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David Ramaker David Ramaker

Talmer acquisition drives up Chemical Financial earnings

BY Thursday, January 26, 2017 09:16am

MIDLAND — Chemical Financial Corp. posted significantly higher earnings for the final three months of 2016, driven by the $1.7 billion acquisition of Talmer Bancorp Inc. that closed in late summer.

The Midland-based Chemical Financial (Nasdaq: CHFC) on Wednesday afternoon reported net income of $47.1 million, or 66 cents per diluted share, which compares to net income of $11.4 million, or 23 cents per diluted share, in the fourth quarter of 2015.

The results include a significant reduction in expenses related to the Talmer acquisition that closed on Aug. 31, plus the inclusion of Talmer’s operations.

“Our fourth quarter financial results reflect both a solid finish to a milestone year and a strong base from which Chemical Financial Corp. will move forward,” Chemical Financial President and CEO David Ramaker said in a statement. “During the quarter, we completed the integration of Talmer Bank and Chemical Bank, our fourth successful integration over the past two years.

“Continued stable economic conditions in our core markets facilitated significant organic loan growth during the quarter, and we believe we have an attractive pipeline as we look forward to 2017.”

Net income for all of 2016 totaled $108 million, or $2.71 per diluted share. That compares to $86.8 million, or $2.68 per diluted share, for 2015.

Chemical Financial recorded $18 million in acquisition-related expenses in the fourth quarter, which was partially offset by $7.4 million from the sale of branches and a $6.4 million gain from a change in the fair value of loan-servicing rights.

Minus acquisition-related expenses and the sale of branches after the transaction, Chemical Financial had net income of $49.9 million for the fourth quarter, or 70 cents per diluted share, versus $37.5 million, or 75 cents per diluted share, a year earlier. Annual net income would have been $140.5 million, or $2.81 per diluted share, compared to $92.3 million, or $2.54 per diluted share for all of 2015.

The bank — which has 249 offices in Michigan, northeast Ohio and northern Indiana — ended 2016 with total assets of $17.36 billion, versus $9.18 billion a year earlier. The Talmer acquisition accounted for $7.71 billion additional assets for Chemical.

Total loans at year end totaled $12.99 billion; the bank had $12.87 billion in total deposits.

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