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Chemical Financial Corporation Reports 2017 Second Quarter Operating Results

MIDLAND, Mich., July 25, 2017 (GLOBE NEWSWIRE) -- Chemical Financial Corporation ("Corporation" or "Chemical") (NASDAQ:CHFC) today announced 2017 second quarter net income of $52.0 million, or $0.73 per diluted share, compared to 2017 first quarter net income of $47.6 million, or $0.67 per diluted share and 2016 second quarter net income of $25.8 million, or $0.67 per diluted share. Excluding transaction expenses and the change in fair value in loan servicing rights ("significant items"), net income in the second quarter of 2017 was $53.5 million, or $0.75 per diluted share, compared to $50.7 million, or $0.71 per diluted share, in the first quarter of 2017 and $27.8 million, or $0.72 per diluted share, in the second quarter of 2016.(1)

During the second quarter of 2017, significant items included transaction expenses of $0.5 million and a $1.8 million detriment to earnings due to the change in fair value in loan servicing rights, compared to transaction expenses of $4.2 million and a $0.5 million detriment to earnings due to the change in fair value in loan servicing rights in the first quarter of 2017. Transaction expenses for the second quarter of 2016 were $3.1 million.

"We are encouraged by the underlying trends this quarter including improved operating expense trends, fee income and quality loan growth," noted David T. Provost, Chief Executive Officer of Chemical Financial Corporation and Thomas C. Shafer, Vice Chairman of the Corporation and Chief Executive Officer of Chemical Bank. "Going forward, we will seek to further improve our fundamentals by carefully assessing how we allocate capital and focusing on strategies to enhance revenue growth while continuing to improve our operating efficiency."

The Corporation's return on average assets was 1.14% during the second quarter of 2017, compared to 1.09% during the first quarter of 2017 and 1.10% in the second quarter of 2016. The Corporation's return on average shareholders' equity was 8.0% in the second quarter of 2017, compared to 7.4% during the first quarter of 2017 and 10.0% in the second quarter of 2016. Excluding significant items, the Corporation's return on average assets was 1.17% during the second quarter of 2017, compared to 1.16% during the first quarter of 2017 and 1.19% in the second quarter of 2016 and the Corporation's return on average shareholders' equity was 8.2% in the second quarter of 2017, compared to 7.8% during the first quarter of 2017 and 10.7% in the second quarter of 2016. The Corporation's return on average tangible shareholders' equity was 14.3% in the second quarter of 2017, compared to 13.3% during the first quarter of 2017 and 14.3% in the second quarter of 2016. Excluding significant items, the Corporation's return on average tangible equity was 14.7% in the second quarter of 2017, compared to 14.2% during the first quarter of 2017 and 15.4% in the second quarter of 2016.(2)

Net interest income was $137.9 million in the second quarter of 2017, $7.9 million, or 6.0%, higher than the first quarter of 2017 and $60.5 million, or 78.0%, higher than the second quarter of 2016. The higher net interest income in the second quarter of 2017 compared to the first quarter of 2017 was driven by the positive impact of organic loan growth, an increase in the investment securities portfolio, an increase in interest accretion from purchase accounting discounts on acquired loans, and one additional day in the quarter. These benefits to net interest income were partially offset by the interest expense impact of increases in short-term borrowings and deposits. The increase in net interest income in the second quarter of 2017 over the second quarter of 2016 was primarily attributable to loans acquired in the merger with Talmer Bancorp, Inc. ("Talmer") and organic loan growth. The Corporation experienced net organic loan growth of $394.0 million during the second quarter of 2017 and $1.14 billion during the twelve months ended June 30, 2017. The merger with Talmer added $4.88 billion of loans on August 31, 2016.

The net interest margin was 3.41% in both the second quarter of 2017 and the first quarter of 2017, compared to 3.60% in the second quarter of 2016. The net interest margin (on a tax-equivalent basis) was 3.48% in the second quarter of 2017, compared to 3.49% in the first quarter of 2017 and 3.70% in the second quarter of 2016.(3) The net interest margin (on a tax-equivalent basis) in the second quarter of 2017, compared to the first quarter of 2017, was compressed due to an increase in the investment securities portfolio funded by an increase in short-term borrowings. This compression was offset by an increase of 11 basis points in yield on total loans in the second quarter of 2017 to 4.22%, compared to the first quarter of 2017, primarily due to an increase of interest accretion from purchase accounting discounts on acquired loans and an increase in the average coupon rates on loans.

The provision for loan losses was $6.2 million in the second quarter of 2017, compared to $4.1 million in the first quarter of 2017 and $3.0 million in the second quarter of 2016. The increase in the provision for loan losses in the second quarter of 2017, compared to both the first quarter of 2017 and the second quarter of 2016, was primarily the result of an increase in organic growth in the loan portfolio. Originated loan growth was $699.9 million in the second quarter of 2017, compared to $501.4 million in the first quarter of 2017. The growth in the originated loan portfolio was partially offset by run-off in the acquired loan portfolio of $305.9 million in the second quarter of 2017, compared to $218.8 million in the first quarter of 2017. It is important to note that the acquired loan portfolio was adjusted to the fair value of loans at each respective acquisition date and, as of June 30, 2017, no allowance has been recorded for this population of loans. Therefore, the run-off of acquired loans does not result in the reduction of allowance.

Net loan charge-offs were $1.2 million, or 0.04% of average loans, in the second quarter of 2017, compared to $3.5 million, or 0.11% of average loans, in the first quarter of 2017 and $1.8 million, or 0.10% of average loans, in the second quarter of 2016. Net loan charge-offs in the first quarter of 2017 included $1.5 million of losses from one commercial loan relationship.

