Chemical Financial (CHFC) reported first-quarter income of $12.4 million, up almost 35% from a year earlier, as the Midland, Mich., company's earnings were boosted by the sale of its merchant processing business.
The $5.5 billion-asset company reported its highest level of quarterly earnings per share since the fourth quarter of 2006, David B. Ramaker, Chemical's chairman and chief executive, said in a news release. Earnings per share of 45 cents beat analysts' expectations by four cents, according to Thomson Reuters.
Noninterest income climbed more than 16%, to $12.6 million, from a year earlier as the company recorded an after-tax one-time gain of $900,000 from the sale of its merchant processing business to First Data. That deal also will provide the bank with future revenue sharing opportunities, Chemical said.
The company reported Monday that its net interest income totaled $46.2 million, up 2.2% year over year, as average loans increased 4%, to $152 million. The bank's provision for loan losses dropped 33%, to $5 million, from a year earlier as net loan chargeoffs fell 25% to $5.5 million.
Higher compensation costs increased operating expenses 2.5%, to $36.3 million, from a year earlier. This was partially offset by lower expenses for loan collection, consulting and Federal Deposit Insurance Corp. premiums.