2,029,672

 
1,234,964

Held-to-maturity
 
677,093

 
657,176

 
623,427

Total investment securities
 
2,640,639

 
2,686,848

 
1,858,391

Loans held-for-sale
 
52,133

 
87,198

 
81,830

Loans:
 
 
 
 
 
 
Total loans
 
14,155,267

 
13,833,368

 
12,990,779

Allowance for loan losses
 
(91,887
)
 
(85,760
)
 
(78,268
)
Net loans
 
14,063,380

 
13,747,608

 
12,912,511

Premises and equipment
 
126,896

 
141,550

 
145,012

Loan servicing rights
 
63,841

 
62,195

 
58,315

Goodwill
 
1,134,568

 
1,134,568

 
1,133,534

Other intangible assets
 
34,271

 
35,797

 
40,211

Interest receivable and other assets
 
709,154

 
749,333

 
650,973

Total Assets
 
$
19,280,873

 
$
19,354,308

 
$
17,355,179

Liabilities
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
Noninterest-bearing
 
$
3,725,779

 
$
3,688,848

 
$
3,341,520

Interest-bearing
 
9,917,024

 
10,116,397

 
9,531,602

Total deposits
 
13,642,803

 
13,805,245

 
12,873,122

Interest payable and other liabilities
 
181,203

 
163,532

 
134,637

Securities sold under agreements to repurchase with customers
 
415,236

 
414,597

 
343,047

Short-term borrowings
 
2,000,000

 
1,900,000

 
825,000

Long-term borrowings
 
372,882

 
397,845

 
597,847

Total liabilities
 
16,612,124

 
16,681,219

 
14,773,653

Shareholders' Equity
 
 
 
 
 
 
Preferred stock, no par value per share
 

 

 

Common stock, $1 par value per share
 
71,207

 
71,152

 
70,599

Additional paid-in capital
 
2,203,637

 
2,201,334

 
2,210,762

Retained earnings
 
414,885

 
425,433

 
340,201

Accumulated other comprehensive loss
 
(20,980
)
 
(24,830
)
 
(40,036
)
Total shareholders' equity
 
2,668,749

 
2,673,089

 
2,581,526

Total Liabilities and Shareholders' Equity
 
$
19,280,873

 
$
19,354,308

 
$
17,355,179




7


Chemical Financial Corporation Announces Fourth Quarter and Full Year 2017 Operating Results
 
Consolidated Statements of Income (Unaudited)
Chemical Financial Corporation
(In thousands, except per share data)
 
Three Months Ended
 
Year Ended
 
December 31,
2017
 
September 30,
2017
 
December 31,
2016
 
December 31,
2017
 
December 31,
2016
Interest Income
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
150,558

 
$
148,771

 
$
134,463

 
$
573,128

 
$
383,545

Interest on investment securities:
 
 
 
 
 
 
 
 
 
Taxable
10,289

 
9,326

 
4,687

 
31,496

 
10,989

Tax-exempt
5,105

 
4,577

 
3,940

 
18,343

 
12,317

Dividends on nonmarketable equity securities
2,018

 
1,039

 
582

 
4,924

 
1,973

Interest on deposits with the Federal Reserve Bank and other banks and federal funds sold
1,192

 
1,231

 
744

 
4,244

 
1,555

Total interest income
169,162

 
164,944

 
144,416

 
632,135

 
410,379

Interest Expense
 
 
 
 
 
 
 
 
 
Interest on deposits
14,303

 
12,926

 
8,866

 
46,727

 
23,021

Interest on short-term borrowings
7,413

 
6,591

 
875

 
20,321

 
1,660

Interest on long-term borrowings
1,541

 
1,799

 
2,228

 
7,509

 
4,617

Total interest expense
23,257

 
21,316

 
11,969

 
74,557

 
29,298

Net Interest Income
145,905

 
143,628

 
132,447

 
557,578

 
381,081

Provision for loan losses
7,522

 
5,499

 
6,272

 
23,300

 
14,875

Net interest income after provision for loan losses
138,383

 
138,129

 
126,175

 
534,278

 
366,206

Noninterest Income
 
 
 
 
 
 
 
 
 
Service charges and fees on deposit accounts
9,073

 
9,147

 
8,414

 
35,001

 
28,136

Wealth management revenue
6,539

 
6,188

 
6,034

 
25,512

 
22,601

Other charges and fees for customer services
7,522

 
6,624

 
9,981

 
32,771

 
30,246

Net gain on sale of loans and other mortgage banking revenue
7,925

 
5,241

 
14,420

 
32,205

 
21,859

(Loss) gain on sale of investment securities
(7,556
)
 
1

 
76

 
(7,388
)
 
129

Gain on sale of branches

 

 
7,391

 

 
7,391

Other
8,816

 
4,921

 
7,948

 
25,918

 
11,988

Total noninterest income
32,319

 
32,122

 
54,264

 
144,019

 
122,350

Operating Expenses
 
 
 
 
 
 
 
 
 
Salaries, wages and employee benefits
48,358

 
52,621

 
57,631

 
213,828

 
165,213

Occupancy
7,546

 
6,871

 
7,644

 
30,554

 
23,525

Equipment and software
8,000

 
7,582

 
8,709

 
32,248

 
24,408

Outside processing and service fees
9,081

 
9,626

 
7,290

 
35,142

 
21,199

Merger expenses
1,511

 
2,379

 
18,016

 
8,522

 
61,134

Restructuring expenses
1,056

 
18,824

 

 
19,880

 

Other
24,470

 
21,636

 
15,012

 
81,820

 
42,939

Total operating expenses
100,022

 
119,539

 
114,302

 
421,994

 
338,418

Income before income taxes
70,680

 
50,712

 
66,137

 
256,303

 
150,138

Income tax expense
61,234

 
10,253

 
18,969

 
106,780

 
42,106

Net Income
$
9,446

 
$
40,459

 
$
47,168

 
$
149,523

 
$
108,032

Earnings Per Common Share:
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding-basic
71,095

