10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2016

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ____________ to ____________            

Commission File Number: 000-08185

CHEMICAL FINANCIAL CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Michigan	38-2022454
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
235 E. Main Street Midland, Michigan	48640
(Address of Principal Executive Offices)	(Zip Code)

(989) 839-5350

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	þ	Accelerated filer	¨
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  þ

The number of shares outstanding of the registrant’s Common Stock, $1 par value, as of July 21, 2016, was 38,268,487 shares.

INDEX

Chemical Financial Corporation

Form 10-Q

Index to Form 10-Q

	Page
Forward-Looking Statements	3
Part I. Financial Information	4
Item 1. Financial Statements	4
Consolidated Statements of Financial Position as of June 30, 2016 (unaudited), December 31, 2015 and June 30, 2015 (unaudited)	4
Consolidated Statements of Income for the Three and Six Months Ended June 30, 2016 and 2015 (unaudited)	5
Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2016 and 2015 (unaudited)	6
Consolidated Statements of Changes in Shareholders’ Equity for the Six Months Ended June 30, 2016 and 2015 (unaudited)	7
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015 (unaudited)	8
Notes to Consolidated Financial Statements (unaudited)	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	52
Item 3. Quantitative and Qualitative Disclosures About Market Risk	84
Item 4. Controls and Procedures	84
Part II. Other Information	85
Item 1A. Risk Factors	85
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	85
Item 6. Exhibits	86
Signatures	87
Exhibit Index	88

2

Forward-Looking Statements

This report contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy and the Corporation. Words and phrases such as "anticipates," "believes," "continue," "estimates," "expects," "forecasts," "future," "intends," "is likely," "judgment," "look ahead," "look forward," "on schedule," "opinion," "opportunity," "plans," "potential," "predicts," "probable," "projects," "should," "strategic," "trend," "will," and variations of such words and phrases or similar expressions are intended to identify such forward-looking statements. Such statements are based upon current beliefs and expectations and involve substantial risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These statements include, among others, statements related to future levels of loan charge-offs, future levels of provisions for loan losses, real estate valuation, future levels of nonperforming assets, the rate of asset dispositions, future capital levels, future dividends, future growth and funding sources, future liquidity levels, future profitability levels, future deposit insurance premiums, future asset levels, the effects on earnings of future changes in interest rates, the future level of other revenue sources, future economic trends and conditions, future initiatives to expand the Corporation’s market share, expected performance and cash flows from acquired loans, future effects of new or changed accounting standards, future opportunities for acquisitions, opportunities to increase top line revenues, the Corporation’s ability to grow its core franchise, future cost savings and the Corporation’s ability to maintain adequate liquidity and capital based on the requirements adopted by the Basel Committee on Banking Supervision and U.S. regulators. All statements referencing future time periods are forward-looking.

Management's determination of the provision and allowance for loan losses; the carrying value of acquired loans, goodwill and mortgage servicing rights; the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment); and management's assumptions concerning pension and other postretirement benefit plans involve judgments that are inherently forward-looking. There can be no assurance that future loan losses will be limited to the amounts estimated. All of the information concerning interest rate sensitivity is forward-looking. The future effect of changes in the financial and credit markets and the national and regional economies on the banking industry, generally, and on the Corporation, specifically, are also inherently uncertain. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("risk factors") 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. The Corporation undertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

This report also contains forward-looking statements regarding Chemical's outlook or expectations with respect to its planned merger with Talmer Bancorp, Inc. ("Talmer"), the expected costs to be incurred in connection with the transaction, the expected impact of the transaction on Chemical's future financial performance and consequences of the integration of Talmer into Chemical.

Risk factors relating both to the transaction and the integration of Talmer into Chemical after closing include, without limitation:

• Completion of the transaction is dependent on, among other things, receipt of regulatory approvals, the timing of which cannot be predicted with precision at this point and which may not be received at all.

• The impact of the completion of the transaction on Chemical's financial statements will be affected by the timing of the transaction.

• The transaction may be more expensive to complete and the anticipated benefits, including anticipated cost savings and strategic gains, may be significantly harder or take longer to achieve than expected or may not be achieved in their entirety as a result of unexpected factors or events.

• The integration of Talmer’s business and operations into Chemical, which will include conversion of Talmer’s operating systems and procedures, may take longer than anticipated or be more costly than anticipated or have unanticipated adverse results relating to Chemical's or Talmer’s existing businesses.

• Chemical’s ability to achieve anticipated results from the transaction is dependent on the state of the economic and financial markets going forward. Specifically, Chemical may incur more credit losses than expected and customer and employee attrition may be greater than expected.

• The outcome of pending or threatened litigation, whether currently existing or commencing in the future, including litigation related to the transaction.

• The effect of divestitures that may be required by regulatory authorities in certain markets in which Chemical and Talmer compete.

• The challenges of integrating, retaining and hiring key personnel.

• Failure to attract new customers and retain existing customers in the manner anticipated.

In addition, risk factors include, but are not limited to, the risk factors described in Item 1A of Chemical's Annual Report on Form 10-K for the year ended December 31, 2015. These and other factors are representative of the risk factors that may emerge and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.

3

Part I. Financial Information

Item 1.    Financial Statements

Chemical Financial Corporation

Consolidated Statements of Financial Position

	June 30, 2016			December 31, 2015			June 30, 2015
	(Unaudited)						(Unaudited)
Assets	(In thousands, except share data)
Cash and cash equivalents:
Cash and cash due from banks	$	179,310		$	194,136		$	167,054
Interest-bearing deposits with the Federal Reserve Bank and other banks	53,650			44,653			47,980
Total cash and cash equivalents	232,960			238,789			215,034
Investment securities:
Available-for-sale, at fair value	458,552			553,731			685,706
Held-to-maturity (fair value - $568,415 at June 30, 2016, $512,705 at December 31, 2015 and $466,578 at June 30, 2015)	552,828			509,971			469,837
Total investment securities	1,011,380			1,063,702			1,155,543
Loans held-for-sale, at fair value	13,990			10,327			7,798
Loans	7,647,269			7,271,147			7,034,743
Allowance for loan losses	(71,506		)	(73,328		)	(74,941		)
Net loans	7,575,763			7,197,819			6,959,802
Premises and equipment (net of accumulated depreciation of $121,890 at June 30, 2016, $120,382 at December 31, 2015 and $112,530 at June 30, 2015)	102,709			106,317			111,968
Goodwill	286,867			287,393			285,512
Other intangible assets	34,270			38,104			41,201
Interest receivable and other assets	256,233			246,346			243,867
Total Assets	$	9,514,172		$	9,188,797		$	9,020,725
Liabilities and Shareholders’ Equity
Deposits:
Noninterest-bearing	$	2,007,629		$	1,934,583		$	1,860,863
Interest-bearing	5,457,017			5,522,184			5,432,116
Total deposits	7,464,646			7,456,767			7,292,979
Interest payable and other liabilities	71,417			76,466			66,174
Securities sold under agreements to repurchase with customers	256,213			297,199			305,291
Short-term borrowings	300,000			100,000			227,000
Long-term borrowings	371,597			242,391			148,490
Total liabilities	8,463,873			8,172,823			8,039,934
Shareholders’ equity:
Preferred stock, no par value:
Authorized – 2,000,000 shares, none issued	—			—			—
Common stock, $1 par value per share:
Authorized — 60,000,000 shares
Issued and outstanding — 38,267,118 shares at June 30, 2016, 38,167,861 shares at December 31, 2015 and 38,110,136 shares at June 30, 2015	38,267			38,168			38,110
Additional paid-in capital	727,145			725,280			722,329
Retained earnings	310,585			281,558			251,456
Accumulated other comprehensive loss	(25,698		)	(29,032		)	(31,104		)
Total shareholders’ equity	1,050,299			1,015,974			980,791
Total Liabilities and Shareholders’ Equity	$	9,514,172		$	9,188,797		$	9,020,725

See accompanying notes to consolidated financial statements (unaudited).

4

Chemical Financial Corporation

Consolidated Statements of Income (Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
	(In thousands, except per share data)
Interest Income
Interest and fees on loans	$	77,578	$	64,613	$	151,979	$	122,710
Interest on investment securities:
Taxable	1,798		2,202		3,727		4,509
Tax-exempt	2,640		2,185		5,305		4,091
Dividends on nonmarketable equity securities	777		551		1,033		749
Interest on deposits with the Federal Reserve Bank and other banks	144		128		357		250
Total interest income	82,937		69,679		162,401		132,309
Interest Expense
Interest on deposits	4,260		3,630		8,319		6,982
Interest on short-term borrowings	226		101		326		199
Interest on long-term borrowings	956		213		1,931		213
Total interest expense	5,442		3,944		10,576		7,394
Net Interest Income	77,495		65,735		151,825		124,915
Provision for loan losses	3,000		1,500		4,500		3,000
Net interest income after provision for loan losses	74,495		64,235		147,325		121,915
Noninterest Income
Service charges and fees on deposit accounts	6,337		6,445		12,057		12,361
Wealth management revenue	5,782		5,605		10,983		10,676
Other charges and fees for customer services	6,463		6,516		12,855		12,506
Mortgage banking revenue	1,595		1,688		3,000		3,091
Gain on sale of investment securities	18		28		37		607
Other	702		392		1,384		708
Total noninterest income	20,897		20,674		40,316		39,949
Operating Expenses
Salaries, wages and employee benefits	33,127		31,711		67,017		60,964
Occupancy	5,514		4,386		10,419		8,812
Equipment and software	4,875		4,480		9,279		8,878
Merger and acquisition-related transaction expenses	3,054		3,457		5,648		4,819
Other	12,515		12,751		25,609		24,332
Total operating expenses	59,085		56,785		117,972		107,805
Income before income taxes	36,307		28,124		69,669		54,059
Federal income tax expense	10,600		9,100		20,700		17,200
Net Income	$	25,707	$	19,024	$	48,969	$	36,859
Net Income Per Common Share:
Basic	$	0.67	$	0.54	$	1.28	$	1.08
Diluted	0.67		0.54		1.27		1.08
Cash Dividends Declared Per Common Share	0.26		0.24		0.52		0.48

See accompanying notes to consolidated financial statements (unaudited).

5

Chemical Financial Corporation

Consolidated Statements of Comprehensive Income (Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
	(In thousands)
Net income	$	25,707		$	19,024		$	48,969		$	36,859
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on investment securities available-for-sale, net of tax expense (benefit) of $742 and $(1,084) for the three months ended June 30, 2016 and 2015, respectively, and $2,212 and $177 for the six months ended June 30, 2016 and 2015, respectively	1,379			(2,014		)	4,108			331
Reclassification adjustment for realized gain on sale of investment securities available-for-sale included in net income, net of tax expense of $6 and $10 for the three months ended June 30, 2016 and 2015, respectively, and $13 and $212 for the six months ended June 30, 2016 and 2015, respectively	(12		)	(18		)	(24		)	(395		)
Adjustment for pension and other postretirement benefits, net of tax expense (benefit) of $(202) and $380 for the three months ended June 30, 2016 and 2015, respectively, and $(404) and $761 for the six months ended June 30, 2016 and 2015, respectively	(375		)	707			(750		)	1,413
Total other comprehensive income (loss), net of tax	992			(1,325		)	3,334			1,349
Comprehensive income	$	26,699		$	17,699		$	52,303		$	38,208

See accompanying notes to consolidated financial statements (unaudited).

6

Chemical Financial Corporation

Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total
	(In thousands, except per share data)
Balances at December 31, 2014	$	32,774	$	565,166		$	231,646		$	(32,453	)	$	797,133
Comprehensive income						36,859			1,349			38,208
Cash dividends declared and paid of $0.48 per share						(17,049		)				(17,049		)
Issuance of common stock in business acquisitions	5,183		154,721									159,904
Shares issued – stock options	88		1,058									1,146
Shares issued – directors’ stock plans	11		305									316
Shares issued – restricted stock units	53		(381		)							(328		)
Share-based compensation	1		1,460									1,461
Balances at June 30, 2015	$	38,110	$	722,329		$	251,456		$	(31,104	)	$	980,791
Balances at December 31, 2015	$	38,168	$	725,280		$	281,558		$	(29,032	)	$	1,015,974
Comprehensive income						48,969			3,334			52,303
Cash dividends declared and paid of $0.52 per share						(19,942		)				(19,942		)
Shares issued – stock options	48		480									528
Shares issued – directors’ stock plans	5		120									125
Shares issued – restricted stock units	45		(514		)							(469		)
Share-based compensation	1		1,779									1,780
Balances at June 30, 2016	$	38,267	$	727,145		$	310,585		$	(25,698	)	$	1,050,299

See accompanying notes to consolidated financial statements (unaudited).

7

Chemical Financial Corporation

Consolidated Statements of Cash Flows (Unaudited)

	Six Months Ended June 30,
	2016			2015
	(In thousands)
Operating Activities
Net income	$	48,969		$	36,859
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	4,500			3,000
Gains on sales of loans	(3,431		)	(3,375		)
Proceeds from sales of loans	119,845			119,683
Loans originated for sale	(120,077		)	(111,903		)
Net gains from sales/writedowns of other real estate and repossessed assets	(2,512		)	(1,578		)
Depreciation of premises and equipment	5,562			5,239
Amortization of intangible assets	4,751			3,787
Net gains on sale of investment securities	(37		)	(607		)
Net amortization of premiums and discounts on investment securities	2,891			2,759
Share-based compensation expense	1,780			1,461
Net increase in interest receivable and other assets	(13,642		)	(11,695		)
Net decrease in interest payable and other liabilities	(4,139		)	(15,727		)
Net cash provided by operating activities	44,460			27,903
Investing Activities
Investment securities – available-for-sale:
Proceeds from sales	—			13,173
Proceeds from maturities, calls and principal reductions	99,528			113,973
Investment securities – held-to-maturity:
Proceeds from maturities, calls and principal reductions	57,518			54,481
Purchases	(101,295		)	(205,286		)
Net increase in loans	(385,814		)	(250,997		)
Proceeds from sales of other real estate and repossessed assets	7,377			7,934
Purchases of premises and equipment, net of disposals	(3,897		)	(3,333		)
Cash acquired, net of cash paid, in business combinations	—			16,551
Net cash used in investing activities	(326,583		)	(253,504		)
Financing Activities
Net increase in interest- and noninterest-bearing demand deposits and savings accounts	95,263			217,719
Net decrease in time deposits	(87,384		)	(72,795		)
Net increase in securities sold under agreements to repurchase with customers and other short-term borrowings	159,014			103,824
Proceeds from long-term borrowings	150,000			25,000
Repayment of long-term borrowings	(20,558		)	—
Cash dividends paid	(19,942		)	(17,049		)
Proceeds from directors’ stock plans and exercise of stock options, net of shares withheld	653			1,462
Cash paid for payroll taxes upon conversion of share-based awards	(752		)	(546		)
Net cash provided by financing activities	276,294			257,615
Net increase (decrease) in cash and cash equivalents	(5,829		)	32,014
Cash and cash equivalents at beginning of period	238,789			183,020
Cash and cash equivalents at end of period	$	232,960		$	215,034
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	10,764		$	6,592
Loans transferred to other real estate and repossessed assets	3,370			5,908
Closed branch offices transferred to other real estate	1,863			359
Federal income taxes paid	11,700			20,800
Business combinations:
Fair value of tangible assets acquired (non-cash)	—			1,284,552
Goodwill and identifiable intangible assets acquired	—			116,478
Liabilities assumed	—			1,257,917
Common stock issued	—			159,904

See accompanying notes to consolidated financial statements (unaudited).

8

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Note 1: Significant Accounting Policies

Nature of Operations

Chemical Financial Corporation ("Corporation" or "Chemical") operates in a single operating segment — commercial banking. The Corporation is a financial holding company, headquartered in Midland, Michigan, that operates through one commercial bank, Chemical Bank. Chemical Bank operates within the State of Michigan as a state-chartered commercial bank. Chemical Bank operates through an internal organizational structure of four regional banking units and offers a full range of traditional banking and fiduciary products and services to the residents and business customers in the bank’s geographical market areas. The products and services offered by the regional banking units, through branch banking offices, are generally consistent throughout the Corporation, as is the pricing of those products and services. The marketing of products and services throughout the Corporation’s regional banking units is generally uniform, as many of the markets served by the regional banking units overlap. The distribution of products and services is uniform throughout the Corporation’s regional banking units and is achieved primarily through retail branch banking offices, automated teller machines and electronically accessed banking products.

The Corporation’s primary sources of revenue are interest from its loan products and investment securities, service charges and fees from customer deposit accounts and wealth management revenue.

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Corporation and its subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the interim consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Corporation’s consolidated financial statements and footnotes thereto included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2015. In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments believed necessary to present fairly the financial condition and results of operations of the Corporation for the periods presented. Operating results for the six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

Use of Estimates

Management makes estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying footnotes. Estimates that are particularly susceptible to significant change include the determination of the allowance for loan losses, expected cash flows from acquired loans, fair value amounts related to business combinations, pension expense, income taxes, goodwill impairment and those assets that require fair value measurement. Actual results could differ from these estimates.

Business Combinations

Pursuant to the guidance of Accounting Standards Codification ("ASC") Topic 805, Business Combinations ("ASC 805"), the Corporation recognizes assets acquired, including identified intangible assets, and the liabilities assumed in acquisitions at their fair values as of the acquisition date, with the acquisition-related transaction and restructuring costs expensed in the period incurred.

ASC 805 affords a measurement period beyond the acquisition date that allows the Corporation the opportunity to finalize the acquisition accounting in the event that new information is identified that existed as of the acquisition date but was not known by the Corporation at that time. The Corporation anticipates that measurement period adjustments may arise from adjustments to the fair values of assets and liabilities recognized at the acquisition date for its May 31, 2015 acquisition of Lake Michigan Financial Corporation ("Lake Michigan"), as additional information is obtained, such as appraisals of collateral securing loans and other borrower information. In the event that a measurement period adjustment is identified, the Corporation will recognize the adjustment as part of its acquisition accounting, which may result in an adjustment to goodwill being recorded in the period the adjustment was identified.

See Note 2 for further information regarding the Corporation's mergers and acquisitions, including its pending merger with Talmer Bancorp, Inc. ("Talmer").

9

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Originated Loans

Originated loans include all of the Corporation's portfolio loans, excluding loans acquired in business combinations, as further discussed below. Originated loans are stated at their principal amount outstanding, net of unearned income, charge-offs and unamortized deferred fees and costs. Loan interest income is recognized on the accrual basis. Deferred loan fees and costs are amortized over the loan term based on the level-yield method. Net loan commitment fees are deferred and amortized into fee income on a straight-line basis over the commitment period.

The past due status of a loan is based on the loan’s contractual terms. A loan is placed in nonaccrual status (accrual of interest is discontinued) when principal or interest is past due 90 days or more (except for a loan that is secured by residential real estate, which is transferred to nonaccrual status at 120 days past due), unless the loan is both well-secured and in the process of collection, or earlier when, in the opinion of management, there is sufficient reason to doubt the collectibility of principal or interest. Interest previously accrued, but not collected, is reversed and charged against interest income at the time the loan is placed in nonaccrual status. Subsequent receipts of interest while a loan is in nonaccrual status are recorded as a reduction of principal. Loans are returned to accrual status when principal and interest payments are brought current, payments have been received consistently for a period of time (generally six months) and collectibility is no longer in doubt.

Loans Acquired in a Business Combination

Loans acquired in a business combination ("acquired loans") consist of loans acquired on May 31, 2015 in the acquisition of Lake Michigan, on April 1, 2015 in the acquisition of Monarch Community Bancorp, Inc. ("Monarch"), on October 31, 2014 in the acquisition of Northwestern Bancorp, Inc. ("Northwestern"), and on April 30, 2010 in the acquisition of O.A.K. Financial Corporation ("OAK"). Acquired loans were recorded at fair value at the date of acquisition, without a carryover of the associated allowance for loan losses related to these loans, through a fair value discount that was, in part, attributable to deterioration in credit quality. The estimate of expected credit losses was determined based on due diligence performed by executive and senior officers of the Corporation, with assistance from third-party consultants. The fair value discount was recorded as a reduction of the acquired loans’ outstanding principal balances in the consolidated statement of financial position at the acquisition date.

The Corporation accounts for acquired loans, which are recorded at fair value at acquisition, in accordance with ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality ("ASC 310-30"). ASC 310-30 allows investors to aggregate loans acquired into loan pools that have common risk characteristics and thereby use a composite interest rate and expectation of cash flows expected to be collected for the loan pools. Under the provisions of ASC 310-30, the Corporation aggregated acquired loans into 2 pools in the acquisition of Lake Michigan, 2 pools in the acquisition of Monarch, 4 pools in the acquisition of Northwestern and 14 pools in the acquisition of OAK based upon common risk characteristics, including types of loans, commercial type loans with similar risk grades and whether loans were performing or nonperforming. A pool is considered a single unit of accounting for the purposes of applying the guidance prescribed in ASC 310-30. A loan will be removed from a pool of acquired loans only if the loan is sold, foreclosed, paid off or written off, and will be removed from the pool at the carrying value. If an individual loan is removed from a pool of loans, the difference between its relative carrying amount and the cash, fair value of the collateral, or other assets received would not affect the effective yield used to recognize the accretable difference on the remaining pool. The Corporation estimated the cash flows expected to be collected over the life of the pools of loans at acquisition and estimates expected cash flows quarterly thereafter, based on a set of assumptions including expectations as to default rates, prepayment rates and loss severities. The Corporation must make numerous assumptions, interpretations and judgments using internal and third-party credit quality information to determine whether it is probable that the Corporation will be able to collect all contractually required payments. This is a point in time assessment and inherently subjective due to the nature of the available information and judgment involved.

The calculation of the fair value of the acquired loan pools entails estimating the amount and timing of cash flows attributable to both principal and interest expected to be collected on such loan pools and then discounting those cash flows at market interest rates. The excess of a loan pool's expected cash flows at the acquisition date over its estimated fair value is referred to as the "accretable yield," which is recognized into interest income over the estimated remaining life of the loan pool on a level-yield basis. The difference between a loan pool's contractually required principal and interest payments at the acquisition date and the cash flows expected to be collected at the acquisition date is referred to as the "nonaccretable difference," which includes an estimate of future credit losses expected to be incurred over the estimated life of the loan pool and interest payments that are not expected to be collected. Decreases to the expected cash flows in each loan pool in subsequent periods will require the Corporation to record a provision for loan losses. Improvements in expected cash flows in each loan pool in subsequent periods will result in reversing a portion of the nonaccretable difference, which is then classified as part of the accretable yield and subsequently recognized into interest income over the estimated remaining life of the loan pool.

10

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Loans Modified Under Troubled Debt Restructurings

Loans modified under troubled debt restructurings ("TDRs") involve granting a concession to a borrower who is experiencing financial difficulty. Concessions generally include modifications to original loan terms, including changes to a loan’s payment schedule or interest rate, which generally would not otherwise be considered. The Corporation’s TDRs include performing and nonperforming TDRs, which consist of originated loans that continue to accrue interest at the loan's original interest rate as the Corporation expects to collect the remaining principal and interest on the loan, and nonaccrual TDRs, which include originated loans that are in a nonaccrual status and are no longer accruing interest, as the Corporation does not expect to collect the full amount of principal and interest owed from the borrower on these loans. In accordance with ASC Topic 310-30, acquired loans are excluded from TDRs as these loans are accounted for in pools at net realizable value based on the principal and interest the Corporation expects to collect on such loans. At the time of modification (except for loans on nonaccrual status), a TDR is reported as a nonperforming TDR until a six-month payment history of principal and interest payments, in accordance with the terms of the loan modification, is sustained, at which time the Corporation moves the loan to a performing status ("performing TDR"). If the Corporation does not expect to collect all principal and interest on the loan, the modified loan is classified as a nonaccrual TDR. All TDRs are accounted for as impaired loans and are included in the Corporation’s analysis of the allowance for loan losses. A TDR that has been renewed by a borrower who is no longer experiencing financial difficulty and which yields a market rate of interest at the time of a renewal is no longer reported as a TDR.

