Chemical Financial corporation announced 2016 first quarter net income of $23.3 million, or $0.60 per diluted share.
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This compares to 2015 fourth quarter net income of $25.5 million, or $0.66 per diluted share and 2015 first quarter net income of $17.8 million, or $0.54 per diluted share.
Excluding merger and acquisition-related transaction expenses, net income in the first quarter of 2016 was $24.9 million, or $0.65 per diluted share, compared to $26.9 million, or $0.70 per diluted share, in the fourth quarter of 2015 and $18.7 million, or $0.57 per diluted share, in the first quarter of 2015.
Transaction expenses attributable to the pending merger with Talmer Bancorp, which was announced on January 26, 2016, were $2.6 million in the first quarter of 2016, while transaction expenses attributable to the April 1, 2015 acquisition of Monarch Community Bancorp and the May 31, 2015 acquisition of Lake Michigan Financial corporation were $2.1 million in the fourth quarter of 2015 and $1.4 million in the first quarter of 2015.
The corporation's return on average assets was 1.01% during the first quarter of 2016, compared to 1.10% in the fourth quarter of 2015 and 0.98% in the first quarter of 2015.
The corporation's return on average shareholders' equity was 9.2% in the first quarter of 2016, compared to 10.1% in the fourth quarter of 2015 and 9.0% in the first quarter of 2015.
Excluding transaction expenses, the corporation's return on average assets was 1.09% during the first quarter of 2016, compared to 1.16% in the fourth quarter of 2015 and 1.03% in the first quarter of 2015 and the corporation's return on average shareholders' equity was 9.9% in the first quarter of 2016, compared to 10.7% in the fourth quarter of 2015 and 9.5% in the first quarter of 2015.
Net interest income was $74.3 million in the first quarter of 2016, $1.1 million, or 1.5%, lower than the fourth quarter of 2015, although $15.1 million, or 26%, higher than the first quarter of 2015.
The decrease in net interest income in the first quarter of 2016, compared to the fourth quarter of 2015, was largely attributable to lower interest income resulting from one less day in the first quarter of 2016 and semi-annual interest income from Federal Reserve Bank (FRB) dividends and seasonal loan fees in the fourth quarter of 2015.
Loan growth in the first quarter of 2016 was offset by a slight reduction in the average yield of the loan portfolio during the quarter.
The increase in net interest income in the first quarter of 2016 over the first quarter of 2015 was largely attributable to the positive impact of organic loan growth and the impact of the corporation's acquisitions of Monarch and Lake Michigan.
The net interest margin (on a tax-equivalent basis) was 3.60% in the first quarter of 2016, compared to 3.64% in the fourth quarter of 2015 and 3.55% in the first quarter of 2015.
The average yield on the loan portfolio was 4.13% in the first quarter of 2016, compared to 4.16% in both the fourth quarter of 2015 and the first quarter of 2015.
The average yield of the investment securities portfolio was 2.29% in the first quarter of 2016, compared to 2.21% in the fourth quarter of 2015 and 1.96% in the first quarter of 2015.
The corporation's average cost of funds was 0.25% in both the first quarter of 2016 and the fourth quarter of 2015, compared to 0.21% in the first quarter of 2015.
The provision for loan losses was $1.5 million in the first quarter of 2016, compared to $2.0 million in the fourth quarter of 2015 and $1.5 million in the first quarter of 2015.
Net loan charge-offs were $4.5 million, or 0.25% of average loans, in the first quarter of 2016, compared to $4.3 million, or 0.24% of average loans, in the fourth quarter of 2015 and $1.9 million, or 0.14% of average loans, in the first quarter of 2015. Net loan charge-offs in the first quarter of 2016 included $2.9 million from one commercial loan relationship. ■