 
70,911

 
70,171

 
70,865

 
49,091

Weighted average common shares outstanding-diluted
71,682

 
71,505

 
71,304

 
71,513

 
49,603

Basic earnings per common share
$
0.13

 
$
0.57

 
$
0.67

 
$
2.11

 
$
2.21

Diluted earnings per common share
$
0.13

 
$
0.56

 
$
0.66

 
$
2.08

 
$
2.17

Diluted, excluding significant items (non-GAAP)
$
0.87

 
$
0.76

 
$
0.75

 
$
3.06

 
$
2.88

Cash Dividends Declared Per Common Share
$
0.28

 
$
0.28

 
$
0.27

 
$
1.10

 
$
1.06

Key Ratios (annualized where applicable):
 

 
 
 
 

 
 
 
 
Return on average assets
0.20
%
 
0.86
%
 
1.09
%
 
0.81
%
 
0.90
%
Return on average shareholders' equity
1.4
%
 
6.1
%
 
7.4
%
 
5.7
%
 
7.0
%
Return on average tangible shareholders' equity, excluding significant items (non-GAAP)
16.5
%
 
14.6
%
 
15.3
%
 
14.9
%
 
14.9
%
Net interest margin (tax-equivalent basis) (non-GAAP)
3.47
%
 
3.48
%
 
3.56
%
 
3.48
%
 
3.60
%
Efficiency ratio - GAAP
56.1
%
 
68.0
%
 
61.2
%
 
60.1
%
 
67.2
%
Efficiency ratio - adjusted (non-GAAP)
47.4
%
 
51.2
%
 
53.7
%
 
51.9
%
 
54.4
%

8


Chemical Financial Corporation Announces Fourth Quarter and Full Year 2017 Operating Results
 
Selected Quarterly Information (Unaudited)
Chemical Financial Corporation
(Dollars in thousands, except per share data)
 
4th Quarter 2017
 
3rd Quarter 2017
 
2nd Quarter 2017
 
1st Quarter 2017
 
4th Quarter 2016
 
3rd Quarter 2016
 
2nd Quarter 2016
 
1st Quarter 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Summary of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Interest income
$
169,162

 
$
164,944

 
$
155,133

 
$
142,896

 
$
144,416

 
$
103,562

 
$
82,937

 
$
79,464

Interest expense
23,257

 
21,316

 
17,185

 
12,799

 
11,969

 
6,753

 
5,442

 
5,134

Net interest income
145,905

 
143,628

 
137,948

 
130,097

 
132,447

 
96,809

 
77,495

 
74,330

Provision for loan losses
7,522

 
5,499

 
6,229

 
4,050

 
6,272

 
4,103

 
3,000

 
1,500

Net interest income after provision for loan losses
138,383

 
138,129

 
131,719

 
126,047

 
126,175

 
92,706

 
74,495

 
72,830

Noninterest income
32,319

 
32,122

 
41,568

 
38,010

 
54,264

 
27,770

 
20,897

 
19,419

Operating expenses, excluding merger and restructuring expenses and impairment of income tax credits (non-GAAP)
91,298

 
95,241

 
97,772

 
100,029

 
96,286

 
68,674

 
56,031

 
56,293

Merger and restructuring expenses
2,567

 
21,203

 
465

 
4,167

 
18,016

 
37,470

 
3,054

 
2,594

Impairment of income tax credits
6,157

 
3,095

 

 

 

 

 

 

Income before income taxes
70,680

 
50,712

 
75,050

 
59,861

 
66,137

 
14,332

 
36,307

 
33,362

Income tax expense
61,234

 
10,253

 
23,036

 
12,257

 
18,969

 
2,848

 
10,532

 
9,757

Net income
$
9,446

 
$
40,459

 
$
52,014

 
$
47,604

 
$
47,168

 
$
11,484

 
$
25,775

 
$
23,605

Significant items, net of tax
53,240

 
13,782

 
302

 
2,709

 
6,906

 
25,118

 
1,985

 
1,686

Net income, excluding significant items
$
62,686

 
$
54,241

 
$
52,316

 
$
50,313

 
$
54,074

 
$
36,602

 
$
27,760

 
$
25,291

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Per Common Share Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Net income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Basic
$
0.13

 
$
0.57

 
$
0.73

 
$
0.67

 
$
0.67

 
$
0.23

 
$
0.67

 
$
0.61

Diluted
0.13

 
0.56

 
0.73

 
0.67

 
0.66

 
0.23

 
0.67

 
0.60

Diluted, excluding significant items (non-GAAP)
0.87

 
0.76

 
0.73

 
0.70

 
0.75

 
0.73

 
0.72

 
0.65

Cash dividends declared
0.28

 
0.28

 
0.27

 
0.27

 
0.27

 
0.27

 
0.26

 
0.26

Book value - period-end
37.48

 
37.57

 
37.11

 
36.56

 
36.57

 
36.37

 
27.45

 
26.99

Tangible book value - period-end
21.21

 
21.36

 
20.89

 
20.32

 
20.20

 
19.99

 
19.68

 
19.20

Market value - period-end
53.47

 
52.26

 
48.41

 
51.15

 
54.17

 
44.13

 
37.29

 
35.69

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin (taxable equivalent basis) (non-GAAP)
3.47
%
 
3.48
%
 
3.48
%
 
3.49
%
 
3.56
%
 
3.58
%
 
3.70
%
 
3.60
%
Efficiency ratio - adjusted (non-GAAP)
47.4
%
 
51.2
%
 
52.2
%
 
57.4
%
 
53.7
%
 
52.7
%
 
54.6
%
 
57.6
%
Return on average assets
0.20
%
 
0.86
%
 
1.14
%
 
1.09
%
 
1.09
%
 
0.37
%
 
1.10
%
 
1.02
%
Return on average shareholders' equity
1.4
%
 
6.1
%
 
8.0
%
 
7.4
%
 
7.4
%
 
2.9
%
 
10.0
%
 
9.3
%
Average shareholders' equity as a percent of average assets
13.9
%
 
14.0
%
 
14.3
%
 
14.8
%
 
14.9
%
 
12.7
%
 
11.1
%
 
11.0
%
Capital ratios (period end):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tangible shareholders' equity as a percent of tangible assets
8.3
%
 
8.3
%
 
8.4
%
 
8.8
%
 
8.8
%
 
8.7
%
 
8.2
%
 
8.2
%
Total risk-based capital ratio (1)
10.9
%
 
11.2
%
 
11.1
%
 
11.4
%
 
11.5
%
 
11.1
%
 
11.4
%
 
11.5
%
(1) Estimated at December 31, 2017.

