8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (date of earliest event reported):
July 20, 2004

Chemical Financial Corporation
(Exact Name of Registrant as
Specified in its Charter)

Michigan
(State or Other
Jurisdiction of
Incorporation) 000-08185
(Commission
File Number) 38-2022454
(IRS Employer
Identification No.)

333 E. Main Street
Midland, Michigan
(Address of Principal Executive Offices)
48640
(Zip Code)

(989) 839-5350
(Registrant's Telephone Number,
Including Area Code)

Item 7.          Financial Statements and Exhibits.

(c)	Exhibits:
	99.1	Press Release dated July 20, 2004

Item 12.          Results of Operation and Financial Condition.

                    On July 20, 2004, Chemical Financial Corporation issued the press release attached as Exhibit 99.1 to this Form 8-K, which is here incorporated by reference. This Report and the Exhibit are furnished to, and not filed with, the Commission.

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:	July 22, 2004	CHEMICAL FINANCIAL CORPORATION (Registrant)
		By:	/s/Lori A. Gwizdala
			Lori A. Gwizdala Executive Vice President Chief Financial Officer and Treasurer

EXHIBIT INDEX

Exhibit No	Document
99.1	Press Release dated July 20, 2004

EX-99

EXHIBIT 99.1

PRESS RELEASE

NASDAQ:	CHFC
FOR RELEASE:	IMMEDIATE
DATE:	July 20, 2004
CONTACT:	David B. Ramaker President & Chief Executive Officer Chemical Financial Corporation 989/839-5269
	Lori A. Gwizdala Executive Vice President & Chief Financial Officer Chemical Financial Corporation 989/839-5358

CHEMICAL FINANCIAL CORPORATION
ANNOUNCES
SECOND QUARTER OPERATING RESULTS

          Midland, Michigan - Chemical Financial Corporation's Board of Directors today announced second quarter net income of $13.9 million, or $.58 per diluted share, up $.2 million as compared with net income of $13.7 million, or $.58 per diluted share, for the second quarter of 2003. This represented an increase of 1.4% in net income for the second quarter 2004. The returns on average assets and average equity during the second quarter of 2004 were 1.44% and 11.9%, respectively, as compared to 1.54% and 12.4%, respectively, for the second quarter of 2003.

          Net income was $28.0 million, or $1.17 per share in the first six months of 2004, compared to net income of $27.7 million, or $1.17 per share in the first six months of 2003. This represented an increase of 1.1% in net income for the first six months of 2004. The returns on average assets and average equity during the first six months of 2004 were 1.45% and 12.1%, respectively, as compared to 1.56% and 12.8%, respectively, for the first six months of 2003.

          Net interest income increased $1.4 million, or 3.9%, to $36.4 million in the second quarter of 2004, as compared to the second quarter of 2003. The increase was attributable to the acquisition of Caledonia Financial Corporation ("Caledonia") on December 1, 2003. The Corporation's earnings were also positively affected by a decrease in the provision for loan

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PRESS RELEASE

July 20, 2004
Page 2

losses of $611 thousand. The decrease in the provision for loan losses was impacted by lower net loan charge-offs in the second quarter of 2004, as compared to the second quarter of 2003. Total operating expenses increased $1.7 million, or 7.5%, in the second quarter of 2004, as compared to the second quarter of 2003. The additional operating expenses from the acquisition of Caledonia, of approximately $1.2 million, represented approximately two-thirds of the increase.

          Total assets of the Corporation at June 30, 2004 were $3.84 billion, up 7.1% over the $3.59 billion in total assets reported at June 30, 2003. Total deposits at June 30, 2004 were $2.96 billion, up 2.8% over total deposits of $2.88 billion at June 30, 2003. Total loans increased $352 million, or 15.7%, during the twelve months ended June 30, 2004 to $2.59 billion. The acquisition of Caledonia added $211 million in assets, $184 million in loans and $171 million in deposits on December 1, 2003.

          The Corporation's provision for loan losses for the quarter ended June 30, 2004 was $661 thousand, as compared to net loan charge-offs of $603 thousand. As of June 30, 2004, the allowance for loan losses was $33.6 million and represented 1.30% of total loans. Non-performing loans were $10.9 million, or .42% of total loans, at the current quarter-end.

          Shareholders' equity at June 30, 2004 was $468 million, or $19.56 per share, and represented 12.2% of total assets and a tangible equity to asset ratio of 10.4% as of June 30, 2004.

          Chemical Financial Corporation is the fourth largest bank holding company headquartered in Michigan. The Company's three subsidiary banks operate 133 banking offices and 2 loan production offices spread over 33 counties in the lower peninsula of Michigan.

