MIDLAND, Mich., Jan. 21 /PRNewswire-FirstCall/ -- Aloysius J. Oliver,
Chairman of Chemical Financial Corporation (Nasdaq: CHFC), today announced
December 31, 2002 year end net income of $54.945 million or $2.31 per share,
as compared to net operating income of $49.80 million or $2.10 per share, for
the year 2001. This represents an increase of 10.0% in operating earnings per
share. Net operating income in 2001 excludes pre-tax non-recurring expenses
of $9.20 million or $7.10 million on an after-tax basis, incurred in the first
quarter of 2001 to complete the merger with Shoreline Financial Corporation
and for internal bank consolidations. Comparing net income in 2002 to net
income in 2001, which includes the merger related and consolidated charges,
net income was up 28.6% during 2002.
Net income in the fourth quarter of 2002 was $13.682 million or $.57 per
diluted share, down $95,000 as compared to net income of $13.777 million or
$.58 per diluted share in the fourth quarter of 2001. The Corporation's
fourth quarter 2002 net income was .7% below the fourth quarter 2001. The
decrease in fourth quarter earnings was attributed to the write-down of equity
securities of $472,000, net of taxes, reflecting an other-than-temporary
decline in market value of these securities and a higher provision for loan
losses of $283,000. These amounts were partially offset by an increase in net
interest income and lower operating expenses.
Net interest income increased $433,000, or 1.2%, to $36.4 million in the
fourth quarter of 2002. The increase was due to the decrease in the cost of
funds outpacing the decrease in yield on earning assets. Total operating
expenses decreased $330,000, or 1.4% in the fourth quarter of 2002 compared to
2001 primarily due to lower professional fees and the absence of goodwill
amortization.
Total assets of the Corporation at December 31, 2002 were $3.569 billion,
up 2.3% over the $3.488 billion in total assets reported at December 31, 2001.
Total deposits at December 31, 2002 were $2.847 billion, up 2.1% over total
deposits of $2.789 billion at December 31, 2001. Total loans were $2.075
billion at December 31, 2002, down $107 million, or 4.9%, from total loans at
December 31, 2001 or $2.182 billion. The decline in loans was primarily
attributable to a reduction in residential real estate loans. The low
interest rate environment prompted many customers to refinance their mortgages
to the longer-term fixed interest rate products that the Corporation sells in
the secondary market.
The Corporation's provision for loan losses for the three and twelve
months ended December 31, 2002 was $1.013 million and $3.765 million,
respectively, as compared to net loan losses during the same periods in 2002
of $1.342 million and $4.087 million, respectively. As of December 31, 2002,
the allowance for loan losses was $30.672 million, or 1.48% of total loans,
while non-performing loans were $7.281 million, or .35% of total loans. Non-
performing loans are down $5.797 million, or 44.3% from December 31, 2001.
Shareholders' equity at December 31, 2002 was $430 million, or $18.17 per
share, and represented 12.1% of total assets. The Corporation's tangible
equity to asset ratio was 11.0% as the end of the year.
On December 9, 2002, the Corporation announced a 5% stock dividend payable
on January 24, 2002. All per share calculations are adjusted for the stock
dividend.
Chemical Financial Corporation is the fourth largest bank holding company
headquartered in Michigan. The Company's three subsidiary banks operate 129
"Chemical Bank" offices and 2 loan production offices spread over 32 counties
in the lower peninsula of Michigan. CFC Data Corp, Midland, is the Company's
wholly owned data processing subsidiary.
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 interests 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) 2002 2001
Assets:
Cash and demand deposits due from banks $148,112 $150,546
Federal funds sold 69,900 86,800
Interest-bearing deposits with
unaffiliated banks 53,135 40,591
Investment securities taxable 1,076,292 872,748
Investment securities nontaxable 51,690 59,527
Total Investment Securities 1,127,982 932,275
Commercial and agricultural loans 327,438 332,055
Real estate construction loans 108,589 137,500
Real estate commercial loans 481,084 432,747
Real estate residential loans 648,286 769,272
Consumer loans 509,789 510,967
Total Loans 2,075,186 2,182,541
Less: Allowance for loan losses 30,672 30,994
Net Loans 2,044,514 2,151,547
Premises and equipment 42,767 43,143
Intangible assets 40,489 42,615
Other assets 41,994 40,789
Total Assets $3,568,893 $3,488,306
Liabilities and Shareholders' Equity:
Noninterest-bearing deposits $475,933 $460,619
Interest-bearing deposits 2,371,339 2,328,905
Total Deposits 2,847,272 2,789,524
FHLB borrowings 157,393 167,893
Other borrowings - short term 104,212 118,584
Interest payable and other liabilities 29,677 22,849
Total Liabilities 3,138,554 3,098,850
Shareholders' Equity:
Common stock, $1 par value 23,684 22,514
Surplus 325,149 290,656
Retained earnings 62,721 64,792
Accumulated other comprehensive income 18,785 11,494
Total Shareholders' Equity 430,339 389,456
Total Liabilities and
Shareholders' Equity $3,568,893 $3,488,306
Chemical Financial Corporation Announces Fourth Quarter Operating Results