9


Chemical Financial Corporation Announces Fourth Quarter and Full Year 2017 Operating Results
 
Average Balances, Tax Equivalent Interest and Effective Yields and Rates (Unaudited)(1) 
Chemical Financial Corporation
(Dollars in thousands)
 
Three Months Ended
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
Average
Balance
 
Interest (FTE)
 
Effective
Yield/Rate(1)
 
Average
Balance
 
Interest (FTE)
 
Effective
Yield/Rate
(1)
 
Average
Balance
 
Interest (FTE)
 
Effective
Yield/Rate
(1)
Assets
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans(1)(2)
$
13,954,366

 
$151,413
 
4.31
%
 
$
13,795,750

 
$149,595
 
4.31
%
 
$
12,895,557

 
$135,301
 
4.18
%
Taxable investment securities
1,715,494

 
10,289

 
2.40

 
1,629,344

 
9,326

 
2.29

 
1,065,453

 
4,687

 
1.76

Tax-exempt investment securities(1)
981,299

 
7,830

 
3.19

 
896,854

 
7,013

 
3.13

 
807,093

 
6,047

 
3.00

Other interest-earning assets
180,098

 
2,018

 
4.45

 
180,188

 
1,039

 
2.29

 
80,202

 
582

 
2.89

Interest-bearing deposits with the FRB and other banks and federal funds sold
307,028

 
1,192

 
1.54

 
313,104

 
1,231

 
1.56

 
307,802

 
744

 
0.96

Total interest-earning assets
17,138,285

 
172,742

 
4.01

 
16,815,240

 
168,204

 
3.98

 
15,156,107

 
147,361

 
3.87

Less: allowance for loan losses
(86,521
)
 
 
 
 
 
(84,640
)
 
 
 
 
 
(74,822
)
 
 
 
 
Other assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash due from banks
239,307

 
 
 
 
 
250,743

 
 
 
 
 
245,613

 
 
 
 
Premises and equipment
138,880

 
 
 
 
 
146,266

 
 
 
 
 
144,652

 
 
 
 
Interest receivable and other assets
1,777,479

 
 
 
 
 
1,730,539

 
 
 
 
 
1,793,118

 
 
 
 
Total assets
$19,207,430
 
 
 
 
 
$18,858,148
 
 
 
 
 
$17,264,668
 
 
 
 
Liabilities and shareholders' equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
$
2,709,033

 
$
1,242

 
0.18
%
 
$
2,725,807

 
$
1,321

 
0.19
%
 
$
2,680,241

 
$
1,266

 
0.19
%
Savings deposits
4,023,075

 
4,296

 
0.42

 
4,012,299

 
3,985

 
0.39

 
3,490,972

 
1,263

 
0.14

Time deposits
3,136,655

 
8,765

 
1.11

 
3,007,109

 
7,620

 
1.01

 
3,209,695

 
6,337

 
0.79

Short-term borrowings
2,366,571

 
7,413

 
1.24

 
2,279,998

 
6,591

 
1.15

 
949,292

 
875

 
0.38

Long-term borrowings
383,739

 
1,541

 
1.67

 
426,155

 
1,799

 
1.67

 
600,066

 
2,228

 
1.41

Total interest-bearing liabilities
12,619,073

 
23,257

 
0.73

 
12,451,368

 
21,316

 
0.68

 
10,930,266

 
11,969

 
0.44

Noninterest-bearing deposits
3,734,650

 

 

 
3,643,765

 

 

 
3,622,365

 

 

Total deposits and borrowed funds
16,353,723

 
23,257

 
0.56

 
16,095,133

 
21,316

 
0.53

 
14,552,631

 
11,969

 
0.33

Interest payable and other liabilities
177,678

 
 
 
 
 
119,782

 
 
 
 
 
147,094

 
 
 
 
Shareholders' equity
2,676,029

 
 
 
 
 
2,643,233

 
 
 
 
 
2,564,943

 
 
 
 
Total liabilities and shareholders' equity
$
19,207,430

 
 
 
 
 
$
18,858,148

 
 
 
 
 
$
17,264,668

 
 
 
 
Net Interest Spread (Average yield earned on interest-earning assets minus average rate paid on interest-bearing liabilities)
 
3.28
%
 
 
 
 
 
3.30
%
 
 
 
 
 
3.43
%
Net Interest Income (FTE)
 
 
$
149,485

 
 
 
 
 
$
146,888

 
 
 
 
 
$
135,392

 
 
Net Interest Margin (Net Interest Income (FTE) divided by total average interest-earning assets)
 
3.47
%
 
 
 
 
 
3.48
%
 
 
 
 
 
3.56
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation to Reported Net Interest Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income, fully taxable equivalent (non-GAAP)
 
$149,485
 
 
 
 
 
$146,888
 
 
 
 
 
$135,392
 
 
Adjustments for taxable equivalent interest(1):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans
 
 
(855
)
 
 
 
 
 
(824
)
 
 
 
 
 
(838
)
 
 
Tax-exempt investment securities
 
 
(2,725
)
 
 
 
 
 
(2,436
)
 
 
 
 
 
(2,107
)
 
 
Total taxable equivalent interest adjustments
 
(3,580
)
 
 
 
 
 
(3,260
)
 
 
 
 
 
(2,945
)
 
 
Net interest income (GAAP)
 
 
$145,905
 
 
 
 
 
$143,628
 
 
 
 
 
$132,447
 
 
Net interest margin (GAAP)
 
 
3.39
%
 
 
 
 
 
3.40
%
 
 
 
 
 
3.48
%
 
 
(1) Fully taxable equivalent (FTE) basis using a federal income tax rate of 35%. The presentation of net interest income on a FTE basis is not in accordance with GAAP, but is customary in the banking industry.
(2) 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.