          Chemical Financial Corporation common stock trades on The Nasdaq Stock Market under the symbol CHFC and is one of the issues comprising the Nasdaq Financial 100 index.

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PRESS RELEASE

July 20, 2004
Page 3

Forward Looking Statements

This press release contains forward-looking statements. Words such as "anticipates," "believes," "estimates," "expects," "intends," "should," "will," variations of such words and similar expressions are intended to identify forward-looking statements. These statements reflect management's current beliefs as to the expected outcomes of future events and are not guarantees of future performance. These statements involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. Factors that could cause a difference include, among others: changes in the national and local economies or market conditions; changes in interest rates and banking regulations; the impact of competition from traditional or new sources; and the possibility that anticipated cost savings and revenue enhancements from mergers and acquisitions and bank consolidations may not be fully realized at all or within the expected time frames. These and other factors that may emerge could cause decisions and actual results to differ materially from current expectations. Chemical undertakes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.

#          #          #

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Chemical Financial Corporation Announces Second Quarter Operating Results

Consolidated Statements of Financial Position (Unaudited)
Chemical Financial Corporation and Subsidiaries

(In thousands)	June 30, 2004		December 31, 2003		June 30, 2003
Assets:
Cash and demand deposits due from banks	$	114,743	$	131,184	$	122,712
Federal funds sold		60,700		25,900		41,200
Interest-bearing deposits with unaffiliated banks		9,931		5,107		6,096
Investment securities taxable		883,033		876,806		1,040,945
Investment securities nontaxable		41,557		45,056		47,877
Total Investment Securities		924,590		921,862		1,088,822
Commercial loans		466,666		405,929		329,929
Real estate construction loans		132,956		138,280		106,747
Real estate commercial loans		655,053		628,815		527,400
Real estate residential loans		781,062		767,199		753,014
Consumer loans		553,237		541,052		519,727
Total Loans		2,588,974		2,481,275		2,236,817
Less: Allowance for loan losses		33,552		33,179		30,482
Net Loans		2,555,422		2,448,096		2,206,335
Premises and equipment		48,077		49,616		40,795
Intangible assets		75,683		76,846		39,472
Other assets		52,593		50,277		42,397
Total Assets	$	3,841,739	$	3,708,888	$	3,587,829
Liabilities and Shareholders' Equity:
Noninterest-bearing deposits	$	551,087	$	532,752	$	530,010
Interest-bearing deposits		2,408,162		2,434,484		2,347,416
Total Deposits		2,959,249		2,967,236		2,877,426
FHLB borrowings		285,191		155,373		148,573
Other borrowings - short term		95,371		91,524		88,949
Interest payable and other liabilities		33,569		36,706		29,741
Total Liabilities		3,373,380		3,250,839		3,144,689
Shareholders' Equity:
Common stock, $1 par value		23,944		23,801		23,665
Surplus		333,475		328,774		324,213
Retained earnings		110,054		94,746		78,558
Accumulated other comprehensive income		886		10,728		16,704
Total Shareholders' Equity		468,359		458,049		443,140
Total Liabilities and Shareholders' Equity	$	3,841,739	$	3,708,888	$	3,587,829

4

Chemical Financial Corporation Announces Second Quarter Operating Results

Consolidated Statements of Income (Unaudited)
Chemical Financial Corporation and Subsidiaries

	Quarter Ended June 30,				Six Months Ended June 30,
(In thousands, except per share data)	2004		2003		2004		2003
Interest Income:
Interest and fees on loans	$	37,481	$	36,155	$	74,959	$	72,569
Interest on investment securities:
Taxable		8,276		9,778		17,152		20,458
Nontaxable		526		639		1,091		1,316
Total Interest on Securities		8,802		10,417		18,243		21,774
Interest on federal funds sold		202		107		403		443
Interest on deposits with unaffiliated banks		98		18		163		157
Total Interest Income		46,583		46,697		93,768		94,943
Interest Expense:
Interest on deposits		7,523		9,453		15,214		20,293
Interest on FHLB borrowings		2,548		2,077		5,124		4,190
Interest on other borrowings - short term		103		138		199		307
Total Interest Expense		10,174		11,668		20,537		24,790
Net Interest Income		36,409		35,029		73,231		70,153
Provision for loan losses		661		1,272		1,407		1,567
Net Interest Income after
Provision for Loan Losses		35,748		33,757		71,824		68,586
Noninterest Income:
Service charges on deposit accounts		4,757		4,262		9,311		8,153
Trust services revenue		1,871		1,791		3,780		3,518
Other charges and fees for customer services		1,806		1,834		3,354		3,749
Mortgage banking revenue		1,080		1,861		1,860		3,408
Investment securities gains		267		308		1,250		492
Other		224		30		412		80
Total Noninterest Income		10,005		10,086		19,967		19,400
Operating Expenses:
Salaries and employee benefits		14,693		13,594		29,494		27,283
Occupancy and equipment		4,440		4,016		9,284		8,029
Other		5,787		5,572		11,302		10,896
Total Operating Expenses		24,920		23,182		50,080		46,208
Income Before Income Taxes		20,833		20,661		41,711		41,778
Federal income taxes		6,967		6,991		13,726		14,094
Net Income	$	13,866	$	13,670	$	27,985	$	27,684
Net income per share:
Basic	$	0.58	$	0.58	$	1.17	$	1.17
Diluted		0.58		0.58		1.17		1.17
Cash dividends per share		0.265		0.250		0.530		0.500
Average shares outstanding:
Basic		23,934		23,684		23,913		23,690
Diluted		24,009		23,735		23,998		23,738