Loans in the Corporation’s commercial loan portfolio (comprised of commercial, commercial real estate, real estate construction and land development loans) that meet the definition of a TDR generally consist of loans where the Corporation has allowed borrowers to defer scheduled principal payments and make interest-only payments for a specified period of time at the stated interest rate of the original loan agreement or reduced payments due to a moderate extension of the loan’s contractual term. If the Corporation does not expect to collect all principal and interest on the loan, the modified loan is classified as a nonaccrual TDR. If the Corporation does not expect to incur a loss on the loan based on its assessment of the borrowers’ expected cash flows, as the pre- and post-modification effective yields are approximately the same, the loan is classified as a nonperforming TDR until a six-month payment history is sustained, at which time the loan is classified as a performing TDR. Since no loss is expected to be incurred on nonperforming TDRs, no additional provision for loan losses has been recognized for these loans and they continue to accrue interest at their contractual interest rate. Nonperforming TDRs are individually evaluated for impairment and transferred to nonaccrual status if they become 90 days past due as to principal or interest payments or if it is probable that any remaining principal and interest payments due on the loan will not be collected in accordance with the modified terms of the loan.

Loans in the Corporation’s consumer loan portfolio (comprised of residential mortgage, consumer installment and home equity loans) that meet the definition of a performing or nonperforming TDR generally consist of residential mortgage loans that include a concession that reduces a borrower’s monthly payments by decreasing the interest rate charged on the loan for a specified period of time (generally 24 months) under a formal modification agreement. The Corporation recognizes an additional provision for loan losses related to impairment on these loans on an individual basis based on the present value of expected future cash flows discounted at the loan’s original effective interest rate. These loans continue to accrue interest at their effective interest rate, which consists of contractual interest under the terms of the modification agreement in addition to an adjustment for the accretion of computed impairment. These loans are moved to nonaccrual status if they become 90 days past due as to principal or interest payments, or sooner if conditions warrant.

Impaired Loans

A loan is defined to be impaired when it is probable that payment of principal and interest will not be paid in accordance with the original contractual terms of the loan agreement. Impaired loans include nonaccrual loans (including nonaccrual TDRs), performing and nonperforming TDRs and acquired loans that were not performing in accordance with original contractual terms. Impaired loans are accounted for at the lower of the present value of expected cash flows discounted at the loan's original effective interest rate or the estimated fair value of the collateral, if the loan is collateral dependent. When the present value of expected cash flows or the fair value of collateral of an impaired loan in the originated loan portfolio is less than the amount of unpaid principal outstanding on the loan, the principal balance of the loan is reduced to its carrying value through either an allocation of the allowance for loan losses or a partial charge-off of the loan balance.

Nonperforming Loans

Nonperforming loans are comprised of loans for which the accrual of interest has been discontinued (nonaccrual loans, including nonaccrual TDRs), accruing originated loans contractually past due 90 days or more as to interest or principal payments and nonperforming TDRs.

Acquired loans that were classified as nonperforming loans prior to being acquired and acquired loans that are not performing in accordance with contractual terms subsequent to acquisition are not classified as nonperforming loans subsequent to acquisition

11

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

because the loans are recorded in pools at net realizable value based on the principal and interest the Corporation expects to collect on such loans.

Allowance for Loan Losses

The allowance for loan losses ("allowance") is presented as a reserve against loans. The allowance represents management’s assessment of probable loan losses inherent in the Corporation’s loan portfolio.

Management’s evaluation of the adequacy of the allowance is based on a continuing review of the loan portfolio, actual loan loss experience, the underlying value of the collateral, risk characteristics of the loan portfolio, the level and composition of nonperforming loans, the financial condition of the borrowers, the balance of the loan portfolio, loan growth, economic conditions, employment levels in the Corporation’s local markets, and special factors affecting specific business sectors. The Corporation maintains formal policies and procedures to monitor and control credit risk. Management evaluates the allowance on a quarterly basis in an effort to ensure the level is appropriate to absorb probable losses inherent in the loan portfolio.

The allowance provides for probable losses that have been identified with specific customer relationships and for probable losses believed to be incurred in the remainder of the originated loan portfolio, but that have not been specifically identified. The Corporation utilizes its own loss experience to estimate inherent losses on loans. Internal risk ratings are assigned to each loan in the commercial loan portfolio (commercial, commercial real estate, real estate construction and land development loans) at the time of origination and are subject to subsequent periodic reviews by senior management. The Corporation performs a detailed credit quality review quarterly on all loans greater than $0.25 million that have deteriorated below certain levels of credit risk, and may allocate a specific portion of the allowance to such loans based upon this review. A portion of the allowance is allocated to the remaining loans by applying projected loss ratios, based on numerous factors. Projected loss ratios incorporate factors such as charge-off experience, trends with respect to adversely risk-rated loans in the commercial loan portfolio, trends with respect to past due and nonaccrual loans, changes in economic conditions and trends, changes in the value of underlying collateral and other credit risk factors. This evaluation involves a high degree of uncertainty.

In determining the allowance and the related provision for loan losses, the Corporation considers four principal elements: (i) valuation allowances based upon probable losses identified during the review of impaired loans in the commercial loan portfolio, (ii) reserves established for adversely-rated loans in the commercial loan portfolio and nonaccrual residential mortgage, consumer installment and home equity loans based on loan loss experience of other adversely-rated loans, (iii) reserves, by loan classes, on all other loans based principally on a five-year historical loan loss experience, with equal weighting placed on all of the years, loan loss trends and giving consideration to estimated loss emergence periods, and (iv) a reserve for qualitative factors that take into consideration risks inherent in the originated loan portfolio that differ from historical loan loss experience.

Although the Corporation allocates portions of the allowance to specific loans and loan types, the entire allowance attributable to originated loans is available for any loan losses that occur in the originated portfolio. Loans that are deemed not collectible are charged off and reduce the allowance. The provision for loan losses and recoveries on loans previously charged off increase the allowance. Collection efforts may continue and recoveries may occur after a loan is charged off.

Acquired loans are aggregated into pools based upon common risk characteristics. An allowance may be recorded related to an acquired loan pool if it experiences a decrease in expected cash flows, as compared to those projected at the acquisition date. On a quarterly basis, the expected future cash flow of each pool is estimated based on various factors, including changes in property values of collateral dependent loans, default rates, loss severities and prepayment speeds. Decreases in estimates of expected cash flows within a pool generally result in a charge to the provision for loan losses and a corresponding increase in the allowance allocated to acquired loans for the particular pool. Increases in estimates of expected cash flows within a pool generally result in a reduction in the allowance allocated to acquired loans for the particular pool, if applicable, and then an adjustment to the accretable yield for the pool, which will increase amounts recognized in interest income in subsequent periods.

Various regulatory agencies, as an integral part of their examination process, periodically review the allowance. Such agencies may require additions to the allowance, based on their judgment, reflecting information available to them at the time of their examinations.

Fair Value Measurements

Fair value for assets and liabilities measured at fair value on a recurring or nonrecurring basis refers to the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants in the market in which the reporting entity transacts such sales or transfers based on the assumptions market participants would use when pricing an asset or liability. Assumptions are developed based on prioritizing information within a fair value hierarchy that gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, such as the reporting entity’s own data.

12

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

The Corporation may choose to measure eligible items at fair value at specified election dates. Unrealized gains and losses on items for which the fair value measurement option has been elected are reported in earnings at each subsequent reporting date. The fair value option (i) may be applied instrument by instrument, with certain exceptions, allowing the Corporation to record identical financial assets and liabilities at fair value or by another measurement basis permitted under GAAP, (ii) is irrevocable (unless a new election date occurs) and (iii) is applied only to entire instruments and not to portions of instruments. At June 30, 2016, December 31, 2015 and June 30, 2015, the Corporation had elected the fair value option on all of its residential mortgage loans held-for-sale. The Corporation has not elected the fair value option for any other financial assets or liabilities.

Share-Based Compensation

The Corporation grants stock options, stock awards, restricted stock performance units and restricted stock service-based units to certain executive and senior management employees. The Corporation accounts for share-based compensation expense using the modified-prospective transition method. Under that method, compensation expense is recognized for stock options based on the estimated grant date fair value as computed using the Black-Scholes option pricing model and the probability of issuance. The Corporation accounts for stock awards based on the closing stock price of the Corporation's common stock on the date of the award. The fair values of both stock options and stock awards are recognized as compensation expense on a straight-line basis over the requisite service period. The Corporation accounts for restricted stock performance units based on the closing stock price of the Corporation's common stock on the date of grant, discounted by the present value of estimated future dividends to be declared over the requisite performance or service period. The fair value of restricted stock performance units is recognized as compensation expense over the expected requisite performance period, or requisite service period for awards with multiple performance and service conditions. The Corporation accounts for restricted stock service-based units based on the closing stock price of the Corporation's common stock on the date of grant, as these awards accrue dividend equivalents equal to the amount of any cash dividends that would have been payable to a shareholder owning the number of shares of the Corporation's common stock represented by the restricted stock service-based units. The fair value of the restricted stock service-based units is recognized as compensation expense over the requisite service period.

Cash flows realized from the tax benefits of exercised stock option awards that result from actual tax deductions that are in excess of the recorded tax benefits related to the compensation expense recognized for those options (excess tax benefits) are classified as financing activities on the consolidated statements of cash flows.

Bank-Owned Life Insurance

The Corporation has life insurance policies on certain key officers of Chemical Bank. The majority of the bank-owned life insurance policies of the Corporation were obtained through its acquisition of Lake Michigan. Bank-owned life insurance is recorded at the cash surrender value, net of surrender charges, and is included within other assets on the consolidated statements of financial position and changes in the cash surrender values are recorded as other noninterest income on the consolidated statements of income.

Income and Other Taxes

The Corporation is subject to the income and other tax laws of the United States, the State of Michigan and any other states where nexus has been created. These laws are complex and are subject to different interpretations by the taxpayer and the various taxing authorities. In determining the provision for income and other taxes, management must make judgments and estimates about the application of these inherently complex laws, related regulations and case law. In the process of preparing the Corporation’s tax returns, management attempts to make reasonable interpretations of enacted tax laws. These interpretations are subject to challenge by the tax authorities upon audit or to reinterpretation based on management’s ongoing assessment of facts and evolving case law.

On a quarterly basis, management assesses the reasonableness of its effective federal tax rate based upon its estimate of taxable income and the applicable taxes expected for the full year. Deferred tax assets and liabilities are reassessed on a quarterly basis, including the need for a valuation allowance for deferred tax assets.

Uncertain income tax positions are evaluated to determine whether it is more-likely-than-not that a tax position will be sustained upon examination based on the technical merits of the tax position. If a tax position is more-likely-than-not to be sustained, a tax benefit is recognized for the amount that is greater than 50% likely to be realized. Reserves for contingent income tax liabilities attributable to unrecognized tax benefits associated with uncertain tax positions are reviewed quarterly for adequacy based upon developments in tax law and the status of audits or examinations. The Corporation had no contingent income tax liabilities recorded at June 30, 2016, December 31, 2015 or June 30, 2015.

13

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Investments in Qualified Affordable Housing Projects, Federal Historic Projects and New Market Tax Credits

The Corporation invests in qualified affordable housing projects, federal historic projects, and new market projects for the purpose of community reinvestment and obtaining tax credits. Return on the Corporation's investment in these projects comes in the form of the tax credits and tax losses that pass through to the Corporation. The carrying value of the investments are reflected in other assets on the consolidated statements of financial position. The Corporation utilizes the proportional amortization method to account for investments in qualified affordable housing projects and the equity method to account for investments in other tax credit projects.

Under the proportional amortization method, the Corporation amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits allocated. The Corporation recognized additional income tax expense attributable to the amortization of investments in qualified affordable housing projects of $0.6 million and $1.2 million during the three and six months ended June 30, 2016, respectively, and $0.2 million and $0.3 million during the three and six months ended June 30, 2015, respectively. The Corporation's remaining investment in qualified affordable housing projects accounted for under the proportional amortization method totaled $24.3 million at June 30, 2016, $21.7 million at December 31, 2015 and$21.4 million atJune 30, 2015.

Under the equity method, the Corporation's share of the earnings or losses are included in other operating expenses on the consolidated statements of income. The Corporation's remaining investment in new market projects accounted for under the equity method totaled $7.5 million, $1.7 million and $3.3 million at June 30, 2016, December 31, 2015 and June 30, 2015, respectively.

The Corporation's unfunded equity contributions relating to investments in qualified affordable housing projects, federal historic tax projects and new market projects is recorded in other liabilities on the consolidated statements of financial position. The Corporation's remaining unfunded equity contributions totaled $11.5 million, $8.0 million and $9.7 million at June 30, 2016, December 31, 2015 and June 30, 2015.

Management analyzes these investments for potential impairment when events or changes in circumstances indicate that it is more-likely-than-not that the carrying amount of the investment will not be realized. An impairment loss is measured as the amount by which the carrying amount of an investment exceeds its fair value. There were no impairment losses recognized as of June 30, 2016, December 31, 2015 or June 30, 2015.

The Corporation consolidates variable interest entities ("VIEs") in which it is the primary beneficiary. In general, a VIE is an entity that either (i) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (ii) has a group of equity owners that are unable to make significant decisions about its activities or (iii) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns as generated by its operations. If any of these characteristics are present, the entity is subject to a variable interests consolidation model, and consolidation is based on variable interests, not on ownership of the entity's outstanding voting stock. Variable interests are defined as contractual, ownership, or other monetary interests in an entity that change with fluctuations in the entity's net asset value. The primary beneficiary consolidates the VIE. The primary beneficiary is defined as the enterprise that has the power to direct the activities and absorb losses or the right to receive benefits. The Corporation is a significant limited partner in the qualified affordable housing, federal historic and new market projects it has invested in. These projects meet the definition of VIEs. However, the Corporation is not the primary beneficiary of any of the VIEs in which it holds a limited partnership interest; therefore, the VIEs are not consolidated in the Corporation's consolidated financial statements.

Shareholders’ Equity

Common Stock Repurchase Programs

From time to time, the board of directors of the Corporation approves common stock repurchase programs allowing management to repurchase shares of the Corporation’s common stock in the open market. The repurchased shares are available for later reissuance in connection with potential future stock dividends, the Corporation’s dividend reinvestment plan, employee benefit plans and other general corporate purposes. Under these programs, the timing and actual number of shares subject to repurchase are at the discretion of management and are contingent on a number of factors, including the projected parent company cash flow requirements and the Corporation’s market price per share.

In January 2008, the board of directors of the Corporation authorized the repurchase of up to 500,000 shares of the Corporation’s common stock under a stock repurchase program. In November 2011, the board of directors of the Corporation reaffirmed the stock buy-back authorization with the qualification that the shares may only be repurchased if the share price is below the tangible book value per share of the Corporation’s common stock at the time of the repurchase. Since the January 2008 authorization, no shares have been repurchased. At June 30, 2016, there were 500,000 remaining shares available for repurchase under the Corporation’s stock repurchase program.

14

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Shelf Registration

On June 12, 2014, the Corporation filed an automatic shelf registration statement on Form S-3 with the Securities and Exchange Commission ("SEC") for an indeterminate amount of securities, which became immediately effective. The shelf registration statement provides the Corporation with the ability to raise capital, subject to SEC rules and limitations, if the board of directors of the Corporation decides to do so.

Preferred Stock

On April 20, 2015, the shareholders of the Corporation approved an amendment to the restated articles of incorporation which eliminated and replaced the previous class of 200,000 shares of preferred stock, that had been approved by shareholders on April 20, 2009, with a new class of 2,000,000 shares of preferred stock. At June 30, 2016, no shares of preferred stock were issued and outstanding.

Common Stock

On July 19, 2016, the shareholders of the Corporation approved an amendment to the restated articles of incorporation to increase the number of authorized shares of common stock from 60,000,000 to 100,000,000 in connection with the pending merger with Talmer.

Legal Matters

On February 22, 2016, two putative class action and derivative complaints were filed in the Circuit Court for Oakland County, Michigan by individuals purporting to be a shareholder of Talmer. The actions are styled Regina Gertel Lee v. Chemical Financial Corporation, et. al., Case No. 2016-151642-CB and City of Livonia Employees’ Retirement System v. Chemical Financial Corporation et. al., Case No. 2016-151641-CB. These complaints purport to be brought derivatively on behalf of Talmer against the individual defendants, and individually and on behalf of all others similarly situated against Talmer and Chemical. The complaints allege, among other things, that the directors of Talmer breached their fiduciary duties to Talmer’s shareholders in connection with the merger by approving a transaction pursuant to an allegedly inadequate process that undervalues Talmer and includes preclusive deal protection provisions, and that Chemical allegedly aided and abetted the Talmer directors in breaching their duties to Talmer’s shareholders. The complaints also allege that the individual defendants have been unjustly enriched. Both complaints seek various remedies on behalf of the putative class (consisting of all shareholders of Talmer who are not related to or affiliated with any defendant). They request, among other things, that the Court enjoin the merger from being consummated in accordance with its agreed-upon terms, direct the Talmer directors to exercise their fiduciary duties, rescind the merger agreement to the extent that it is already implemented, award the plaintiff all costs and disbursements in each respective action (including reasonable attorneys’ and experts’ fees), and grant such further relief as the court deems just and proper. The City of Livonia plaintiff amended its complaint on April 21, 2016 to add additional factual allegations, including but not limited to allegations that Keefe Bruyette & Woods, Inc. served as a financial advisor for the proposed merger despite an alleged conflict of interest, that Talmer’s board acted under actual or potential conflicts of interest, and that the defendants omitted and/or misrepresented material information about the proposed merger in the Form S-4 Registration Statement relating to the proposed merger. Talmer, Chemical and the individual defendants all believe that the claims asserted against each of them in the above-described lawsuits are without merit and intend to vigorously defend against these lawsuits. These two cases ere consolidated as In re Talmer Bancorp Shareholder Litigation, case number 2016-151641-CB, per an order entered on May 12, 2016.

On March 22, 2016, an additional putative class action and derivative complaint was filed in the Circuit Court for Oakland County, Michigan, by an individual purporting to be a shareholder of Talmer, styled Stephen Bushansky v. Gary Torgow et. al. Case No. 2016-152112-CB. This action contained similar allegations, claims, and requests for relief as the complaints filed in the Lee and City of Livonia lawsuits discussed above. The Bushansky lawsuit was voluntarily dismissed by the plaintiff as to all defendants, without prejudice, on April 18, 2016. On April 27, 2016, Stephen Bushansky filed a new putative class action complaint in the United State District Court for Eastern District of Michigan, styled Stephen Bushansky v. Talmer Bancorp In. et.al., Docket No. 1:16-cv-11511. This lawsuit alleged violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, and named Talmer, Chemical, and several individuals as defendants. The complaint alleged, among other things, that the Defendants issued materially incomplete and misleading disclosures in the preliminary Form S-4 Registration Statement relating to the proposed merger. The Federal Bushansky lawsuit was voluntarily dismissed by the plaintiff as to all defendants, without prejudice, on June 20, 2016.

On April 6, 2016, a complaint was filed in the United States District Court for the Eastern District of Michigan by another purported shareholder of Talmer, styled Matthew Sciabacucchi v. Chemical Financial Corporation et. al., Docket No. 1:16-cv-11261. Mr. Sciabacucchi purports to bring this action “on behalf of himself and all others similarly situated.” This lawsuit alleges violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, naming Talmer, Chemical, and several individuals as defendants. 

15

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

The complaint alleges, among other things, that the Defendants issued materially incomplete and misleading disclosures in the Form S-4 Registration Statement relating to the proposed merger. The Complaint contains requests for relief that include, among other things, that the Court enjoin the proposed transaction, rescind the transaction if it is consummated or award rescissory damages, order the Talmer directors to file a revised Registration Statement, declare that the Defendants violated Sections 14(a) and/or Section 20(a) of the Securities Exchange Act, as well as Rule 14a-9 promulgated thereunder, award the plaintiff all costs associated with bringing the action (including reasonable attorneys’ and experts’ fees), and grant such further relief as the court deems just and proper. Talmer, Chemical and the individual defendants all believe that the claims asserted against each of them in this lawsuit are without merit and intend to vigorously defend against this lawsuit.

On April 25, 2016, a complaint was filed in the United States District Court for the Eastern District of Michigan by another purported shareholder of Talmer, styled Kevin Nicholl v. Chemical Financial Corporation et. al., Docket No. 1:16-cv-11482. The plaintiff names Talmer, Chemical, and several individuals as defendants. This lawsuit was styled as a class action and derivative action, and alleged breach of fiduciary duties as well as violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934. The Nicholl lawsuit was voluntarily dismissed by the plaintiff as to all defendants, with prejudice, on June 20, 2016.

On June 16, 2016, a complaint was filed in the United States District Court for the Eastern District of Michigan by a purported Talmer shareholder, styled City of Livonia Employees’ Retirement System v. Chemical Financial Corporation, et. al., Docket No. 2:16-cv-12229. The plaintiff purports to bring the action “individually and on behalf of all others similarly situated,” and requests certification as a class action. This lawsuit alleges violations of Section 14(a) and 20(a) of the Securities Exchange Act of 1934. The Complaint alleges, among other things, that the Defendants issued materially incomplete and misleading disclosures in the Form S-4 Registration Statement relating to the proposed merger. The Complaint contains requests for relief that include, among other things, that the Court enjoin the proposed transaction unless and until additional information is provided to Talmer’s shareholders, declare that the Defendants violated the securities laws in connection with the proposed merger, award compensatory damages, interest, attorneys’ and experts’ fees, and that the Court grant such other relief as it deems just and proper. Talmer, Chemical, and the individual defendants all believe that the claims asserted against each of them in this lawsuit are without merit and intend to vigorously defend against this lawsuit.

In addition, the Corporation and Chemical Bank are subject to certain legal actions arising in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the ultimate disposition of these matters is not expected to have a material adverse effect on the consolidated financial condition or results of operations of the Corporation.

Reclassifications

Certain amounts appearing in the consolidated financial statements and notes thereto for prior periods have been reclassified to conform with the current presentation. The reclassification had no effect on net income or shareholders’ equity as previously reported.

Adopted Accounting Pronouncements

Consolidation of Variable Interest Entities

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis ("ASU 2015-02"). ASU 2015-02 is applicable to reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, ASU 2015-02 (i) modifies the evaluation of whether limited partnerships and similar legal entities are VIEs, (ii) eliminates the presumption that a general partner should consolidate a limited partnership, (iii) affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships and (iv) provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The adoption of ASU 2015-02 effective January 1, 2016 did not have a material impact on the Corporation's consolidated financial condition or results of operations.

Customer's Accounting for Cloud Computing Fees

In April 2015, the FASB issued ASU No. 2015-05, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"). ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU 2015-05 does not change the accounting for a customer’s accounting for service contracts. The purpose of ASU 2015-05 is to clarify which fees paid in a cloud computing arrangement should be capitalized and

16

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

which fees should be expensed as incurred. The adoption of ASU 2015-05 prospectively effective January 1, 2016 did not have a material impact on the Corporation's consolidated financial condition or results of operations.

Pending Accounting Pronouncements

Recognition and Measurement

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"). ASU 2016-01 amends current guidance by: (i) requiring equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income, (ii) allowing an entity to measure equity investments that do not have readily determinable fair values at either fair value or cost minus impairment, if any, plus or minus changes in observable prices, with changes in measurement recognized in net income, (iii) simplifying the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iv) eliminating the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet; (v) requiring use the of exit price notion when measuring the fair value of financial instruments for disclosure purposes; (vi) requiring recognition of changes in the fair value related to instrument-specific credit risk in other comprehensive income if the fair value option for financial liabilities is elected, (vii) requiring separate presentation in the financial statements of financial assets and financial liabilities by measurement category, and (8) clarifying that an entity should evaluate the need for a valuation allowance on deferred tax assets related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 is effective for interim and annual reporting periods beginning after December 15, 2017. Early application is permitted as of the beginning of the fiscal year of adoption only for items (iv) and (vi) above. Early adoption of the other items mentioned above is not permitted. The adoption of ASU 2016-01 is not expected to have a material impact on the Corporation's consolidated financial condition or results of operations.

Leases

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). Under ASU 2016-02, the Corporation will be required to recognize the following for all leases (with the exception of short-term leases): (i) a right to use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term and (ii) a lease liability, which is a liability that represents lessee's obligation to make lease payments arising from a lease, measured on a discounted basis. ASU 2016-02 requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. ASU 2016-02 is effective for public companies for interim and annual periods beginning after December 15, 2018. The adoption of ASU 2016-02 is not expected to have a material impact on the Corporation's consolidated financial condition or results of operations.

Stock Compensation

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 allows for simplification of several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under ASU 2016-09, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement. ASU 2016-09 also requires recognition of excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. ASU 2016-09 further permits the withholding of an amount up to employees' maximum individual tax rate in the relevant jurisdiction without resulting in a liability classification. ASU 2016-09 also requires any excess tax benefits be classified along with other income tax cash flows as an operating activity and cash paid by an employer when directly withholding shares for tax-withholding purposes to be classified as a financing activity. ASU 2016-09 is effective for public companies for interim and annual periods beginning after December 15, 2016. The Corporation is currently evaluating the impact of ASU 2016-09 on the Corporation's consolidated financial condition and results of operations.

