MIDLAND, Mich., Jan. 20 /PRNewswire-FirstCall/ -- Aloysius J. Oliver,
Chairman of Chemical Financial Corporation, announced December 31, 2003 fourth
quarter and year end net income of $13.56 million, or $.57 per diluted share
and $55.72 million, or $2.35 per diluted share, respectively, compared to
fourth quarter and year end 2002 net income of $13.68 million, or $.57 per
diluted share and $54.95 million, or $2.31 per diluted share. Return on
average assets in the fourth quarter and year end 2003 was 1.50% and 1.56%,
respectively, compared to 1.52% and 1.55%, respectively, in the fourth quarter
and year end 2002. Comparing net income in 2003 to net income in 2002, net
income was up 1.4%.
The Corporation completed the acquisition of Caledonia Financial
Corporation ("Caledonia"), a one-bank holding company headquartered in
Caledonia, Michigan, on December 1, 2003. Shareholders of Caledonia received
$39.00 cash for each share of Caledonia common stock in a taxable transaction.
The total value of the transaction was approximately $55.3 million. The
results of operations of State Bank of Caledonia are included in the
Corporation's 2003 earnings from the date of acquisition.
Net income in the fourth quarter of 2003 was down $119,000, or .9% as
compared to the fourth quarter of 2002. The decrease in fourth quarter
earnings was attributed to lower net interest income and mortgage banking
revenue. These decreases were partially offset by investment securities
gains, a lower provision for loan losses and lower operating expenses.
Net income for 2003 was up $771,000, or 1.4% as compared to 2002. The
increase was attributed to higher noninterest income, a lower provision for
loan losses and lower operating expenses. These amounts were partially offset
by lower net interest income.
Net interest income decreased $5.9 million, or 4.1% in 2003 as compared to
2002. The decrease was due to a lower net interest margin of 4.18% in 2003
compared to 4.44% in 2002. The lower net interest margin was due to a
decrease in the yield on both loans and investment securities outpacing the
decrease in the cost of funds.
Total noninterest income increased $4.6 million, or 13.2% in 2003 as
compared to 2002. The increase was primarily due to an increase in service
charges on deposit accounts of $2.9 million and an increase in investment
securities gains of $2.1 million. Total operating expenses decreased $1.6
million, or 1.7% in 2003 compared to 2002. The decrease was primarily due to
lower Michigan Single Business tax and various other operating expenses.
Total assets of the Corporation at December 31, 2003 were $3.71 billion,
up 3.9% over the $3.57 billion in total assets reported at December 31, 2002.
Total deposits at December 31, 2003 were $2.97 billion, up 4.2% over total
deposits of $2.85 billion at December 31, 2002. Total loans were $2.48
billion at December 31, 2003, up $406 million, or 19.6%, from total loans at
December 31, 2002 of $2.07 billion. The increase in loans was primarily
attributable to an increase in residential and commercial real estate loans.
The State Bank of Caledonia purchase on December 1, 2003 accounted for
approximately $253 million of the increase in total assets, $185 million of
the increase in loans and $176 million of the increase in deposits during
2003.
The Corporation's provision for loan losses for the three and twelve
months ended December 31, 2003 was $.73 million and $2.83 million,
respectively, as compared to net loan losses during the same periods in 2003
of $.99 million and $3.35 million, respectively.
Approximately $.26 million of the net loan losses in the fourth quarter
were attributable to the State Bank of Caledonia. As of December 31, 2003,
the allowance for loan losses was $33.18 million, or 1.34% of total loans,
while nonperforming loans were $11.35 million, or .46% of total loans.
Nonperforming loans are up $4.1 million, or 56% from December 31, 2002. The
Caledonia acquisition added $1.9 million in nonperforming loans. As of
December 31, 2003, the allowance for loan losses as a percentage of non-
performing loans was 292%.
Shareholders' equity at December 31, 2003 was $458 million, or $19.25 per
share, and represented 12.4% of total assets. The Corporation's tangible
equity to asset ratio was 10.5% at the end of the year. The Corporation's
return on average equity in the fourth quarter and year-end 2003 was 12.3% and
12.7%, respectively, compared to 12.8% and 13.5%, respectively, during the
same periods in 2002.
Chemical Financial Corporation is the fourth largest bank holding company
headquartered in Michigan. The Company's four subsidiary banks operate 133
branch offices and 2 loan production offices spread over 33 counties in the
lower peninsula of Michigan.
Chemical Financial Corporation common stock trades on the Nasdaq Stock
Market under the symbol CHFC and is one of the issues comprising the Nasdaq
Financial 100 index.