The Corporation's nonperforming loans totaled $50.9 million at June 30, 2017, compared to $47.8 million at March 31, 2017 and $44.0 million at June 30, 2016. Nonperforming loans comprised 0.37% of total loans at June 30, 2017, compared to 0.36% at March 31, 2017 and 0.58% at June 30, 2016. The decrease in the percentage of nonperforming loans to total loans at June 30, 2017, compared to June 30, 2016, was primarily due to $4.88 billion of total loans added as a result of the merger with Talmer, as none of these loans are classified as nonperforming after the merger date since they are recorded in loan pools at their estimated net realizable value in accordance with generally accepted accounting principles.

At June 30, 2017, the allowance for loan losses of the originated loan portfolio was $83.8 million, or 0.97% of originated loans, compared to $78.8 million, or 0.99% of originated loans, at March 31, 2017 and $71.5 million, or 1.12% of originated loans, at June 30, 2016. The reduction in allowance for loan losses as a percentage of originated loans primarily reflects overall credit improvement. The allowance for loan losses of the originated loan portfolio as a percentage of nonperforming loans was 164.7% at both June 30, 2017 and March 31, 2017, compared to 162.5% at June 30, 2016.

Noninterest income was $41.6 million in the second quarter of 2017, compared to $38.0 million in the first quarter of 2017 and $20.9 million in the second quarter of 2016. Noninterest income in the second quarter of 2017 increased compared to the first quarter of 2017, primarily due to a $1.1 million increase in wealth management revenue. Net gain on sale of loans and other mortgage banking revenue also increased $0.7 million and included a $1.8 million detriment to earnings due to a change in fair value in loan servicing rights in the second quarter of 2017, compared to a $0.5 million detriment in the first quarter of 2017. Noninterest income in the second quarter of 2017 was higher than the second quarter of 2016 due primarily to incremental revenue resulting from the merger with Talmer.

Operating expenses were $98.2 million in the second quarter of 2017, compared to $104.2 million in the first quarter of 2017 and $59.1 million in the second quarter of 2016. Operating expenses included transaction expenses of $0.5 million in the second quarter of 2017, $4.2 million in the first quarter of 2017 and $3.1 million in the second quarter of 2016. Excluding these transaction expenses, operating expenses were $97.8 million in the second quarter of 2017, compared to $100.0 million in the first quarter of 2017 and $56.0 million in the second quarter of 2016.(4) The decrease in operating expenses, excluding transaction expenses, in the second quarter of 2017, compared to the first quarter of 2017 was primarily due to a decrease of $7.6 million in salaries, wages and employee benefits expenses, aided by a decrease in payroll taxes mostly attributable to stock option exercises during the first quarter of 2017 and an increase in the deferral of loan origination costs due to increased loan production and revised loan origination costs based on an updated loan origination cost study. The increase in operating expenses, excluding transaction expenses, in the second quarter of 2017, compared to the second quarter of 2016, was primarily attributable to incremental expenses resulting from the merger with Talmer.

The effective tax rate was 30.7% in the second quarter of 2017, compared to 20.5% in the first quarter of 2017 and 29.0% in the second quarter of 2016. The tax rate for the first quarter of 2017 benefited from stock option exercises that occurred in the first quarter of 2017.

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 54.7% in the second quarter of 2017, compared to 62.0% in the first quarter of 2017 and 60.1% in the second quarter of 2016. The Corporation's adjusted efficiency ratio, which excludes significant items, amortization of intangibles and net gains on sales of branches, closed branch locations and investment securities, was 52.2% in the second quarter of 2017, compared to 57.4% in the first quarter of 2017 and 54.6% in the second quarter of 2016.(5)

Total assets were $18.78 billion at June 30, 2017, compared to $17.64 billion at March 31, 2017 and $9.51 billion at June 30, 2016. The increase in total assets during the three months ended June 30, 2017 was primarily attributable to an increase in investment securities available-for-sale and loan growth that was funded by an increase in short-term FHLB advances. During the quarter, the investment securities portfolio grew by $490.0 million to $2.41 billion at June 30, 2017. The increase in total assets during the twelve months ended June 30, 2017 was primarily attributable to the merger with Talmer, organic loan growth and an increase in investment securities available-for-sale.

Total loans were $13.67 billion at June 30, 2017, an increase of $394.0 million, or 3.0%, from total loans of $13.27 billion at March 31, 2017 and an increase of $6.02 billion, or 78.7%, from total loans of $7.65 billion at June 30, 2016. The Corporation experienced organic loan growth of $394.0 million during the second quarter of 2017 and $1.14 billion during the twelve months ended June 30, 2017. The Corporation added $4.88 billion of loans as part of the merger with Talmer on August 31, 2016.

Total deposits were $13.20 billion at June 30, 2017, compared to $13.13 billion at March 31, 2017 and $7.46 billion at June 30, 2016. The Corporation experienced organic growth in customer deposits of $72.0 million during the second quarter of 2017. The Corporation added $5.29 billion of deposits as part of the merger with Talmer that was completed on August 31, 2016, including $403.2 million of brokered deposits. The Corporation reduced the balance of brokered deposits by $351.2 million during the period of September 30, 2016 to June 30, 2017.

Securities sold under agreements to repurchase with customers were $310.0 million at June 30, 2017, compared to $398.9 million at March 31, 2017 and $256.2 million at June 30, 2016. Short-term borrowings were $2.05 billion at June 30, 2017, compared to $900.0 million at March 31, 2017 and $300.0 million at June 30, 2016 and consisted of short-term FHLB advances utilized by the Corporation to fund short-term liquidity needs. The increase in short-term FHLB advances in the second quarter 2017 was primarily utilized to fund an increase in the investment securities portfolio and loan growth. Long-term borrowings were $435.9 million at June 30, 2017, compared to $490.9 million at March 31, 2017 and $371.6 million at June 30, 2016.

