Chemical Financial in Midland, Mich., reported higher quarterly profit as revenue from a recent acquisition outpaced expense growth.
The $19 billion-asset company said in a press release Tuesday that its second-quarter earnings doubled from a year earlier, to $52 million, or 73 cents a share. The results take into account Chemical’s August 2016 purchase of Talmer Bancorp in Troy, Mich.
Net interest income rose 78% to $137 million. The results included $4.9 billion of loans from Talmer and $1.2 billion that Chemical originated in the first half of this year.
Deposits rose by 76% to $13.2 billion; Chemical said it added $72 million of deposits in the quarter. The company also noted that it had allowed $350 million of brokered deposits to run off since September.
The net interest margin narrowed by 19 basis points to 3.41%.
Noninterest income nearly doubled to $41.6 million, paced by gains in wealth management.
The company’s noninterest expenses rose by 66% to $98 million largely because of Talmer. Merger-related expenses were down significantly from previous quarters.
"We are encouraged by the underlying trends this quarter including improved operating expense trends, fee income and quality loan growth," David Provost, who recently became CEO, said in the release.
"We will seek to further improve our fundamentals," Provost added, "by carefully assessing how we allocate capital and focusing on strategies to enhance revenue growth while continuing to improve our operating efficiency.”