5

Chemical Financial Corporation Announces Second Quarter Operating Results

Financial Summary (Unaudited)
Chemical Financial Corporation and Subsidiaries
(Dollars in thousands)

	Quarter Ended June 30,		Six Months Ended June 30,
	2004	2003	2004	2003
Average Balances
Total assets	$3,876,665	$3,563,035	$3,877,963	$3,568,663
Total interest-earning assets	3,632,968	3,368,826	3,628,558	3,383,787
Total loans	2,559,608	2,173,962	2,538,344	2,137,557
Total deposits	3,001,871	2,856,439	3,009,285	2,859,093
Total shareholders' equity	469,366	441,358	466,317	437,694

	Quarter Ended June 30,		Six Months Ended June 30,
	2004	2003	2004	2003
Key Ratios (annualized where applicable)
Net interest margin	4.07%	4.22%	4.09%	4.24%
Efficiency ratio	53.3%	50.9%	53.6%	51.1%
Return on average assets	1.44%	1.54%	1.45%	1.56%
Return on average shareholders' equity	11.9%	12.4%	12.1%	12.8%
Average shareholders' equity as a
percent of average assets	12.1%	12.4%	12.0%	12.3%
Tangible shareholders' equity as a
percent of total assets			10.4%	11.4%
Total risk-based capital ratio			16.9%	18.7%

	June 30,
	2004		2003
Credit Quality Statistics
Nonaccrual loans	$	5,413	$	5,139
Loans 90 or more days past due
and still accruing		5,488		5,066
Total nonperforming loans		10,901		10,205
Repossessed assets acquired (RAA)		7,344		5,659
Total nonperforming assets		18,245		15,864
Net loan charge-offs		1,034		1,757
Allowance for loan losses as a
percent of total loans		1.30%		1.36%
Allowance for loan losses as a
percent of nonperforming loans		308%		299%
Nonperforming loans as a
percent of total loans		0.42%		0.46%
Nonperforming assets as a
percent of total loans plus RAA		0.70%		0.71%
Net loan charge-offs as a
percent of average loans		0.08%		0.17%

	June 30,
	2004		2003
Additional Data
Goodwill	$	63,293	$	27,940
Core deposits and other intangibles		9,138		9,130
Mortgage servicing rights		3,252		2,402
Amortization of intangibles		1,580		1,989

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Chemical Financial Corporation Announces Second Quarter Operating Results

Selected Quarterly Information (Unaudited)
Chemical Financial Corporation and Subsidiaries
(Dollars in thousands)

	2nd Qtr. 2004	1st Qtr. 2004	4th Qtr. 2003	3rd Qtr. 2003	2nd Qtr. 2003
Summary of Operations
Interest income	$46,583	$47,185	$44,857	$45,237	$46,697
Interest expense	10,174	10,363	10,002	10,473	11,668
Net interest income	36,409	36,822	34,855	34,764	35,029
Provision for loan losses	661	746	727	540	1,272
Net interest income after provision
for loan losses	35,748	36,076	34,128	34,224	33,757
Noninterest income	10,005	9,962	9,420	10,274	10,086
Noninterest expense	24,920	25,160	23,014	22,701	23,182
Income taxes	6,967	6,759	6,971	7,328	6,991
Net income	13,866	14,119	13,563	14,469	13,670
Per Common Share Data
Net income:
Basic	$0.58	$0.59	$0.57	$0.61	$0.58
Diluted	0.58	0.59	0.57	0.61	0.58
Cash dividends	0.265	0.265	0.25	0.25	0.25
Book value	19.56	19.63	19.25	18.94	18.73

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