Credit Losses

In June, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

ASU 2016-13 requires an entity measure expected credit losses for financial assets over the estimated lifetime of expected credit loss and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The standard includes the following core concepts in determining the expected credit loss estimate: (a) be based on an asset’s amortized cost (including premiums or discounts, net deferred fees and costs, foreign

17

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

exchange and fair value hedge accounting adjustments), (b) reflect losses expected over the remaining contractual life of an asset (considering the effect of voluntary prepayments), (c) consider available relevant information about the estimated collectability of cash flows (including information about past events, current conditions, and reasonable and supportable forecasts), and (d) reflect the risk of loss, even when that risk is remote.

ASU 2016-13 also amends the recording of purchased credit-deteriorated assets. Under the new guidance, an allowance will be recognized at acquisition through a gross-up approach whereby an entity will record as the initial amortized cost the sum of (a) the purchase price and (b) an estimate of credit losses as of the date of acquisition. In addition, the guidance also requires immediate recognition in earnings any subsequent changes, both favorable and unfavorable, in expected cash flows by adjusting this allowance.

ASU 2016-13 amends the impairment model for available-for-sale debt securities and requires entities to determine whether all or a portion of the unrealized loss on an available-for-sale debt security is a credit loss. Management may not use the length of time a security has been in an unrealized loss position as a factor in concluding whether a credit loss exists, as is currently permitted. In addition, an entity will recognize an allowance for credit losses on available-for-sale debt securities as a contra-account to the amortized cost basis rather than as a direct reduction of the amortized cost basis of the investment, as is currently required. As a result, entities will recognize improvements to credit losses on available-for-sale debt securities immediately in earnings rather than as interest income over time under current practice.

New disclosures required by ASU 2016-13 include: (a) for financial assets measured at amortized cost, an entity will be required to disclose information about how it developed its allowance, including changes in the factors that influenced management’s estimate of expected credit losses and the reasons for those changes, (b) for financial receivables and net investments in leases measured at amortized cost, an entity will be required to further disaggregate the information it currently discloses about the credit quality of these assets by year or the asset’s origination or vintage for as many as five annual periods, and (c) for available-for-sale debt securities, an entity will be required to provide a roll-forward of the allowance for credit losses and an aging analysis for securities that are past due.

Upon adoption of ASU 2016-13, a cumulative-effect adjustment to retained earnings will be recorded as of the beginning of the first reporting period in which the guidance is effective. ASU 2016-13 is effective for public companies for interim and annual periods beginning after December 15, 2019, with early adoption permitted for annual periods beginning after December 15, 2018. The Corporation is currently evaluating the provisions of ASU 2016-13 to determine the potential impact on the Corporation's consolidated financial condition and results of operations.

Note 2: Mergers and Acquisitions

Pending Merger with Talmer Bancorp, Inc.

On January 25, 2016, the Corporation entered into an Agreement and Plan of Merger with Talmer. Under the terms of the merger agreement, each Talmer shareholder will receive $1.61 in cash and 0.4725 shares of the Corporation's common stock for each share of Talmer common stock, subject to adjustment in limited circumstances. Based on the 30-day volume weighted price per share of the Corporation's common stock as of January 25, 2016, the merger had a transaction value of approximately $1.1 billion. Following the completion of the merger, the Corporation intends to consolidate Talmer's wholly-owned subsidiary bank, Talmer Bank and Trust, with and into Chemical Bank. At June 30, 2016, Talmer had total assets of $6.9 billion, total loans of $5.0 billion and total deposits of $5.3 billion, including brokered deposits of $389 million. Talmer Bank and Trust is a full service community bank offering a full suite of commercial banking, retail banking, mortgage banking, wealth management and trust services to small and medium-sized businesses and individuals through 80 full service banking offices located primarily within southeast Michigan and northeast Ohio, as well as in west Michigan, northeast Michigan, Chicago, Illinois, northern Indiana, and Las Vegas, Nevada. At a special meeting of Talmer shareholders, held on July 14, 2016, Talmer shareholders approved the merger. And at a special meeting of Chemical shareholders, held on July 19, 2016, Chemical shareholders approved the merger. Completion of the merger is subject to regulatory approval, in addition to satisfaction of other customary closing conditions.

Acquisition of Lake Michigan Financial Corporation

On May 31, 2015, the Corporation acquired all the outstanding stock of Lake Michigan for total consideration of $187.4 million, which included stock consideration of $132.9 million and cash consideration of $54.5 million. As a result of the acquisition, the Corporation issued approximately 4.3 million shares of its common stock, based on an exchange ratio of 1.326 shares of its common stock, and paid $16.64 in cash, for each share of Lake Michigan common stock outstanding. Lake Michigan, a bank holding company which owned The Bank of Holland and The Bank of Northern Michigan, provided traditional banking services and products with five banking offices in Holland, Grand Haven, Grand Rapids, Petoskey and Traverse City, Michigan. The Bank of Holland and The Bank of Northern Michigan were consolidated with and into Chemical Bank on November 13, 2015.

18

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

At the acquisition date, Lake Michigan added total assets of $1.24 billion, including total loans of $986 million, and total deposits of $925 million to the Corporation's consolidated statement of financial position. The Corporation recorded $101 million of goodwill, which was primarily attributable to the synergies and economies of scale expected from combining the operations of the Corporation and Lake Michigan. In addition, the Corporation recorded $8.6 million of core deposit and other intangible assets in conjunction with the acquisition. During the first quarter 2016, the Corporation obtained additional information regarding the valuation of deferred tax assets, which resulted in a decrease to goodwill recognized in the transaction of $0.5 million. In accordance with ASU 2015-16, no amounts were recorded in the consolidated statements of income during 2016 for these adjustments that would have been recorded in a previous reporting period had these adjustments been recognized as of the acquisition date.

Upon acquisition, the Lake Michigan loan portfolio had contractually required principal and interest payments receivable of $1.01 billion and $190.2 million, respectively, expected principal and interest cash flows of $986.1 million and $189.6 million, respectively, and a fair value of $985.5 million. The difference between the contractually required payments receivable and the expected cash flows represents the nonaccretable difference, which totaled $22.6 million at the acquisition date, with $22.0 million attributable to expected credit losses. The difference between the expected cash flows and fair value represents the accretable yield, which totaled $190.2 million at the date of acquisition. The outstanding contractual principal balance and the carrying amount of the Lake Michigan acquired loan portfolio were $756 million and $734 million, respectively, at June 30, 2016, compared to $864 million and $842 million, respectively, at December 31, 2015 and $990 million and $967 million, respectively, at June 30, 2015. There was no related allowance for loan losses at those dates.

Acquisition of Monarch Community Bancorp, Inc.

On April 1, 2015, the Corporation acquired all of the outstanding stock of Monarch in an all-stock transaction valued at $27.2 million. As a result of the acquisition, the Corporation issued 860,575 shares of its common stock based on an exchange ratio of 0.0982 shares of its common stock for each share of Monarch common stock outstanding. Monarch, a bank holding company, owned Monarch Community Bank, which operated five full service branch offices in Coldwater, Marshall, Hillsdale and Union City, Michigan. Monarch Community Bank was consolidated with and into Chemical Bank on May 8, 2015.

As of the April 1, 2015 acquisition date, Monarch added total assets of $183 million, including total loans of $122 million, and total deposits of $144 million to the Corporation's consolidated statement of financial position. In connection with the acquisition of Monarch, the Corporation recorded $5.3 million of goodwill, which was primarily attributable to the synergies and economies of scale expected from combining the operations of the Corporation and Monarch. In addition, the Corporation recorded $1.9 million of core deposit intangible assets in conjunction with the acquisition.

Upon acquisition, the Monarch loan portfolio had contractually required principal and interest payments receivable of $128.9 million and $37.8 million, respectively, expected principal and interest cash flows of $122.6 million and $37.1 million, respectively, and a fair value of $121.8 million. The difference between the contractually required payments receivable and the expected cash flows represents the nonaccretable difference, which totaled $7.1 million at the acquisition date, with $6.3 million attributable to expected credit losses. The difference between the expected cash flows and fair value represents the accretable yield, which totaled $37.9 million at the date of acquisition. The outstanding contractual principal balance and the carrying amount of the Monarch acquired loan portfolio were $101 million and $94 million, respectively, at June 30, 2016, compared to $115 million and $108 million, respectively, at December 31, 2015 and $126 million and $119 million, respectively, at June 30, 2015. There was no related allowance for loan losses at those dates.

Acquisition of Northwestern Bancorp, Inc.

On October 31, 2014, the Corporation acquired all of the outstanding stock of Northwestern Bancorp, Inc. (Northwestern) for total cash consideration of $121 million. Northwestern, a bank holding company which owned Northwestern Bank, provided traditional banking services and products through 25 banking offices serving communities in the northwestern lower peninsula of Michigan. At the acquisition date, Northwestern added total assets of $815 million, including total loans of $475 million, and total deposits of $794 million to the Corporation. Northwestern Bank was consolidated with and into Chemical Bank as of the acquisition date. In connection with the acquisition of Northwestern, the Corporation recorded $60.3 million of goodwill, which was primarily attributable to the synergies and economies of scale expected from combining the operations of the Corporation and Northwestern. In addition, the Corporation recorded $12.9 million of core deposit intangible assets in conjunction with the acquisition.

19

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Upon acquisition, the Northwestern loan portfolio had contractually required principal and interest payments receivable of $507 million and $112 million, respectively, expected principal and interest cash flows of $481 million and $104 million, respectively, and a fair value of $475 million. The difference between the contractually required payments receivable and the expected cash flows represents the nonaccretable difference, which totaled $34 million at the acquisition date, with $26 million attributable to expected credit losses. The difference between the expected cash flows and fair value represents the accretable yield, which totaled $110 million at the acquisition date. The outstanding contractual principal balance and the carrying amount of the Northwestern acquired loan portfolio were $305 million and $275 million, respectively, at June 30, 2016, compared to $361 million and $330 million, respectively, at December 31, 2015 and $415 million and $382 million, respectively, at June 30, 2015.

Acquisition of 21 Branches

On December 7, 2012, Chemical Bank acquired 21 branches from Independent Bank, a subsidiary of Independent Bank Corporation, located in the Northeast and Battle Creek regions of Michigan, including $404 million in deposits and $44 million in loans (branch acquisition transaction). The purchase price of the branch offices, including equipment, was $8.1 million and the Corporation paid a premium on deposits of $11.5 million, or approximately 2.85% of total deposits. The loans were purchased at a discount of 1.75%. In connection with the branch acquisition transaction, the Corporation recorded goodwill of $6.8 million and other intangible assets attributable to customer core deposits of $5.6 million.

Acquisition of O.A.K. Financial Corporation

On April 30, 2010, the Corporation acquired OAK in an all-stock transaction for total consideration of $83.7 million. OAK provided traditional banking services and products through 14 banking offices serving communities in Ottawa, Allegan and Kent counties in west Michigan. At the acquisition date, OAK added total assets of $820 million, including total loans of $627 million, and total deposits of $693 million, including brokered deposits of $193 million. Upon acquisition, the OAK loan portfolio had contractually required principal payments receivable of $683 million and a fair value of $627 million. The outstanding contractual principal balance and the carrying amount of the OAK acquired loan portfolio were $182 million and $166 million, respectively, at June 30, 2016, compared to $204 million and $183 million, respectively, at December 31, 2015 and $236 million and $215 million, respectively, at June 30, 2015.

Accretable Yield

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:

	Lake Michigan			Monarch			North-western			OAK			Total
Six Months Ended June 30, 2016	(In thousands)
Balance at beginning of period	$	152,999		$	34,558		$	82,623		$	28,077		$	298,257
Additions (reductions)*	(10,365		)	(863		)	(5,848		)	(201		)	(17,277		)
Accretion recognized in interest income	(17,291		)	(2,836		)	(8,029		)	(6,284		)	(34,440		)
Reclassification from nonaccretable difference	—			—			5,000			5,000			10,000
Balance at end of period	$	125,343		$	30,859		$	73,746		$	26,592		$	256,540
Six Months Ended June 30, 2015
Balance at beginning of period	$	—		$	—		$	104,675		$	33,286		$	137,961
Additions attributable to acquisitions	190,246			37,914			—			—			228,160
Additions (reductions)*	1,550			(1,141		)	(2,859		)	5,215			2,765
Accretion recognized in interest income	(3,486		)	(968		)	(10,058		)	(6,326		)	(20,838		)
Balance at end of period	$	188,310		$	35,805		$	91,758		$	32,175		$	348,048

*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.

As part of its ongoing assessment of the acquired loan portfolios, management has determined that the overall credit quality of the Northwestern and OAK acquired loan portfolios has improved, which has resulted in an improvement in expected cash flows of certain loan pools in these acquired loan portfolios. Accordingly, management reclassified $5.0 million during the three months ended June 30, 2016 from the nonaccretable difference to the accretable yield for each of these acquired loan portfolios, which will increase amounts recognized into interest income over the estimated remaining lives of the loan pools within these portfolios.

20

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Note 3: Investment Securities

The following is a summary of the amortized cost and fair value of investment securities available-for-sale and investment securities held-to-maturity at June 30, 2016, December 31, 2015 and June 30, 2015:

	Investment Securities Available-for-Sale
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(In thousands)
June 30, 2016
U.S. Treasury securities	$	5,781	$	29	$	—	$	5,810
Government sponsored agencies	156,843		715		536		157,022
State and political subdivisions	12,901		319		—		13,220
Residential mortgage-backed securities	166,582		2,034		—		168,616
Collateralized mortgage obligations	100,433		611		195		100,849
Corporate bonds	9,746		30		64		9,712
Preferred stock and trust preferred securities	2,888		436		1		3,323
Total	$	455,174	$	4,174	$	796	$	458,552
December 31, 2015
U.S. Treasury securities	$	5,773	$	—	$	8	$	5,765
Government sponsored agencies	195,711		78		800		194,989
State and political subdivisions	14,731		395		6		15,120
Residential mortgage-backed securities	189,452		538		2,222		187,768
Collateralized mortgage obligations	133,256		111		1,137		132,230
Corporate bonds	14,825		2		200		14,627
Preferred stock and trust preferred securities	2,888		344		—		3,232
Total	$	556,636	$	1,468	$	4,373	$	553,731
June 30, 2015
U.S. Treasury securities	$	8,270	$	24	$	—	$	8,294
Government sponsored agencies	227,424		683		200		227,907
State and political subdivisions	26,476		503		14		26,965
Residential mortgage-backed securities	213,621		742		1,694		212,669
Collateralized mortgage obligations	167,768		245		981		167,032
Corporate bonds	39,680		76		78		39,678
Preferred stock and trust preferred securities	2,889		272		—		3,161
Total	$	686,128	$	2,545	$	2,967	$	685,706

21

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

	Investment Securities Held-to-Maturity
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(In thousands)
June 30, 2016
State and political subdivisions	$	552,328	$	16,123	$	321	$	568,130
Trust preferred securities	500		—		215		285
Total	$	552,828	$	16,123	$	536	$	568,415
December 31, 2015
State and political subdivisions	$	509,471	$	7,446	$	4,512	$	512,405
Trust preferred securities	500		—		200		300
Total	$	509,971	$	7,446	$	4,712	$	512,705
June 30, 2015
State and political subdivisions	$	469,337	$	4,853	$	7,912	$	466,278
Trust preferred securities	500		—		200		300
Total	$	469,837	$	4,853	$	8,112	$	466,578

The majority of the Corporation’s residential mortgage-backed securities and collateralized mortgage obligations are backed by a U.S. government agency (Government National Mortgage Association) or a government sponsored enterprise (Federal Home Loan Mortgage Corporation or Federal National Mortgage Association).

The following is a summary of the amortized cost and fair value of investment securities at June 30, 2016, by maturity, for both available-for-sale and held-to-maturity investment securities. The maturities of residential mortgage-backed securities and collateralized mortgage obligations are based on scheduled principal payments. The maturities of all other debt securities are based on final contractual maturity.

	June 30, 2016
	Amortized Cost		Fair Value
	(In thousands)
Investment Securities Available-for-Sale:
Due in one year or less	$	154,820	$	155,386
Due after one year through five years	257,040		258,856
Due after five years through ten years	37,877		38,374
Due after ten years	4,049		4,112
Preferred stock	1,388		1,824
Total	$	455,174	$	458,552
Investment Securities Held-to-Maturity:
Due in one year or less	$	59,330	$	59,633
Due after one year through five years	275,988		280,491
Due after five years through ten years	130,304		136,879
Due after ten years	87,206		91,412
Total	$	552,828	$	568,415

22

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

The following schedule summarizes information for both available-for-sale and held-to-maturity investment securities with gross unrealized losses at June 30, 2016, December 31, 2015 and June 30, 2015, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position.

	Less Than 12 Months				12 Months or More				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In thousands)
June 30, 2016
Government sponsored agencies	$	14,110	$	19	$	18,787	$	517	$	32,897	$	536
State and political subdivisions	73,532		237		25,713		84		99,245		321
Collateralized mortgage obligations	8,461		13		22,955		182		31,416		195
Corporate bonds	—		—		4,936		64		4,936		64
Preferred stock and trust preferred securities	1,499		1		285		215		1,784		216
Total	$	97,602	$	270	$	72,676	$	1,062	$	170,278	$	1,332
December 31, 2015
U.S. Treasury securities	$	5,765	$	8	$	—	$	—	$	5,765	$	8
Government sponsored agencies	114,640		292		21,681		508		136,321		800
State and political subdivisions	195,285		2,891		68,361		1,627		263,646		4,518
Residential mortgage-backed securities	169,226		2,146		3,435		76		172,661		2,222
Collateralized mortgage obligations	60,459		408		39,382		729		99,841		1,137
Corporate bonds	9,532		200		—		—		9,532		200
Trust preferred securities	—		—		300		200		300		200
Total	$	554,907	$	5,945	$	133,159	$	3,140	$	688,066	$	9,085
June 30, 2015
Government sponsored agencies	$	24,789	$	163	$	14,715	$	37	$	39,504	$	200
State and political subdivisions	258,503		5,433		63,584		2,493		322,087		7,926
Residential mortgage-backed securities	187,858		1,592		3,643		102		191,501		1,694
Collateralized mortgage obligations	49,845		155		48,881		826		98,726		981
Corporate bonds	9,670		49		14,971		29		24,641		78
Trust preferred securities	—		—		300		200		300		200
Total	$	530,665	$	7,392	$	146,094	$	3,687	$	676,759	$	11,079

An assessment is performed quarterly by the Corporation to determine whether unrealized losses in its investment securities portfolio are temporary or other-than-temporary by carefully considering all reasonably available information. The Corporation reviews factors such as financial statements, credit ratings, news releases and other pertinent information of the underlying issuer or company to make its determination. Management did not believe any individual unrealized loss on any investment security, as of June 30, 2016, represented an other-than-temporary impairment (OTTI). Management believed that the unrealized losses on investment securities at June 30, 2016 were temporary in nature and due primarily to changes in interest rates and reduced market liquidity and not as a result of credit-related issues.

At June 30, 2016, the Corporation did not have the intent to sell any of its impaired investment securities and believed that it was more-likely-than-not that the Corporation will not have to sell any such investment securities before a full recovery of amortized cost. Accordingly, at June 30, 2016, the Corporation believed the impairments in its investment securities portfolio were temporary in nature. However, there is no assurance that OTTI may not occur in the future.

23

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Note 4: Loans

Loan portfolio segments are defined as the level at which an entity develops and documents a systematic methodology to determine its allowance. The Corporation has two loan portfolio segments (commercial loans and consumer loans) that it uses in determining the allowance. Both quantitative and qualitative factors are used by management at the loan portfolio segment level in determining the adequacy of the allowance for the Corporation. Classes of loans are a disaggregation of an entity’s loan portfolio segments. Classes of loans are defined as a group of loans which share similar initial measurement attributes, risk characteristics, and methods for monitoring and assessing credit risk. The Corporation has six classes of loans, which are set forth below.

Commercial — Loans and lines of credit to varying types of businesses, including municipalities, school districts and nonprofit organizations, for the purpose of supporting working capital, operational needs and term financing of equipment. Repayment of such loans is generally provided through operating cash flows of the business. Commercial loans are predominately secured by equipment, inventory, accounts receivable, personal guarantees of the owner and other sources of repayment, although the Corporation may also secure commercial loans with real estate.

Commercial real estate — Loans secured by real estate occupied by the borrower for ongoing operations, non-owner occupied real estate leased to one or more tenants and vacant land that has been acquired for investment or future land development.

Real estate construction and land development — Real estate construction loans represent secured loans for the construction of business properties. Real estate construction loans often convert to a commercial real estate loan at the completion of the construction period. Land development loans represent secured development loans made to borrowers for the purpose of infrastructure improvements to vacant land to create finished marketable residential and commercial lots/land. Most land development loans are originated with the intention that the loans will be paid through the sale of developed lots/land by the developers within twelve months of the completion date. Land development loans are primarily comprised of loans to develop residential properties.

Residential mortgage — Loans secured by one- to four-family residential properties, generally with fixed interest rates for periods of fifteen years or less. The loan-to-value ratio at the time of origination is generally 80% or less. Residential mortgage loans with a loan-to-value ratio of more than 80% generally require private mortgage insurance.

Consumer installment — Loans to consumers primarily for the purpose of acquiring automobiles, recreational vehicles and personal watercraft and comprised primarily of indirect loans purchased from dealers. These loans consist of relatively small amounts that are spread across many individual borrowers.

Home equity — Loans and lines of credit whereby consumers utilize equity in their personal residence, generally through a second mortgage, as collateral to secure the loan.

Commercial, commercial real estate, real estate construction and land development loans are referred to as the Corporation’s commercial loan portfolio, while residential mortgage, consumer installment and home equity loans are referred to as the Corporation’s consumer loan portfolio. A summary of loans follows:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Commercial loan portfolio:
Commercial	$	1,953,301	$	1,905,879	$	1,754,873
Commercial real estate	2,157,733		2,112,162		2,243,513
Real estate construction and land development	285,848		232,076		112,312
Subtotal	4,396,882		4,250,117		4,110,698
Consumer loan portfolio:
Residential mortgage	1,494,192		1,429,636		1,310,167
Consumer installment	1,048,622		877,457		887,907
Home equity	707,573		713,937		725,971
Subtotal	3,250,387		3,021,030		2,924,045
Total loans	$	7,647,269	$	7,271,147	$	7,034,743

24

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Credit Quality Monitoring

The Corporation maintains loan policies and credit underwriting standards as part of the process of managing credit risk. These standards include making loans generally only within the Corporation’s market areas. The Corporation’s lending markets generally consist of communities across the lower peninsula of Michigan, except for the southeastern portion of Michigan. The Corporation has no foreign loans.

The Corporation, through Chemical Bank, has a commercial loan portfolio approval process involving underwriting and individual and group loan approval authorities to consider credit quality and loss exposure at loan origination. The loans in the Corporation’s commercial loan portfolio are risk rated at origination based on the grading system set forth below. The approval authority of relationship managers is established based on experience levels, with credit decisions greater than $1.0 million requiring group loan authority approval, except for six executive and senior officers who have varying loan limits exceeding $1.5 million and up to $3.5 million. With respect to the group loan authorities, Chemical Bank has a loan committee, consisting of certain executive and senior officers, that meets weekly to consider loans ranging in amounts from $1.0 million to $10.0 million, depending on risk rating and credit action required. A directors’ loan committee of Chemical Bank, consisting of eight independent members of the board of directors of Chemical Bank, the chief executive officer of Chemical Bank and the senior credit officer of Chemical Bank, meets bi-weekly to consider loans in amounts over $10.0 million, and certain loans under $10.0 million depending on a loan’s risk rating and credit action required. Loans over $15.0 million require the approval of the board of directors of Chemical Bank.

The majority of the Corporation’s consumer loan portfolio is comprised of secured loans that are relatively small. The Corporation’s consumer loan portfolio has a centralized approval process which utilizes standardized underwriting criteria. The ongoing measurement of credit quality of the consumer loan portfolio is largely done on an exception basis. If payments are made on schedule, as agreed, then no further monitoring is performed. However, if delinquency occurs, the delinquent loans are turned over to the Corporation’s collection department for resolution, resulting in repossession or foreclosure if payments are not brought current. Credit quality for the entire consumer loan portfolio is measured by the periodic delinquency rate, nonaccrual amounts and actual losses incurred.

