Acquisitions (Tables)

9 Months Ended

Sep. 30, 2015

Business Acquisition, Pro Forma Information [Table Text Block]

Unaudited Pro Forma Combined Results of Operations

The following presentation of unaudited pro forma combined results of operations of Chemical, Lake Michigan, Monarch, and Northwestern presents these results as if the acquisitions had been completed as of the beginning of each period indicated. The unaudited pro forma combined results of operations are presented solely for information purposes and are not intended to represent or be indicative of the consolidated results of operations that Chemical would have reported had this transaction been completed as of the dates and for the periods presented, nor are they indicative of future results. In particular, no adjustments have been made to eliminate the amount of Lake Michigan's, Monarch's, or Northwestern's provision for loan losses incurred prior to the acquisition date that would not have been necessary had the acquired loans been recorded at fair value as of the beginning of each period indicated. In addition, no adjustment has been made for the lost opportunity cost associated with the all-cash purchase of Northwestern. In accordance with Article 11 of SEC Regulation S-X, transaction costs directly attributable to the acquisition have been excluded.



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(In thousands, except per share data)
Interest income	$	78,851	$	76,651	$	233,136	$	224,740
Interest expense	5,234		6,526		16,596		20,152
Net interest income	73,617		70,125		216,540		204,588
Provision for loan losses	1,500		1,950		4,500		5,985
Net interest income after provision for loan losses	72,117		68,175		212,040		198,603
Noninterest income	20,215		22,209		63,395		65,696
Operating expenses	57,365		60,863		180,147		183,084
Income before income taxes	34,967		29,521		95,288		81,215
Federal income tax expense	9,915		8,569		21,192		24,011
Net income	$	25,052	$	20,952	$	74,096	$	57,204
Net income per common share:
Basic	$	0.66	$	0.55	$	1.95	$	1.59
Diluted	0.65		0.55		1.93		1.58
Weighted average shares outstanding:
Basic	38,123		37,944		38,072		36,071
Diluted	38,393		38,139		38,319		36,307

Activity for accretable yield includes contractually due interest of acquired loans

Activity for the accretable yield, which includes contractually due interest for acquired loans that have been renewed or extended since the date of acquisition and continue to be accounted for in loan pools in accordance with ASC 310-30, follows:



	Nine Months Ended September 30,
	2015															2014
	Lake Michigan			Monarch			North-western			OAK			Total			OAK
	(In thousands)
Balance at beginning of period	$	—		$	—		$	104,675		$	33,286		$	137,961		$	32,610
Additions attributable to acquisitions	190,246			37,914			—			—			228,160			—
Additions (reductions)*	803			(1,492		)	(4,196		)	6,417			1,532			4,493
Accretion recognized in interest income	(14,190		)	(3,053		)	(14,434		)	(9,151		)	(40,828		)	(11,262		)
Reclassification from nonaccretable difference	—			—			—			—			—			10,000
Balance at end of period	$	176,859		$	33,369		$	86,045		$	30,552		$	326,825		$	37,349

*Represents additions of estimated contractual interest expected to be collected from acquired loans being renewed or extended, less reductions in contractual interest resulting from the early payoff of acquired loans.

Lake Michigan Financial Corp [Member]

Business Acquisition [Line Items]

Purchase Accounting Fair Value Adjustments [Table Text Block]

A summary of the purchase price and the excess of the purchase price over the fair value of adjusted net assets acquired (goodwill) follows (in thousands):



Fair value of the Corporation's common shares issued on May 31, 2015 (4,322,101 shares at a market price of $30.29 per share)	$	130,916
Fair value of Lake Michigan options converted to the Corporation's options	2,000
Cash paid to acquire outstanding stock	54,478
Total purchase price	$	187,394

Net assets acquired⁽¹⁾:
Lake Michigan shareholders' equity	$	89,280
Adjustments to reflect fair value of net assets acquired:
Loans	(22,600		)
Allowance for loan losses	15,888
Premises and equipment	(4,022		)	⁽²	⁾
Core deposit intangibles	8,003			⁽²	⁾
Deferred tax assets, net	3,172			⁽²	⁾
Deposits and borrowings, net	(3,048		)
Other assets and other liabilities	(157		)	⁽²	⁾
Fair value of adjusted net assets acquired	86,516
Goodwill recognized as a result of the Lake Michigan transaction	$	100,878

Schedule of Purchase Price Allocation [Table Text Block]



	Original Allocation		Adjustments			Revised Allocation
	(In thousands)
Assets
Cash and cash equivalents	$	39,301	$	—		$	39,301
Investment securities	66,699		—			66,699
Loans	985,542		—			985,542
Premises and equipment	13,673		(1,689		)	11,984
Deferred tax asset, net	14,888		903			15,791
Goodwill	100,002		876			100,878
Core deposit intangible asset	7,303		700			8,003
Bank-owned life insurance	23,844		—			23,844
Other assets	38,449		(790		)	37,659
Assets acquired, at fair value	1,289,701		—			1,289,701
Liabilities
Deposits	924,697		—			924,697
Short-term borrowings	30,000		—			30,000
Other borrowings	124,723		—			124,723
Other liabilities	22,887		—			22,887
Total liabilities acquired, at fair value	1,102,307		—			1,102,307
Total purchase price	$	187,394	$	—		$	187,394

Monarch Community Bancorp [Member]

Business Acquisition [Line Items]

Purchase Accounting Fair Value Adjustments [Table Text Block]

A summary of the purchase price and the excess of the purchase price over the fair value of adjusted net assets acquired (goodwill) follows (in thousands):



Fair value of the Corporation's common shares issued on April 1, 2015 (860,575 shares at a market price of $31.36 per share)	$	26,988
Cash paid	203
Total purchase price	$	27,191

Net assets acquired⁽¹⁾:
Monarch shareholders' equity	15,270
Adjustments to reflect fair value of net assets acquired:
Loans	(7,150		)
Allowance for loan losses	2,128
Deferred tax assets, net:
Net operating loss carryforward	7,900
Other	1,817			⁽²⁾
Premises and equipment	(370		)
Core deposit intangibles	1,930
Mortgage servicing rights	315
Other assets and other liabilities	37
Fair value of adjusted net assets acquired	21,877
Goodwill recognized as a result of the Monarch transaction	$	5,314

Schedule of Purchase Price Allocation [Table Text Block]

Monarch:



Assets
Cash and cash equivalents	$	32,171
Loans	121,783
Premises and equipment	3,064
Deferred tax assets, net
Net operating loss carryforward	7,900
Other	2,383
Interest receivable and other assets	6,972
Goodwill	5,314
Core deposit intangibles	1,930
Mortgage servicing rights	1,284
Assets acquired, at fair value	182,801
Liabilities
Deposits	144,311
FHLB advances	8,000
Interest payable and other liabilities	3,299
Total liabilities acquired, at fair value	155,610
Total purchase price	$	27,191