Looks like Chemical Financial Corporation’s restructuring work is largely complete for the moment, and it’s already paying off on the bottom line — the intended target of those changes including consolidation of branches and new professional hires — as the bank reports a solid fourth quarter and end of year financials.
Chemical Financial Corporation this week announced 2017 fourth quarter net income of $9.4 million, or 13-cents per diluted share. When you back out one-time charges of $46.7-million as a result of income tax expenses from the revaluation of net deferred tax assets, merger and restructuring costs of $2.6-million, and $7.6-million in losses on the sale of investment securities, quarterly income was $62.7-million, or 87-cents per diluted share.
David Provost, CEO of Chemical Financial and Thomas Shafer, Vice Chairman of the institution as well as CEO of Chemical Bank said, “We are pleased with our results for the quarter, including improved efficiency resulting from our restructuring efforts, high quality loan growth, maintaining a stable net interest margin and making headway on new commercial banker hires.” They added, “We believe the efforts that we have undergone put us in a solid position for a successful 2018. We look forward to further growth in our markets to be achieved through investments in expanding our commercial lending and banking teams in high growth areas, key operation staff adds to support our customer service enhancements and enhancing our core systems.”
The corporation’s return on average assets was 0.20-percent during the fourth quarter of 2017, compared to 0.86-percent in the third quarter of 2017, and 1.09-percent in the fourth quarter of 2016. Additionally, Chemical’s return on average shareholders’ equity was 1.4-percent in the fourth quarter of 2017, compared to 6.1-percent in the third quarter of 2017, and 7.4-percent in the fourth quarter of 2016.
Chemical Financial reports operating expenses were $100.0 million in the fourth quarter of 2017, compared to $119.5 million in the third quarter of 2017, and $114.3 million in the fourth quarter of 2016. Operating expenses included merger and restructuring expenses of $2.6 million in the fourth quarter of 2017, $21.2 million in the third quarter of 2017, and $18.0 million in the fourth quarter of 2016.
Operating expenses were $422.0 million for the year ended December 31, 2017, compared to $338.4 million in 2016. Operating expenses included merger and restructuring expenses of $28.4 million in 2017 and $61.1 million in 2016.
Meanwhile, side-by-side with the 25 consolidated branches impacted in the fourth quarter, which reduced staff, the bank was hiring more than a dozen new commercial lenders for offices in Grand Rapids, Cleveland and in Southeast Michigan and still plan to hire up to 10 more commercial bankers over the first half of 2018. Those details emerged in the institution’s live conference call with Wall Street analysts on Wednesday.
The CFO, Dennis Klaeser told the analysts, “It is our goal of really growing in our core markets of Detroit, Grand Rapids and Cleveland where we feel the growth opportunities are.”
Chemical Bank has multiple branches throughout Southwest Michigan, and is a major presence on the financial scene in Berrien, Cass and Van Buren Counties.
