Parent Company Only Financial Statements

Condensed financial statements of Chemical Financial Corporation (parent company) only follow:

Condensed Statements of Financial Position



	December 31,
(Dollars in thousands)	2018		2017
Assets
Cash at subsidiary bank	$	11,477	$	5,761
Investment in subsidiaries	2,820,866		2,673,858
Premises and equipment	3,595		3,931
Goodwill	1,092		1,092
Deferred tax asset	5,865		7,203
Other assets	27,157		31,459
Total assets	$	2,870,052	$	2,723,304
Liabilities
Other liabilities	$	17,892	$	18,877
Non-revolving line-of-credit	—		19,963
Subordinated debentures	15,900		15,715
Total liabilities	33,792		54,555
Shareholders' equity	2,836,260		2,668,749
Total liabilities and shareholders' equity	$	2,870,052	$	2,723,304

Condensed Statements of Income



	Years Ended December 31,
(Dollars in thousands)	2018			2017			2016
Income
Cash dividends from subsidiaries	$	114,300		$	165,000		$	110,450
Other (loss) income	(269		)	921			151
Total income	114,031			165,921			110,601
Expenses
Interest expense	1,601			3,076			1,816
Operating expenses	13,784			23,298			30,589
Total expenses	15,385			26,374			32,405
Income before income taxes and equity in undistributed net income of subsidiaries	98,646			139,547			78,196
Income tax benefit	4,472			12,670			11,378
Equity in undistributed net income (loss) of subsidiaries	180,902			(2,694		)	18,458
Net income	$	284,020		$	149,523		$	108,032

Condensed Statements of Cash Flows



	Years Ended December 31,
(Dollars in thousands)	2018			2017			2016
Cash Flows From Operating Activities
Net income	$	284,020		$	149,523		$	108,032
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation expense	8,578			17,346			13,452
Depreciation of premises and equipment	435			408			355
Equity in undistributed net (income) loss of subsidiaries	(180,902		)	2,694			(18,458		)
Net decrease in other assets	4,302			1,410			9,752
Net increase (decrease) in other liabilities	537			25,178			(11,830		)
Net cash provided by operating activities	116,970			196,559			101,303
Cash Flows From Investing Activities
Cash paid, net of cash assumed, in business combinations	—			—			(107,622		)
Purchases of premises and equipment, net	(99		)	(288		)	(774		)
Net cash used in investing activities	(99		)	(288		)	(108,396		)
Cash Flows From Financing Activities
Cash dividends paid	(88,954		)	(78,498		)	(49,389		)
Proceeds from issuance of common stock, net of issuance costs	—			—			—
Repayment of subordinated debt obligations	—			—			(18,558		)
Repayments of other borrowings	(20,000		)	(105,000		)	(62,500		)
Proceeds from issuance of other borrowings	—			—			125,000
Proceeds from directors' stock purchase plan and exercise of stock options	3,115			3,991			1,572
Cash paid for payroll taxes upon conversion of restricted stock units	(5,316		)	(27,854		)	(1,065		)
Net cash used in financing activities	(111,155		)	(207,361		)	(4,940		)
Net increase (decrease) in cash and cash equivalents	5,716			(11,090		)	(12,033		)
Cash and cash equivalents at beginning of year	5,761			16,851			28,884
Cash and cash equivalents at end of year	$	11,477		$	5,761		$	16,851

Business combinations:
Fair value of assets acquired (noncash)	$	—		$	—		$	46,898
Liabilities assumed	—			—			58,309
Common stock and stock options issued	—			—			1,504,811