Loans in the commercial loan portfolio tend to be larger and more complex than those in the consumer loan portfolio, and therefore, are subject to more intensive monitoring. All loans in the commercial loan portfolio have an assigned relationship manager, and most borrowers provide periodic financial and operating information that allows the relationship managers to stay abreast of credit quality during the life of the loans. The risk ratings of loans in the commercial loan portfolio are reassessed at least annually, with loans below an acceptable risk rating reassessed more frequently and reviewed by various loan committees within the Corporation at least quarterly.

The Corporation maintains a centralized independent loan review function that monitors the approval process and ongoing asset quality of the loan portfolio, including the accuracy of loan grades. The Corporation also maintains an independent appraisal review function that participates in the review of all appraisals obtained by the Corporation for loans in the commercial loan portfolio.

Credit Quality Indicators

Commercial Loan Portfolio

The Corporation uses a nine grade risk rating system to monitor the ongoing credit quality of its commercial loan portfolio. These loan grades rank the credit quality of a borrower by measuring liquidity, debt capacity, coverage and payment behavior as shown in the borrower’s financial statements. The loan grades also measure the quality of the borrower’s management and the repayment support offered by any guarantors. A summary of the Corporation’s loan grades (or characteristics of the loans within each grade) follows:

Risk Grades 1-5 (Acceptable Credit Quality) — All loans in risk grades 1 through 5 are considered to be acceptable credit risks by the Corporation and are grouped for purposes of allowance for loan loss considerations and financial reporting. The five grades essentially represent a ranking of loans that are all viewed to be of acceptable credit quality, taking into consideration the various factors mentioned above, but with varying degrees of financial strength, debt coverage, management and factors that could impact credit quality. Business credits within risk grades 1 through 5 range from Risk Grade 1: Prime Quality (factors include: excellent business credit; excellent debt capacity and coverage; outstanding management; strong guarantors; superior liquidity and net worth; favorable loan-to-value ratios; debt secured by cash or equivalents, or backed by the full faith and credit of the U.S. Government) to Risk Grade 5: Acceptable Quality With Care (factors include: acceptable business credit, but with added risk due to specific industry or internal situations).

25

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Risk Grade 6 (Watch) — A business credit that is not acceptable within the Corporation’s loan origination criteria; cash flow may not be adequate or is continually inconsistent to service current debt; financial condition has deteriorated as company trends/management have become inconsistent; the company is slow in furnishing quality financial information; working capital needs of the company are reliant on short-term borrowings; personal guarantees are weak and/or with little or no liquidity; the net worth of the company has deteriorated after recent or continued losses; the loan requires constant monitoring and attention from the Corporation; payment delinquencies becoming more serious; if left uncorrected, these potential weaknesses may, at some future date, result in deterioration of repayment prospects.

Risk Grade 7 (Substandard — Accrual) — A business credit that is inadequately protected by the current financial net worth and paying capacity of the obligor or of the collateral pledged, if any; management has deteriorated or has become non-existent; quality financial information is not available; a high level of maintenance is required by the Corporation; cash flow can no longer support debt requirements; loan payments are continually and/or severely delinquent; negative net worth; personal guaranty has become insignificant; a credit that has a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. The Corporation still expects a full recovery of all contractual principal and interest payments; however, a possibility exists that the Corporation will sustain some loss if deficiencies are not corrected.

Risk Grade 8 (Substandard — Nonaccrual) — A business credit accounted for on a nonaccrual basis that has all the weaknesses inherent in a loan classified as risk grade 7 with the added characteristic that the weaknesses are so pronounced that, on the basis of current financial information, conditions and values, collection in full is highly questionable; a partial loss is possible and interest is no longer being accrued. This loan meets the definition of an impaired loan. The risk of loss requires analysis to determine whether a valuation allowance needs to be established.

Risk Grade 9 (Substandard — Doubtful) — A business credit that has all the weaknesses inherent in a loan classified as risk grade 8 and interest is no longer being accrued, but additional deficiencies make it highly probable that liquidation will not satisfy the majority of the obligation; the primary source of repayment is nonexistent and there is doubt as to the value of the secondary source of repayment; the possibility of loss is likely, but current pending factors could strengthen the credit. This loan meets the definition of an impaired loan. A loan charge-off is recorded when management deems an amount uncollectible; however, the Corporation will establish a valuation allowance for probable losses, if required.

The Corporation considers all loans graded 1 through 5 as acceptable credit risks and structures and manages such relationships accordingly. Periodic financial and operating data combined with regular loan officer interactions are deemed adequate to monitor borrower performance. Loans graded 6 and 7 are considered higher-risk credits than loans graded 1 through 5 and the frequency of loan officer contact and receipt of financial data is increased to stay abreast of borrower performance. Loans graded 8 and 9 are considered problematic and require special care. Further, loans graded 6 through 9 are managed and monitored regularly through a number of processes, procedures and committees, including oversight by a loan administration committee comprised of executive and senior management of the Corporation, and include highly structured reporting of financial and operating data, intensive loan officer intervention and strategies to exit, as well as potential management by the Corporation’s special assets group.

The following schedule presents the recorded investment of loans in the commercial loan portfolio by risk rating categories at June 30, 2016, December 31, 2015 and June 30, 2015:

26

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

	Commercial		Commercial Real Estate		Real Estate Construction and Land Development		Total
	(In thousands)
June 30, 2016
Originated Portfolio:
Risk Grades 1-5	$	1,537,612	$	1,479,365	$	239,194	$	3,256,171
Risk Grade 6	46,202		36,814		843		83,859
Risk Grade 7	35,602		15,434		517		51,553
Risk Grade 8	14,577		21,324		496		36,397
Risk Grade 9	—		1		—		1
Subtotal	1,633,993		1,552,938		241,050		3,427,981
Acquired Portfolio:
Risk Grades 1-5	292,492		554,352		40,671		887,515
Risk Grade 6	15,352		20,746		1,500		37,598
Risk Grade 7	8,448		23,879		1,229		33,556
Risk Grade 8	3,016		5,818		1,398		10,232
Risk Grade 9	—		—		—		—
Subtotal	319,308		604,795		44,798		968,901
Total	$	1,953,301	$	2,157,733	$	285,848	$	4,396,882
December 31, 2015
Originated Portfolio:
Risk Grades 1-5	$	1,418,301	$	1,341,202	$	183,323	$	2,942,826
Risk Grade 6	34,727		31,036		180		65,943
Risk Grade 7	39,933		26,658		1,123		67,714
Risk Grade 8	26,459		25,163		521		52,143
Risk Grade 9	2,095		—		—		2,095
Subtotal	1,521,515		1,424,059		185,147		3,130,721
Acquired Portfolio:
Risk Grades 1-5	340,782		629,430		41,683		1,011,895
Risk Grade 6	28,321		23,926		2,556		54,803
Risk Grade 7	11,607		29,975		1,537		43,119
Risk Grade 8	3,654		4,772		1,153		9,579
Risk Grade 9	—		—		—		—
Subtotal	384,364		688,103		46,929		1,119,396
Total	$	1,905,879	$	2,112,162	$	232,076	$	4,250,117
June 30, 2015
Originated Portfolio:
Risk Grades 1-5	$	1,269,091	$	1,273,725	$	97,364	$	2,640,180
Risk Grade 6	32,189		34,677		433		67,299
Risk Grade 7	41,316		29,737		2,127		73,180
Risk Grade 8	17,260		25,283		502		43,045
Risk Grade 9	—		4		—		4
Subtotal	1,359,856		1,363,426		100,426		2,823,708
Acquired Portfolio:
Risk Grades 1-5	347,914		820,400		10,139		1,178,453
Risk Grade 6	29,412		22,796		71		52,279
Risk Grade 7	13,910		30,288		119		44,317
Risk Grade 8	3,781		6,603		1,557		11,941
Risk Grade 9	—		—		—		—
Subtotal	395,017		880,087		11,886		1,286,990
Total	$	1,754,873	$	2,243,513	$	112,312	$	4,110,698

27

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Consumer Loan Portfolio

The Corporation evaluates the credit quality of loans in the consumer loan portfolio based on the performing or nonperforming status of the loan. Loans in the consumer loan portfolio that are performing in accordance with original contractual terms and are less than 90 days past due and accruing interest are considered to be in a performing status, while those that are in nonaccrual status, contractually past due 90 days or more as to interest or principal payments or classified as a nonperforming TDR are considered to be in a nonperforming status. Nonaccrual TDRs in the consumer loan portfolio are included with nonaccrual loans, while other TDRs in the consumer loan portfolio are considered to be in a nonperforming status until they meet the Corporation’s definition of a performing TDR, at which time they are considered to be in a performing status.

The following schedule presents the recorded investment of loans in the consumer loan portfolio based on loans in a performing status and loans in a nonperforming status at June 30, 2016, December 31, 2015 and June 30, 2015:

	Residential Mortgage		Consumer Installment		Home Equity		Total Consumer
	(In thousands)
June 30, 2016
Originated Loans:
Performing	$	1,299,382	$	1,041,978	$	598,283	$	2,939,643
Nonperforming	7,983		285		3,042		11,310
Subtotal	1,307,365		1,042,263		601,325		2,950,953
Acquired Loans:
Performing	185,492		6,298		105,360		297,150
Nonperforming	1,335		61		888		2,284
Subtotal	186,827		6,359		106,248		299,434
Total	$	1,494,192	$	1,048,622	$	707,573	$	3,250,387
December 31, 2015
Originated Loans:
Performing	$	1,207,945	$	868,975	$	587,566	$	2,664,486
Nonperforming	9,030		451		3,246		12,727
Subtotal	1,216,975		869,426		590,812		2,677,213
Acquired Loans:
Performing	210,580		7,984		122,118		340,682
Nonperforming	2,081		47		1,007		3,135
Subtotal	212,661		8,031		123,125		343,817
Total	$	1,429,636	$	877,457	$	713,937	$	3,021,030
June 30, 2015
Originated Loans:
Performing	$	1,058,696	$	871,543	$	584,520	$	2,514,759
Nonperforming	9,793		393		2,357		12,543
Subtotal	1,068,489		871,936		586,877		2,527,302
Acquired Loans:
Performing	238,698		15,966		138,086		392,750
Nonperforming	2,980		5		1,008		3,993
Subtotal	241,678		15,971		139,094		396,743
Total	$	1,310,167	$	887,907	$	725,971	$	2,924,045

28

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Nonperforming Loans

A summary of nonperforming loans follows:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Nonaccrual loans:
Commercial	$	14,577	$	28,554	$	17,260
Commercial real estate	21,325		25,163		25,287
Real estate construction and land development	496		521		502
Residential mortgage	5,343		5,557		6,004
Consumer installment	285		451		393
Home equity	1,971		1,979		1,769
Total nonaccrual loans	43,997		62,225		51,215
Accruing loans contractually past due 90 days or more as to interest or principal payments:
Commercial	3		364		711
Commercial real estate	3		254		56
Residential mortgage	407		402		424
Home equity	1,071		1,267		588
Total accruing loans contractually past due 90 days or more as to interest or principal payments	1,484		2,287		1,779
Nonperforming TDRs:
Commercial loan portfolio	14,240		16,297		14,547
Consumer loan portfolio	2,233		3,071		3,365
Total nonperforming TDRs	16,473		19,368		17,912
Total nonperforming loans	$	61,954	$	83,880	$	70,906

The Corporation’s nonaccrual loans at June 30, 2016, December 31, 2015 and June 30, 2015 included $32.4 million, $35.9 million and $35.7 million, respectively, of nonaccrual TDRs.

The Corporation had $0.9 million of residential mortgage loans that were in the process of foreclosure at June 30, 2016, compared to $2.9 million and $2.0 million at December 31, 2015 and June 30, 2015, respectively.

29

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Impaired Loans

The following schedule presents impaired loans by classes of loans at June 30, 2016, December 31, 2015 and June 30, 2015:

	Recorded Investment		Unpaid Principal Balance		Related Valuation Allowance
	(In thousands)
June 30, 2016
Impaired loans with a valuation allowance:
Commercial	$	3,764	$	3,769	$	2,582
Commercial real estate	3,270		3,438		472
Residential mortgage	20,745		20,745		163
Subtotal	27,779		27,952		3,217
Impaired loans with no related valuation allowance:
Commercial	34,633		43,576		—
Commercial real estate	47,894		58,312		—
Real estate construction and land development	2,196		3,770		—
Residential mortgage	6,678		7,365		—
Consumer installment	347		365		—
Home equity	2,859		3,084		—
Subtotal	94,607		116,472		—
Total impaired loans:
Commercial	38,397		47,345		2,582
Commercial real estate	51,164		61,750		472
Real estate construction and land development	2,196		3,770		—
Residential mortgage	27,423		28,110		163
Consumer installment	347		365		—
Home equity	2,859		3,084		—
Total	$	122,386	$	144,424	$	3,217
December 31, 2015
Impaired loans with a valuation allowance:
Commercial	$	18,898	$	19,426	$	5,700
Commercial real estate	4,448		4,688		497
Residential mortgage	21,037		21,037		192
Subtotal	44,383		45,151		6,389
Impaired loans with no related valuation allowance:
Commercial	31,039		37,703		—
Commercial real estate	53,518		69,130		—
Real estate construction and land development	2,136		3,108		—
Residential mortgage	7,638		8,644		—
Consumer installment	498		512		—
Home equity	2,986		3,270		—
Subtotal	97,815		122,367		—
Total impaired loans:
Commercial	49,937		57,129		5,700
Commercial real estate	57,966		73,818		497
Real estate construction and land development	2,136		3,108		—
Residential mortgage	28,675		29,681		192
Consumer installment	498		512		—
Home equity	2,986		3,270		—
Total	$	142,198	$	167,518	$	6,389

30

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

	Recorded Investment		Unpaid Principal Balance		Related Valuation Allowance
	(In thousands)
June 30, 2015
Impaired loans with a valuation allowance:
Commercial	$	4,044	$	4,137	$	718
Commercial real estate	2,789		2,948		603
Residential mortgage	20,970		20,970		260
Subtotal	27,803		28,055		1,581
Impaired loans with no related valuation allowance:
Commercial	32,461		38,160		—
Commercial real estate	56,052		78,490		—
Real estate construction and land development	2,393		4,175		—
Residential mortgage	8,984		8,984		—
Consumer installment	398		398		—
Home equity	2,778		2,778		—
Subtotal	103,066		132,985		—
Total impaired loans:
Commercial	36,505		42,297		718
Commercial real estate	58,841		81,438		603
Real estate construction and land development	2,393		4,175		—
Residential mortgage	29,954		29,954		260
Consumer installment	398		398		—
Home equity	2,778		2,778		—
Total	$	130,869	$	161,040	$	1,581

The difference between an impaired loan’s recorded investment and the unpaid principal balance for originated loans represents a partial charge-off resulting from a confirmed loss due to the value of the collateral securing the loan being below the loan balance and management’s assessment that full collection of the loan balance is not likely, and for acquired loans that meet the definition of an impaired loan represents fair value adjustments recognized at the acquisition date attributable to expected credit losses and the discounting of expected cash flows at market interest rates. The difference between the recorded investment and the unpaid principal balance of $22.0 million, $25.3 million and $30.2 million at June 30, 2016, December 31, 2015 and June 30, 2015, respectively, includes confirmed losses (partial charge-offs) of $16.3 million, $17.1 million and $15.2 million, respectively, and fair value discount adjustments of $5.7 million, $8.2 million and $15.0 million, respectively.

Impaired loans included $12.5 million, $12.8 million and $15.9 million at June 30, 2016, December 31, 2015 and June 30, 2015, respectively, of acquired loans that were not performing in accordance with original contractual terms. Acquired loans that are not performing in accordance with contractual terms are not reported as nonperforming loans because these loans are recorded in pools at their net realizable value based on the principal and interest the Corporation expects to collect on these loans. Impaired loans also included $49.4 million, $47.8 million and $45.8 million at June 30, 2016, December 31, 2015 and June 30, 2015, respectively, of performing TDRs.

31

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

The following schedule presents information related to impaired loans for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	Average Recorded Investment		Interest Income Recognized While on Impaired Status		Average Recorded Investment		Interest Income Recognized While on Impaired Status
	(In thousands)
Commercial	$	38,606	$	348	$	41,811	$	677
Commercial real estate	53,723		391		55,839		849
Real estate construction and land development	2,265		26		2,166		51
Residential mortgage	27,418		356		27,755		722
Consumer installment	330		1		359		2
Home equity	2,791		13		3,022		28
Total	$	125,133	$	1,135	$	130,952	$	2,329

	Three Months Ended June 30, 2015				Six Months Ended June 30, 2015
	Average Recorded Investment		Interest Income Recognized While on Impaired Status		Average Recorded Investment		Interest Income Recognized While on Impaired Status
	(In thousands)
Commercial	$	36,735	$	263	$	37,655	$	552
Commercial real estate	60,393		458		60,317		983
Real estate construction and land development	2,290		36		2,403		63
Residential mortgage	29,432		380		28,392		711
Consumer installment	426		1		463		1
Home equity	2,529		14		2,440		22
Total	$	131,805	$	1,152	$	131,670	$	2,332

The following schedule presents the aging status of the recorded investment in loans by classes of loans at June 30, 2016, December 31, 2015 and June 30, 2015:

	31-60 Days Past Due		61-89 Days Past Due		Accruing Loans Past Due 90 Days or More		Non-accrual Loans		Total Past Due		Current		Total Loans
	(In thousands)
June 30, 2016
Originated Portfolio:
Commercial	$	4,522	$	822	$	3	$	14,577	$	19,924	$	1,614,069	$	1,633,993
Commercial real estate	8,842		343		3		21,325		30,513		1,522,425		1,552,938
Real estate construction and land development	62		—		—		496		558		240,492		241,050
Residential mortgage	1,955		—		407		5,343		7,705		1,299,660		1,307,365
Consumer installment	2,856		554		—		285		3,695		1,038,568		1,042,263
Home equity	2,594		366		1,071		1,971		6,002		595,323		601,325
Total	$	20,831	$	2,085	$	1,484	$	43,997	$	68,397	$	6,310,537	$	6,378,934
Acquired Portfolio:
Commercial	$	547	$	—	$	3,038	$	—	$	3,585	$	315,723	$	319,308
Commercial real estate	90		—		5,817		—		5,907		598,888		604,795
Real estate construction and land development	389		—		1,398		—		1,787		43,011		44,798
Residential mortgage	407		—		1,335		—		1,742		185,085		186,827
Consumer installment	58		25		62		—		145		6,214		6,359
Home equity	416		38		888		—		1,342		104,906		106,248
Total	$	1,907	$	63	$	12,538	$	—	$	14,508	$	1,253,827	$	1,268,335

32

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

	31-60 Days Past Due		61-89 Days Past Due		Accruing Loans Past Due 90 Days or More		Non-accrual Loans		Total Past Due		Current		Total Loans
	(In thousands)
December 31, 2015
Originated Portfolio:
Commercial	$	3,685	$	1,230	$	364	$	28,554	$	33,833	$	1,487,682	$	1,521,515
Commercial real estate	4,168		1,603		254		25,163		31,188		1,392,871		1,424,059
Real estate construction and land development	—		—		—		521		521		184,626		185,147
Residential mortgage	1,737		—		402		5,557		7,696		1,209,279		1,216,975
Consumer installment	3,145		644		—		451		4,240		865,186		869,426
Home equity	1,767		788		1,267		1,979		5,801		585,011		590,812
Total	$	14,502	$	4,265	$	2,287	$	62,225	$	83,279	$	5,724,655	$	5,807,934
Acquired Portfolio:
Commercial	$	490	$	532	$	3,735	$	—	$	4,757	$	379,607	$	384,364
Commercial real estate	3,557		691		4,771		—		9,019		679,084		688,103
Real estate construction and land development	—		—		1,154		—		1,154		45,775		46,929
Residential mortgage	1,370		—		2,081		—		3,451		209,210		212,661
Consumer installment	55		—		47		—		102		7,929		8,031
Home equity	847		78		1,007		—		1,932		121,193		123,125
Total	$	6,319	$	1,301	$	12,795	$	—	$	20,415	$	1,442,798	$	1,463,213
June 30, 2015
Originated Portfolio:
Commercial	$	4,055	$	2,317	$	711	$	17,260	$	24,343	$	1,335,513	$	1,359,856
Commercial real estate	2,754		1,117		56		25,287		29,214		1,334,212		1,363,426
Real estate construction and land development	413		—		—		502		915		99,511		100,426
Residential mortgage	1,536		—		424		6,004		7,964		1,060,525		1,068,489
Consumer installment	2,526		302		—		393		3,221		868,715		871,936
Home equity	2,334		204		588		1,769		4,895		581,982		586,877
Total	$	13,618	$	3,940	$	1,779	$	51,215	$	70,552	$	5,280,458	$	5,351,010
Acquired Portfolio:
Commercial	$	690	$	—	$	3,781	$	—	$	4,471	$	390,546	$	395,017
Commercial real estate	969		291		6,603		—		7,863		872,224		880,087
Real estate construction and land development	—		—		1,557		—		1,557		10,329		11,886
Residential mortgage	1,077		138		2,980		—		4,195		237,483		241,678
Consumer installment	—		56		5		—		61		15,910		15,971
Home equity	1,153		210		1,008		—		2,371		136,723		139,094
Total	$	3,889	$	695	$	15,934	$	—	$	20,518	$	1,663,215	$	1,683,733

33

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Loans Modified Under Troubled Debt Restructurings (TDRs)

The following schedule presents the Corporation’s TDRs at June 30, 2016, December 31, 2015 and June 30, 2015:

	Performing TDRs		Non-Performing TDRs		Nonaccrual TDRs		Total
	(In thousands)
June 30, 2016
Commercial loan portfolio	$	30,866	$	14,240	$	28,979	$	74,085
Consumer loan portfolio	18,512		2,233		3,402		24,147
Total	$	49,378	$	16,473	$	32,381	$	98,232
December 31, 2015
Commercial loan portfolio	$	29,844	$	16,297	$	32,682	$	78,823
Consumer loan portfolio	17,966		3,071		3,251		24,288
Total	$	47,810	$	19,368	$	35,933	$	103,111
June 30, 2015
Commercial loan portfolio	$	28,203	$	14,547	$	32,001	$	74,751
Consumer loan portfolio	17,605		3,365		3,707		24,677
Total	$	45,808	$	17,912	$	35,708	$	99,428

The following schedule provides information on the Corporation's TDRs that were modified during the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30, 2016					Six Months Ended June 30, 2016
	Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment
	(Dollars in thousands)
Commercial loan portfolio:
Commercial	21	$	4,149	$	4,149	28	$	7,981	$	7,981
Commercial real estate	2	1,454		1,454		6	2,441		2,441
Subtotal – commercial loan portfolio	23	5,603		5,603		34	10,422		10,422
Consumer loan portfolio	14	490		490		21	694		694
Total	37	$	6,093	$	6,093	55	$	11,116	$	11,116

	Three Months Ended June 30, 2015					Six Months Ended June 30, 2015
	Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment
	(Dollars in thousands)
Commercial loan portfolio:
Commercial	13	$	2,332	$	2,332	18	$	4,264	$	4,264
Commercial real estate	4	527		527		9	3,061		3,061
Real estate construction and land development	1	305		305		1	305		305
Subtotal – commercial loan portfolio	18	3,164		3,164		28	7,630		7,630
Consumer loan portfolio	29	1,633		1,631		39	1,969		1,967
Total	47	$	4,797	$	4,795	67	$	9,599	$	9,597

The pre-modification and post-modification recorded investment represents amounts as of the date of loan modification. The difference between the pre-modification and post-modification recorded investment of residential mortgage TDRs represents impairment recognized by the Corporation through the provision for loan losses computed based on a loan's post-modification present value of expected future cash flows discounted at the loan's original effective interest rate.

34

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

The following schedule includes TDRs for which there was a payment default during the three and six months ended June 30, 2016 and 2015, whereby the borrower was past due with respect to principal and/or interest for 90 days or more, and the loan became a TDR during the twelve-month period prior to the default:

	Three Months Ended June 30, 2016			Six Months Ended June 30, 2016
	Number of Loans	Principal Balance at End of Period		Number of Loans	Principal Balance at End of Period
	(Dollars in thousands)
Commercial loan portfolio:
Commercial	—	$	—	—	$	—
Commercial real estate	1	788		2	1,721
Subtotal – commercial loan portfolio	1	788		2	1,721
Consumer loan portfolio	1	—		2	—
Total	2	$	788	4	$	1,721
	Three Months Ended June 30, 2015			Six Months Ended June 30, 2015
	Number of Loans	Principal Balance at End of Period		Number of Loans	Principal Balance at End of Period
	(Dollars in thousands)
Commercial loan portfolio:
Commercial	—	$	—	—	$	—
Commercial real estate	1	183		4	942
Subtotal – commercial loan portfolio	1	183		4	942
Consumer loan portfolio	—	—		1	33
Total	1	$	183	5	$	975

35

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Allowance for Loan Losses

The following schedule presents, by loan portfolio segment, the changes in the allowance for the three and six months ended June 30, 2016 and details regarding the balance in the allowance and the recorded investment in loans at June 30, 2016 by impairment evaluation method.