10


Chemical Financial Corporation Announces Fourth Quarter and Full Year 2017 Operating Results
 
Average Balances, Tax Equivalent Interest and Effective Yields and Rates (Unaudited)(1) 
Chemical Financial Corporation
(Dollars in thousands)
 
 
Year Ended
 
 
December 31, 2017
 
December 31, 2016
 
 
Average
Balance
 
Interest (FTE)
 
Effective
Yield/Rate(1)
 
Average
Balance
 
Interest (FTE)
 
Effective
Yield/Rate
(1)
Assets
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Loans(1)(2)
 
$
13,607,683

 
$
576,429

 
4.24
%
 
$
9,304,573

 
$
386,575

 
4.15
%
Taxable investment securities
 
1,431,167

 
31,496

 
2.20

 
706,567

 
10,989

 
1.56

Tax-exempt investment securities(1)
 
905,831

 
28,120

 
3.10

 
595,677

 
18,929

 
3.18

Other interest-earning assets
 
157,738

 
4,924

 
3.12

 
55,341

 
1,973

 
3.57

Interest-bearing deposits with the FRB and other banks and federal funds sold
 
298,006

 
4,244

 
1.42

 
194,637

 
1,555

 
0.80

Total interest-earning assets
 
16,400,425

 
645,213

 
3.93

 
10,856,795

 
420,021

 
3.87

Less: allowance for loan losses
 
(82,644
)
 
 
 
 
 
(73,136
)
 
 
 
 
Other assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash due from banks
 
235,621

 
 
 
 
 
186,706

 
 
 
 
Premises and equipment
 
144,114

 
 
 
 
 
118,080

 
 
 
 
Interest receivable and other assets
 
1,767,640

 
 
 
 
 
948,710

 
 
 
 
Total assets
 
$
18,465,156

 
 
 
 
 
$
12,037,155

 
 
 
 
Liabilities and shareholders' equity
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
 
$
2,753,294

 
$
4,870

 
0.18
%
 
$
2,143,064

 
$
3,277

 
0.15
%
Savings deposits
 
3,940,499

 
13,049

 
0.33

 
2,534,038

 
2,877

 
0.11

Time deposits
 
3,014,302

 
28,808

 
0.96

 
2,154,118

 
16,867

 
0.78

Short-term borrowings
 
1,978,951

 
20,321

 
1.03

 
571,510

 
1,660

 
0.29

Long-term borrowings
 
455,246

 
7,509

 
1.67

 
418,636

 
4,617

 
1.10

Total interest-bearing liabilities
 
12,142,292

 
74,557

 
0.61

 
7,821,366

 
29,298

 
0.37

Noninterest-bearing deposits
 
3,547,271

 

 

 
2,566,342

 

 

Total deposits and borrowed funds
 
15,689,563

 
74,557

 
0.48

 
10,387,708

 
29,298

 
0.28

Interest payable and other liabilities
 
147,731

 
 
 
 
 
102,726

 
 
 
 
Shareholders' equity
 
2,627,862

 
 
 
 
 
1,546,721

 
 
 
 
Total liabilities and shareholders' equity
 
$
18,465,156

 
 
 
 
 
$
12,037,155

 
 
 
 
Net Interest Spread (Average yield earned on interest-earning assets minus average rate paid on interest-bearing liabilities)
 
 
 
3.32
%
 
 
 
 
 
3.50
%
Net Interest Income (FTE)
 
 
 
$
570,656

 
 
 
 
 
$
390,723

 
 
Net Interest Margin (Net Interest Income (FTE) divided by total average interest-earning assets)
 
 
 
3.48
%
 
 
 
 
 
3.60
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation to Reported Net Interest Income
 
 
 
 
 
 
 
 
 
 
Net interest income, fully taxable equivalent (non-GAAP)
 
$
570,656

 
 
 
 
 
$
390,723

 
 
Adjustments for taxable equivalent interest(1):
 
 
 
 
 
 
 
 
 
 
 
 
Loans
 
 
 
(3,301
)
 
 
 
 
 
(3,030
)
 
 
Tax-exempt investment securities
 
 
 
(9,777
)
 
 
 
 
 
(6,612
)
 
 
Total taxable equivalent interest adjustments
 
 
 
(13,078
)
 
 
 
 
 
(9,642
)
 
 
Net interest income (GAAP)
 
 
 
$
557,578

 
 
 
 
 
$
381,081

 
 
Net interest margin (GAAP)
 
 
 
3.40
%
 
 
 
 
 
3.51
%
 
 
(1) Fully taxable equivalent (FTE) basis using a federal income tax rate of 35%. The presentation of net interest income on a FTE basis is not in accordance with GAAP, but is customary in the banking industry.
(2) 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.

11


Chemical Financial Corporation Announces Fourth Quarter and Full Year 2017 Operating Results
 
Noninterest Income and Operating Expenses Information (Unaudited)
Chemical Financial Corporation
(Dollars in thousands)
 
4th Quarter 2017
 
3rd Quarter 2017
 
2nd Quarter 2017
 
1st Quarter 2017
 
4th Quarter 2016
 
3rd Quarter 2016
 
2nd Quarter 2016
 
1st Quarter 2016
 
 
 
 
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service charges and fees on deposit accounts
$
9,073

 
$
9,147

 
$
8,777

 
$
8,004

 
$
8,414

 
$
7,665

 
$
6,337

 
$
5,720

Wealth management revenue
6,539

 
6,188

 
6,958

 
5,827

 
6,034

 
5,584

 
5,782

 
5,201

Electronic banking fees
5,578

 
4,370

 
7,482

 
6,817

 
8,196

 
5,533

 
4,786

 
4,918

Net gain on sale of loans and other mortgage banking revenue
7,938

 
9,282

 
11,681

 
9,679

 
8,072

 
5,675

 
1,595

 
1,405

Change in fair value in loan servicing rights(1)
(13
)
 
(4,041
)
 
(1,802
)
 
(519
)
 
6,348

 
(1,236
)
 

 

Other fees for customer services
1,944

 
2,254

 
2,252

 
2,074

 
1,785

 
1,877

 
1,677

 
1,474

(Loss) gain on sale of investment securities
(7,556
)
 
1

 
77

 
90

 
76

 
16

 
18

 
19

Bank-owned life insurance
1,377

 
1,124

 
1,106

 
1,211

 
957

 
446

 
237

 
196

Gain on sale of branch offices

 

 

 

 
7,391

 

 

 

Other
7,439

 
3,797

 
5,037

 
4,827

 
6,991

 
2,210

 
465

 
486

Total noninterest income
$
32,319

 
$
32,122

 
$
41,568

 
$
38,010

 
$
54,264

 
$
27,770

 
$
20,897

 
$
19,419

(1)
Included within the line item "Net gain on sale of loans and other mortgage banking revenue" in the Consolidated Statements of Income.
 