Forward Looking Statements
This press release contains forward-looking statements. Words such as
"anticipates," "believes," "estimates," "expects," "intends," "should,"
"will," variations of such words and similar expressions are intended to
identify forward-looking statements. These statements reflect management's
current beliefs as to the expected outcomes of future events and are not
guarantees of future performance. These statements involve certain risks,
uncertainties and assumptions 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. Factors that could cause a
difference include, among others: changes in the national and local economies
or market conditions; changes in interest rates and banking regulations; the
impact of competition from traditional or new sources; and the possibility
that anticipated cost savings and revenue enhancements from mergers and
acquisitions and bank consolidations may not be fully realized at all or
within the expected time frames. These and other factors that may emerge
could cause decisions and actual results to differ materially from current
expectations. Chemical undertakes no obligation to revise, update, or clarify
forward-looking statements to reflect events or conditions after the date of
this release.
Chemical Financial Corporation Announces Fourth Quarter Operating Results
Consolidated Statements of Financial Position (Unaudited)
Chemical Financial Corporation and Subsidiaries
December 31, December 31,
(In thousands) 2003 2002
Assets:
Cash and demand deposits due from banks $131,184 $148,112
Federal funds sold 25,900 69,900
Interest-bearing deposits with
unaffiliated banks 5,107 53,135
Investment securities taxable 876,806 1,076,292
Investment securities nontaxable 45,056 51,690
Total Investment Securities 921,862 1,127,982
Commercial loans 389,324 327,438
Real estate construction loans 107,046 108,589
Real estate commercial loans 669,486 481,084
Real estate residential loans 775,821 648,042
Consumer loans 539,598 509,789
Total Loans 2,481,275 2,074,942
Less: Allowance for loan losses 33,179 30,672
Net Loans 2,448,096 2,044,270
Premises and equipment 49,616 42,767
Intangible assets 76,846 40,489
Other assets 50,277 41,994
Total Assets $3,708,888 $3,568,649
Liabilities and Shareholders' Equity:
Noninterest-bearing deposits $532,752 $475,933
Interest-bearing deposits 2,434,484 2,371,339
Total Deposits 2,967,236 2,847,272
FHLB borrowings 155,373 157,393
Other borrowings - short term 91,524 104,212
Interest payable and other liabilities 36,706 29,433
Total Liabilities 3,250,839 3,138,310
Shareholders' Equity:
Common stock, $1 par value 23,801 23,684
Surplus 328,774 325,149
Retained earnings 94,746 62,721
Accumulated other comprehensive income 10,728 18,785
Total Shareholders' Equity 458,049 430,339
Total Liabilities and
Shareholders' Equity $3,708,888 $3,568,649
Chemical Financial Corporation Announces Fourth Quarter Operating Results
Consolidated Statements of Income (Unaudited)
Chemical Financial Corporation and Subsidiaries
Three Months Ended Twelve Months Ended
December 31, December 31,
(In thousands, except per share data) 2003 2002 2003 2002
Interest Income:
Interest and fees on loans $36,046 $37,745 $144,835 $155,803
Interest on investment securities:
Taxable 8,029 12,045 36,700 49,554
Nontaxable 590 678 2,518 2,911
Total Interest on Investment
Securities 8,619 12,723 39,218 52,465
Interest on federal funds sold 137 385 749 2,000
Interest on deposits with
unaffiliated banks 55 183 235 776
Total Interest Income 44,857 51,036 185,037 211,044
Interest Expense:
Interest on deposits 7,790 12,263 36,345 55,536
Interest on FHLB borrowings 2,108 2,200 8,381 8,848
Interest on other borrowings - short
term 104 210 539 968
Total Interest Expense 10,002 14,673 45,265 65,352
Net Interest Income 34,855 36,363 139,772 145,692
Provision for loan losses 727 1,013 2,834 3,765
Net Interest Income after
Provision for Loan Losses 34,128 35,350 136,938 141,927
Noninterest Income:
Service charges on deposit accounts 4,601 4,400 16,935 14,002
Other charges and fees for customer
services 1,233 1,783 6,605 7,131
Mortgage banking revenue 1,238 2,007 6,954 7,513
Trust services revenue 1,671 1,633 6,794 6,405
Investment securities gains (losses) 387 (584) 1,296 (768)
Other 290 36 510 251
Total Noninterest Income 9,420 9,275 39,094 34,534
Operating Expenses:
Salaries and employee benefits 13,910 13,430 54,480 54,168
Occupancy 2,039 1,926 7,921 7,590
Equipment 1,840 2,228 8,045 8,391
Other 5,225 6,108 21,477 23,377
Total Operating Expenses 23,014 23,692 91,923 93,526
Income Before Income Taxes 20,534 20,933 84,109 82,935
Federal income taxes 6,971 7,251 28,393 27,990
Net Income $13,563 $13,682 $55,716 $54,945
Net income per share:
Basic $0.57 $0.58 $2.35 $2.32
Diluted 0.57 0.57 2.35 2.31
Cash dividends per share 0.25 0.23 1.00 0.91
Average shares outstanding:
Basic 23,718 23,683 23,693 23,677
Diluted 23,813 23,757 23,756 23,742
Chemical Financial Corporation Announces Fourth Quarter Operating Results
Financial Summary (Unaudited)
Chemical Financial Corporation and Subsidiaries
(Dollars in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
Average Balances
Total assets $3,585,924 $3,560,130 $3,578,678 $3,538,599
Total interest-earning
assets 3,372,706 3,363,068 3,381,083 3,325,572
Total loans 2,352,269 2,067,623 2,222,704 2,088,395
Total deposits 2,883,412 2,842,417 2,868,180 2,825,975
Total shareholders' equity 436,855 424,421 439,178 406,762
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
Key Ratios (annualized
where applicable)
Net interest margin 4.15% 4.34% 4.18% 4.44%
Efficiency ratio 51.5% 51.3% 50.9% 51.3%
Return on average assets 1.50% 1.52% 1.56% 1.55%
Return on average
shareholders' equity 12.3% 12.8% 12.7% 13.5%
Average shareholders'
equity as a percent of average
assets 12.2% 11.9% 12.3% 11.5%
Tangible shareholders'
equity as a percent of total
assets 10.5% 11.0%
Total risk-based capital ratio 16.6% 18.6%
December 31,
2003 2002
Credit Quality Statistics
Nonaccrual loans $6,691 $4,859
Loans 90 or more days past due
and still accruing interest 4,656 2,422
Total nonperforming loans 11,347 7,281
Repossessed assets acquired (RAA) 6,002 4,298
Total nonperforming assets 17,349 11,579
Net loan charge-offs 3,352 4,087
Allowance for loan losses
as a percent of total loans 1.34% 1.48%
Allowance for loan losses
as a percent of nonperforming loans 292% 421%
Nonperforming loans as percent of total loans 0.46% 0.35%
Nonperforming assets as a percent of total loans
plus RAA 0.70% 0.56%
Net loan charge-offs as a percent of average loans 0.15% 0.20%
December 31,
2003 2002
Additional Data
Goodwill $63,405 $27,940
Core deposit and other intangibles 10,177 10,054
Mortgage servicing rights 3,264 2,495
Amortization of intangibles 3,718 4,642
Chemical Financial Corporation Announces Fourth Quarter Operating Results
Selected Quarterly Information (Unaudited)
Chemical Financial Corporation and Subsidiaries
(Dollars in thousands)
4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
2003 2003 2003 2003
Summary of Operations
Interest income $44,857 $45,237 $46,697 $48,246
Interest expense 10,002 10,473 11,668 13,122
Net interest income 34,855 34,764 35,029 35,124
Provision for loan losses 727 540 1,272 295
Net interest income after provision
for loan losses 34,128 34,224 33,757 34,829
Noninterest income 9,420 10,274 10,086 9,314
Noninterest expense 23,014 22,701 23,182 23,026
Income taxes 6,971 7,328 6,991 7,103
Net income 13,563 14,469 13,670 14,014
Per Common Share Data
Net income:
Basic $0.57 $0.61 $0.58 $0.59
Diluted 0.57 0.61 0.58 0.59
Cash dividends 0.25 0.25 0.25 0.25
Book value 19.25 18.94 18.73 18.45
4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
2002 2002 2002 2002
Summary of Operations
Interest income $51,036 $52,475 $53,292 $54,241
Interest expense 14,673 16,076 16,585 18,018
Net interest income 36,363 36,399 36,707 36,223
Provision for loan losses 1,013 747 1,352 653
Net interest income after provision
for loan losses 35,350 35,652 35,355 35,570
Noninterest income 9,275 8,588 8,000 8,671
Noninterest expense 23,692 23,134 23,021 23,679
Income taxes 7,251 7,088 6,799 6,852
Net income 13,682 14,018 13,535 13,710
Per Common Share Data
Net income:
Basic $0.58 $0.59 $0.57 $0.58
Diluted 0.57 0.59 0.57 0.58
Cash dividends 0.23 0.23 0.23 0.23
Book value 18.17 17.78 17.19 16.57
SOURCE Chemical Financial Corporation
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Related links:
http://chemicalbankmi.com
Company News On-Call:
http://www.prnewswire.com/comp/157448.html
CONTACT:
David B. Ramaker, +1-989-839-5269, or Lori A.
Gwizdala, +1-989-839-5358, both of Chemical Financial Corporation
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