MIDLAND, Mich., April 18 /PRNewswire-FirstCall/ -- The Board of Directors
of Chemical Financial Corporation (Nasdaq: CHFC) today announced 2005 first
quarter net income of $13.50 million or $0.53 per diluted share, as compared
to net income of $14.12 million or $0.56 per diluted share in the first
quarter of 2004.
First Quarter Operating Results
Net income and earnings per share in the first quarter of 2005 decreased
4.4% and 5.4%, respectively, from the first quarter of 2004. The decreases in
net income and earnings per share were attributable to lower net interest
income and a slightly higher effective federal income tax rate. These two
items were partially offset by slightly higher noninterest income and a slight
decrease in operating expenses.
Net interest income of $35.95 million in the first quarter of 2005 was
down $0.88 million, or 2.4% from the first quarter of 2004. The decrease in
net interest income was attributable to both a decrease in average interest-
earning assets and a reduction in the net interest margin.
Average interest-earnings assets were $3.59 billion in the first quarter
of 2005, down $48 million, or 1.3% from the first quarter of 2004, although
approximately the same as in the fourth quarter of 2004. The decrease in
average interest-earning assets between the first quarter of 2005 and the
first quarter of 2004 was primarily the result of a decline in deposits.
Average loans were $2.58 billion in the first quarter of 2005, up $58.3
million, or 2.3% from average loans in the first quarter of 2004, although
down $22.8 million, or 0.9% from average loans in the fourth quarter of 2004.
The net interest margin was 4.11% in the first quarter of 2005, compared
to 4.12% in the first quarter of 2004 and 4.18% in the fourth quarter of 2004.
The decrease in net interest margin in the first quarter of 2005, compared to
the first quarter of 2004, was attributable to the Corporation's increase in
its average cost of interest-bearing liabilities exceeding the increase in its
average yield on interest-earning assets. The average cost of interest-
bearing liabilities was 1.77% in the first quarter of 2005, an increase of 32
basis points over the first quarter of 2004. The increase in the average cost
of interest-bearing liabilities was primarily a result of the increase in the
average cost of deposits, which has been driven by the overall rise in short-
term market interest rates and increased competition for deposits. The
Corporation's average yield on interest-earning assets was 5.47% in the first
quarter of 2005, an increase of 20 basis points over the first quarter of
2004. The increase in the average yield on interest-earning assets was
primarily driven by the increase in the interest yield on variable rate
commercial loans tied to the prime rate.
The Corporation's provision for loan losses in the first quarter of 2005
was $0.73 million, compared to net loan charge-offs of $0.73 million during
the same period. The provision for loan losses in the first quarter of 2004
was $0.75 million compared to net loan charge-offs during the period of $0.43
million.
Total noninterest income was $10.18 million in the first quarter of 2005,
up $0.22 million or 2.2% over the first quarter of 2004. The Corporation
experienced slight increases in a number of noninterest income categories,
including trust and investment management services revenue, service charges on
deposit accounts, ATM and debit card revenue, and investment securities gains.
These increases were mostly offset by a continued reduction in mortgage
banking revenue and related title insurance agency commissions. Investment
securities gains of $1.09 million in the first quarter of 2005 included $0.85
million attributable to the sale of one common stock equity security owned by
the parent company. Investment securities gains of $0.98 million in the first
quarter of 2004 included $0.61 million of investment securities gains
attributable to the sale of common stock equity securities owned by the parent
company. The parent company did not hold any remaining common stock equity
securities as of March 31, 2005.
Operating expenses were $24.98 million in the first quarter of 2005, down
approximately $0.18 million, or 0.7% from the first quarter of 2004.
Balance Sheet and Capital Position
Total assets of the Corporation at March 31, 2005 were $3.80 billion, up
$32.8 million or 0.9% over the $3.76 billion in total assets reported at
December 31, 2004. Total deposits at March 31, 2005 were $2.93 billion, up
$64.5 million, or 2.3% from total deposits of $2.86 billion at December 31,
2004.
Total loans were $2.577 billion at March 31, 2005, down $8.8 million, or
0.3% from total loans of $2.586 billion at December 31, 2004. The Corporation
achieved an $11.6 million or 2.5% increase in commercial loans and a $2.1
million or 1.7% increase in real estate construction loans during the three
months ended March 31, 2005. These increases were offset by slight decreases
in the remaining three loan categories, with the largest decrease occurring in
consumer loans. Consumer loans declined $16.3 million, or 3.0% during the
first quarter of 2005.