	Commercial Loan Portfolio			Consumer Loan Portfolio			Unallocated		Total
	(In thousands)
Changes in allowance for loan losses for the three months ended June 30, 2016:
Beginning balance	$	44,668		$	25,650		$	—	$	70,318
Provision for loan losses	900			2,100			—		3,000
Charge-offs	(2,542		)	(1,078		)	—		(3,620		)
Recoveries	1,202			606			—		1,808
Ending balance	$	44,228		$	27,278		$	—	$	71,506
Changes in allowance for loan losses for the six months ended June 30, 2016:
Beginning balance	$	47,234		$	26,094		$	—	$	73,328
Provision for loan losses	1,900			2,600			—		4,500
Charge-offs	(6,438		)	(2,640		)	—		(9,078		)
Recoveries	1,532			1,224			—		2,756
Ending balance	$	44,228		$	27,278		$	—	$	71,506
Allowance for loan losses balance at June 30, 2016 attributable to:
Loans individually evaluated for impairment	$	3,054		$	163		$	—	$	3,217
Loans collectively evaluated for impairment	41,174			27,115			—		68,289
Loans acquired with deteriorated credit quality	—			—			—		—
Total	$	44,228		$	27,278		$	—	$	71,506
Recorded investment (loan balance) at June 30, 2016:
Loans individually evaluated for impairment	$	81,504		$	20,745		$	—	$	102,249
Loans collectively evaluated for impairment	3,346,477			2,930,208			—		6,276,685
Loans acquired with deteriorated credit quality	968,901			299,434			—		1,268,335
Total	$	4,396,882		$	3,250,387		$	—	$	7,647,269

The following schedule presents, by loan portfolio segment, details regarding the balance in the allowance and the recorded investment in loans at December 31, 2015 by impairment evaluation method.

	Commercial Loan Portfolio		Consumer Loan Portfolio		Unallocated		Total
	(In thousands)
Allowance for loan losses balance at December 31, 2015 attributable to:
Loans individually evaluated for impairment	$	6,197	$	192	$	—	$	6,389
Loans collectively evaluated for impairment	41,037		25,902		—		66,939
Loans acquired with deteriorated credit quality	—		—		—		—
Total	$	47,234	$	26,094	$	—	$	73,328
Recorded investment (loan balance) at December 31, 2015:
Loans individually evaluated for impairment	$	100,379	$	21,037	$	—	$	121,416
Loans collectively evaluated for impairment	3,030,342		2,656,176		—		5,686,518
Loans acquired with deteriorated credit quality	1,119,396		343,817		—		1,463,213
Total	$	4,250,117	$	3,021,030	$	—	$	7,271,147

36

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

The following schedule presents, by loan portfolio segment, the changes in the allowance for the three and six months ended June 30, 2015 and details regarding the balance in the allowance and the recorded investment in loans at June 30, 2015 by impairment evaluation method.

	Commercial Loan Portfolio			Consumer Loan Portfolio			Unallocated		Total
	(In thousands)
Changes in allowance for loan losses for the three months ended June 30, 2015:
Beginning balance	$	46,819		$	24,579		$	3,858	$	75,256
Provision for loan losses	(626		)	(109		)	2,235		1,500
Charge-offs	(915		)	(1,809		)	—		(2,724		)
Recoveries	249			660			—		909
Ending balance	$	45,527		$	23,321		$	6,093	$	74,941
Changes in allowance for loan losses for the six months ended June 30, 2015:
Beginning balance	$	44,156		$	28,803		$	2,724	$	75,683
Provision for loan losses	2,967			(3,336		)	3,369		3,000
Charge-offs	(2,419		)	(3,448		)	—		(5,867		)
Recoveries	823			1,302			—		2,125
Ending balance	$	45,527		$	23,321		$	6,093	$	74,941
Allowance for loan losses balance at June 30, 2015 attributable to:
Loans individually evaluated for impairment	$	1,321		$	260		$	—	$	1,581
Loans collectively evaluated for impairment	44,206			23,061			6,093		73,360
Loans acquired with deteriorated credit quality	—			—			—		—
Total	$	45,527		$	23,321		$	6,093	$	74,941
Recorded investment (loan balance) at June 30, 2015:
Loans individually evaluated for impairment	$	85,799		$	20,970		$	—	$	106,769
Loans collectively evaluated for impairment	2,737,909			2,506,332			—		5,244,241
Loans acquired with deteriorated credit quality	1,286,990			396,743			—		1,683,733
Total	$	4,110,698		$	2,924,045		$	—	$	7,034,743

Note 5: Intangible Assets

The Corporation has the following types of intangible assets: goodwill, core deposit intangible assets, non-compete intangible assets and mortgage servicing rights (MSRs). Goodwill, core deposit intangible assets, and non-compete intangible assets arose as a result of business combinations or other acquisitions. MSRs arose as a result of selling residential mortgage loans in the secondary market while retaining the right to service these loans and receive servicing income over the life of the loan and from acquisitions of other banks that had MSRs. Amortization is recorded on the core deposit intangible assets, non-compete intangible assets and MSRs.

Goodwill recorded is primarily attributable to the synergies and economies of scale expected from combining the operations of the Corporation and other acquisitions. The Corporation recorded additional goodwill in the first quarter of 2016 of $0.5 million related to the 2015 acquisition of Lake Michigan resulting from adjustments to the original acquisition date valuation of acquired assets and liabilities. Goodwill is not amortized but is evaluated at least annually for impairment. The Corporation’s most recent annual goodwill impairment test performed as of October 31, 2015 did not indicate that an impairment of goodwill existed. The Corporation also determined that no triggering events have occurred that indicated impairment from the most recent valuation date through June 30, 2016 and that the Corporation's goodwill was not impaired at June 30, 2016.

37

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

The following table shows the net carrying value of the Corporation’s intangible assets:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Goodwill	$	286,867	$	287,393	$	285,512
Other intangible assets:
Core deposit intangible assets	$	24,429	$	26,654	$	28,353
Non-compete intangible assets	164		328		541
Mortgage servicing rights	9,677		11,122		12,307
Total other intangible assets	$	34,270	$	38,104	$	41,201

The following table sets forth the carrying amount, accumulated amortization and amortization expense of core deposit intangible assets that are amortizable and arose from business combinations or other acquisitions:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Gross original amount	$	40,055	$	40,055	$	39,355
Accumulated amortization	15,626		13,401		11,002
Carrying amount	$	24,429	$	26,654	$	28,353
Amortization expense for the three months ended June 30	$	1,113			$	952
Amortization expense for the six months ended June 30	$	2,225			$	1,743

The estimated future amortization expense on core deposit intangible assets for periods ending after June 30, 2016 is as follows: 2016 — $2.1 million; 2017 — $3.8 million; 2018 — $3.6 million; 2019 — $3.4 million; 2020 — $2.9 million; 2021 and thereafter — $8.6 million. The non-compete intangible assets will be fully amortized during 2016.

The following shows the net carrying value and fair value of MSRs and the total loans that the Corporation is servicing for others:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Net carrying value of MSRs	$	9,677	$	11,122	$	12,307
Fair value of MSRs	$	12,493	$	15,542	$	16,602
Valuation allowance	$	412	$	—	$	—
Loans serviced for others that have servicing rights capitalized	$	2,014,986	$	2,082,899	$	2,193,067

MSRs are stratified into servicing assets originated by the Corporation and those acquired in acquisitions of other institutions and further stratified into relatively homogeneous pools based on products with similar characteristics. There was a valuation allowance of $0.4 million as of June 30, 2016 related to impairment within certain pools attributable to the Corporation's servicing portfolios that were acquired in the Northwestern and Monarch transactions. There was no impairment valuation allowance recorded on the Corporation's MSRs at and December 31, 2015 and June 30, 2015.

The following table shows the activity for capitalized MSRs:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(In thousands)
Balance at beginning of period	$	10,478		$	11,583		$	11,122		$	12,217
Acquired in Monarch acquisition	—			1,284			—			1,284
Additions	586			415			917			815
Amortization	(975		)	(1,175		)	(1,950		)	(2,209		)
Change in valuation allowance	(412		)	200			(412		)	200
Balance at end of period	$	9,677		$	12,307		$	9,677		$	12,307

38

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Note 6: Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of related tax benefit/expense, were as follows:

	June 30, 2016			December 31, 2015			June 30, 2015
	(In thousands)
Net unrealized gains (losses) on investment securities – available-for-sale, net of related tax expense (benefit) of $1,182 at June 30, 2016, $(1,017) at December 31, 2015 and $(148) at June 30, 2015	$	2,196		$	(1,888	)	$	(274	)
Pension and other postretirement benefits adjustment, net of related tax benefit of $15,020 at June 30, 2016, $14,616 at December 31, 2015 and $16,601 at June 30, 2015	(27,894		)	(27,144		)	(30,830		)
Accumulated other comprehensive loss	$	(25,698	)	$	(29,032	)	$	(31,104	)

Note 7: Borrowings

Short-term Borrowings

The Corporation's short-term borrowings, which generally have an original term to maturity of 30 days or less, consisted of short-term FHLB advances outstanding of $300 million at June 30, 2016, $100 million at December 31, 2015 and $205 million at June 30, 2015, and federal funds purchased of $22 million at June 30, 2015. There were no federal funds purchased at June 30, 2016 and December 31, 2015.

Long-term Borrowings

A summary of the Corporation's long-term borrowings follows:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Long-term borrowings:
Long-term FHLB advances	$	329,320	$	181,394	$	81,469
Securities sold under agreements to repurchase	17,277		17,453		23,649
Non-revolving line-of-credit	25,000		25,000		25,000
Subordinated debt obligations	—		18,544		18,372
Total long-term borrowings	$	371,597	$	242,391	$	148,490

During the second quarter of 2016, the Corporation borrowed $100 million of long-term FHLB advances which have a three-year term at a fixed-rate of 1.00%. During the first quarter of 2016, the Corporation borrowed $50 million of long-term FHLB advances which have a four-year term at a fixed-rate of 1.30%. The Corporation's long-term FHLB advances have a combined weighted-average interest rate of 1.27% as of June 30, 2016. The Corporation's FHLB advances, including both short-term and long-term, require monthly interest payments and are collateralized by eligible loans totaling $2.98 billion as of June 30, 2016. The scheduled reductions of long-term FHLB advances as of June 30, 2016 were as follows: 2016 - $5.1 million; 2017 - $47.1 million; 2018 - $67.1 million; 2019; - $100.0 million; and 2020 - $110.0 million.

Securities sold under agreements to repurchase are with an unaffiliated financial institution and are secured by available for-sale-securities. As of June 30, 2016, these agreements had scheduled maturities of $8.1 million in 2016 and $9.2 million in 2017.

The Corporation has a $25 million secured non-revolving line-of-credit with an unaffiliated third-party financial institution. The line-of-credit originally matured in May 2016 and was extended for a period of three months. The Corporation is fully drawn on the entire amount of the line-of-credit. This line-of-credit bears a variable rate of interest which is based on the one-, two- or three-month LIBOR, as periodically selected by the Corporation, plus a fixed stated rate (effective interest rate of 2.41% at June 30, 2016). The line-of-credit agreement contains certain restrictive covenants. The Corporation was in compliance with all of the covenants at June 30, 2016.

As a result of the Lake Michigan transaction on May 31, 2015, the Corporation acquired subordinated debt obligations in the amount of $18.6 million. The Corporation fully repaid these debt obligations during the first quarter of 2016.

39

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Note 8: Regulatory Capital

Federal and state banking regulations place certain restrictions on the transfer of assets, in the form of dividends, loans, or advances, from Chemical Bank to the Corporation. As of June 30, 2016, substantially all of the assets of Chemical Bank were restricted from transfer to the Corporation in the form of loans or advances. Dividends from Chemical Bank are the principal source of funds for the Corporation. In addition to the statutory limits, the Corporation considers the overall financial and capital position of Chemical Bank prior to making any cash dividend decisions.

The Corporation and Chemical Bank are subject to various regulatory capital requirements administered by federal banking agencies. Under these capital requirements, Chemical Bank must meet specific capital guidelines that involve quantitative measures of assets and certain off-balance sheet items as calculated under regulatory accounting practices. In addition, capital amounts and classifications are subject to qualitative judgments by regulators. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Corporation’s consolidated financial statements.

Quantitative measures established by regulation to ensure capital adequacy require minimum ratios of Tier 1 capital to average assets (Leverage Ratio) and common equity Tier 1, Tier 1 and Total capital to risk-weighted assets. These capital guidelines assign risk weights to on- and off-balance sheet items in arriving at total risk-weighted assets. Minimum capital levels are based upon the perceived risk of various asset categories and certain off-balance sheet instruments. Risk weighted assets of the Corporation totaled $7.50 billion, $7.14 billion and $6.99 billion at June 30, 2016, December 31, 2015 and June 30, 2015, respectively.

In July 2013, the Board of Governors of the Federal Reserve System ("Reserve Board") and FDIC approved final rules implementing the Basel Committee on Banking Supervision's ("BCBS") capital guidelines for U.S. banks (commonly referred to as "Basel III"). Beginning January 1, 2015, the Basel III capital rules include a new minimum common equity Tier 1 capital to risk-weighted assets ("CET Tier 1") ratio of 4.5%, in addition to raising the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0% and requiring a minimum leverage ratio of 4.0%. The Basel III capital rules also establish a new capital conservation buffer of 2.5% of risk-weighted assets, which is phased-in over a four-year period beginning January 1, 2016.

At June 30, 2016, December 31, 2015 and June 30, 2015, Chemical Bank’s capital ratios exceeded the quantitative capital ratios required for an institution to be considered “well-capitalized.” Significant factors that may affect capital adequacy include, but are not limited to, a disproportionate growth in assets versus capital and a change in mix or credit quality of assets.

The summary below compares the actual capital amounts and ratios with the quantitative measures established by regulation to ensure capital adequacy:

	Actual				Minimum Required for Capital Adequacy Purposes				Required to be Well Capitalized Under Prompt Corrective Action Regulations
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
	(Dollars in thousands)
June 30, 2016
Total Capital to Risk-Weighted Assets:
Corporation	$	851,114	11.4	%	$	599,743	8.0	%	N/A		N/A
Chemical Bank	854,189		11.4		598,142		8.0		$	747,677	10.0	%
Tier 1 Capital to Risk-Weighted Assets:
Corporation	779,608		10.4		449,807		6.0		N/A		N/A
Chemical Bank	782,683		10.5		448,606		6.0		598,142		8.0
Common Equity Tier 1 Capital to Risk-Weighted Assets:
Corporation	779,608		10.4		337,355		4.5		N/A		N/A
Chemical Bank	782,683		10.5		336,455		4.5		485,990		6.5
Leverage Ratio:
Corporation	779,608		8.6		361,408		4.0		N/A		N/A
Chemical Bank	782,683		8.7		360,746		4.0		450,932		5.0

40

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

	Actual				Minimum Required for Capital Adequacy Purposes				Required to be Well Capitalized Under Prompt Corrective Action Regulations
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
	(Dollars in thousands)
December 31, 2015
Total Capital to Risk-Weighted Assets:
Corporation	$	841,257	11.8	%	$	571,509	8.0	%	N/A		N/A
Chemical Bank	830,294		11.7		570,073		8.0		$	712,591	10.0	%
Tier 1 Capital to Risk-Weighted Assets:
Corporation	767,929		10.7		428,631		6.0		N/A		N/A
Chemical Bank	756,966		10.6		427,555		6.0		570,073		8.0
Common Equity Tier 1 Capital to Risk-Weighted Assets:
Corporation	753,815		10.6		321,474		4.5		N/A		N/A
Chemical Bank	756,966		10.6		320,666		4.5		463,184		6.5
Leverage Ratio:
Corporation	767,929		8.6		356,396		4.0		N/A		N/A
Chemical Bank	756,966		8.5		355,911		4.0		444,888		5.0
June 30, 2015
Total Capital to Risk-Weighted Assets:
Corporation	$	816,595	11.6	%	$	559,273	8.0	%	N/A		N/A
Chemical Bank	713,999		12.0		471,422		8.0		$	589,277	10.0	%
The Bank of Holland	77,648		10.2		61,028		8.0		76,285		10.0
The Bank of Northern Michigan	32,779		10.1		25,878		8.0		32,347		10.0
Tier 1 Capital to Risk-Weighted Assets:
Corporation	741,654		10.6		419,455		6.0		N/A		N/A
Chemical Bank	640,324		10.9		353,566		6.0		471,422		8.0
The Bank of Holland	76,312		10.0		45,771		6.0		61,028		8.0
The Bank of Northern Michigan	32,779		10.1		19,408		6.0		25,878		8.0
Common Equity Tier 1 Capital to Risk-Weighted Assets:
Corporation	723,654		10.4		314,591		4.5		N/A		N/A
Chemical Bank	640,324		10.9		265,175		4.5		383,030		6.5
The Bank of Holland	76,312		10.0		34,328		4.5		49,585		6.5
The Bank of Northern Michigan	32,779		10.1		14,556		4.5		21,025		6.5
Leverage Ratio:
Corporation	741,654		9.4		314,344		4.0		N/A		N/A
Chemical Bank	640,324		8.5		300,703		4.0		375,878		5.0
The Bank of Holland	76,312		9.9		30,710		4.0		38,388		5.0
The Bank of Northern Michigan	32,779		9.1		14,421		4.0		18,026		5.0

Note 9: Fair Value Measurements

Fair value, as defined by GAAP, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for market activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

41

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

The Corporation utilizes fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Investment securities — available-for-sale and loans held-for-sale are recorded at fair value on a recurring basis. Additionally, the Corporation may be required to record other assets, such as impaired loans, goodwill, other intangible assets, other real estate and repossessed assets, at fair value on a nonrecurring basis. These nonrecurring fair value adjustments typically involve the application of lower of cost or market accounting or write-downs of individual assets.

The Corporation determines the fair value of its financial instruments based on a three-level hierarchy established by GAAP. The classification and disclosure of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. Observable inputs reflect market-derived or market-based information obtained from independent sources, while unobservable inputs reflect management’s estimates about market data. The three levels of inputs that may be used to measure fair value within the GAAP hierarchy are as follows:

Level 1 Valuation is based upon quoted prices for identical instruments traded in active markets. Level 1 valuations for the Corporation would include U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets. Valuations are obtained from a third-party pricing service for these investment securities.

Level 2 Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 2 valuations for the Corporation include government sponsored agency securities, including securities issued by the Federal Home Loan Bank, Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, Federal Farm Credit Bank, Student Loan Marketing Corporation and the Small Business Administration, securities issued by certain state and political subdivisions, residential mortgage-backed securities, collateralized mortgage obligations, corporate bonds, preferred stock and available-for-sale trust preferred securities. Valuations are obtained from a third-party pricing service for these investment securities.

Level 3 Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models, yield curves and similar techniques. The determination of fair value requires management judgment or estimation and generally is corroborated by external data, which includes third-party pricing services. Level 3 valuations for the Corporation include securities issued by certain state and political subdivisions, held-to-maturity trust preferred investment securities, impaired loans, goodwill, core deposit intangible assets, non-compete intangible assets, MSRs and other real estate and repossessed assets.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Corporation’s financial assets and financial liabilities carried at fair value and all financial instruments disclosed at fair value. In general, fair value is based upon quoted market prices, where available. If quoted market prices are not available, fair value is based upon third-party pricing services when available. Fair value may also be based on internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be required to record financial instruments at fair value. Any such valuation adjustments are applied consistently over time. The Corporation’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.

While management believes the Corporation’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Furthermore, the fair value amounts may change significantly after the date of the statement of financial position from the amounts reported in the consolidated financial statements and related notes.

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

Investment securities — available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are generally measured using independent pricing models or other model-based valuation techniques that include market inputs, such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data and industry and economic events.

The Corporation elected the fair value option for all residential mortgage loans held-for-sale originated on or after July 1, 2012. Accordingly, loans held-for-sale are recorded at fair value on a recurring basis. The fair values of loans held-for-sale are based on the market price for similar loans sold in the secondary market, and therefore, are classified as Level 2 valuations.

42

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Disclosure of Recurring Basis Fair Value Measurements

For assets measured at fair value on a recurring basis, quantitative disclosures about the fair value measurements for each major category of assets were as follows:

	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In thousands)
June 30, 2016
Investment securities – available-for-sale:
U.S. Treasury securities	$	5,810	$	—	$	—	$	5,810
Government sponsored agencies	—		157,022		—		157,022
State and political subdivisions	—		13,220		—		13,220
Residential mortgage-backed securities	—		168,616		—		168,616
Collateralized mortgage obligations	—		100,849		—		100,849
Corporate bonds	—		9,712		—		9,712
Preferred stock and trust preferred securities	—		3,323		—		3,323
Total investment securities – available-for-sale	5,810		452,742		—		458,552
Loans held-for-sale	—		13,990		—		13,990
Total assets measured at fair value on a recurring basis	$	5,810	$	466,732	$	—	$	472,542
December 31, 2015
Investment securities – available-for-sale:
U.S. Treasury securities	$	5,765	$	—	$	—	$	5,765
Government sponsored agencies	—		194,989		—		194,989
State and political subdivisions	—		15,120		—		15,120
Residential mortgage-backed securities	—		187,768		—		187,768
Collateralized mortgage obligations	—		132,230		—		132,230
Corporate bonds	—		14,627		—		14,627
Preferred stock and trust preferred securities	—		3,232		—		3,232
Total investment securities – available-for-sale	5,765		547,966		—		553,731
Loans held-for-sale	—		10,327		—		10,327
Total assets measured at fair value on a recurring basis	$	5,765	$	558,293	$	—	$	564,058
June 30, 2015
Investment securities – available-for-sale:
U.S. Treasury securities	$	8,294	$	—	$	—	$	8,294
Government sponsored agencies	—		227,907		—		227,907
State and political subdivisions	—		26,965		—		26,965
Residential mortgage-backed securities	—		212,669		—		212,669
Collateralized mortgage obligations	—		167,032		—		167,032
Corporate bonds	—		39,678		—		39,678
Preferred stock	—		3,161		—		3,161
Total investment securities – available-for-sale	8,294		677,412		—		685,706
Loans held-for-sale	—		7,798		—		7,798
Total assets measured at fair value on a recurring basis	$	8,294	$	685,210	$	—	$	693,504

There were no liabilities recorded at fair value on a recurring basis at June 30, 2016, December 31, 2015 or June 30, 2015.

43

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

The Corporation does not record loans held for investment at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allocation of the allowance (valuation allowance) may be established or a portion of the loan is charged off. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. The fair value of impaired loans is estimated using one of several methods, including the loan’s observable market price, the fair value of the collateral or the present value of the expected future cash flows discounted at the loan’s effective interest rate. Those impaired loans not requiring a valuation allowance represent loans for which the fair value of the expected repayments or collateral exceed the remaining carrying amount of such loans. Impaired loans where a valuation allowance is established or a portion of the loan is charged off based on the fair value of collateral are subject to nonrecurring fair value measurement and require classification in the fair value hierarchy. The Corporation records impaired loans as Level 3 valuations as there is generally no observable market price or independent appraised value, or management determines the fair value of the collateral is further impaired below the appraised value. When management determines the fair value of the collateral is further impaired below appraised value, discount factors ranging between 70% and 80% of the appraised value are used depending on the nature of the collateral and the age of the most recent appraisal.

Goodwill is subject to impairment testing on an annual basis. The assessment of goodwill for impairment requires a significant degree of judgment. In the event the assessment indicates that it is more-likely-than-not that the fair value is less than the carrying value, the asset is considered impaired and recorded at fair value. Goodwill that is impaired and subject to nonrecurring fair value measurements is a Level 3 valuation. At June 30, 2016, December 31, 2015 and June 30, 2015, no goodwill was impaired, and therefore, goodwill was not recorded at fair value on a nonrecurring basis.