The Corporation's shareholders' equity to total assets ratio was 14.1% at June 30, 2017, compared to 14.7% at March 31, 2017 and 11.0% at June 30, 2016. The Corporation's tangible equity to tangible assets ratio and total risk-based capital ratio were 8.4% and 11.1% (estimated), respectively, at June 30, 2017 compared to 8.8% and 11.4%, respectively, at March 31, 2017 and 8.2% and 11.4%, respectively, at June 30, 2016.(6) The Corporation's book value was $37.11 per share at June 30, 2017, compared to $36.56 per share at March 31, 2017 and $27.45 per share at June 30, 2016. The Corporation's tangible book value was $20.89 per share at June 30, 2017, compared to $20.32 per share at March 31, 2017 and $19.68 per share at June 30, 2016.(7)

(1) Net income, excluding significant items, and diluted earnings per share, excluding significant items, are non-GAAP financial measures. 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.

(2) Return on average assets, excluding significant items, return on average shareholders’ equity, excluding significant items, return on average tangible shareholders' equity, and return on average tangible shareholders' equity, excluding significant items are non-GAAP financial measures. 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.

(3) Net interest margin, on a tax equivalent basis, is a non-GAAP financial measure. Please refer to the section entitled "Non-GAAP Financial Measures" in this press release and to the financial tables entitled "Average Balances, Fully Tax Equivalent (FTE) Interest and Effective Yields and Rates" for a reconciliation of net interest income used to compute net interest margin on a tax equivalent basis to the most directly comparable GAAP financial measure.

(4) Operating expenses excluding transaction expenses is a non-GAAP financial measure.

(5) Adjusted efficiency ratio is a non-GAAP financial measure. 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 measure.

(6) Tangible equity to tangible assets ratio is a non-GAAP financial measure. 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 measure.

(7) Tangible book value per share is a non-GAAP financial measure. 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 measure.

Conference Call Details

Chemical Financial Corporation will host a conference call to discuss its second quarter 2017 operating results on Wednesday, July 26, 2017, at 10:30 a.m. ET. Anyone interested may access the conference call on a live basis by dialing toll-free at 1-888-490-2760 and entering 481059 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 249 banking offices located primarily in Michigan, northeast Ohio and northern Indiana. At June 30, 2017, the Corporation had total assets of $18.78 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 relations 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 include 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, and information presented excluding transaction expenses or significant items, including net income, diluted earnings per share, return on average assets, return on average shareholders' equity, operating expenses and the efficiency ratio. 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. 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.

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. 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 improvement of core operating efficiency, future levels of loan charge-offs, future levels of provisions for loan losses, real estate valuation, future levels of nonperforming assets, the rate of asset dispositions, future capital levels, future dividends, future growth and funding sources, future liquidity levels, future profitability levels, future deposit insurance premiums, future asset 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, opportunities to increase top line revenues, the Corporation’s ability to grow its core franchise, future cost savings and the Corporation’s ability to maintain adequate liquidity and capital based on the requirements adopted by the Basel Committee on Banking Supervision and U.S. regulators. 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. 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 Chemical'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.


Chemical Financial Corporation Announces 2017 Second Quarter Operating Results
Consolidated Statements of Financial Position (Unaudited)
Chemical Financial Corporation
(In thousands, except per share data)
June 30,
2017
March 31,
2017
December 31,
2016
June 30,
2016
Assets
Cash and cash equivalents:
Cash and cash due from banks$230,219 $191,940 $237,758 $179,310
Interest-bearing deposits with the Federal Reserve Bank and other banks and federal funds sold389,022 249,840 236,644 53,650
Total cash and cash equivalents619,241 441,780 474,402 232,960
Investment securities:
Available-for-sale1,767,478 1,275,846 1,234,964 458,552
Held-to-maturity645,605 647,192 623,427 552,828
Total investment securities2,413,083 1,923,038 1,858,391 1,011,380
Loans held-for-sale65,371 39,123 81,830 13,990
Loans:
Total loans13,667,372 13,273,392 12,990,779 7,647,269
Allowance for loan losses(83,797) (78,774) (78,268) (71,506)
Net loans13,583,575 13,194,618 12,912,511 7,575,763
Premises and equipment146,460 142,763 145,012 102,709
Loan servicing rights64,522 64,604 58,315 9,677
Goodwill1,133,534 1,133,534 1,133,534 286,867
Other intangible assets37,322 38,848 40,211 24,593
Interest receivable and other assets718,297 658,665 650,973 256,233
Total Assets$18,781,405 $17,636,973 $17,355,179 $9,514,172
Liabilities
Deposits:
Noninterest-bearing$3,626,592 $3,399,287 $3,341,520 $2,007,629
Interest-bearing9,577,775 9,733,060 9,531,602 5,457,017
Total deposits13,204,367 13,132,347 12,873,122 7,464,646
Interest payable and other liabilities141,702 114,789 134,637 71,417
Securities sold under agreements to repurchase with customers310,042 398,910 343,047 256,213
Short-term borrowings2,050,000 900,000 825,000 300,000
Long-term borrowings435,852 490,876 597,847 371,597
Total liabilities16,141,963 15,036,922 14,773,653 8,463,873
Shareholders' Equity
Preferred stock, no par value per share
Common stock, $1 par value per share71,131 71,118 70,599 38,267
Additional paid-in capital2,197,501 2,194,705 2,210,762 726,734
Retained earnings404,939 372,193 340,201 310,996
Accumulated other comprehensive loss(34,129) (37,965) (40,036) (25,698)
Total shareholders' equity2,639,442 2,600,051 2,581,526 1,050,299
Total Liabilities and Shareholders' Equity$18,781,405 $17,636,973 $17,355,179 $9,514,172


