Chemical Financial Corp. of Midland, Mich., reported nearly flat earnings of $9.6 million for the second quarter with gains in net interest income offset by a dramatic increase in its provision for loan losses.
Net interest income was $35.6 million, up nearly 10% from a year earlier, as rates paid on deposits declined faster than rates for loans.
The $3.74 billion-asset company also got a $1.7 million boost from the sale of MasterCard stock during the quarter.
Its loan-loss provision rose 160% from a year earlier, to $6.5 million. Chemical attributed the increase primarily to higher chargeoffs of commercial and construction loans. Net loan chargeoffs were $6.5 million, up 400% from the second quarter of 2007. Chemical's stock fell 1.8% Monday, to $25.14.