Other intangible assets consist of core deposit intangible assets, non-compete intangible assets, and MSRs. These items are recorded at fair value when initially recorded. Subsequently, core deposit intangible assets and non-compete intangible assets are amortized primarily on an accelerated basis over periods ranging from ten to fifteen years and are subject to impairment testing whenever events or changes in circumstances indicate that the carrying amount exceeds the fair value of the asset. If core deposit intangible asset or non-compete intangible asset impairment is identified, the Corporation classifies impaired core deposit intangible assets and impaired non-compete intangible assets subject to nonrecurring fair value measurements as Level 3 valuations. At June 30, 2016, December 31, 2015 and June 30, 2015, there was no impairment identified for core deposit intangible assets or non-compete intangible assets. The fair value of MSRs is initially estimated using a model that calculates the net present value of estimated future cash flows using various assumptions, including prepayment speeds, the discount rate and servicing costs. If the valuation model reflects a value less than the carrying value, MSRs are adjusted to fair value, as determined by the model, through a valuation allowance. The Corporation classifies MSRs subject to nonrecurring fair value measurements as Level 3 valuations. At June 30, 2016 , the Corporation recognized a valuation allowance of $0.4 million related to impairment within certain pools attributable to the Corporation's servicing portfolios that were acquired in the Northwestern and Monarch transactions. As a result, the MSRs related to these servicing portfolios were considered to be recorded at fair value on a nonrecurring basis as of June 30, 2016. At December 31, 2015 and June 30, 2015, there was no impairment identified for MSRs and, therefore, no other intangible assets were recorded at fair value on a nonrecurring basis.

The carrying amounts for other real estate (ORE) and repossessed assets (RA) are reported in the consolidated statements of financial position under “Interest receivable and other assets.” ORE and RA include real estate and other types of assets repossessed by the Corporation. ORE and RA are recorded at the lower of cost or fair value upon the transfer of a loan to ORE or RA and, subsequently, ORE and RA continue to be measured and carried at the lower of cost or fair value. Fair value is based upon independent market prices, appraised values of the property or management’s estimation of the value of the property. The Corporation records ORE and RA as Level 3 valuations as management generally determines that the fair value of the property is impaired below the appraised value. When management determines the fair value of the property is further impaired below appraised value, discount factors ranging between 70% and 75% of the appraised value are used depending on the nature of the property and the age of the most recent appraisal.

44

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Disclosure of Nonrecurring Basis Fair Value Measurements

For assets measured at fair value on a nonrecurring basis, quantitative disclosures about fair value measurements for each major category of assets were as follows:

	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In thousands)
June 30, 2016
Impaired originated loans	$	—	$	—	$	23,655	$	23,655
Other real estate/repossessed assets	—		—		8,440		8,440
Mortgage servicing rights	—		—		6,153		6,153
Total	$	—	$	—	$	38,248	$	38,248
December 31, 2015
Impaired originated loans	$	—	$	—	$	42,065	$	42,065
Other real estate/repossessed assets	—		—		9,935		9,935
Total	$	—	$	—	$	52,000	$	52,000
June 30, 2015
Impaired originated loans	$	—	$	—	$	24,517	$	24,517
Other real estate/repossessed assets	—		—		14,197		14,197
Total	$	—	$	—	$	38,714	$	38,714

There were no liabilities recorded at fair value on a nonrecurring basis at June 30, 2016, December 31, 2015 and June 30, 2015.

The following table presents additional information about the significant unobservable inputs used in the fair value measurement of financial assets measured on a nonrecurring basis that were categorized within the Level 3 of the fair value hierarchy (fair value in thousands):

	Fair Value at June 30, 2016		Valuation Technique	Significant Unobservable Inputs	Range
Impaired originated loans	$	23,655	Appraisal of collateral	Discount for type of collateral and age of appraisal	20%-30%
Other real estate/repossessed assets	8,440		Appraisal of property	Discount for type of property and age of appraisal	25%-30%
Mortgage servicing rights	6,153		Discounted cash flow	Constant prepayment rate	12%-22%
				Discount rate	10%-11%

Disclosures about Fair Value of Financial Instruments

GAAP requires disclosures about the estimated fair value of the Corporation's financial instruments, including those financial assets and liabilities that are not measured and reported at fair value on a recurring or nonrecurring basis. However, the method of estimating fair value for certain financial instruments, such as loans, that are not required to be measured on a recurring or nonrecurring basis, as prescribed by ASC 820, Fair Value Measurements and Disclosures, does not incorporate the exit-price concept of fair value. The Corporation utilized the fair value hierarchy in computing the fair values of its financial instruments. In cases where quoted market prices were not available, the Corporation employed present value methods using unobservable inputs requiring management's judgment to estimate the fair values of its financial instruments, which are considered Level 3 valuations. These Level 3 valuations are affected by the assumptions made and, accordingly, do not necessarily indicate amounts that could be realized in a current market exchange. It is also the Corporation's general practice and intent to hold the majority of its financial instruments until maturity and, therefore, the Corporation does not expect to realize the estimated amounts disclosed.

45

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

The methodologies for estimating the fair value of financial assets and financial liabilities on a recurring or nonrecurring basis are discussed above. At June 30, 2016, December 31, 2015 and June 30, 2015, the estimated fair values of cash and cash equivalents, interest receivable and interest payable approximated their carrying values at those dates. The methodologies for other financial assets and financial liabilities follow.

Fair value measurement for investment securities — held-to-maturity is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques that include market inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data and industry and economic events. Fair value measurements using Level 2 valuations of investment securities — held-to-maturity include the majority of the Corporation's investment securities issued by state and political subdivisions. Level 3 valuations include certain securities issued by state and political subdivisions and trust preferred investment securities.

Fair value measurements of nonmarketable equity securities, which consisted of Federal Home Loan Bank (FHLB) and Federal Reserve Bank (FRB) stock, are based on their redeemable value, which is cost. The market for these securities is restricted to the issuer of the stock and subject to impairment evaluation. It is not practicable to determine the fair value of these securities within the fair value hierarchy due to the restrictions placed on their transferability.

Loans held-for-sale are carried at fair value, as the Corporation elected the fair value option on these loans. The fair values of loans held-for-sale are based on the market price for similar loans sold in the secondary market, and therefore, are classified as Level 2 valuations.

The fair value of variable interest rate loans that reprice regularly with changes in market interest rates are based on carrying values. The fair values for fixed interest rate loans are estimated using discounted cash flow analyses, using the Corporation’s interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. The resulting fair value amounts are adjusted to estimate the impact of changes in the credit quality of borrowers after the loans were originated. The fair value measurements for loans are Level 3 valuations.

The fair values of deposit accounts without defined maturities, such as interest- and noninterest-bearing checking, savings and money market accounts, are equal to the amounts payable on demand. The fair values for variable-interest rate time deposits with defined maturities approximate their carrying amounts. Fair value measurements for fixed-interest rate time deposits with defined maturities are based on the discounted value of contractual cash flows, using the Corporation’s interest rates currently being offered for deposits of similar maturities, and are Level 3 valuations. However, if the estimated fair value is less than the carrying value, the carrying value is reported as the fair value.

Short-term borrowings consist of securities sold under agreements to repurchase with customers, short-term FHLB advances and federal funds purchased. Fair value measurements for short-term borrowings are based on the present value of future estimated cash flows using current interest rates offered to the Corporation for debt with similar terms and are Level 2 valuations.

Long-term borrowings consist of long-term FHLB advances, securities sold under agreements to repurchase with an unaffiliated financial institution, a non-revolving line-of-credit and subordinated debt obligations. Fair value measurements for long-term borrowings are based on the present value of future estimated cash flows using current interest rates offered to the Corporation for debt with similar terms. Long-term FHLB advances and the non-revolving line-of-credit included in long-term borrowings are Level 2 valuations, while securities sold under agreements to repurchase with an unaffiliated financial institution and subordinated debt obligations are Level 3 valuations.

The Corporation’s unused commitments to extend credit, standby letters of credit and loan commitments have no carrying amount and have been estimated to have no realizable fair value. Historically, a majority of the unused commitments to extend credit have not been drawn upon and, generally, the Corporation does not receive fees in connection with these commitments other than standby letter of credit fees, which are not significant.

Fair value measurements have not been made for items that are not defined by GAAP as financial instruments, including such items as the value of the Corporation’s Wealth Management department and the value of the Corporation’s core deposit base. The Corporation believes it is impractical to estimate a representative fair value for these types of assets, even though management believes they add significant value to the Corporation.

46

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

A summary of carrying amounts and estimated fair values of the Corporation’s financial instruments included in the consolidated statements of financial position was as follows:

	Level in Fair Value Measurement Hierarchy	June 30, 2016				December 31, 2015				June 30, 2015
		Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(In thousands)
Assets:
Cash and cash equivalents	Level 1	$	232,960	$	232,960	$	238,789	$	238,789	$	215,034	$	215,034
Investment securities:
Available-for-sale	Level 1	5,810		5,810		5,765		5,765		8,294		8,294
Available-for-sale	Level 2	452,742		452,742		547,966		547,966		677,412		677,412
Held-to-maturity	Level 2	552,328		568,130		509,471		512,405		469,337		466,278
Held-to-maturity	Level 3	500		285		500		300		500		300
Nonmarketable equity securities	NA	47,775		47,775		36,907		36,907		36,142		36,142
Loans held-for-sale	Level 2	13,990		13,990		10,327		10,327		7,798		7,798
Net loans	Level 3	7,575,763		7,593,013		7,197,819		7,201,994		6,959,802		6,969,655
Interest receivable	Level 2	23,111		23,111		21,953		21,953		21,668		21,668
Liabilities:
Deposits without defined maturities	Level 2	$	5,904,618	$	5,904,618	$	5,809,355	$	5,809,355	$	5,547,764	$	5,547,764
Time deposits	Level 3	1,560,028		1,563,446		1,647,412		1,647,412		1,745,215		1,745,215
Interest payable	Level 2	1,389		1,389		1,578		1,578		1,557		1,557
Short-term borrowings	Level 2	556,213		556,213		397,199		397,199		532,291		532,291
Long-term borrowings	Level 2	354,320		359,043		206,394		206,394		106,469		106,469
Long-term borrowings	Level 3	17,277		17,228		35,997		35,997		42,021		42,021

Note 10: Earnings Per Common Share

Basic earnings per common share for the Corporation is computed by dividing net income by the weighted average number of common shares outstanding during the period. Basic earnings per common share excludes any dilutive effect of common stock equivalents.

Diluted earnings per common share for the Corporation is computed by dividing net income by the sum of the weighted average number of common shares outstanding and the dilutive effect of common stock equivalents using the treasury stock method. Average shares of common stock for diluted net income per common share include shares to be issued upon the exercise of stock options granted under the Corporation’s share-based compensation plans, restricted stock units that may be converted to stock and stock to be issued under the deferred stock compensation plan for non-employee directors. For any period in which a net loss is recorded, the assumed exercise of stock options, restricted stock units that may be converted to stock and stock to be issued under the deferred stock compensation plan would have an anti-dilutive impact on the net loss per common share and thus are excluded in the diluted earnings per common share calculation.

47

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

The following summarizes the numerator and denominator of the basic and diluted earnings per common share computations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(In thousands, except per share data)
Numerator for both basic and diluted earnings per common share, net income	$	25,707	$	19,024	$	48,969	$	36,859
Denominator for basic earnings per common share, weighted average common shares outstanding	38,258		35,162		38,228		33,992
Weighted average common stock equivalents	342		235		332		235
Denominator for diluted earnings per common share	38,600		35,397		38,560		34,227
Basic earnings per common share	$	0.67	$	0.54	$	1.28	$	1.08
Diluted earnings per common share	$	0.67	$	0.54	$	1.27	$	1.08

The average number of exercisable employee stock option awards outstanding that were “out-of-the-money,” whereby the option exercise price per share exceeded the market price per share and, therefore, were not included in the computation of diluted earnings per common share because they would have been anti-dilutive totaled zero and 80,700 for the three months ended June 30, 2016 and 2015, respectively, and zero and 100,875 for the six months ended June 30, 2016 and 2015, respectively.

Note 11: Share-Based Compensation

The Corporation maintains share-based compensation plans under which it periodically grants share-based awards for a fixed number of shares to certain officers of the Corporation. The fair value of share-based awards is recognized as compensation expense over the requisite service or performance period. During the three-month periods ended June 30, 2016 and 2015, share-based compensation expense related to stock options, restricted stock units and other share-based awards totaled $1.0 million and $0.8 million, respectively. During the six months ended June 30, 2016 and 2015, share-based compensation expense related to stock options, restricted stock units and other share-based awards totaled $1.8 million and $1.5 million, respectively.

During the six-month period ended June 30, 2016, the Corporation granted options to purchase 441,167 shares of common stock, 99,208 restricted stock units and 940 shares of common stock to certain officers of the Corporation. On April 20, 2015, the shareholders of the Corporation approved the Stock Incentive Plan of 2015, which provides for 1,300,000 shares of the Corporation's common stock to be made available for future equity-based awards and canceled the amount of shares available for future grant under prior share-based compensation plans. At June 30, 2016, there were 703,493 shares of common stock available for future grants under the Stock Incentive Plan of 2015.

Stock Options

The Corporation issues stock options to certain officers. Stock options are issued at the current market price of the Corporation's common stock on the date of grant and expire ten years from the date of grant. Stock options granted after 2012 vest ratably over a five-year period. Stock options granted prior to 2013 generally vest ratably over a three-year period.

48

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

A summary of activity for the Corporation’s stock options as of and for the six months ended June 30, 2016 is presented below:

	Non-Vested Stock Options Outstanding						Stock Options Outstanding
	Number of Options		Weighted- Average Exercise Price Per Share		Weighted- Average Grant Date Fair Value Per Share		Number of Options		Weighted- Average Exercise Price Per Share
Outstanding at December 31, 2015	479,755		$	28.75	$	8.49	1,054,739		$	25.38
Granted	441,167		32.81		6.15		441,167		32.81
Exercised	—		—		—		(96,058	)	21.81
Vested	(118,273	)	28.30		8.40		—		—
Forfeited/expired	(33,901	)	31.00		7.25		(33,901	)	31.00
Outstanding at June 30, 2016	768,748		$	31.04	$	7.21	1,365,947		$	27.89
Exercisable/vested at June 30, 2016							597,199		$	23.84

The weighted-average remaining contractual terms were 7.1 years for all outstanding stock options and 4.9 years for exercisable stock options at June 30, 2016. The intrinsic value of all outstanding in-the-money stock options and exercisable in-the-money stock options was $11.2 million and $8.1 million, respectively, at June 30, 2016. The aggregate intrinsic values of outstanding and exercisable options at June 30, 2016 were calculated based on the closing market price of the Corporation’s common stock on June 30, 2016 of $37.29 per share less the exercise price. Options with intrinsic values less than zero, or “out-of-the-money” options, are not included in the aggregate intrinsic value reported.

At June 30, 2016, unrecognized compensation expense related to stock options totaled $5.2 million and is expected to be recognized over a remaining weighted average period of 3.8 years. Stock options granted prior to 2016 contain change-of-control provisions that may get triggered if the merger with Talmer is completed. In the event the change-of control provisions are triggered, unrecognized compensation expense related to these stock options will become immediately recognized by the Corporation.

The fair value of the stock options granted during the six months ended June 30, 2016 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions.

Expected dividend yield	3.30		%
Risk-free interest rate	1.39		%
Expected stock price volatility	27.9		%
Expected life of options – in years	6.5
Weighted average fair value of options granted	$	6.15

Restricted Stock Units

In addition to stock options, the Corporation grants restricted stock performance units and restricted stock service-based units (collectively referred to as restricted stock units) to certain officers. The restricted stock performance units vest based on the Corporation achieving certain performance target levels and the grantee completing the requisite service period. The restricted stock performance units are eligible to vest from 0.5x to 1.5x the number of units originally granted depending on which, if any, of the performance target levels are met. However, if the minimum performance target levels are not achieved, no shares will become vested or be issued for that respective year’s restricted stock performance units. The restricted stock service-based units vest upon satisfaction of a service condition. Upon achievement of the performance target level and/or satisfaction of a service condition, if applicable, the restricted stock units are converted into shares of the Corporation’s common stock on a one-to-one basis. Compensation expense related to restricted stock units is recognized over the expected requisite performance or service period, as applicable.

49

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

A summary of the activity for restricted stock units as of and for the six months ended June 30, 2016 is presented below:

	Number of Units		Weighted- Average Grant Date Fair Value  Per Unit
Outstanding at December 31, 2015	207,989		$	26.41
Granted	99,208		30.78
Converted into shares of common stock	(45,787	)	22.89
Forfeited/expired	(4,126	)	29.65
Outstanding at June 30, 2016	257,284		$	28.67

At June 30, 2016, unrecognized compensation expense related to restricted stock units totaled $4.9 million and is expected to be recognized over a remaining weighted average period of 2.7 years. Restricted stock units granted prior to 2016 contain change-of-control provisions that may get triggered if the merger with Talmer is completed. In the event the change-of control provisions are triggered, unrecognized compensation expense related to these restricted stock units will become immediately recognized by the Corporation.

Note 12: Pension and Other Postretirement Benefit Plans

The Corporation's retirement plans include a qualified pension plan, a nonqualified pension plan, a nonqualified postretirement benefit plan, a 401(k) savings plan, and a multi-employer defined benefit plan.

Qualified and Nonqualified Pension Plans and Nonqualified Postretirement Benefit Plans

The components of net periodic benefit cost for the Corporation’s qualified and nonqualified pension plans and nonqualified postretirement benefit plan are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(In thousands)
Defined Benefit Pension Plans
Service cost	$	277		$	273		$	554		$	545
Interest cost	1,358			1,332			2,716			2,664
Expected return on plan assets	(2,140		)	(2,161		)	(4,281		)	(4,322		)
Amortization of prior service credit	—			(1		)	—			(2		)
Amortization of unrecognized net loss	572			1,056			1,144			2,112
Net periodic benefit cost	$	67		$	499		$	133		$	997
Postretirement Benefit Plan
Service cost	$	2		$	4		$	4		$	8
Interest cost	33			33			66			67
Amortization of prior service cost	29			32			58			65
Amortization of unrecognized net gain	(25		)	—			(49		)	(1		)
Net periodic benefit cost	$	39		$	69		$	79		$	139

The Corporation’s pension plan does not have a contribution requirement in 2016. The Corporation did not make a contribution to the pension plan during 2015. The discount rate used to compute the Corporation's pension plan expense for 2016 is 4.55%.

401(k) Savings Plan

401(k) Savings Plan expense for the Corporation’s match of participants’ base compensation contributions and a 4% of eligible pay contribution to certain employees who are not grandfathered under the pension plan was $1.4 million and $1.3 million for the three months ended June 30, 2016 and 2015, respectively, and $2.7 million and $2.4 million for the six months ended June 30, 2016 and 2015, respectively.

50

Chemical Financial Corporation

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

Multi-Employer Defined Benefit Plan

In conjunction with the April 1, 2015 acquisition of Monarch, the Corporation acquired a participation in the Pentegra Defined Benefit Plan for Financial Institutions (Pentegra DB Plan), a qualified defined benefit pension plan. Employee benefits for Monarch employees under the Plan were frozen effective April 1, 2004. The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and as a multiple-employer plan under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code (IRC). The Pentegra DB Plan is a single plan under IRC Section 413(c) and, as a result, all of the plan's assets stand behind all of the plan's liabilities. Accordingly, contributions made by a participating employer may be used to provide benefits to participants of other participating employers. No contributions were made by the Corporation to the Pentegra DB Plan for the three and six months ended June 30, 2016.

Note 13: Financial Guarantees

In the normal course of business, the Corporation is a party to financial instruments containing credit risk that are not required to be reflected in the consolidated statements of financial position. For the Corporation, these financial instruments are financial and performance standby letters of credit. The Corporation has risk management policies to identify, monitor and limit exposure to credit risk. To mitigate credit risk for these financial guarantees, the Corporation generally determines the need for specific covenant, guarantee and collateral requirements on a case-by-case basis, depending on the nature of the financial instrument and the customer’s creditworthiness. At June 30, 2016, December 31, 2015 and June 30, 2015, the Corporation had $47 million, $39 million and $45 million, respectively, of outstanding financial and performance standby letters of credit that expire in five years or less. The majority of these standby letters of credit are collateralized. The Corporation determined that there were no potential losses from standby letters of credit at June 30, 2016, December 31, 2015 and June 30, 2015.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is management's discussion and analysis of certain significant factors that have affected the financial condition and results of operations of Chemical Financial Corporation ("Corporation") during the periods included in the consolidated financial statements included in this report.

Critical Accounting Policies

The Corporation's consolidated financial statements are prepared in accordance with United States generally accepted accounting principles ("GAAP"), Securities and Exchange Commission ("SEC") rules and interpretive releases and general practices within the industry in which the Corporation operates. Application of these principles requires management to make estimates, assumptions and complex judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates, assumptions and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, the consolidated financial statements could reflect different estimates, assumptions and judgments. Actual results could differ significantly from those estimates. Certain policies inherently have a greater reliance on the use of estimates, assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported. Management has identified the determination of the allowance for loan losses, accounting for business combinations (including acquired loans), pension plan accounting, income and other taxes, fair value measurements and the evaluation of goodwill impairment to be the accounting areas that require the most subjective or complex judgments and, as such, could be most subject to revision as new or additional information becomes available or circumstances change, including overall changes in the economic climate and/or market interest rates. Therefore, management considers them to be critical accounting policies and discusses them directly with the Audit Committee of the board of directors. The Corporation's significant accounting policies are more fully described in Note 1 to the audited consolidated financial statements contained in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2015 and the more significant assumptions and estimates made by management are more fully described in “Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies” in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2015. There were no material changes to the Corporation's significant accounting policies or the estimates made pursuant to those policies during the most recent quarter.

Mergers, Acquisitions and Branch Closings

Pending Merger with Talmer Bancorp, Inc.

On January 25, 2016, the Corporation entered into an Agreement and Plan of Merger with Talmer Bancorp, Inc. ("Talmer"). Under the terms of the merger agreement, each Talmer shareholder will receive $1.61 in cash and 0.4725 shares of the Corporation's common stock for each share of Talmer common stock, subject to adjustment in limited circumstances. Based on the 30-day volume weighted price per share of the Corporation's common stock as of January 25, 2016, the merger had a transaction value of approximately $1.1 billion. Following the completion of the merger, the Corporation intends to consolidate Talmer's wholly-owned subsidiary bank, Talmer Bank and Trust, with and into Chemical Bank. At June 30, 2016, Talmer had total assets of $6.9 billion, including total loans of $5.0 billion, and total deposits of $5.3 billion, including brokered deposits of $389 million. Talmer Bank and Trust is a full service community bank offering a full suite of commercial banking, retail banking, mortgage banking, wealth management and trust services to small and medium-sized businesses and individuals through 80 full service banking offices located primarily within southeast Michigan and northeast Ohio, as well as in west Michigan, northeast Michigan, Chicago, Illinois, northern Indiana, and Las Vegas, Nevada. At a special meeting of Talmer shareholders, held on July 14, 2016, Talmer shareholders approved the merger. And at a special meeting of Chemical shareholders, held on July 19, 2016, Chemical shareholders approved the merger. Completion of the merger is subject to regulatory approval, in addition to satisfaction of other customary closing conditions.

Acquisition of Lake Michigan Financial Corporation

On May 31, 2015, the Corporation acquired all of the outstanding stock of Lake Michigan Financial Corporation ("Lake Michigan") for total consideration of $187.4 million, which included stock consideration of $132.9 million and cash consideration of $54.5 million. As a result of the acquisition, the Corporation issued approximately 4.3 million shares of its common stock, based on an exchange ratio of 1.326 shares of its common stock, and paid $16.64 in cash, for each share of Lake Michigan common stock outstanding. Lake Michigan, a bank holding company, owned The Bank of Holland and The Bank of Northern Michigan, which combined operated five banking offices in Holland, Grand Haven, Grand Rapids, Petoskey and Traverse City, Michigan. The Bank of Holland and The Bank of Northern Michigan were consolidated with and into Chemical Bank during the fourth quarter of 2015. The acquisition of Lake Michigan resulted in increases in the Corporation's total assets of $1.24 billion, including total loans of $986 million, and total deposits of $925 million. In connection with the acquisition of Lake Michigan, the Corporation recorded $101 million of goodwill, which was primarily attributable to the synergies and economies of scale expected from combining the operations of the Corporation and Lake Michigan. In addition, the Corporation recorded $8.6 million of core deposit and other intangible assets in conjunction with the acquisition.

52

Acquisition of Monarch Community Bancorp, Inc.