4th Quarter 2017
 
3rd Quarter 2017
 
2nd Quarter 2017
 
1st Quarter 2017
 
4th Quarter 2016
 
3rd Quarter 2016
 
2nd Quarter 2016
 
1st Quarter 2016
 
 
 
 
Operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and wages
$
41,866

 
$
44,641

 
$
44,959

 
$
48,526

 
$
47,936

 
$
33,841

 
$
26,887

 
$
26,743

Employee benefits
6,492

 
7,980

 
7,642

 
11,722

 
9,695

 
6,724

 
6,240

 
7,147

Occupancy
7,546

 
6,871

 
8,745

 
7,392

 
7,644

 
5,462

 
5,514

 
4,905

Equipment and software
8,000

 
7,582

 
8,149

 
8,517

 
8,709

 
6,420

 
4,875

 
4,404

Outside processing and service fees
9,081

 
9,626

 
8,924

 
7,511

 
7,290

 
5,365

 
4,833

 
3,711

FDIC insurance premiums
4,556

 
2,768

 
2,460

 
1,406

 
2,813

 
1,849

 
1,338

 
1,407

Professional fees
3,483

 
3,489

 
2,567

 
1,968

 
2,304

 
1,472

 
1,020

 
1,036

Intangible asset amortization
1,525

 
1,526

 
1,525

 
1,513

 
1,843

 
1,292

 
1,195

 
1,194

Credit-related expenses
803

 
1,874

 
1,895

 
1,200

 
(1,029
)
 
(371
)
 
(1,331
)
 
30

Merger expenses
1,511

 
2,379

 
465

 
4,167

 
18,016

 
37,470

 
3,054

 
2,594

Restructuring expenses
1,056

 
18,824

 

 

 

 

 

 

Impairment of income tax credit
6,157

 
3,095

 

 

 

 

 

 

Other
7,946

 
8,884

 
10,906

 
10,274

 
9,081

 
6,620

 
5,460

 
5,716

Total operating expenses
$
100,022

 
$
119,539

 
$
98,237

 
$
104,196

 
$
114,302

 
$
106,144

 
$
59,085

 
$
58,887




12


Chemical Financial Corporation Announces Fourth Quarter and Full Year 2017 Operating Results
 
Composition of Loans and Deposits and Additional Information on Intangible Assets (Unaudited)
Chemical Financial Corporation
(Dollars in Thousands)
 
Dec 31,
2017
 
Sep 30,
2017
 
Organic Growth - Three Months Ended Dec 31, 2017
 
Jun 30,
2017
 
Mar 31,
2017
 
Dec 31,
2016
 
Organic Growth - Twelve Months Ended Dec 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Composition of Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial loan portfolio:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
$
3,385,642

 
$
3,319,965

 
2.0
 %
 
$
3,360,161

 
$
3,253,608

 
$
3,217,300

 
5.2
 %
Commercial real estate
4,500,670

 
4,315,978

 
4.3

 
4,324,323

 
4,097,771

 
3,973,140

 
13.3

Real estate construction
574,215

 
501,413

 
14.5

 
446,678

 
453,811

 
403,772

 
42.2

Subtotal - commercial loans
8,460,527

 
8,137,356

 
4.0

 
8,131,162

 
7,805,190

 
7,594,212

 
11.4

Consumer loan portfolio:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
3,252,487

 
3,221,307

 
1.0

 
3,125,397

 
3,133,465

 
3,086,474

 
5.4

Consumer installment
1,613,008

 
1,615,983

 
(0.2
)
 
1,553,967

 
1,481,057

 
1,433,884

 
12.5

Home equity
829,245

 
858,722

 
(3.4
)
 
856,846

 
853,680

 
876,209

 
(5.4
)
Subtotal - consumer loans
5,694,740

 
5,696,012

 

 
5,536,210

 
5,468,202

 
5,396,567

 
5.5

Total loans
$
14,155,267

 
$
13,833,368

 
2.3
 %
 
$
13,667,372

 
$
13,273,392

 
$
12,990,779

 
9.0
 %

 
Dec 31,
2017
 
Sep 30,
2017
 
Organic Growth - Three Months Ended Dec 31, 2017
 
Jun 30,
2017
 
Mar 31,
2017
 
Dec 31,
2016
 
Organic Growth - Twelve Months Ended Dec 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Composition of Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
3,725,779

 
$
3,688,848

 
1.0
 %
 
$
3,399,287

 
$
3,341,520

 
$
3,341,520

 
11.5
 %
Savings
1,697,762

 
1,736,360

 
(2.2
)
 
1,752,040

 
1,662,115

 
1,662,115

 
2.1

Interest-bearing demand
2,725,336

 
2,976,212

 
(8.4
)
 
2,900,546

 
2,825,801

 
2,825,801

 
(3.6
)
Money market accounts
2,276,719

 
2,289,852

 
(0.6
)
 
2,161,645

 
2,033,319

 
2,033,319

 
12.0

Brokered deposits
133,496

 
132,806

 
0.5

 
156,367

 
226,429

 
226,429

 
(41.0
)
Other time deposits
3,083,711

 
2,981,167

 
3.4

 
2,762,462

 
2,783,938

 
2,783,938

 
10.8

Total deposits
$
13,642,803

 
$
13,805,245

 
(1.2
)%
 
$
13,132,347

 
$
12,873,122

 
$
12,873,122

 
6.0
 %


 
Dec 31,
2017
 
Sep 30,
2017
 
Jun 30,
2017
 
Mar 31,
2017
 
Dec 31,
2016
 
 
 
 
 
 
 
 
 
 
Additional Data - Intangibles
 
 
 
 
 
 
 
 
 
Goodwill
$
1,134,568

 
$
1,134,568

 
$
1,133,534

 
$
1,133,534

 
$
1,133,534

Loan servicing rights
63,841

 
62,195

 
64,522

 
64,604

 
58,315

Core deposit intangibles (CDI)
34,259

 
35,747

 
37,235

 
38,723

 
40,211

Noncompete agreements
13

 
50

 
87

 
125

 



13


Chemical Financial Corporation Announces Fourth Quarter and Full Year 2017 Operating Results
 
Nonperforming Assets (Unaudited)
Chemical Financial Corporation
(Dollars in thousands)
 
 
Dec 31, 2017
 
Sep 30, 2017
 
Jun 30, 2017
 
Mar 31, 2017
 
Dec 31, 2016
 
Sep 30, 2016
 
Jun 30, 2016
 
Mar 31, 2016
Nonperforming Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming Loans(1):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
 
