Chemical Financial (CHFC) in Midland, Mich., managed to boost quarterly earnings with higher interest income and lower credit costs.
The $5.6 billion-asset company's third-quarter earnings rose 20% from a year earlier, to $13.9 million. Net interest income edged up 1.4% from a year earlier, to $46.9 million. Noninterest income increased by 7.5% from a year earlier, to $12 million.
Chemical said the increase in net interest income came from lower deposit costs and higher yields in its securities portfolio. Loan yields declined.
Expenses increased because of acquisition costs associated with a pending branch deal with Independent Bank (IBCP) in Iona, Mich. Regulators have approved the transaction, which should close in the fourth quarter.
"Our strong financial condition favorably positions us to pursue organic and acquisitive growth opportunities, as evidenced by our pending acquisition" of the 21 Independent branches, David Ramaker, Chemical's chairman, president and chief executive, said in a Monday press release. "We will selectively assess other potential growth opportunities that arise as we expect Michigan's banking industry to continue to consolidate."