Chemical Financial Corporation Announces 2017 Second Quarter Operating Results
Consolidated Statements of Income (Unaudited)
Chemical Financial Corporation
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30,
2017
March 31,
2017
June 30,
2016
June 30,
2017
June 30,
2016
Interest Income
Interest and fees on loans$141,314 $132,485 $77,578 $273,799 $151,979
Interest on investment securities:
Taxable7,125 4,756 1,798 11,881 3,727
Tax-exempt4,426 4,235 2,640 8,661 5,305
Dividends on nonmarketable equity securities1,246 621 777 1,867 1,033
Interest on deposits with the Federal Reserve Bank and other banks and federal funds sold1,022 799 144 1,821 357
Total interest income155,133 142,896 82,937 298,029 162,401
Interest Expense
Interest on deposits10,582 8,916 4,260 19,498 8,319
Interest on short-term borrowings4,659 1,658 226 6,317 326
Interest on long-term borrowings1,944 2,225 956 4,169 1,931
Total interest expense17,185 12,799 5,442 29,984 10,576
Net Interest Income137,948 130,097 77,495 268,045 151,825
Provision for loan losses6,229 4,050 3,000 10,279 4,500
Net interest income after provision for loan losses131,719 126,047 74,495 257,766 147,325
Noninterest Income
Service charges and fees on deposit accounts8,777 8,004 6,337 16,781 12,057
Wealth management revenue6,958 5,827 5,782 12,785 10,983
Other charges and fees for customer services9,734 8,891 6,463 18,625 12,855
Net gain on sale of loans and other mortgage banking revenue9,879 9,160 1,595 19,039 3,000
Gain on sale of investment securities77 90 18 167 37
Other6,143 6,038 702 12,181 1,384
Total noninterest income41,568 38,010 20,897 79,578 40,316
Operating Expenses
Salaries, wages and employee benefits52,601 60,248 33,127 112,849 67,017
Occupancy8,745 7,392 5,514 16,137 10,419
Equipment and software8,149 8,517 4,875 16,666 9,279
Merger and acquisition-related transaction expenses (transaction expenses)465 4,167 3,054 4,632 5,648
Other28,277 23,872 12,515 52,149 25,609
Total operating expenses98,237 104,196 59,085 202,433 117,972
Income before income taxes75,050 59,861 36,307 134,911 69,669
Income tax expense23,036 12,257 10,532 35,293 20,289
Net Income$52,014 $47,604 $25,775 $99,618 $49,380
Earnings Per Common Share:
Weighted average common shares outstanding-basic70,819 70,628 38,258 70,725 38,228
Weighted average common shares outstanding-diluted71,443 71,415 38,600 71,429 38,560
Basic earnings per share$0.73 $0.67 $0.67 $1.41 $1.29
Diluted earnings per share0.73 0.67 0.67 1.39 1.28
Cash Dividends Declared Per Common Share0.27 0.27 0.26 0.54 0.52
Key Ratios (annualized where applicable):
Return on average assets1.14% 1.09% 1.10% 1.11% 1.06%
Return on average shareholders' equity8.0% 7.4% 10.0% 7.7% 9.6%
Net interest margin (tax-equivalent basis) (non-GAAP)3.48% 3.49% 3.70% 3.49% 3.65%
Efficiency ratio - GAAP54.7% 62.0% 60.1% 58.2% 61.4%
Efficiency ratio - adjusted (non-GAAP)52.2% 57.4% 54.6% 54.7% 56.1%


Chemical Financial Corporation Announces 2017 Second Quarter Operating Results
Selected Quarterly Information (Unaudited)
Chemical Financial Corporation
(Dollars in thousands, except per share data)
2nd
Quarter
2017
1st
Quarter
2017
4th
Quarter
2016
3rd
Quarter
2016
2nd
Quarter
2016
1st
Quarter
2016
Summary of Operations
Interest income$155,133 $142,896 $144,416 $103,562 $82,937 $79,464
Interest expense17,185 12,799 11,969 6,753 5,442 5,134
Net interest income137,948 130,097 132,447 96,809 77,495 74,330
Provision for loan losses6,229 4,050 6,272 4,103 3,000 1,500
Net interest income after provision for loan losses131,719 126,047 126,175 92,706 74,495 72,830
Noninterest income41,568 38,010 54,264 27,770 20,897 19,419
Operating expenses, excluding transaction expenses (non-GAAP)97,772 100,029 96,286 68,674 56,031 56,293
Transaction expenses465 4,167 18,016 37,470 3,054 2,594
Income before income taxes75,050 59,861 66,137 14,332 36,307 33,362
Income tax expense23,036 12,257 18,969 2,848 10,532 9,757
Net income$52,014 $47,604 $47,168 $11,484 $25,775 $23,605
Significant items, net of tax1,474 3,046 2,781 25,921 1,985 1,686
Net income, excluding significant items$53,488 $50,650 $49,949 $37,405 $27,760 $25,291
Per Common Share Data
Net income:
Basic$0.73 $0.67 $0.67 $0.23 $0.67 $0.61
Diluted0.73 0.67 0.66 0.23 0.67 0.60
Diluted, excluding significant items (non-GAAP)0.75 0.71 0.70 0.75 0.72 0.65
Cash dividends declared0.27 0.27 0.27 0.27 0.26 0.26
Book value - period-end37.11 36.56 36.57 36.37 27.45 26.99
Tangible book value - period-end20.89 20.32 20.20 19.99 19.68 19.20
Market value - period-end48.41 51.15 54.17 44.13 37.29 35.69
Key Ratios (annualized where applicable)
Net interest margin (taxable equivalent basis) (non-GAAP)3.48% 3.49% 3.56% 3.58% 3.70% 3.60%
Efficiency ratio - adjusted (non-GAAP)52.2% 57.4% 53.7% 52.7% 54.6% 57.6%
Return on average assets1.14% 1.09% 1.09% 0.37% 1.10% 1.02%
Return on average shareholders' equity8.0% 7.4% 7.4% 2.9% 10.0% 9.3%
Average shareholders' equity as a percent of average assets14.3% 14.8% 14.9% 12.7% 11.1% 11.0%
Capital ratios (period end):
Tangible shareholders' equity as a percent of tangible assets8.4% 8.8% 8.8% 8.7% 8.2% 8.2%
Total risk-based capital ratio (1)11.1% 11.4% 11.5% 11.1% 11.4% 11.5%

(1) Estimated at June 30, 2017.