As of March 31, 2005, the allowance for loan losses was $34.17 million or
1.33% of total loans, while nonperforming loans were $10.74 million or 0.42%
of total loans. Nonperforming loans were up $0.7 million or 6.8% from
December 31, 2004. Nonperforming assets as a percentage of loans plus
repossessed assets were 0.67% as of March 31, 2005, compared to 0.65% as of
December 31, 2004. Net loan losses as a percentage of average total loans
were 0.11% on an annualized basis in the first quarter of 2005, the same
percentage as during the twelve months ended December 31, 2004.
Shareholders' equity at March 31, 2005 was $487 million or $19.32 per
share and represented 12.8% of total assets. The Corporation's total risk-
based capital and tangible equity to asset ratios were 17.7% and 11.1%,
respectively, as of March 31, 2005.
Chemical Financial Corporation is the fourth largest bank holding company
headquartered in Michigan. The Company's three subsidiary banks operate
"Chemical Bank" branch offices throughout 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 laws and
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 First Quarter Operating Results
Consolidated Statements of Financial Position (Unaudited)
Chemical Financial Corporation and Subsidiaries
March 31, December 31, March 31,
(In thousands) 2005 2004 2004
Assets:
Cash and demand deposits due from
banks $94,135 $106,565 $106,610
Federal funds sold 51,500 34,500 75,400
Interest-bearing deposits with
unaffiliated banks 37,151 5,869 27,854
Investment securities - available for
sale 740,738 716,757 840,957
Investment securities - held to
maturity 159,467 176,517 169,742
Total Investment Securities 900,205 893,274 1,010,699
Commercial loans 480,553 468,970 444,229
Real estate construction loans 122,951 120,900 148,592
Real estate commercial loans 696,018 697,779 640,292
Real estate residential loans 756,468 760,834 773,195
Consumer loans 520,800 537,102 542,811
Total Loans 2,576,790 2,585,585 2,549,119
Less: Allowance for loan losses 34,171 34,166 33,494
Net Loans 2,542,619 2,551,419 2,515,625
Premises and equipment 46,671 47,577 48,669
Intangible assets 73,728 74,421 76,141
Other assets 50,881 50,500 49,574
Total Assets $3,796,890 $3,764,125 $3,910,572
Liabilities and Shareholders' Equity:
Noninterest-bearing deposits 525,272 $555,287 $502,147
Interest-bearing deposits 2,402,675 2,308,186 2,515,476
Total Deposits 2,927,947 2,863,473 3,017,623
Other borrowings - short term 94,445 101,834 92,002
Interest payable and other liabilities 33,828 28,986 38,940
FHLB borrowings 253,979 284,996 292,210
Total Liabilities 3,310,199 3,279,289 3,440,775
Shareholders' Equity:
Common stock, $1 par value 25,185 25,169 23,931
Surplus 379,149 378,694 333,065
Retained earnings 87,096 80,266 102,530
Accumulated other comprehensive
income/(loss) (4,739) 707 10,271
Total Shareholders' Equity 486,691 484,836 469,797
Total Liabilities and
Shareholders' Equity $3,796,890 $3,764,125 $3,910,572
Chemical Financial Corporation Announces First Quarter Operating Results
Consolidated Statements of Income (Unaudited)
Chemical Financial Corporation and Subsidiaries
Three Months Ended
March 31,
(In thousands, except per share data) 2005 2004
Interest Income:
Interest and fees on loans $38,811 $37,478
Interest on investment securities:
Taxable 7,781 8,876
Nontaxable 490 565
Total Interest on Investment
Securities 8,271 9,441
Interest on federal funds sold 653 201
Interest on deposits with unaffiliated
banks 225 65
Total Interest Income 47,960 47,185
Interest Expense:
Interest on deposits 9,193 7,691
Interest on other borrowings - short
term 348 96
Interest on FHLB borrowings 2,472 2,576
Total Interest Expense 12,013 10,363
Net Interest Income 35,947 36,822
Provision for loan losses 730 746
Net Interest Income after
Provision for Loan Losses 35,217 36,076
Noninterest Income:
Service charges on deposit accounts 4,716 4,554
