MIDLAND — Chemical Financial Corp. has completed a restructuring that was designed to drive $20 million in annualized cost savings and put more focus on commercial lending.
The Midland-based Chemical Financial (Nasdaq: CHFC) consolidated 25 branches during the fourth quarter — which were on top of 13 locations that bank previously consolidated — and reduced staff, closed a title service and cut back resources to direct auto lending.
The bank also hired 14 new commercial lenders in Grand Rapids, Southeast Michigan and Cleveland, many of whom came from larger regional banks.
Chemical Financial plans to hire another 10 commercial bankers in the next two quarters, Executive Vice President and CFO Dennis Klaeser told brokerage analysts Wednesday during a conference call to discuss quarterly results.
“It’s our goal of really growing in our core markets of Detroit, Grand Rapids and Cleveland where we feel the growth opportunities are,” he said.
The bank is planning for loan growth of 9 percent to 10 percent for 2018, and is “focused on the quality of growth and the composition of the growth,” President and CEO David Provost said. Commercial lending will primarily drive total loan growth, Provost said.
The bank in 2017 grew total loans by 9 percent to $14.16 billion. Commercial loans grew 11.4 percent for the year to $8.46 billion.
Chemical Financial reported net income of $9.4 million for the fourth quarter of 2017, or 13 cents per diluted share. Minus one-time charges — including a $46.7 million charge to income tax expenses from the revaluation of net deferred tax assets, $2.6 million in merger and restructuring expenses, and $7.6 million in losses on the sale of investment securities — quarterly net income was $62.7 million, or 87 cents per diluted share.
The results for the final three months of 2017 compare to net income of $47.1 million, or 66 cents per diluted share, in the fourth quarter of 2016.
“We had a great quarter,” Provost said. “We remain confident in our future success, and we believe we are well positioned to achieve additional competitive and market share gains as we move forward.”
For all of 2017, Chemical Financial recorded net income of $149.5 million, or $2.08 per diluted share, versus $108.3 million, or $2.17 per diluted share, in the prior year.
At the end of the year, Chemical had 212 offices in Michigan, northeast Ohio and northern Indiana with total assets of $19.28 billion, an 11 percent increase from a year earlier.