Chemical Financial Corporation Announces 2017 Second Quarter Operating Results
Average Balances, Fully Tax Equivalent (FTE) Interest and Effective Yields and Rates(1) (Unaudited)
Chemical Financial Corporation
(Dollars in thousands)
Three Months Ended
June 30, 2017 March 31, 2017 June 30, 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)$13,513,927 $142,128 4.22% $13,155,846 $133,293 4.11% $7,511,192 $78,295 4.19%
Taxable investment securities1,364,358 7,125 2.09 1,005,489 4,756 1.89 515,303 1,798 1.40
Tax-exempt investment securities(1)882,445 6,781 3.07 861,508 6,495 3.02 484,271 4,061 3.35
Other interest-earning assets166,244 1,246 3.01 103,334 621 2.44 43,615 777 7.16
Interest-bearing deposits with the FRB and other banks and federal funds sold302,022 1,022 1.36 269,288 799 1.20 82,246 144 0.70
Total interest-earning assets16,228,996 158,302 3.91 15,395,465 145,964 3.83 8,636,627 85,075 3.96
Less: allowance for loan losses(80,690) (78,616) (71,790)
Other assets:
Cash and cash due from banks222,954 229,203 148,034
Premises and equipment145,320 146,044 104,488
Interest receivable and other assets1,748,119 1,781,923 515,039
Total assets$18,264,699 $17,474,019 $9,332,398
Liabilities and shareholders' equity
Interest-bearing liabilities:
Interest-bearing demand deposits$2,682,652 $1,289 0.19% $2,898,061 $1,018 0.14% $1,892,512 $582 0.12%
Savings deposits3,881,260 3,047 0.31 3,842,594 1,721 0.18 2,073,412 476 0.09
Time deposits2,958,436 6,246 0.85 2,953,069 6,177 0.85 1,582,467 3,202 0.81
Short-term borrowings2,027,505 4,659 0.92 1,225,888 1,658 0.55 418,232 226 0.22
Long-term borrowings474,086 1,944 1.65 539,032 2,225 1.67 281,327 956 1.37
Total interest-bearing liabilities12,023,939 17,185 0.57 11,458,644 12,799 0.45 6,247,950 5,442 0.35
Noninterest-bearing deposits3,499,686 3,305,201 1,979,423
Total deposits and borrowed funds15,523,625 17,185 0.44 14,763,845 12,799 0.35 8,227,373 5,442 0.27
Interest payable and other liabilities134,557 125,673 72,011
Shareholders' equity2,606,517 2,584,501 1,033,014
Total liabilities and shareholders' equity$18,264,699 $17,474,019 $9,332,398
Net Interest Spread (Average yield earned on interest-earning assets minus average rate paid on interest-bearing liabilities) 3.34% 3.38% 3.61%
Net Interest Income (FTE) $141,117 $133,165 $79,633
Net Interest Margin (Net Interest Income (FTE) divided by total average interest-earning assets) 3.48% 3.49% 3.70%
Reconciliation to Reported Net Interest Income
Net interest income, fully taxable equivalent (non-GAAP) $141,117 $133,165 $79,633
Adjustments for taxable equivalent interest (1):
Loans (814) (808) (717)
Tax-exempt investment securities (2,355) (2,260) (1,421)
Total taxable equivalent interest adjustments (3,169) (3,068) (2,138)
Net interest income (GAAP) $137,948 $130,097 $77,495
Net interest margin (GAAP) 3.41% 3.41% 3.60%

(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.


Chemical Financial Corporation Announces 2017 Second Quarter Operating Results
Average Balances, Fully Tax Equivalent (FTE) Interest and Effective Yields and Rates (1) (Unaudited)
Chemical Financial Corporation
(Dollars in thousands)
Six Months Ended
June 30, 2017 June 30, 2016
Average
Balance
Interest
(FTE)
Effective
Yield/Rate(1)
Average
Balance
Interest
(FTE)
Effective
Yield/Rate(1)
Assets
Interest-earning assets:
Loans (1)(2) $13,335,876 $275,421 4.16% $7,405,332 $153,394 4.16%
Taxable investment securities 1,185,915 11,881 2.00 534,914 3,727 1.39
Tax-exempt investment securities (1) 872,034 13,276 3.04 490,287 8,161 3.33
Other interest-earning assets 134,962 1,867 2.79 41,554 1,033 5.00
Interest-bearing deposits with the FRB and other banks and federal funds sold 285,746 1,821 1.28 109,582 357 0.66
Total interest-earning assets 15,814,533 304,266 3.87 8,581,669 166,672 3.90
Less: allowance for loan losses (79,658) (72,669)
Other assets:
Cash and cash due from banks 226,061 153,156
Premises and equipment 145,680 105,223
Interest receivable and other assets 1,764,925 519,337
Total assets $17,871,541 $9,286,716
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits $2,789,762 $2,307 0.17% $1,923,068 $1,050 0.11%
Savings deposits 3,862,033 4,768 0.25 2,061,141 865 0.08
Time deposits 2,955,768 12,423 0.85 1,604,020 6,404 0.80
Short-term borrowings 1,628,911 6,317 0.78 383,966 326 0.17
Long-term borrowings 506,379 4,169 1.66 273,675 1,931 1.42
Total interest-bearing liabilities 11,742,853 29,984 0.51 6,245,870 10,576 0.34
Noninterest-bearing deposits 3,402,981 1,943,159
Total deposits and borrowed funds 15,145,834 29,984 0.40 8,189,029 10,576 0.26
Interest payable and other liabilities 130,140 72,216
Shareholders' equity 2,595,567 1,025,471
Total liabilities and shareholders' equity $17,871,541 $9,286,716
Net Interest Spread (Average yield earned on interest-earning assets minus average rate paid on interest-bearing liabilities) 3.36% 3.56%
Net Interest Income (FTE) $274,282 $156,096
Net Interest Margin (Net Interest Income (FTE) divided by total average interest-earning assets) 3.49% 3.65%
Reconciliation to Reported Net Interest Income
Net interest income, fully taxable equivalent (non-GAAP) $274,282 $156,096
Adjustments for taxable equivalent interest (1):
Loans (1,622) (1,415)
Tax-exempt investment securities (4,615) (2,856)
Total taxable equivalent interest adjustments (6,237) (4,271)
Net interest income (GAAP) $268,045 $151,825
Net interest margin (GAAP) 3.41% 3.55%