Consolidated Statements of Income (Unaudited)
Chemical Financial Corporation and Subsidiaries
Quarter Ended Twelve Months Ended
December 31, December 31,
(In thousands, except per share data) 2002 2001 2002 2001
Interest Income:
Interest and fees on loans $37,745 $43,478 $155,803 $161,422
Interest on investment securities:
Taxable 12,045 11,908 49,554 49,184
Nontaxable 678 806 2,911 3,359
Total Interest on Securities 12,723 12,714 52,465 52,543
Interest on federal funds sold 385 588 2,000 4,604
Interest on deposits with
unaffiliated banks 183 227 776 681
Total Interest Income 51,036 57,007 211,044 219,250
Interest Expense:
Interest on deposits 12,263 18,407 55,536 79,227
Interest on FHLB borrowings 2,200 2,281 8,848 7,285
Interest on other borrowings -
short term 210 353 968 2,670
Total Interest Expense 14,673 21,041 65,352 89,182
Net Interest Income 36,363 35,966 145,692 130,068
Provision for loan losses 1,013 730 3,765 2,004
Net Interest Income after
provision for loan losses 35,350 35,236 141,927 128,064
Noninterest Income:
Trust services revenue 1,633 1,606 6,405 6,544
Service charges on deposit accounts 4,400 2,844 14,002 10,838
Other charges and fees for
customer services 1,783 1,783 7,131 6,947
Mortgage banking revenue 2,007 2,711 7,513 6,370
Investment securities gains (losses) (584) 116 (768) 530
Other 36 253 251 644
Total Noninterest Income 9,275 9,313 34,534 31,873
Operating Expenses:
Salaries and employee benefits 13,430 12,670 54,168 48,258
Occupancy and equipment 4,154 4,524 15,981 14,620
Other 6,108 6,828 23,377 22,552
Merger and restructuring expenses - - - 9,167
Total Operating Expenses 23,692 24,022 93,526 94,597
Income Before Income Taxes 20,933 20,527 82,935 65,340
Federal income taxes 7,251 6,750 27,990 22,617
Net Income $13,682 $13,777 $54,945 $42,723
Net income per share:
Basic $0.58 $0.59 $2.32 $1.81
Diluted 0.57 0.58 2.31 1.80
Diluted - net operating income 0.57 0.58 2.31 2.10
Cash dividends per share 0.23 0.22 0.91 0.87
Average shares outstanding:
Basic 23,683 23,630 23,677 23,626
Diluted 23,757 23,712 23,742 23,692
Chemical Financial Corporation Announces Fourth Quarter Operating Results
Financial Summary (Unaudited)
Chemical Financial Corporation and Subsidiaries
(Dollars in thousands)
Quarter Ended Twelve Months Ended
December 31, December 31,
2002 2001 2002 2001
Average Balances
Total assets $3,561,135 $3,470,794 $3,539,138 $3,213,561
Total earning assets 3,372,005 3,271,830 3,326,111 3,026,296
Total loans 2,065,435 2,204,971 2,085,744 1,996,803
Total deposits 2,842,417 2,776,049 2,825,975 2,582,480
Total shareholders' equity 424,421 384,067 406,762 369,829
Quarter Ended Twelve Months Ended
December 31, December 31,
2002 2001 2002 2001
Key Ratios (annualized
where applicable)
Net interest margin 4.34% 4.43% 4.44% 4.38%
Efficiency ratio 51.3% 52.4% 51.3% 52.0%
Return on average assets 1.52% 1.57% 1.55% 1.33%
Return on average assets -
net operating income (1) 1.52% 1.57% 1.55% 1.55%
Return on average
shareholders' equity 12.8% 14.2% 13.5% 11.6%
Return on average
shareholders' equity -
net operating income (1) 12.8% 14.2% 13.5% 13.5%
Average shareholders'
equity as a percent of
average assets 11.9% 11.1% 11.5% 11.5%
Tangible shareholders'
equity as a percent of
total assets 11.0% 10.1%
Total risk-based capital ratio 18.6% 17.4%
December 31,
2002 2001
Credit Quality Statistics
Nonaccrual loans $4,859 $6,897
Loans 90 or more days past due
and still accruing 2,422 6,181
Restructured loans - -
Total nonperforming loans 7,281 13,078
Repossessed assets acquired (RAA) 4,298 728
Total nonperforming assets 11,579 13,806
Net loan charge-offs 4,087 1,657
Allowance for loan losses as a
percent of total loans 1.48% 1.42%
Allowance for loan losses as a
percent of nonperforming loans 421% 237%
Nonperforming loans as a
percent of total loans 0.35% 0.60%
Nonperforming assets as a
percent of total loans plus RAA 0.56% 0.64%
Net loan charge-offs as a
percent of average loans 0.20% 0.08%
December 31,
2002 2001
Additional Data
Goodwill $27,940 $27,940
Core deposit intangibles 10,054 11,831
Mortgage servicing rights 2,495 2,844
Amortization of intangibles 4,642 3,326
(1) Net operating income is based on net income that excludes $7.1
million, on an after-tax basis, of merger related and consolidation costs
incurred in January 2001 in connection with the merger with Shoreline
Financial Corporation and the Corporation's internal consolidation of nine of
its eleven bank charters into two.
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. 4th Qtr.
2002 2002 2002 2002 2001
Summary of Operations
Interest income $51,036 $52,475 $53,292 $54,241 $57,007
Interest expense 14,673 16,076 16,585 18,018 21,041
Net interest income 36,363 36,399 36,707 36,223 35,966
Provision for loan losses 1,013 747 1,352 653 730
Net interest income after
provision for loan losses 35,350 35,652 35,355 35,570 35,236
Noninterest income 9,275 8,588 8,000 8,671 9,313
Noninterest expense 23,692 23,134 23,021 23,679 24,022
Income taxes 7,251 7,088 6,799 6,852 6,750
Net income 13,682 14,018 13,535 13,710 13,777
Per Common Share Data
Net income:
Basic $0.58 $0.59 $0.57 $0.58 $0.59
Diluted 0.57 0.59 0.57 0.58 0.58
Cash dividends 0.23 0.23 0.23 0.23 0.22
Book value 18.17 17.78 17.19 16.57 16.48
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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