$
19,691

 
$
15,648

 
$
18,773

 
$
16,717

 
$
13,178

 
$
13,742

 
$
14,577

 
$
19,264

Commercial real estate
 
29,545

 
25,150

 
19,723

 
20,828

 
19,877

 
19,914

 
21,325

 
25,859

Real estate construction
 
77

 
78

 
56

 
79

 
80

 
80

 
496

 
546

Residential mortgage
 
8,635

 
8,646

 
7,714

 
6,749

 
6,969

 
5,119

 
5,343

 
5,062

Consumer installment
 
842

 
875

 
757

 
755

 
879

 
378

 
285

 
360

Home equity
 
4,305

 
3,908

 
3,871

 
2,713

 
3,351

 
2,064

 
1,971

 
2,328

Total nonaccrual loans(1)
 
63,095

 
54,305

 
50,894

 
47,841

 
44,334

 
41,297

 
43,997

 
53,419

Other real estate and repossessed assets
 
8,807

 
10,605

 
14,582

 
16,395

 
17,187

 
20,730

 
8,440

 
9,248

Total nonperforming assets
 
$
71,902

 
$
64,910

 
$
65,476

 
$
64,236

 
$
61,521

 
$
62,027

 
$
52,437

 
$
62,667

Accruing loans contractually past due 90 days or more as to interest or principal payments, excluding acquired loans accounted for under ASC 310-30:
 
 
 
 
Commercial
 
$

 
$
3,521

 
$
58

 
$
1,823

 
$
11

 
$
221

 
$
3

 
$
370

Commercial real estate
 
13

 
144

 
262

 
700

 
277

 
739

 
3

 

Real estate construction
 

 

 

 

 

 
1,439

 

 

Residential mortgage
 

 

 

 

 

 
375

 
407

 
423

Home equity
 
1,364

 
2,367

 
2,026

 
1,169

 
995

 
628

 
1,071

 
679

Total accruing loans contractually past due 90 days or more as to interest or principal payments
 
$
1,377

 
$
6,032

 
$
2,346

 
$
3,692

 
$
1,283

 
$
3,402

 
$
1,484

 
$
1,472

(1) Acquired loans, accounted for under Accounting Standards Codification 310-30, that are not performing in accordance with contractual terms are not reported as nonperforming loans because these loans are recorded in pools at their net realizable value based on the principal and interest the Corporation expects to collect on these loans.

14


Chemical Financial Corporation Announces Fourth Quarter and Full Year 2017 Operating Results
 
Summary of Loan Loss Experience (Unaudited)
Chemical Financial Corporation
(Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended
 
4th Quarter 2017
 
3rd Quarter 2017
 
2nd Quarter 2017
 
1st Quarter 2017
 
4th Quarter 2016
 
3rd Quarter 2016
 
2nd Quarter 2016
 
1st Quarter 2016
 
Dec 31,
2017
 
Dec 31,
2016
Allowance for loan losses - originated portfolio
 
 
 
 
  Allowance for loan losses - beginning of period
$
85,181

 
$
83,797

 
$
78,774

 
$
78,268

 
$
73,775

 
$
71,506

 
$
70,318

 
$
73,328

 
$
78,268

 
$
73,328

Provision for loan losses
8,101

 
4,920

 
6,229

 
4,050

 
6,272

 
4,103

 
3,000

 
1,500

 
23,300

 
14,875

Net loan charge-offs:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
(613
)
 
(2,348
)
 
(239
)
 
(1,999
)
 
(336
)
 
(150
)
 
(1,153
)
 
(3,115
)
 
(5,199
)
 
(4,754
)
Commercial real estate
783

 
(174
)
 
(205
)
 
730

 
(280
)
 
(154
)
 
(187
)
 
(440
)
 
1,134

 
(1,061
)
Real estate construction
(1
)
 

 

 
(9
)
 
36

 
(31
)
 

 
(11
)
 
(10
)
 
(6
)
Residential mortgage
(142
)
 
(44
)
 
19

 
(567
)
 
(236
)
 
(304
)
 
8

 
(172
)
 
(734
)
 
(704
)
Consumer installment
(1,318
)
 
(857
)
 
(747
)
 
(1,310
)
 
(823
)
 
(1,137
)
 
(486
)
 
(602
)
 
(4,232
)
 
(3,048
)
Home equity
(104
)
 
(113
)
 
(34
)
 
(389
)
 
(140
)
 
(58
)
 
6

 
(170
)
 
(640
)
 
(362
)
Net loan charge-offs
(1,395
)
 
(3,536
)
 
(1,206
)
 
(3,544
)
 
(1,779
)
 
(1,834
)
 
(1,812
)
 
(4,510
)
 
(9,681
)
 
(9,935
)
Allowance for loan losses - end of period
$
91,887

 
$
85,181

 
$
83,797

 
$
78,774

 
$
78,268

 
$
73,775

 
$
71,506

 
$
70,318

 
$
91,887

 
$
78,268

Allowance for loan losses - acquired loan portfolio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses - beginning of period
579

 

 

 

 

 

 

 

 

 

Provision for loan losses
(579
)
 
579

 

 

 

 

 

 

 

 

Allowance for loan losses - end of period

 
579

 

 

 

 

 

 

 

 

Total allowance for loan losses
$
91,887

 
$
85,760

 
$
83,797

 
$
78,774

 
$
78,268

 
$
73,775

 
$
71,506

 
$
70,318

 
$
91,887

 
$
78,268

Net loan charge-offs as a percent of average loans (quarterly amounts annualized)
0.04%
 
0.10%
 
0.04%
 
0.11%
 
0.06%
 
0.08%
 
0.10%
 
0.25%
 
0.07%
 
0.11%

 
Dec 31,
2017
 
Sep 30,
2017
 
Jun 30,
2017
 
Mar 31,
2017
 
Dec 31,
2016
 
 
 
 
 
 
 
 
 
 
Originated loans
$
9,747,429

 
$
9,156,096

 
$
8,659,622

 
$
7,959,769

 
$
7,458,401

Acquired loans
4,407,838

 
4,677,272

 
5,007,750

 
5,313,623

 
5,532,378

Total loans
$
14,155,267

 
$
13,833,368

 
$
13,667,372

 
$
13,273,392

 
$
12,990,779

 
 
 
 
 
 
 
 
 
 
Allowance for loan losses as a percent of:
 