(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.


Chemical Financial Corporation Announces 2017 Second Quarter Operating Results
Noninterest Income and Operating Expenses Information (Unaudited)
Chemical Financial Corporation
(Dollars in thousands)
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$8,777 $8,004 $8,414 $7,665 $6,337 $5,720
Wealth management revenue6,958 5,827 6,034 5,584 5,782 5,201
Electronic banking fees7,482 6,817 8,196 5,533 4,786 4,918
Net gain on sale of loans and other mortgage banking revenue9,879 9,160 14,420 4,439 1,595 1,405
Other fees for customer services2,252 2,074 1,785 1,877 1,677 1,474
Gain on sale of investment securities77 90 76 16 18 19
Gain on sale of branch offices 7,391
Other6,143 6,038 7,948 2,656 702 682
Total noninterest income$41,568 $38,010 $54,264 $27,770 $20,897 $19,419


2nd
Quarter
2017
1st
Quarter
2017
4th
Quarter
2016
3rd
Quarter
2016
2nd
Quarter
2016
1st
Quarter
2016
Operating expenses
Salaries and wages$44,959 $48,526 $47,936 $33,841 $26,887 $26,743
Employee benefits7,642 11,722 9,695 6,724 6,240 7,147
Occupancy8,745 7,392 7,644 5,462 5,514 4,905
Equipment and software8,149 8,517 8,709 6,420 4,875 4,404
Outside processing and service fees8,924 7,511 7,290 5,365 4,833 3,711
FDIC insurance premiums2,460 1,406 2,813 1,849 1,338 1,407
Professional fees2,567 1,968 2,304 1,472 1,020 1,036
Intangible asset amortization1,525 1,513 1,843 1,292 1,195 1,194
Credit-related expenses1,895 1,200 (1,029) (371) (1,331) 30
Transaction expenses465 4,167 18,016 37,470 3,054 2,594
Other10,906 10,274 9,081 6,620 5,460 5,716
Total operating expenses$98,237 $104,196 $114,302 $106,144 $59,085 $58,887


Chemical Financial Corporation Announces 2017 Second Quarter Operating Results
Composition of Loans and Deposits and Additional Information on Intangible Assets (Unaudited)
Chemical Financial Corporation
(Dollars in Thousands)
Organic
Growth -
Organic
Growth -
June 30,
2017
March 31, 2017 Three
Months
Ended
June 30,
2017
Dec 31,
2016
Sep 30,
2016
Talmer
Merger
Aug 31,
2016
June 30,
2016
Twelve
Months
Ended
June 30,
2017
Composition of Loans
Commercial loan portfolio:
Commercial$3,360,161 $3,253,608 3.3% $3,217,300 $3,199,576 $1,223,179 $1,953,301 9.4%
Commercial real estate4,324,323 4,097,771 5.5 3,973,140 3,733,377 1,589,900 2,157,733 26.7
Real estate construction446,678 453,811 (1.6) 403,772 500,494 166,364 285,848 (1.9)
Subtotal - commercial loans8,131,162 7,805,190 4.2 7,594,212 7,433,447 2,979,443 4,396,882 17.2
Consumer loan portfolio:
Residential mortgage3,125,397 3,133,465 (0.3) 3,086,474 3,046,959 1,531,641 1,494,192 6.7
Consumer installment1,553,967 1,481,057 4.9 1,433,884 1,335,707 158,835 1,048,622 33.0
Home equity856,846 853,680 0.4 876,209 899,676 212,483 707,573 (8.9)
Subtotal - consumer loans5,536,210 5,468,202 1.2 5,396,567 5,282,342 1,902,959 3,250,387 11.8
Total loans$13,667,372 $13,273,392 3.0% $12,990,779 $12,715,789 $4,882,402 $7,647,269 14.9%


Organic
Growth -
Organic
Growth -
June 30,
2017
March 31,
2017
Three
Months
Ended
June 30,
2017
Dec 31,
2016
Sep 30,
2016
Talmer
Merger

Aug 31,
2016
June 30,
2016
Twelve
Months
Ended
June 30,
2017
Composition of Deposits
Noninterest-bearing demand$3,626,592 $3,399,287 6.7% $3,341,520 $3,264,934 $1,236,902 $2,007,629 19.0%
Savings1,749,199 1,752,040 (0.2) 1,662,115 1,650,276 549,428 1,107,558 8.3
Interest-bearing demand2,606,032 2,900,546 (10.2) 2,825,801 3,316,635 894,748 1,819,865 (6.0)
Money market accounts2,235,412 2,161,645 3.4 2,033,319 1,692,656 699,739 969,566 58.4
Brokered deposits123,728 156,367 (20.9) 226,429 474,902 403,210 173,092 (261.5)
Other time deposits2,863,404 2,762,462 3.7 2,783,938 2,873,459 1,510,591 1,386,936 (2.5)
Total deposits$13,204,367 $13,132,347 0.5% $12,873,122 $13,272,862 $5,294,618 $7,464,646 6.0%


