Will Consolidate Three Subsidiary Bank Charters into Single Charter,
Realign Branch Network, and Reorganize Management
MIDLAND, Mich., Oct. 28 /PRNewswire-FirstCall/ -- Chemical Financial
Corporation (Nasdaq: CHFC) today announced a strategic restructuring designed
to reposition the bank holding company to better capitalize on growth
opportunities in high potential markets. The restructuring, which resulted
from an intensive examination of the Company's core retail banking franchise,
encompasses three integrated initiatives:
* Consolidation of its three subsidiary state bank charters into a single
state chartered institution
* Realignment of its existing branch network, closing eight overlapping
and/or underperforming branches across the state
* Reorganization of senior management to place a greater emphasis on
internal growth initiatives
Management estimates that total costs for the restructuring will not
exceed $1 million, and will be incurred primarily over the next nine months.
Cost savings resulting from reduced compliance costs, staff reductions and
branch closings will begin to be realized over the next twelve months.
"Through these initiatives, Chemical Financial Corporation is seeking to
simplify its delivery structure to better focus our efforts to provide high
quality banking services to the Michigan communities we serve. By
consolidating our charters and realigning our delivery systems -- in essence,
eliminating legacy-based organizational impediments to uniformity across our
network -- we hope to increasingly target organizational time and resources to
better meet customer needs at the community bank level. In the short term,
for the overwhelming majority of our customers, this restructuring will be
seamless," said David B. Ramaker, President & CEO of Chemical Financial
Corporation.
"Chemical Financial's community banking model seeks to maintain local
'ownership' among key stakeholders, position decisionmakers close to the
customer and community, and offer highly customized personal service while
maintaining leadership in the communities we serve. Through this
restructuring, we are seeking to further empower our community bank leaders
and their respective community bank boards to pursue these goals," added
Ramaker.
Charter Consolidation
Chemical Financial Corporation's three state-chartered banking
institutions, Chemical Bank and Trust Company, Chemical Bank West and Chemical
Bank Shoreline, will be integrated into a single state chartered institution
to be known as Chemical Bank. Pending regulatory approval, the Company
expects this to take place on December 31, 2005. In conjunction with the
charter consolidation, the bank will eliminate some 50 to 75 positions
statewide. By consolidating into a single charter, Chemical Financial will
simplify its regulatory compliance function, integrate processing into one
standard platform and migrate to a single, unified corporate and bank board.
Branch Realignment & Closures
The branch delivery system will be realigned from its current three-
institution, 132-branch network, into a decentralized statewide network of 15
community banks with 124 branches, operating under a single brand. Eight
overlapping and/or underperforming branches are slated for closure. Of these,
half are in locations that are within a mile of an existing Chemical Bank
branch but in communities whose demographic profiles and/or transaction counts
do not support the number of Chemical Bank branches currently present. The
other half are in communities whose demographic profile does not support the
continued presence of a bank branch. The consolidation of all branches will
occur at the close of business on or about February 3, 2006.
The branches affected by this realignment are:
* Broadway Office located in Bay City
* Breckenridge Office located in Breckenridge
* West Office located in Caro
* Lake George Office located in Lake George
* Prescott Office located in Prescott
* Cass Street Office located in Albion
* Oak Street Office located in Benton Harbor
* Galien Office located in Galien
Management Reorganization
As a result of the charter consolidation and the branch network
realignment, the roles and responsibilities of many of Chemical Financial's
leaders and managers will change. From a customer-centric perspective, the
roles of the community bank presidents, the leaders at the local market level,
have been redefined to place a greater emphasis on revenue generation and
customer relationships. They will be supported by their local community bank
boards. At the senior management level, roles have been redefined to better
support targeted internal growth initiatives. The reorganization
decentralizes decision areas that touch customers in the communities served
and centralizes certain operating, processing and compliance functions. All
officers and staff will work for a single entity, Chemical Bank, which will
allow the Company to focus on a unified, cohesive statewide culture.
Chemical Financial Corporation is the fourth largest bank holding company
headquartered in Michigan. The Company's three subsidiary banks operate
banking offices spread over 32 counties in the lower peninsula of Michigan.
Subsequent to the restructuring announced herein, the Company will operate a
single subsidiary bank with 124 banking offices in 32 counties.
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
acquisitions, restructurings 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.
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, President & CEO of Chemical
Financial Corporation, +1-989-839-5269
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