 
 
 
Total originated loans
0.94%
 
0.93%
 
0.97%
 
0.99%
 
1.05%
Nonperforming loans
145.6%
 
156.9%
 
164.7%
 
177.7%
 
176.5%
Credit mark as a percent of unpaid principal balance on acquired loans
2.4%
 
2.7%
 
2.6%
 
2.8%
 
3.1%





15




Chemical Financial Corporation Announces Fourth Quarter and Full Year 2017 Operating Results
 
Reconciliation of Non-GAAP Financial Measures (Unaudited)
Chemical Financial Corporation
(Dollars in thousands)
 
4th Quarter 2017
 
3rd Quarter 2017
 
2nd Quarter 2017
 
1st Quarter 2017
 
4th Quarter 2016
 
3rd Quarter 2016
 
2nd Quarter 2016
 
1st Quarter 2016
 
Year Ended
 
 
 
 
 
 
 
 
 
Dec 31, 2017
 
Dec 31, 2016
Non-GAAP Operating Results
 
 
 
 
 
 
 
 
 
 
Net Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, as reported
$
9,446

 
$40,459
 
$52,014
 
$47,604
 
$47,168
 
$11,484
 
$25,775
 
$23,605
 
$149,523
 
$108,032
Merger and restructuring expenses
2,567

 
21,203

 
465

 
4,167

 
18,016

 
37,470

 
3,054

 
2,594

 
28,402

 
61,134

Gain on sales of branch offices

 

 

 

 
(7,391
)
 

 

 

 

 
(7,391
)
Losses on sales of investment securities(1)
7,556

 

 

 

 

 

 

 

 
7,556

 

Significant items
10,123

 
21,203

 
465

 
4,167

 
10,625

 
37,470

 
3,054

 
2,594

 
35,958

 
53,743

Income tax benefit (2)
(3,543
)
 
(7,421
)
 
(163
)
 
(1,458
)
 
(3,719
)
 
(12,352
)
 
(1,069
)
 
(908
)
 
(12,585
)
 
(18,048
)
Revaluation of net deferred tax assets
46,660

 

 

 

 

 

 

 

 
46,660

 

Significant items, net of tax
53,240

 
13,782

 
302

 
2,709

 
6,906

 
25,118

 
1,985

 
1,686

 
70,033

 
35,695

Net income, excluding significant items
$
62,686

 
$
54,241

 
$
52,316

 
$
50,313

 
$
54,074

 
$
36,602

 
$
27,760

 
$
25,291

 
$
219,556

 
$
143,727

Diluted Earnings Per Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings per share, as reported
$
0.13

 
$
0.56

 
$
0.73

 
$
0.67

 
$
0.66

 
$
0.23

 
$
0.67

 
$
0.60

 
$
2.08

 
$
2.17

Effect of significant items, net of tax
0.74

 
0.20

 

 
0.03

 
0.09

 
0.50

 
0.05

 
0.05

 
0.98

 
0.71

Diluted earnings per share, excluding significant items
$
0.87

 
$
0.76

 
$
0.73

 
$
0.70

 
$
0.75

 
$
0.73

 
$
0.72

 
$
0.65

 
$
3.06

 
$
2.88

Return on Average Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets, as reported
0.20
%
 
0.86
%
 
1.14
%
 
1.09
%
 
1.09
%
 
0.37
%
 
1.10
%
 
1.02
%
 
0.81
%
 
0.90
%
Effect of significant items, net of tax
1.11

 
0.29

 
0.01

 
0.06

 
0.16

 
0.83

 
0.09

 
0.07

 
0.38

 
0.29

Return on average assets, excluding significant items
1.31
%
 
1.15
%
 
1.15
%
 
1.15
%
 
1.25
%
 
1.20
%
 
1.19
%
 
1.09
%
 
1.19
%
 
1.19
%
Return on Average Shareholders' Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average shareholders' equity, as reported
1.4
%
 
6.1
%
 
8.0
%
 
7.4
%
 
7.4
%
 
2.9
%
 
10.0
%
 
9.3
%
 
5.7
%
 
7.0
%
Effect of significant items, net of tax
8.0

 
2.1

 

 
0.4

 
1.0

 
6.5

 
0.7

 
0.6

 
2.7

 
2.3

Return on average shareholders' equity, excluding significant items
9.4
%
 
8.2
%
 
8.0
%
 
7.8
%
 
8.4
%
 
9.4
%
 
10.7
%
 
9.9
%
 
8.4
%
 
9.3
%
Return on Average Tangible Shareholders' Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average shareholders' equity, as reported
$2,676,029
 
$2,643,233
 
$2,606,517
 
$2,584,501
 
$2,564,943
 
$1,559,668
 
$1,033,014
 
$1,017,929
 
$2,627,862
 
$1,546,721
Average goodwill, CDI and noncompete agreements, net of tax
1,156,122
 
1,153,394
 
1,154,229
 
1,155,177
 
1,153,598
 
585,393
 
295,882
 
299,685
 
1,155,734
 
582,536
Average tangible shareholders' equity
1,519,907
 
1,489,839
 
1,452,288
 
1,429,324
 
1,411,345
 
974,275
 
737,132
 
718,244
 
1,472,128
 
964,185
Return on average tangible shareholders' equity
2.5
%
 
10.9
%
 
14.3
%
 
13.3
%
 
13.4
%
 
4.7
%
 
14.0
%
 
13.1
%
 
10.2
%
 
11.2
%
Effect of significant items, net of tax
14.0

 
3.7

 
0.1

 
0.8

 
1.9

 
10.3

 
1.1

 
1.0

 
4.7

 
3.7

Return on average tangible shareholders' equity, excluding significant items
16.5
%
 
14.6
%
 
14.4
%
 
14.1
%
 
15.3
%
 
15.0
%
 
15.1
%
 
14.1
%
 
14.9
%
 
14.9
%
(1)
Represents losses on sales of investment securities in the fourth quarter of 2017 as part of the Corporation's treasury and tax management objectives.
(2)
Assumes transaction expenses and other significant items are deductible at an income tax rate of 35%, except for the impact of estimated nondeductible expenses incurred in periods when the Corporation completes merger and acquisition transactions.