June 30,
2017
March 31,
2017
Dec 31,
2016
Sep 30,
2016
June 30,
2016
Additional Data - Intangibles
Goodwill $1,133,534 $1,133,534 $1,133,534 $1,137,166 $286,867
Loan servicing rights 64,522 64,604 58,315 51,393 9,677
Core deposit intangibles (CDI) 37,235 38,723 40,211 35,618 24,429
Noncompete agreements 87 125 82 164


Chemical Financial Corporation Announces 2017 Second Quarter Operating Results
Nonperforming Assets (Unaudited)
Chemical Financial Corporation
(Dollars in thousands)
June 30,
2017
March 31,
2017
Dec 31,
2016
Sep 30,
2016
June 30,
2016
March 31,
2016
Nonperforming Assets
Nonperforming Loans (1):
Nonaccrual loans:
Commercial $18,773 $16,717 $13,178 $13,742 $14,577 $19,264
Commercial real estate 19,723 20,828 19,877 19,914 21,325 25,859
Real estate construction 56 79 80 80 496 546
Residential mortgage 7,714 6,749 6,969 5,119 5,343 5,062
Consumer installment 757 755 879 378 285 360
Home equity 3,871 2,713 3,351 2,064 1,971 2,328
Total nonaccrual loans(1) 50,894 47,841 44,334 41,297 43,997 53,419
Other real estate and repossessed assets 14,582 16,395 17,187 20,730 8,440 9,248
Total nonperforming assets $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 58 1,823 11 221 3 370
Commercial real estate 262 700 277 739 3
Real estate construction 1,439
Residential mortgage 375 407 423
Home equity 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 $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.


Chemical Financial Corporation Announces 2017 Second Quarter Operating Results
Summary of Allowance and Loan Loss Experience (Unaudited)
Chemical Financial Corporation
(Dollars in thousands)
2nd
Quarter
2017
1st Quarter 2017 4th
Quarter
2016
3rd
Quarter
2016
2nd
Quarter
2016
1st
Quarter
2016
Six Months Ended
June 30,
2017
June 30,
2016
Allowance for loan losses - originated loan portfolio
Allowance for loan losses - beginning of period$78,774 $78,268 $73,775 $71,506 $70,318 $73,328 $78,268 $73,328
Provision for loan losses6,229 4,050 6,272 4,103 3,000 1,500 10,279 4,500
Net loan (charge-offs) recoveries:
Commercial(239) (1,999) (336) (150) (1,153) (3,115) (2,238) (4,268)
Commercial real estate(205) 730 (280) (154) (187) (440) 525 (627)
Real estate construction (9) 36 (31) (11) (9) (11)
Residential mortgage19 (567) (236) (304) 8 (172) (548) (164)
Consumer installment(747) (1,310) (823) (1,137) (486) (602) (2,057) (1,088)
Home equity(34) (389) (140) (58) 6 (170) (423) (164)
Net loan charge-offs(1,206) (3,544) (1,779) (1,834) (1,812) (4,510) (4,750) (6,322)
Allowance for loan losses - end of period83,797 78,774 78,268 73,775 71,506 70,318 83,797 71,506
Allowance for loan losses - acquired loan portfolio
Allowance for loan losses - beginning of period
Provision for loan losses
Allowance for loan losses - end of period
Total allowance for loan losses$83,797 $78,774 $78,268 $73,775 $71,506 $70,318 $83,797 $71,506
Net loan charge-offs as a percent of average loans (annualized)0.04% 0.11% 0.06% 0.08% 0.10% 0.25% 0.07% 0.17%


June 30,
2017
March 31,
2017
Dec 31,
2016
Sep 30,
2016
June 30,
2016
Originated loans$8,659,622 $7,959,769 $7,458,401 $6,755,931 $6,378,934
Acquired loans5,007,750 5,313,623 5,532,378 5,959,858 1,268,335
Total loans$13,667,372 $13,273,392 $12,990,779 $12,715,789 $7,647,269
Allowance for loan losses as a percent of:
Total originated loans0.97% 0.99% 1.05% 1.09% 1.12%
Nonperforming loans164.7% 164.7% 176.5% 178.6% 162.5%
Credit mark as a percent of unpaid principal balance on acquired loans1.3% 2.8% 3.1% 3.0% 4.1%