On April 1, 2015, the Corporation acquired all of the outstanding stock of Monarch Community Bancorp, Inc. ("Monarch") in an all-stock transaction valued at $27.2 million. As a result of the acquisition, the Corporation issued 860,575 shares of its common stock based on an exchange ratio of 0.0982 shares of its common stock for each share of Monarch common stock outstanding. Monarch, a bank holding company, owned Monarch Community Bank, which operated five full service branch offices in Coldwater, Marshall, Hillsdale and Union City, Michigan. Monarch Community Bank was consolidated with and into Chemical Bank during the second quarter of 2015. The acquisition of Monarch resulted in increases in the Corporation's total assets of $183 million, including total loans of $122 million, and total deposits of $144 million. In connection with the acquisition of Monarch, the Corporation recorded $5.3 million of goodwill, which was primarily attributable to the synergies and economies of scale expected from combining the operations of the Corporation and Monarch. In addition, the Corporation recorded $1.9 million of core deposit intangible assets in conjunction with the acquisition.

Acquisition of Northwestern Bancorp, Inc.

On October 31, 2014, the Corporation acquired all of the outstanding stock of Northwestern Bancorp, Inc. ("Northwestern") for total cash consideration of $121 million. Northwestern, a bank holding company which owned Northwestern Bank, provided traditional banking services and products through 25 banking offices serving communities in the northwestern lower peninsula of Michigan. As of the October 31, 2014 acquisition date, Northwestern added total assets of $815 million, including total loans of $475 million, and total deposits of $794 million to the Corporation. Northwestern Bank was consolidated with and into Chemical Bank as of the acquisition date and the Corporation consolidated four branches in communities where Chemical Bank and Northwestern had overlapping branches. In connection with the acquisition of Northwestern, the Corporation recorded $60 million of goodwill, which was primarily attributable to the synergies and economies of scale expected from combining the operations of the Corporation and Northwestern. In addition, the Corporation recorded $12.9 million of core deposit intangible assets in conjunction with the acquisition.

Acquisition of 21 Branches

On December 7, 2012, Chemical Bank acquired 21 branches from Independent Bank, a subsidiary of Independent Bank Corporation, located in the northeast and Battle Creek regions of Michigan, including $404 million in deposits and $44 million in loans ("branch acquisition transaction"). The Corporation paid a premium on deposits of $11.5 million, or approximately 2.85% of total deposits acquired, and the loans were purchased at a discount of 1.75%. In connection with the branch acquisition transaction, the Corporation recorded goodwill of $6.8 million, which represented the excess of the purchase price over the fair value of identifiable net assets acquired, and other intangible assets attributable to customer core deposits of $5.6 million.

Acquisition of O.A.K. Financial Corporation

On April 30, 2010, the Corporation acquired O.A.K. Financial Corporation ("OAK") and OAK's wholly-owned bank subsidiary, Byron Bank, in an all-stock transaction for total consideration of $83.7 million. Byron Bank, which was subsequently consolidated with and into Chemical Bank, provided traditional banking services and products through 14 banking offices serving communities in Ottawa, Allegan and Kent counties in west Michigan. At April 30, 2010, OAK had total assets of $820 million, including total loans of $627 million, and total deposits of $693 million, including brokered deposits of $193 million. In connection with the acquisition of OAK, the Corporation recorded goodwill of $43.5 million, which represented the synergies and economies of scale expected from combining the operations of the Corporation and OAK. In addition, the Corporation recorded other intangible assets in conjunction with the acquisition of OAK of $9.8 million.

Branch Closings

On April 15, 2016, the Corporation closed eleven branch locations which were identified as having a small core deposit base and/or were in close proximity to other Chemical Bank branch locations.

In conjunction with the consolidation of The Bank of Northern Michigan with and into Chemical Bank during the fourth quarter of 2015, the Corporation closed two branches in communities where The Bank of Northern Michigan and Chemical Bank had overlapping branches. In conjunction with the acquisition of Monarch during the second quarter of 2015, the Corporation closed two branches in communities where Monarch Community Bank and Chemical Bank had overlapping branches. In conjunction with the acquisition of Northwestern during the fourth quarter of 2014, the Corporation closed four branches in communities where Northwestern Bank and Chemical Bank had overlapping branches.

Expenses associated with the closing of the aforementioned branch office locations were not significant, with the exception of $1.0 million of fair value write-downs recognized in the second quarter of 2016 related to the eleven branch locations that were closed, as the majority of the employees of these closed branch offices were transferred to other nearby Chemical Bank branch locations or other open positions within Chemical Bank.

53

Summary

The Corporation's net income was $25.7 million, or $0.67 per diluted share, in the second quarter of 2016, compared to net income of $23.3 million, or $0.60 per diluted share, in the first quarter of 2016 and net income of $19.0 million, or $0.54 per diluted share, in the second quarter of 2015. Net income in the second quarter of 2016 was 11% higher than the first quarter of 2016 due primarily to higher net interest income, which was partially offset by a higher provision for loan losses. The increase in net interest income was due to a combination of loan growth and an increase in the amount of interest accretion recognized for acquired loans resulting from improvements in expected cash flows from certain pools of acquired loans. Net income in the second quarter of 2016 was 35% higher than the second quarter of 2015 due largely to the Monarch and Lake Michigan acquisitions and strong organic loan growth over the past year. The Corporation's net income was $49.0 million, or $1.27 per diluted share, for the six months endedJune 30, 2016, compared to net income of $36.9 million, or $1.08, for the six months endedJune 30, 2015, with the increase due to a combination of the impact of the Monarch and Lake Michigan acquisitions and organic loan growth.

Merger and acquisition-related transaction expenses ("transaction expenses") totaled $3.1 million in the second quarter of 2016, $2.6 million in the first quarter of 2016 and $3.5 million in the second quarter of 2015. Excluding transaction expenses, net income was $27.7 million, or $0.72 per diluted share, in the second quarter of 2016, compared to $24.9 million, or $0.65 per diluted share, in the first quarter of 2016 and $21.7 million, or $0.61 per diluted share, in the second quarter of 2015. Excluding transaction expenses, the Corporation's net income was $52.6 million, or $1.37 per diluted share, for the six months endedJune 30, 2016, compared to $40.4 million, or $1.18 per diluted share, for the six months endedJune 30, 2015.

Return on average assets, on an annualized basis, was 1.11% in the second quarter of 2016, compared to 1.01% in the first quarter of 2016 and 0.94% in the second quarter of 2015. Return on average equity, on an annualized basis, was 10.0% in the second quarter of 2016, compared to 9.2% in the first quarter of 2016 and 8.6% in the second quarter of 2015. Excluding transaction expenses, the Corporation's return on average assets was 1.19% during the second quarter of 2016, compared to 1.09% in the first quarter of 2016 and 1.07% in the second quarter of 2015 and the Corporation's return on average shareholders' equity was 10.8% in the second quarter of 2016, compared to 9.9% in the first quarter of 2016 and 9.8% in the second quarter of 2015.

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Non-GAAP Financial Measures

This report contains references to financial measures which are not defined in GAAP. Such non-GAAP financial measures include the Corporation's tangible book value per share, tangible equity to tangible assets ratio, presentation of net interest income and net interest margin on a fully taxable equivalent (FTE) basis and information presented excluding transaction expenses, including net income, diluted earnings per share, return on average assets, return on average shareholders' equity and operating expenses. These non-GAAP financial measures have been included as the Corporation believes they are helpful for investors to analyze and evaluate the Corporation's financial performance. Limitations associated with non-GAAP financial measures include the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently. These disclosures should not be considered an alternative to the Corporation's GAAP results.

A reconciliation of a majority of the Corporation's non-GAAP financial measures is presented below. Information related to FTE and transaction expenses can be found under the subheadings "Net Interest Income" and "Operating Expenses" of this report.

	Three Months Ended									Six Months Ended
	June 30, 2016			March 31, 2016			June 30, 2015			June 30, 2016			June 30, 2015
	(Dollars in thousands, except per share data)
Non-GAAP Operating Results
Net Income
Net income, as reported	$	25,707		$	23,262		$	19,024		$	48,969		$	36,859
Transaction expenses, net of tax	1,985			1,686			2,659			3,671			3,544
Net income, excluding transaction expenses	$	27,692		$	24,948		$	21,683		$	52,640		$	40,403
Diluted Earnings Per Share
Diluted earnings per share, as reported	$	0.67		$	0.60		$	0.54		$	1.27		$	1.08
Effect of transaction expenses, net of tax	0.05			0.05			0.07			0.10			0.10
Diluted earnings per share, excluding transaction expenses	$	0.72		$	0.65		$	0.61		$	1.37		$	1.18
Return on Average Assets
Return on average assets, as reported	1.11		%	1.01		%	0.94		%	1.06		%	0.96		%
Effect of transaction expenses, net of tax	0.08			0.08			0.13			0.08			0.09
Return on average assets, excluding transaction expenses	1.19		%	1.09		%	1.07		%	1.14		%	1.05		%
Return on Average Shareholders' Equity
Return on average shareholders' equity, as reported	10.0		%	9.2		%	8.6		%	9.6		%	8.8		%
Effect of transaction expenses, net of tax	0.8			0.7			1.2			0.7			0.9
Return on average shareholders' equity, excluding transaction expenses	10.8		%	9.9		%	9.8		%	10.3		%	9.7		%

Tangible Book Value	June 30, 2016			March 31, 2016			December 31, 2015			June 30, 2015
Shareholders' equity, as reported	$	1,050,299		$	1,032,291		$	1,015,974		$	981
Goodwill, CDI and noncompete agreements, net of tax	(297,044		)	(297,821		)	(299,123		)	(299		)
Tangible shareholders' equity	$	753,255		$	734,470		$	716,851		$	682
Common shares outstanding	38,267			38,248			38,168			38
Book value per share (shareholders' equity, as reported, divided by common shares outstanding)	$	27.45		$	26.99		$	26.62		$	25.74
Tangible book value per share (tangible shareholders' equity divided by common shares outstanding)	$	19.68		$	19.20		$	18.78		$	17.89
Tangible Shareholders' Equity to Tangible Assets
Total assets	$	9,514,172		$	9,303,632		$	9,188,797		$	9,021
Goodwill, CDI and noncompete agreements, net of tax	(297,044		)	(297,821		)	(299,123		)	(299		)
Tangible assets	$	9,217,128		$	9,005,811		$	8,889,674		$	8,722
Tangible shareholders' equity to tangible assets	8.2		%	8.2		%	8.1		%	7.8		%

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Financial Condition

Total Assets

Total assets were $9.51 billion at June 30, 2016, an increase of $211 million, or 2.3%, from total assets of $9.30 billion at March 31, 2016, an increase of $325 million or 3.5% from total assets of $9.19 billion at December 31, 2015 and an increase of $493 million, or 5.5%, from total assets of $9.02 billion at June 30, 2015.

Interest-earning assets were $8.77 billion at June 30, 2016, an increase of $199 million, or 2.3%, from interest-earning assets of $8.57 billion at March 31, 2016, an increase of $347 million, or 4.1%, from interest-earning assets of $8.43 billion at December 31, 2015 and an increase of $492 million, or 5.9%, from interest-earning assets of $8.28 billion at June 30, 2015.

The increases in total assets and interest-earning assets during the three- and twelve-month periods ended June 30, 2016 were primarily due to loan growth that was largely funded by wholesale borrowings and maturing investment securities. Loan growth during the twelve months ended June 30, 2016 was also partially funded by organic growth in customer deposits.

Investment Securities

The carrying value of investment securities totaled $1.01 billion at June 30, 2016, a decrease of $21 million, or 2.0%, from investment securities of $1.03 billion at March 31, 2016, a decrease of $52 million, or 4.9%, from investment securities of $1.06 billion at December 31, 2015 and a decrease of $144 million, or 12%, from investment securities of $1.16 billion at June 30, 2015. The Corporation utilized maturing available-for-sale investment securities over the past twelve months to increase its holdings in state and political subdivisions and to partially fund loan growth. The Corporation has increased its holdings in state and political subdivisions as it has been able to identify municipal investments within its operating markets that both met its investment objectives and provided an attractive yield when compared to other investment options.

A summary of the composition of the carrying value of the Corporation's investment securities portfolio follows:

	June 30, 2016		March 31, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Available-for-sale:
U.S. Treasury securities	$	5,810	$	5,797	$	5,765	$	8,294
Government sponsored agencies	157,022		177,637		194,989		227,907
State and political subdivisions	13,220		15,061		15,120		26,965
Residential mortgage-backed securities	168,616		179,149		187,768		212,669
Collateralized mortgage obligations	100,849		118,398		132,230		167,032
Corporate bonds	9,712		14,708		14,627		39,678
Preferred stock and trust preferred securities	3,323		3,265		3,232		3,161
Total available-for-sale investment securities	458,552		514,015		553,731		685,706
Held-to-maturity:
State and political subdivisions	552,328		517,800		509,471		469,337
Trust preferred securities	500		500		500		500
Total held-to-maturity investment securities	552,828		518,300		509,971		469,837
Total investment securities	$	1,011,380	$	1,032,315	$	1,063,702	$	1,155,543

At June 30, 2016, the Corporation's investment securities portfolio consisted of: U.S. Treasury securities, comprised of fixed-rate government debt obligations issued by the U.S. Department of Treasury, totaling $5.8 million; government sponsored agency (GSA) debt obligations, comprised primarily of fixed-rate instruments backed by Federal Home Loan Banks, Federal Farm Credit Banks and the Student Loan Marketing Corporation, totaling $157.0 million; state and political subdivisions debt obligations, comprised of general debt obligations of issuers primarily located in the State of Michigan and revenue bonds of certain hospitals and public schools and universities located in the State of Michigan, totaling $565.5 million; residential mortgage-backed securities (MBSs), comprised primarily of fixed-rate instruments backed by a U.S. government agency (Government National Mortgage Association) or government sponsored enterprises (Federal Home Loan Mortgage Corporation and Federal National Mortgage Association), totaling $168.6 million; collaterized mortgage obligations (CMOs), comprised of approximately 75% fixed-rate and 25% variable-rate instruments backed by the same U.S. government agency and government sponsored enterprises as the residential MBSs with average maturities of less than three years, totaling $100.8 million; corporate bonds, comprised primarily of debt obligations of large U.S. global financial organizations, totaling $9.7 million; and preferred stock and trust preferred securities

56

(TRUPs), comprised of preferred stock debt instruments of two large regional/national banks and a variable-rate TRUP from a publicly-traded bank holding company included in the available-for-sale investment securities portfolio and a variable-rate TRUP from a small non-public bank holding company included in held-to-maturity investment securities portfolio, totaling $3.8 million. Fixed-rate instruments comprised approximately 90% of the Corporation's investment securities portfolio at June 30, 2016. The Corporation's investment securities portfolio as of June 30, 2016 had a weighted average life of approximately 3.3 years and an effective duration of approximately 2.0 years.

The Corporation utilizes third-party pricing services to obtain market value prices for its investment securities portfolio. On a quarterly basis, the Corporation validates the reasonableness of prices received from the third-party pricing services through independent price verification on a sample of investment securities in the portfolio, data integrity validation based upon comparison of current market prices to prior period market prices and analysis of overall expectations of movement in market prices based upon the changes in the related yield curves and other market factors. On a periodic basis, the Corporation reviews the pricing methodology of the third-party pricing vendors and the results of the vendors' internal control assessments to ensure the integrity of the process that the vendors use to develop market pricing for the Corporation's investment securities portfolio.

The Corporation's investment securities portfolio, with a carrying value of $1.01 billion at June 30, 2016, had gross unrealized losses of $1.3 million at that date. The Corporation's investment securities portfolio had gross unrealized losses of $3.5 million at March 31, 2016, $9.1 million at December 31, 2015 and $11.1 million at June 30, 2015. Management believed that the unrealized losses on investment securities at June 30, 2016 were temporary in nature and due primarily to changes in interest rates on the investment securities and market illiquidity and not as a result of credit-related issues. The improvement in the unrealized loss position of the Corporation's investment securities portfolio as of June 30, 2016 is primarily due to declines in long-term market interest rates. Accordingly, the Corporation believed the unrealized losses in its investment securities portfolio at June 30, 2016 were temporary in nature and, therefore, no impairment loss was recognized in the Corporation's consolidated statement of income for the three months ended June 30, 2016. However, other-than-temporary impairment (OTTI) may occur in the future as a result of material declines in the fair value of investment securities resulting from market, credit, economic or other conditions. A further discussion of the assessment of potential impairment and the Corporation's process that resulted in the conclusion that the unrealized loss impairment was temporary in nature follows.

At June 30, 2016, the gross unrealized losses in the Corporation's investment securities portfolio of $1.3 million were comprised as follows: GSA securities, residential MBSs and CMOs, combined, of $0.7 million; state and political subdivisions securities of $0.3 million; corporate bonds of $0.1 million; and TRUPs of $0.2 million. The amortized costs and fair values of investment securities are disclosed in Note 3 to the consolidated financial statements.

GSA securities, residential MBSs and CMOs, included in the available-for-sale investment securities portfolio, had a combined amortized cost of $424 million and gross unrealized losses of only $0.7 million at June 30, 2016. Virtually all of the impaired investment securities in these categories are backed by the full faith and credit of the U.S. government or a guarantee of a U.S. government agency or government sponsored enterprise. The Corporation determined that the unrealized losses on these investment securities were attributable to current market interest rates being higher than the yields being earned on these investment securities. The Corporation concluded that the unrealized losses attributable to its GSA securities, residential MBSs and CMOs were temporary in nature at June 30, 2016.

State and political subdivisions securities, included in the available-for-sale and the held-to-maturity investment securities portfolios, had an amortized cost of $565 million and gross unrealized losses of only $0.3 million at June 30, 2016. The Corporation's state and political subdivisions securities are almost entirely from issuers primarily located in the State of Michigan and of which approximately 80% are general obligations of the issuer, meaning that repayment of these obligations is funded by general tax collections of the issuer. It was the Corporation's assessment that the impairment on these investment securities was attributable to current market interest rates being slightly higher than the yield on these investment securities and illiquidity in the market due to the nature of a portion of these investment securities. The Corporation concluded that the unrealized losses attributable to its state and political subdivisions securities were temporary in nature at June 30, 2016.

At June 30, 2016, the Corporation held one TRUP in the held-to-maturity investment securities portfolio, with an amortized cost of $0.5 million and gross unrealized loss of $0.2 million. This TRUP represents a 10% interest in the TRUP of a non-public bank holding company in Michigan. The principal of $0.5 million of this TRUP matures in 2033, with interest payments due quarterly. All scheduled interest payments on this TRUP have been made on a timely basis. The Corporation determined that the unrealized loss on this TRUP was attributable to lack of liquidity for issuances of this size. The Corporation concluded that the unrealized loss attributable to this TRUP were temporary in nature at June 30, 2016.

At June 30, 2016, the Corporation expected to fully recover the entire amortized cost basis of each impaired investment security in its investment securities portfolio at that date. Furthermore, at June 30, 2016, the Corporation did not have the intent to sell any of its impaired investment securities and believed that it was more-likely-than-not that the Corporation would not have to sell any of its impaired investment securities before a full recovery of amortized cost. However, there can be no assurance that OTTI losses will not be recognized on the TRUPs or on any other investment security in the future.

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Loans

The Corporation's loan portfolio is comprised of commercial, commercial real estate and real estate construction and land development loans, referred to as the Corporation's commercial loan portfolio, and residential mortgage, consumer installment and home equity loans, referred to as the Corporation's consumer loan portfolio. At June 30, 2016, the Corporation's loan portfolio was $7.65 billion and consisted of loans in the commercial loan portfolio totaling $4.40 billion, or 57% of total loans, and loans in the consumer loan portfolio totaling $3.25 billion, or 43% of total loans. Loans at fixed interest rates comprised 74% of the Corporation's total loan portfolio at June 30, 2016, March 31, 2016, December 31, 2015 and June 30, 2015.

Chemical Bank is a full-service commercial bank and the acceptance and management of credit risk is an integral part of the Corporation's business. The Corporation maintains loan policies and credit underwriting standards as part of the process of managing credit risk. These standards include making loans generally only within the Corporation's market areas. The Corporation's lending markets generally consist of communities across the lower peninsula of Michigan, except for the southeastern portion of Michigan. The Corporation has no foreign loans or any loans to finance highly leveraged transactions. The Corporation's lending philosophy is implemented through strong administrative and reporting controls. The Corporation maintains a centralized independent loan review function that monitors the approval process and ongoing asset quality of the loan portfolio.

A summary of the composition of the Corporation's loan portfolio, by major loan category, follows:

	June 30, 2016		March 31, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Commercial loan portfolio:
Commercial	$	1,953,301	$	1,922,259	$	1,905,879	$	1,754,873
Commercial real estate:
Owner occupied	1,149,439		1,126,901		1,073,463		1,050,334
Nonowner occupied	954,927		959,842		982,280		1,139,042
Vacant land	53,367		56,308		56,419		54,137
Total commercial real estate	2,157,733		2,143,051		2,112,162		2,243,513
Real estate construction and land development	285,848		242,899		232,076		112,312
Subtotal - commercial loan portfolio	4,396,882		4,308,209		4,250,117		4,110,698
Consumer loan portfolio:
Residential mortgage	1,494,192		1,461,120		1,429,636		1,310,167
Consumer installment	1,048,622		897,078		877,457		887,907
Home equity	707,573		700,478		713,937		725,971
Subtotal - consumer loan portfolio	3,250,387		3,058,676		3,021,030		2,924,045
Total loans	$	7,647,269	$	7,366,885	$	7,271,147	$	7,034,743

Total loans were $7.65 billion at June 30, 2016, an increase of $280 million, or 3.8%, from total loans of $7.37 billion at March 31, 2016, an increase of $376 million, or 5.2%, from total loans of $7.27 billion at December 31, 2015 and an increase of $613 million, or 8.7%, from total loans of $7.03 billion at June 30, 2015. The Corporation's loan growth for the three and twelve months ended June 30, 2016, generally occurred across all loan categories and across all of the Corporation's banking markets and was attributable to a combination of improving economic conditions and higher loan demand, as well as the Corporation increasing its market share in both its commercial and consumer loan portfolios.

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A summary of the Corporation's organic loan growth follows (dollars in millions):

	Second Quarter of 2016				First Quarter of 2016			Six Months Ended June 30, 2016			Twelve Months Ended June 30, 2016
Organic Loan Growth	$		%		$			$			$			%
Commercial loan portfolio:
Commercial	$	31	1.6	%	$	16		$	47		$	198		11.3	%
Commercial real estate	15		0.7		31			46			(86		)	(3.8	)
Real estate construction and land development	43		17.7		11			54			174			154.5
Subtotal	89		2.1		58			147			286			7.0
Consumer loan portfolio:
Residential mortgage	$	33	2.3		$	31		$	64		$	184		14.0
Consumer installment	151		16.9		20			171			161			18.1
Home equity	7		1.0		(13		)	(6		)	(18		)	(2.5	)
Subtotal	191		6.3		38			229			327			11.2
Total loans	$	280	3.8	%	$	96		$	376		$	613		8.7	%

A discussion of the Corporation’s loan portfolio by category follows.

Commercial Loan Portfolio

The Corporation's commercial loan portfolio is comprised of commercial loans, commercial real estate loans and real estate construction and land development loans. The Corporation's commercial loan portfolio is well diversified across business lines and has no concentration in any one industry. The commercial loan portfolio of $4.40 billion at June 30, 2016 included 153 loan relationships of $5.0 million or greater. These 153 loan relationships totaled $1.59 billion, which represented 36% of the commercial loan portfolio at June 30, 2016, and included 49 loan relationships that had outstanding balances of $10 million or higher, totaling $847 million, or 19% of the commercial loan portfolio, at that date. The Corporation had 13 loan relationships that had outstanding balances of $20 million or higher, totaling $339 million, or 7.7% of the commercial loan portfolio, at June 30, 2016. The Corporation had 29 loan relationships at June 30, 2016 with loan balances greater than $5.0 million and less than $10 million, totaling $240 million, that had unfunded credit commitments totaling $123 million that, if advanced, could result in a loan relationship of $10 million or more.

The Corporation had $54 million of loans to borrowers in the energy and related industries at June 30, 2016, compared to $49 million at March 31, 2016. These loans comprised approximately 1% of loans in the Corporation's commercial loan portfolio at these dates. Of the Corporation's loans in the energy and related industries, only 1% were nonperforming at both June 30, 2016 and March 31, 2016. The Corporation had another $44 million of unfunded credit commitments to borrowers in the energy and related industries at June 30, 2016.