Trust and investment management
services revenue 2,017 1,909
Other charges and fees for customer
services 1,688 1,548
Mortgage banking revenue 489 780
Investment securities gains 1,089 983
Other 181 188
Total Noninterest Income 10,180 9,962
Operating Expenses:
Salaries and employee benefits 14,580 14,801
Occupancy and equipment 4,756 4,844
Other 5,647 5,515
Total Operating Expenses 24,983 25,160
Income Before Income Taxes 20,414 20,878
Federal income taxes 6,910 6,759
Net Income $13,504 $14,119
Net income per share:
Basic $0.54 $0.56
Diluted 0.53 0.56
Cash dividends per share $0.265 $0.252
Average shares outstanding:
Basic 25,183 25,086
Diluted 25,247 25,185
Chemical Financial Corporation Announces First Quarter Operating Results
Financial Summary (Unaudited)
Chemical Financial Corporation and Subsidiaries
(Dollars in thousands)
Three Months Ended
March 31,
2005 2004
Average Balances
Total assets $3,822,046 $3,888,849
Total interest-earning
assets 3,585,659 3,633,736
Total loans 2,575,331 2,517,080
Total deposits 2,929,347 3,020,391
Total shareholders' equity 487,557 463,268
Three Months Ended
March 31,
2005 2004
Key Ratios (annualized where applicable)
Net interest margin 4.11% 4.12%
Efficiency ratio 54.7% 53.3%
Return on average assets 1.43% 1.46%
Return on average shareholders' equity 11.2% 12.3%
Average shareholders' equity as a percent of
average assets 12.8% 11.9%
Tangible shareholders' equity as a percent of
total assets 11.1% 10.3%
Total risk-based capital ratio 17.7% 16.5%
March 31, December 31, September 30, June 30, March 31,
2005 2004 2004 2004 2004
Credit Quality
Statistics
Nonaccrual loans $7,823 $8,397 $5,787 $5,413 $5,317
Loans 90 or more
days past due and
still accruing 2,914 1,653 5,914 5,488 6,559
Total nonperforming
loans 10,737 10,050 11,701 10,901 11,876
Repossessed assets
acquired (RAA) 6,544 6,799 6,924 7,344 6,294
Total nonperforming
assets 17,281 16,849 18,625 18,245 18,170
Net loan charge-
offs -- year-to-
date 725 2,832 1,658 1,034 431
Allowance for loan
losses as a percent
of total loans 1.33% 1.32% 1.29% 1.30% 1.31%
Allowance for loan
losses as a percent
of nonperforming
loans 318% 340% 288% 308% 282%
Nonperforming loans
as a percent of
total loans 0.42% 0.39% 0.45% 0.42% 0.47%
Nonperforming assets
as a percent of
total loans plus
RAA 0.67% 0.65% 0.71% 0.70% 0.71%
Net loan charge-offs
as a percent of
average loans --
year-to-date
(annualized) 0.11% 0.11% 0.09% 0.08% 0.07%
March 31, December 31, September 30, June 30, March 31,
2005 2004 2004 2004 2004
Additional Data
Goodwill $63,293 $63,293 $63,293 $63,293 $63,293
Core deposits and
other
intangibles 7,324 7,931 8,572 9,138 9,613
Mortgage servicing
rights (MSR),
net of MSR
impairment
reserve 3,111 3,197 3,441 3,252 3,235
MSR impairment
reserve - - - 443 693
Amortization of
intangibles 800 948 931 1,079 851
Chemical Financial Corporation Announces First Quarter Operating Results
Selected Quarterly Information (Unaudited)
Chemical Financial Corporation and Subsidiaries
1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
2005 2004 2004 2004 2004
(Dollars in thousands)
Summary of Operations
Interest income $47,960 $48,164 $47,318 $46,583 $47,185
Interest expense 12,013 10,914 10,165 10,174 10,363
Net interest income 35,947 37,250 37,153 36,409 36,822
Provision for loan losses 730 1,711 701 661 746
Net interest income after
provision for loan losses 35,217 35,539 36,452 35,748 36,076
Noninterest income 10,180 9,739 9,623 10,005 9,962
Noninterest expense 24,983 23,890 24,499 24,920 25,160
Income taxes 6,910 6,987 7,280 6,967 6,759
Net income 13,504 14,401 14,296 13,866 14,119
Per Common Share Data
Net income:
Basic $0.54 $0.57 $0.58 $0.55 $0.56
Diluted 0.53 0.57 0.57 0.55 0.56
Cash dividends 0.265 0.252 0.252 0.252 0.252
Book value 19.32 19.26 19.04 18.63 18.70
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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