Chemical Financial Corporation Announces 2017 Second Quarter Operating Results
Reconciliation of Non-GAAP Financial Measures (Unaudited)
Chemical Financial Corporation
(Amounts in thousands)
2nd
Quarter
2017
1st
Quarter
2017
4th
Quarter
2016
3rd
Quarter
2016
2nd
Quarter
2016
1st
Quarter
2016
Six Months Ended
June 30,
2017
June 30,
2016
Non-GAAP Operating Results
Net Income
Net income, as reported$52,014 $47,604 $47,168 $11,484 $25,775 $23,605 $99,618 $49,380
Transaction expenses 465 4,167 18,016 37,470 3,054 2,594 4,632 5,648
Gain on sales of branch offices (7,391)
Loan servicing rights change in fair valuation 1,802 519 (6,348) 1,236 2,321
Significant items 2,267 4,686 4,277 38,706 3,054 2,594 6,953 5,648
Income tax benefit (1) (793) (1,640) (1,496) (12,785) (1,069) (908) (2,433) (1,977)
Significant items, net of tax 1,474 3,046 2,781 25,921 1,985 1,686 4,520 3,671
Net income, excluding significant items$53,488 $50,650 $49,949 $37,405 $27,760 $25,291 $104,138 $53,051
Diluted Earnings Per Share
Diluted earnings per share, as reported$0.73 $0.67 $0.66 $0.23 $0.67 $0.60 $1.39 $1.28
Effect of significant items, net of tax 0.02 0.04 0.04 0.52 0.05 0.05 0.06 0.10
Diluted earnings per share, excluding significant items$0.75 $0.71 $0.70 $0.75 $0.72 $0.65 $1.45 $1.38
Return on Average Assets
Return on average assets, as reported 1.14% 1.09% 1.09% 0.37% 1.10% 1.02% 1.11% 1.06%
Effect of significant items, net of tax 0.03 0.07 0.07 0.85 0.09 0.07 0.06 0.08
Return on average assets, excluding significant items 1.17% 1.16% 1.16% 1.22% 1.19% 1.09% 1.17% 1.14%
Return on Average Shareholders' Equity
Return on average shareholders' equity, as reported 8.0% 7.4% 7.4% 2.9% 10.0% 9.3% 7.7% 9.6%
Effect of significant items, net of tax 0.2 0.4 0.4 6.7 0.7 0.6 0.3 0.7
Return on average shareholders' equity, excluding significant items 8.2% 7.8% 7.8% 9.6% 10.7% 9.9% 8.0% 10.3%
Return on Average Tangible Shareholders' Equity
Average shareholders' equity$2,606,517
$2,584,501 $2,564,943 $1,559,668 $1,033,014 $1,017,929 $2,595,567
$1,025,471
Average goodwill, CDI and noncompete agreements, net of tax 1,171,593 1,173,019 1,172,079 601,544 312,033 313,753 1,172,302
312,893
Average tangible shareholders' equity$1,434,924
$1,411,482 $1,392,864 $958,124 $720,981 $704,176 $1,423,265
$712,578
Return on average tangible shareholders' equity 14.3% 13.3% 13.4% 4.8% 14.3% 13.4% 14.0% 13.9%
Effect of significant items, net of tax 0.4 0.9 0.8 10.8 1.1 1.0 0.6 1.0
Return on average tangible shareholders' equity, excluding significant items 14.7% 14.2% 14.2% 15.6% 15.4% 14.4% 14.6% 14.9%

(1) 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.


Chemical Financial Corporation Announces 2017 Second Quarter Operating Results
Reconciliation of Non-GAAP Financial Measures (Unaudited)
Chemical Financial Corporation
(Amounts in thousands, except per share data)
2nd
Quarter
2017
1st
Quarter
2017
4th
Quarter
2016
3rd
Quarter
2016
2nd
Quarter
2016
1st
Quarter
2016
Six Months Ended
June 30,
2017
June 30,
2016
Efficiency Ratio
Net interest income$137,948 $130,097 $132,447 $96,809 $77,495 $74,330 $268,045 $151,825
Noninterest income41,568 38,010 54,264 27,770 20,897 19,419 79,578 40,316
Total revenue - GAAP179,516 168,107 186,711 124,579 98,392 93,749 347,623 192,141
Net interest income FTE adjustment3,169 3,068 2,945 2,426 2,138 2,133 6,237 4,271
Loan servicing rights change in fair value (gains)losses1,802 519 (6,348) 1,236 2,321
Gain on sales of branch offices (7,391)
Gains from sale of investment securities gains and closed branch locations(77) (90) (76) (301) (123) (169) (167) (292)
Total revenue - Non-GAAP$184,410 $171,604 $175,841 $127,940 $100,407 $95,713 $356,014 $196,120
Operating expenses - GAAP$98,237 $104,196 $114,302 $106,144 $59,085 $58,887 $202,433 $117,972
Transaction expenses(465) (4,167) (18,016) (37,470) (3,054) (2,594) (4,632) (5,648)
Amortization of intangibles(1,525) (1,513) (1,843) (1,292) (1,195) (1,194) (3,038) (2,389)
Operating expenses - Non-GAAP$96,247 $98,516 $94,443 $67,382 $54,836 $55,099 $194,763 $109,935
Efficiency ratio - GAAP54.7% 62.0% 61.2% 85.2% 60.1% 62.8% 58.2% 61.4%
Efficiency ratio - adjusted Non-GAAP52.2% 57.4% 53.7% 52.7% 54.6% 57.6% 54.7% 56.1%


June 30,
2017
March 31,
2017
Dec 31,
2016
Sep 30,
2016
June 30,
2016
March 31,
2016
Tangible Book Value
Shareholders' equity, as reported$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(1,153,595) (1,154,915) (1,155,617) (1,154,121) (297,044) (297,821)
Tangible shareholders' equity$1,485,847 $1,445,136 $1,425,909 $1,409,545 $753,255 $734,470
Common shares outstanding71,131 71,118 70,599 70,497 38,267 38,248
Book value per share (shareholders' equity, as reported, divided by common shares outstanding)$37.11 $36.56 $36.57 $36.37 $27.45 $26.99
Tangible book value per share (tangible shareholders' equity divided by common shares outstanding)$20.89 $20.32 $20.20 $19.99 $19.68 $19.20
Tangible Shareholders' Equity to Tangible Assets
Total assets, as reported$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(1,153,595) (1,154,915) (1,155,617) (1,154,121) (297,044) (297,821)
Tangible assets$17,627,810 $16,482,058 $16,199,562 $16,229,516 $9,217,128 $9,005,811
Shareholders' equity to total assets14.1% 14.7% 14.9% 14.7% 11.0% 11.1%
Tangible shareholders' equity to tangible assets8.4% 8.8% 8.8% 8.7% 8.2% 8.2%


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

Source:Chemical Financial Corporation