Fueled by increased fee income, Chemical Financial (CHFC) in Midland, Mich., posted its highest quarterly earnings per share in more than six years.
The $5.4 billion-asset company said Monday that its second-quarter earnings totaled $13.9 million, up 26% from a year earlier. Its earnings per share reached 50 cents, marking its highest level of quarterly earnings per share since the fourth quarter of 2005, David B. Ramaker, chairman and chief executive, said in a news release. This beat analysts' estimates by seven cents, according to Thomson Reuters.
The improved earnings reflected modest growth in net interest income and strong gains in noninterest income, as well as a lower loan-loss provision resulting from continued improvement in credit quality, Ramaker said.
Chemical's net interest income totaled $46.4 million, up more than 2% year over year. This increase came from a 5% increase in average loans, which was partially offset by the repricing of interest-earning assets and interest-bearing liabilities.
Noninterest income totaled $13.3 million, up 22% from a year earlier due to increases in mortgage banking revenue and service charges and fees on deposit accounts.
The provision for loan losses dropped almost 43%, to $4 million, year over year while net loan chargeoffs fell 26%, to $5.1 million.