Chemical in Michigan Taps Fees for Higher 1Q Results

Chemical Financial (CHFC) in Midland, Mich., reported higher first-quarter profit because of an increase in fee income.

The $6 billion-asset company's earnings rose 7% from a year earlier, to $13.2 million, or 48 cents a share.

Noninterest income rose 22% from a year earlier, to $16.2 million. Deposit-related fees rose 15% from the first quarter of 2012, to $5.2 million. Income from wealth management, mortgage banking and investment sales also increased.

Chemical's net interest income rose 3% from a year earlier, to $47.6 million, partially because of its December purchase of 21 branches from Independent Bank (IBCP) in Ionia, Mich. The net interest margin contracted by 22 basis points from a year earlier, to 3.54%.

The loan-loss provision fell 40% from a year earlier, to $3 million.

"Despite economic conditions that can best be described as tepid, we continue to post strong earnings growth as a result of the combination of lower credit-related costs and higher organic balance sheet growth," David Ramaker,the company's chairman, president and chief executive, said in a press release Monday. "While asset quality and loan loss metric improvements are expected to continue, we will increasingly look to the combination of asset growth and cost controls to drive future earnings growth."