16


Chemical Financial Corporation Announces Fourth Quarter and Full Year 2017 Operating Results
 
Reconciliation of Non-GAAP Financial Measures (Unaudited)
Chemical Financial Corporation
(Dollars in thousands, except per share data)
 
4th Quarter 2017
 
3rd Quarter 2017
 
2nd Quarter 2017
 
1st Quarter 2017
 
4th Quarter 2016
 
3rd Quarter 2016
 
2nd Quarter 2016
 
1st Quarter 2016
 
Year Ended
 
 
 
 
 
 
 
 
 
Dec 31, 2017
 
Dec 31, 2016
Efficiency Ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
145,905

 
$
143,628

 
$
137,948

 
$
130,097

 
$
132,447

 
$
96,809

 
$
77,495

 
$
74,330

 
$
557,578

 
$
381,081

Noninterest income
32,319

 
32,122

 
41,568

 
38,010

 
54,264

 
27,770

 
20,897

 
19,419

 
144,019

 
122,350

Total revenue - GAAP
178,224

 
175,750

 
179,516

 
168,107

 
186,711

 
124,579

 
98,392

 
93,749

 
701,597

 
503,431

Net interest income FTE adjustment
3,580

 
3,260

 
3,169

 
3,068

 
2,945

 
2,426

 
2,138

 
2,133

 
13,077

 
9,642

Loan servicing rights change in fair value (gains)losses
13

 
4,041

 
1,802

 
519

 
(6,348
)
 
1,236

 

 

 
6,375

 
(5,112
)
Gains on sales of branches

 

 

 

 
(7,391
)
 

 

 

 

 
(7,391
)
Losses (gains) from sale of investment securities and closed branch locations
7,556

 
(1
)
 
(77
)
 
(90
)
 
(76
)
 
(301
)
 
(123
)
 
(169
)
 
7,388

 
(669
)
Total revenue - Non-GAAP
$
189,373

 
$
183,050

 
$
184,410

 
$
171,604

 
$
175,841

 
$
127,940

 
$
100,407

 
$
95,713

 
$
728,437

 
$
499,901

Operating expenses - GAAP
$
100,022

 
$
119,539

 
$
98,237

 
$
104,196

 
$
114,302

 
$
106,144

 
$
59,085

 
$
58,887

 
$
421,994

 
$
338,418

Merger and restructuring expenses
(2,567
)
 
(21,203
)
 
(465
)
 
(4,167
)
 
(18,016
)
 
(37,470
)
 
(3,054
)
 
(2,594
)
 
(28,402
)
 
(61,134
)
Impairment of income tax credits
(6,157
)
 
(3,095
)
 

 

 

 

 

 

 
(9,252
)
 

Operating expense, core - Non-GAAP
91,298

 
95,241

 
97,772

 
100,029

 
96,286

 
68,674

 
56,031

 
56,293

 
384,340

 
277,284

Amortization of intangibles
(1,525
)
 
(1,526
)
 
(1,525
)
 
(1,513
)
 
(1,843
)
 
(1,292
)
 
(1,195
)
 
(1,194
)
 
(6,089
)
 
(5,524
)
Operating expenses, efficiency ratio - Non-GAAP
$
89,773

 
$
93,715

 
$
96,247

 
$
98,516

 
$
94,443

 
$
67,382

 
$
54,836

 
$
55,099

 
$
378,251

 
$
271,760

Efficiency ratio - GAAP
56.1
%
 
68.0
%
 
54.7
%
 
62.0
%
 
61.2
%
 
85.2
%
 
60.1
%
 
62.8
%
 
60.1
%
 
67.2
%
Efficiency ratio - adjusted Non-GAAP
47.4
%
 
51.2
%
 
52.2
%
 
57.4
%
 
53.7
%
 
52.7
%
 
54.6
%
 
57.6
%
 
51.9
%
 
54.4
%

 
Dec 31,
2017
 
Sep 30,
2017
 
Jun 30,
2017
 
Mar 31,
2017
 
Dec 31,
2016
 
Sep 30,
2016
 
Jun 30,
2016
 
Mar 31,
2016
Tangible Book Value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders' equity, as reported
$
2,668,749

 
$
2,673,089

 
$
2,639,442

 
$
2,600,051

 
$
2,581,526

 
$
2,563,666

 
$
1,050,299

 
$
1,032,291

Goodwill, CDI and noncompete agreements, net of tax
(1,158,738
)
 
(1,153,576
)
 
(1,153,595
)
 
(1,154,915
)
 
(1,155,528
)
 
(1,154,121
)
 
(297,044
)
 
(297,821
)
Tangible shareholders' equity
$
1,510,011

 
$
1,519,513

 
$
1,485,847

 
$
1,445,136

 
$
1,425,998

 
$
1,409,545

 
$
753,255

 
$
734,470

Common shares outstanding
71,207

 
71,152

 
71,131

 
71,118

 
70,599

 
70,497

 
38,267

 
38,248

Book value per share (shareholders' equity, as reported, divided by common shares outstanding)
$
37.48

 
$
37.57

 
$
37.11

 
$
36.56

 
$
36.57

 
$
36.37

 
$
27.45

 
$
26.99

Tangible book value per share (tangible shareholders' equity divided by common shares outstanding)
$
21.21

 
$
21.36

 
$
20.89

 
$
20.32

 
$
20.20

 
$
19.99

 
$
19.68

 
$
19.20

Tangible Shareholders' Equity to Tangible Assets
 
 
 
 
 
 
 
 
 
 
 
 
Total assets, as reported
$19,280,873
 
$19,354,308
 
$18,781,405
 
$17,636,973
 
$17,355,179
 
$17,383,637
 
$9,514,172
 
$9,303,632
Goodwill, CDI and noncompete agreements, net of tax
(1,158,738
)
 
(1,153,576
)
 
(1,153,595
)
 
(1,154,915
)
 
(1,155,528
)
 
(1,154,121
)
 
(297,044
)
 
(297,821
)
Tangible assets
$18,122,135
 
$18,200,732
 
$17,627,810
 
$16,482,058
 
$16,199,651
 
$16,229,516
 
$9,217,128
 
$9,005,811
Shareholders' equity to total assets
13.8
%
 
13.8
%
 
14.1
%
 
14.7
%
 
14.9
%
 
14.7
%
 
11.0
%
 
11.1
%
Tangible shareholders' equity to tangible assets
8.3
%
 
8.3
%
 
8.4
%
 
8.8
%
 
8.8
%
 
8.7
%
 
8.2
%
 
8.2
%


17