Chemical Financial in Midland, Mich., reported a higher quarterly profit thanks to double-digit loan growth and credit-quality improvements.
The $6.6 billion-asset company's third-quarter profit increased 12% year over year, to $16.8 million. Profit would have risen even more were it not for a $1.3 million, one-time expense related to Chemical's deal to buy Northwestern Bancorp, which is expected to be completed on Oct. 31.
Total loans rose 11.5%, to $5.04 billion, reflecting gains across all major loan categories. Net interest income was $53.1 million, up 7.7% from a year earlier, because of the loan growth and margin improvements. The net interest margin was 3.59%, up from 3.58% in the third quarter of 2013, despite a decline in the average loan yield, to 4.23%, down from 4.44% a year earlier.
Noninterest income increased 5.5% to $15.4 million, on slight increases in wealth management revenue and electronic banking fees.
The provision for loan losses was $1.5 million, half the amount recorded in the third quarter of 2013, as overall loan credit quality improved. Nonperforming loans totaled $70.7 million at Sept. 30, down 6.7% compared with a year earlier.