Chemical Financial Corporation Announces Dividend Increase
Company Raises Quarterly Dividend Rate to $0.27 Per Share
Regional banks can be solid picks for income investors, and one of them just proved this point by raising its dividend again.
On Wednesday, August 17, Chemical Financial Corporation (NASDAQ:CHFC) announced that its board of directors has approved a third-quarter cash dividend of $0.27 per share. This represents a 3.8% increase from its current quarterly payout of $0.26 per share. The dividend will be payable to shareholders on September 16 as of August 30. (Source: “Chemical Financial Corporation Announces Third Quarter Cash Dividend,” Chemical Financial Corporation, August 17, 2016.)
Chemical Financial Corporation is the second-largest banking company headquartered in Michigan. The company operates through its subsidiary, Chemical Bank, which has 175 banking offices located in 47 counties in Michigan. By the end of June 2016, the company had total assets of $9.5 billion.
“Chemical Financial Corporation’s enhanced financial performance and balance sheet growth have allowed us to again increase our dividend,” said Chemical Financial Corporation’s chairman, president, and chief executive officer, David B. Ramaker, in a statement. “While we continue to remain conservative in our approach to capital management – an approach that has served our shareholders well throughout the Corporation’s history – the Board of Directors is pleased to support increasing the dividend. We will continue to periodically revisit this issue based on our growth strategies and earnings.” (Source: Ibid.)
With the increase, Chemical Financial Corporation has an annual dividend yield of 2.42%.
This dividend hike is the latest sign of strength of the bank holding company. In the second quarter of 2016, the company generated $25.7 million in net income, up 35.3% year-over-year. Earnings per share was $0.67, compared to $0.60 per share earned in the year-ago period. (Source: “Chemical Financial Corporation Reports 2016 Second Quarter Operating Results,” Chemical Financial Corporation, July 26, 2016.)
Chemical Financial Corp had solid loan growth in the second quarter. This helped increase the company’s net interest income by 18% year-over-year to $77.5 million.
Note that Chemical Financial Corp is about to partner with bank holding company Talmer Bancorp Inc (NASDAQ:TLMR). Earlier this month, Chemical Financial Corp announced that it has received regulatory approvals of the merger, which is expected to close on August 31, 2016. (Source: “Chemical Financial Corporation Receives Regulatory Approvals of Its Merger With Talmer Bancorp, Inc.,” Chemical Financial Corp, August 10, 2016.)