Commercial loans consist of loans and lines of credit to varying types of businesses, including municipalities, school districts and nonprofit organizations, for the purpose of supporting working capital and operational needs and term financing of equipment. Repayment of such loans is generally provided through operating cash flows of the customer. Commercial loans are generally secured with inventory, accounts receivable, equipment, personal guarantees of the owner or other sources of repayment, although the Corporation may also obtain real estate as collateral.

Commercial loans were $1.95 billion at June 30, 2016, compared to $1.92 billion at March 31, 2016, $1.91 billion at December 31, 2015 and $1.75 billion at June 30, 2015. Commercial loans represented 25.5% of the Corporation's loan portfolio at June 30, 2016, compared to 26.1%, 26.2% and 24.9% at March 31, 2016, December 31, 2015 and June 30, 2015, respectively.

Commercial real estate loans include loans that are secured by real estate occupied by the borrower for ongoing operations, non-owner occupied real estate leased to one or more tenants and vacant land that has been acquired for investment or future land development. Commercial real estate loans were $2.16 billion at June 30, 2016, compared to $2.14 billion at March 31, 2016, $2.11 billion at December 31, 2015 and $2.24 billion at June 30, 2015. Loans secured by owner occupied properties, non-owner occupied properties and vacant land comprised 53%, 44% and 3%, respectively, of the Corporation's commercial real estate loans outstanding at June 30, 2016. Commercial real estate loans represented 28.2% of the Corporation's loan portfolio at June 30, 2016, compared to 29.1%, 29.0% and 31.9% at March 31, 2016, December 31, 2015 and June 30, 2015, respectively.

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Commercial and commercial real estate lending are generally considered to involve a higher degree of risk than residential mortgage, consumer installment and home equity lending as they typically involve larger loan balances concentrated in a single borrower. In addition, the payment experience on loans secured by income-producing properties and vacant land loans is typically dependent on the success of the operation of the related project and is typically affected by adverse conditions in the real estate market and in the economy. The Corporation generally attempts to mitigate the risks associated with commercial and commercial real estate lending by, among other things, lending primarily in its market areas, lending across industry lines, not developing a concentration in any one line of business and using prudent loan-to-value ratios in the underwriting process. It is management's belief that the Corporation's commercial and commercial real estate loan portfolios are generally well-secured.

Real estate construction loans are primarily originated for construction of commercial properties and often convert to a commercial real estate loan at the completion of the construction period. Land development loans include loans made to developers for the purpose of infrastructure improvements to vacant land to create finished marketable residential and commercial lots/land. A majority of the Corporation's land development loans consist of loans to develop residential real estate. Land development loans are generally originated as interest only with the intention that the loan principal balance will be repaid through the sale of finished properties by the developers within twelve months of the completion date. Real estate construction and land development loans were $286 million at June 30, 2016, compared to $243 million at March 31, 2016, $232 million at December 31, 2015 and $112 million at June 30, 2015. The increases in real estate construction and land development loans during the three and twelve-month periods ended June 30, 2016 were almost entirely attributable to advances on new and existing commercial construction projects, representing a combination of owner and non-owner occupied commercial properties. Real estate construction and land development loans represented 3.7% of the Corporation's loan portfolio at June 30, 2016, compared to 3.3%, 3.2% and 1.6% at March 31, 2016, December 31, 2015 and June 30, 2015, respectively.

Real estate construction and land development lending involves a higher degree of risk than commercial real estate lending and residential mortgage lending because of the uncertainties of construction, including the possibility of costs exceeding the initial estimates, the need to obtain a tenant or purchaser of the property if it will not be owner-occupied or the need to sell developed properties. The Corporation generally attempts to mitigate the risks associated with real estate construction and land development lending by, among other things, lending primarily in its market areas, using prudent underwriting guidelines and closely monitoring the construction process.

Consumer Loan Portfolio

The Corporation's consumer loan portfolio is comprised of residential mortgage loans, consumer installment loans and home equity loans and lines of credit.

Residential mortgage loans consist primarily of one- to four-family residential loans with fixed interest rates of fifteen years or less, with amortization periods generally from fifteen to thirty years. The loan-to-value ratio at the time of origination is generally 80% or less. Loans with more than an 80% loan-to-value ratio generally require private mortgage insurance. At June 30, 2016, approximately two-thirds of the Corporation's residential mortgage loans had an original loan-to-value ratio of 80% or less.

Residential mortgage loans were $1.49 billion at June 30, 2016, compared to $1.46 billion at March 31, 2016, $1.43 billion at December 31, 2015 and $1.31 billion at June 30, 2015. Residential mortgage loans had historically involved the least amount of credit risk in the Corporation's loan portfolio, although the risk on these loans increased during the most recent economic downturn when the unemployment rate increased and real estate property values declined in the State of Michigan. Residential mortgage loans also include loans to consumers for the construction of single family residences that are secured by these properties. Residential mortgage construction loans to consumers were $69.1 million at June 30, 2016, compared to $60.7 million at March 31, 2016, $62.2 million at December 31, 2015 and $69.6 million at June 30, 2015. Residential mortgage loans represented 19.5% of the Corporation's loan portfolio at June 30, 2016, compared to 19.8%, 19.7% and 18.6% at March 31, 2016, December 31, 2015 and June 30, 2015, respectively. The Corporation had residential mortgage loans with maturities beyond five years and that were at fixed interest rates totaling $396 million at June 30, 2016, compared to $392 million, $379 million and $319 million at March 31, 2016, December 31, 2015 and June 30, 2015, respectively.

The Corporation's consumer installment loans consist of relatively small loan amounts to consumers to finance personal items (primarily automobiles, recreational vehicles and marine vehicles) and are comprised primarily of indirect loans purchased from dealerships. Consumer installment loans were $1.05 billion at June 30, 2016, compared to $897 million at March 31, 2016, $877 million at December 31, 2015 and $888 million at June 30, 2015. The majority of growth in consumer installment loans during the second quarter of 2016 was attributable to indirect loans. At June 30, 2016, collateral securing consumer installment loans was comprised approximately as follows: automobiles - 61%; recreational vehicles - 23%; marine vehicles - 11%; other collateral - 4%; and unsecured - 1%. Consumer installment loans represented 13.7% of the Corporation's loan portfolio at June 30, 2016, compared to 12.2%, 12.1% and 12.6% at March 31, 2016, December 31, 2015 and June 30, 2015, respectively.

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The Corporation's home equity loans, including home equity lines of credit, are comprised of loans to consumers who utilize equity in their personal residence, including junior lien mortgages, as collateral to secure the loan or line of credit. Home equity loans were $708 million at June 30, 2016, compared to $700 million at March 31, 2016, $714 million at December 31, 2015 and $726 million at June 30, 2015. At June 30, 2016, approximately 55% of the Corporation's home equity loans were first lien mortgages and 45% were junior lien mortgages. Home equity loans represented 9.3% of the Corporation's loan portfolio at June 30, 2016, compared to 9.5%, 9.8% and 10.3% at March 31, 2016, December 31, 2015 and June 30, 2015, respectively. Home equity lines of credit comprised $273 million, or 39%, of the Corporation's home equity loans at June 30, 2016, compared to $272 million, or 39%, of home equity loans at March 31, 2016, $278 million, or 39% of home equity loans at December 31, 2015 and $284 million, or 39%, of home equity loans at June 30, 2015. The majority of the Corporation's home equity lines of credit are comprised of loans with payments of interest only and original maturities of up to ten years. These home equity lines of credit include junior lien mortgages whereby the first lien mortgage is held by a nonaffiliated financial institution.

Consumer installment and home equity loans generally have shorter terms than residential mortgage loans, but generally involve more credit risk than residential mortgage lending because of the type and nature of the collateral. The Corporation experienced net loan losses totaling 17 basis points (annualized) of average consumer installment and home equity loans during the first six months of 2016, compared to 19 basis points of average consumer installment and home equity loans in all of 2015. Consumer installment and home equity loans are spread across many individual borrowers, which minimizes the risk per loan transaction. The Corporation originates consumer installment and home equity loans utilizing a computer-based credit scoring analysis to supplement the underwriting process. Consumer installment and home equity lending collections are dependent on the borrowers' continuing financial stability and are more likely to be affected by adverse personal situations. Collateral values on properties securing consumer installment and home equity loans are negatively impacted by many factors, including the physical condition of the collateral and property values, although losses on consumer installment and home equity loans are often more significantly impacted by the unemployment rate and other economic conditions. The unemployment rate in the State of Michigan was 4.6% at June 30, 2016, compared to 4.8%, 5.1% and 5.5% at March 31, 2016, December 31, 2015 and June 30, 2015, respectively, and slightly lower than the national average of 4.9% at June 30, 2016.

Nonperforming Assets

Nonperforming assets include nonperforming loans, which consist of originated loans for which the accrual of interest has been discontinued (nonaccrual loans), originated loans that are past due as to principal or interest by 90 days or more and still accruing interest and nonperforming loans that have been modified under troubled debt restructurings (TDRs). Nonperforming assets also include assets obtained through foreclosures and repossessions. The Corporation transfers an originated loan that is 90 days or more past due to nonaccrual status (except for loans that are secured by residential real estate, which are transferred at 120 days past due), unless it believes the loan is both well-secured and in the process of collection. For loans classified as nonaccrual, including those with modifications, the Corporation does not expect to receive all principal and interest payments, and therefore, any payments are recognized as principal reductions when received. Conversely, the Corporation expects to receive all principal and interest payments on loans that meet the definition of nonperforming TDR status. TDRs continue to be reported as nonperforming loans until a six-month payment history of principal and interest payments is sustained in accordance with the terms of the loan modification, at which time the loan is no longer considered a nonperforming asset and the Corporation moves the loan to a performing TDR status.

Nonperforming assets were $70.4 million at June 30, 2016, a decrease of $12.1 million, or 15%, from $82.5 million at March 31, 2016 and a decrease of $23.4 million, or 25%, from $93.8 million at December 31, 2015. The decrease in nonperforming assets during the second quarter of 2016 was primarily attributable to a reduction in nonperforming loans resulting from a combination of principal paydowns of $6.4 million, $3.9 million of loans upgraded to accruing status and net loan charge-offs. Nonperforming assets represented 0.74%, 0.89% and 1.02%of total assets at June 30, 2016, March 31, 2016 and December 31, 2015, respectively. The Corporation's nonperforming assets are notconcentrated in any one industry or any one geographical area within Michigan. Management evaluates and, when appropriate, obtains new appraisals or discount appraised values of existing appraisals to compute net realizable values of nonperforming real estate secured loans and other real estate properties.

Nonperforming assets at June 30, 2016, March 31, 2016 and December 31, 2015 did not include impaired acquired loans totaling $12.5 million, $10.1 million and $12.8 million, respectively, even though these loans were not performing in accordance with their original contractual terms. Acquired loans that are not performing in accordance with contractual terms are not reported as nonperforming loans because these loans are recorded in pools at their net realizable value based on the principal and interest the Corporation expects to collect on these loan pools. Acquired loans not performing in accordance with the loan's original contractual terms are included in the Corporation's impaired loan schedule in Note 4 to the consolidated financial statements.

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The following schedule provides a summary of nonperforming assets:

	June 30, 2016			March 31, 2016			December 31, 2015
	(Dollars in thousands)
Nonaccrual loans:
Commercial	$	14,577		$	19,264		$	28,554
Commercial real estate	21,325			25,859			25,163
Real estate construction and land development	496			546			521
Residential mortgage	5,343			5,062			5,557
Consumer installment	285			360			451
Home equity	1,971			2,328			1,979
Total nonaccrual loans	43,997			53,419			62,225
Accruing loans contractually past due 90 days or more as to interest or principal payments:
Commercial	3			370			364
Commercial real estate	3			—			254
Residential mortgage	407			423			402
Home equity	1,071			679			1,267
Total accruing loans contractually past due 90 days or more as to interest or principal payments	1,484			1,472			2,287
Nonperforming TDRs:
Commercial loan portfolio	14,240			15,351			16,297
Consumer loan portfolio	2,233			3,013			3,071
Total nonperforming TDRs	16,473			18,364			19,368
Total nonperforming loans	61,954			73,255			83,880
Other real estate and repossessed assets(1)	8,440			9,248			9,935
Total nonperforming assets	$	70,394		$	82,503		$	93,815
Nonperforming loans as a percent of total loans	0.81		%	0.99		%	1.15		%
Nonperforming assets as a percent of total assets	0.74		%	0.89		%	1.02		%

(1) Includes property acquired through foreclosure and by acceptance of a deed in lieu of foreclosure and other property held-for-sale.

The Corporation's nonaccrual loans that meet the definition of a TDR (nonaccrual TDR) totaled $32.4 million at June 30, 2016, compared to $32.5 million at March 31, 2016 and $35.9 million at December 31, 2015. These loans have been modified by providing the borrower a financial concession that is intended to improve the Corporation's probability of collection of the amounts due.

The following schedule summarizes changes in nonaccrual loans during the three and six months ended June 30, 2016 and 2015.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
	(In thousands)
Balance at beginning of period	$	53,419		$	53,440		$	62,225		$	50,644
Additions during period	5,467			8,456			10,740			19,037
Principal balances charged off	(3,166		)	(2,369		)	(8,220		)	(4,771		)
Transfers to other real estate/repossessed assets	(1,455		)	(1,744		)	(2,902		)	(3,526		)
Returned to accrual status	(3,874		)	(871		)	(4,217		)	(1,497		)
Payments received	(6,394		)	(5,697		)	(13,629		)	(8,672		)
Balance at end of period	$	43,997		$	51,215		$	43,997		$	51,215

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Nonperforming Loans

The following schedule provides the composition of nonperforming loans, by major loan category, as of June 30, 2016, March 31, 2016 and December 31, 2015.

	June 30, 2016				March 31, 2016				December 31, 2015
	Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total
	(Dollars in thousands)
Commercial loan portfolio:
Commercial	$	22,380	36.1	%	$	26,900	36.7	%	$	33,567	40.0	%
Commercial real estate	27,758		44.8		33,485		45.7		36,602		43.6
Real estate construction and land development	506		0.8		1,005		1.4		984		1.2
Subtotal-commercial loan portfolio	50,644		81.7		61,390		83.8		71,153		84.8
Consumer loan portfolio:
Residential mortgage	7,983		12.9		8,498		11.6		9,030		10.8
Consumer installment	285		0.5		360		0.5		451		0.5
Home equity	3,042		4.9		3,007		4.1		3,246		3.9
Subtotal-consumer loan portfolio	11,310		18.3		11,865		16.2		12,727		15.2
Total nonperforming loans	$	61,954	100.0	%	$	73,255	100.0	%	$	83,880	100.0	%

Total nonperforming loans were $62.0 million at June 30, 2016, a decreaseof $11.3 million, or 15%, compared to $73.3 million at March 31, 2016 and a decrease of $21.9 million,or 26%,compared to $83.9 million at December 31, 2015. The decrease in nonperforming loans during the second quarter of 2016 was primarily attributable to a combination of principal paydowns of $6.4 million, $3.9 million of loans upgraded to accruing status and net loan charge-offs. The Corporation's nonperforming loans in the commercial loan portfolio were $50.6 million at June 30, 2016, a decrease of $10.7 million, or 18%, from $61.4 million at March 31, 2016 and a decrease of $20.5 million,or 29%, from $71.2 million at December 31, 2015. Nonperforming loans in the commercial loan portfolio comprised 82% of total nonperforming loans at June 30, 2016, compared to 84% at March 31, 2016 and 85% at December 31, 2015. The Corporation's nonperforming loans in the consumer loan portfolio were $11.3 million at June 30, 2016, a decrease of $0.6 million, or 4.7%, from $11.9 million at March 31, 2016 and a decrease of $1.4 million, or 11.1%, from $12.7 million at December 31, 2015.

Nonperforming Loans — Commercial Loan Portfolio

Nonperforming commercial loans were $22.4 million at June 30, 2016, a decrease of $4.5 million, or 17%, from $26.9 million at March 31, 2016 and a decrease of $11.2 million, or 33%, from $33.6 million at December 31, 2015. The decreases in nonperforming commercial loans was primarily attributable to a combination of principal paydowns and net loan charge-offs. At June 30, 2016, the Corporation's nonperforming commercial loans were not concentrated in any specific industry. Nonperforming commercial loans comprised 1.1% of total commercial loans at June 30, 2016, compared to 1.4% at March 31, 2016 and 1.8% at December 31, 2015.

Nonperforming commercial real estate loans were $27.8 million at June 30, 2016, a decrease of $5.7 million, or 17%, from $33.5 million at March 31, 2016 and a decrease of $8.8 million, or 24%, from $36.6 million at December 31, 2015.Nonperforming commercial real estate loans comprised 1.3% of total commercial real estate loans at June 30, 2016, compared to 1.6% at March 31, 2016 and 1.7% at December 31, 2015. Nonperforming commercial real estate loans secured by owner occupied real estate, non-owner occupied real estate and vacant land totaled $16.8 million, $5.7 million and $5.3 million, respectively, at June 30, 2016, and comprised 1.9%, 0.9% and 13.3%, respectively, of total owner occupied real estate, non-owner occupied real estate and vacant land loans included in the Corporation's originated commercial real estate loans at June 30, 2016. At June 30, 2016, the Corporation's nonperforming commercial real estate loans were comprised of a diverse mix of commercial lines of business and were also geographically disbursed throughout the Corporation's market areas.The largest concentration of nonperforming commercial real estate loans at June 30, 2016 was one customerrelationship totaling $4.7 million that was primarily secured by vacant land and has been in nonperforming status for over five years.This same customer relationship had nonperforming land development loans of $0.1 million andnonperforming residential mortgage loans of $0.4 million. At June 30, 2016, the loans in this relationship were believed to be adequately secured and the Corporation did not require a specific impairment reserve on them at that date.

Nonperforming real estate construction and land development loans were $0.5 million at June 30, 2016 and $1.0 million at both March 31, 2016 and December 31, 2015. Nonperforming real estate construction and land development loans comprised 0.2% of total real estate construction and land development loans at June 30, 2016, compared to 0.4% at both March 31, 2016 and December 31, 2015.

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At June 30, 2016, the Corporation had nonperforming loans in the commercial loan portfolio of $3.5 million that were secured by real estate and were in various stages of foreclosure, compared to $4.9 million at March 31, 2016 and $2.1 million at December 31, 2015.

The following schedule presents information related to stratification of nonperforming loans in the commercial loan portfolio by dollar amount at June 30, 2016, March 31, 2016 and December 31, 2015.

	June 30, 2016			March 31, 2016			December 31, 2015
	Number of Borrowers	Amount		Number of Borrowers	Amount		Number of Borrowers	Amount
	(Dollars in thousands)
$5,000,000 or more	—	$	—	1	$	6,871	1	$	10,009
$2,500,000 – $4,999,999	2	8,069		1	4,819		3	11,622
$1,000,000 – $2,499,999	9	14,001		11	18,445		13	23,336
$500,000 – $999,999	17	12,664		17	12,448		12	8,543
$250,000 – $499,999	17	5,879		22	7,757		19	6,725
Under $250,000	123	10,031		132	11,050		136	10,918
Total	168	$	50,644	184	$	61,390	184	$	71,153

Nonperforming Loans — Consumer Loan Portfolio

Nonperforming residential mortgage loans were $8.0 million at June 30, 2016,a decrease of $0.5 million, or 6.1%, from $8.5 million at March 31, 2016 and a decrease of $1.0 million, or 12%,from $9.0 million at December 31, 2015. Nonperforming residential mortgage loans comprised 0.5% of total residential mortgage loans at June 30, 2016, compared to 0.6% of total residential mortgage loans at both March 31, 2016 and December 31, 2015. At June 30, 2016, a total of $0.9 million of nonperforming residential mortgage loans were in various stages of foreclosure, compared to $2.3 million at March 31, 2016 and $2.9 million at December 31, 2015.

Nonperforming consumer installment loans were $0.3 million at June 30, 2016, compared to $0.4 million at March 31, 2016 and $0.5 million at December 31, 2015. Nonperforming consumer installment loans comprised less than 0.1% of total consumer installment loans at June 30, 2016, March 31, 2016 and December 31, 2015.

Nonperforming home equity loans were $3.0 million at both June 30, 2016 and March 31, 2016, compared to $3.2 million at December 31, 2015. Nonperforming home equity loans comprised 0.4% of total home equity loans at both June 30, 2016 and March 31, 2016, compared to 0.5% at December 31, 2015.

Troubled Debt Restructurings ("TDRs")

The generally unfavorable economic climate that had existed in Michigan during the most recent economic downturn resulted in a large number of both business and consumer customers experiencing cash flow issues making it difficult to maintain their loan balances in a performing status. The Corporation determined that it was probable that certain customers who were past due on their loans, if provided a modification of their loans by reducing their monthly payments, would be able to bring their loan relationships to a performing status. The Corporation believes loan modifications will potentially result in a lower level of loan losses and loan collection costs than if the Corporation proceeded immediately through the foreclosure process with these borrowers. The loan modifications involve granting concessions to borrowers who are experiencing financial difficulty and, therefore, these loans meet the criteria to be considered TDRs.

The Corporation's performing and nonperforming TDRs continue to accrue interest at the loan's original interest rate as the Corporation expects to collect the remaining principal balance on the loan. A TDR is reported as a nonperforming loan ("nonperforming TDR") until a six-month payment history of principal and interest payments is sustained in accordance with the loan modification, at which time the Corporation moves the loan to a performing status ("performing TDR"). If a performing TDR becomes contractually past due more than 30 days, it is transferred to a nonperforming status. Accordingly, all of the Corporation's performing TDRs at June 30, 2016 were current or less than 30 days past due. The Corporation's nonaccrual loans that meet the definition of a TDR do not accrue interest as the Corporation does not expect to collect the full amount of principal and interest owed from the borrower on these loans.

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The following summarizes the Corporation's TDRs at June 30, 2016, March 31, 2016 and December 31, 2015:

	Performing TDRs		Nonperforming TDRs						Nonaccrual TDRs		Total
			Current		Past Due 31-90 Days		Subtotal
	(In thousands)
June 30, 2016
Commercial loan portfolio	$	30,866	$	10,710	$	3,530	$	14,240	$	28,979	$	74,085
Consumer loan portfolio	18,512		1,729		504		2,233		3,402		24,147
Total TDRs	$	49,378	$	12,439	$	4,034	$	16,473	$	32,381	$	98,232
March 31, 2016
Commercial loan portfolio	$	31,896	$	14,206	$	1,145	$	15,351	$	29,368	$	76,615
Consumer loan portfolio	17,990		2,601		412		3,013		3,146		24,149
Total TDRs	$	49,886	$	16,807	$	1,557	$	18,364	$	32,514	$	100,764
December 31, 2015
Commercial loan portfolio	$	29,844	$	15,726	$	571	$	16,297	$	32,682	$	78,823
Consumer loan portfolio	17,966		2,719		352		3,071		3,251		24,288
Total TDRs	$	47,810	$	18,445	$	923	$	19,368	$	35,933	$	103,111

The Corporation's performing and nonperforming TDRs in the commercial loan portfolio generally consist of loans where the Corporation has allowed borrowers to either (i) temporarily defer scheduled principal payments and make interest-only payments for a short period of time (generally six months to one year) at the stated interest rate of the original loan agreement, (ii) lower payments due to a modification of the loan's original contractual terms, or (iii) enter into moderate extensions of the loan's original contractual maturity date. These TDRs are individually evaluated for impairment. Based on this evaluation, the Corporation does not expect to incur a loss on these TDRs based on its assessment of the borrowers' expected cash flows, as the pre- and post-modification effective yields are approximately the same for these loans. Accordingly, no additional provision for loan losses has been recognized related to these TDRs. Nonperforming TDRs that have made at least six consecutive months of principal and interest payments under a formal modification agreement are classified by the Corporation as performing TDRs. If a TDR in the commercial loan portfolio becomes 90 days past due as to principal or interest, or if it becomes probable that any remaining principal and interest payments due on the loan will not be collected in accordance with the modified contractual terms, the loan is transferred to nonaccrual TDR status.

Due to the borrowers' sustained repayment histories, the Corporation had performing TDRs in the commercial loan portfolio of $30.9 million, $31.9 million and $29.8 million at June 30, 2016, March 31, 2016 and December 31, 2015, respectively. The Corporation also had nonperforming TDRs in the commercial loan portfolio of $14.2 million, $15.4 million and $16.3 million at June 30, 2016, March 31, 2016 and December 31, 2015, respectively. The Corporation's nonperforming TDRs in the commercial loan portfolio are categorized as a risk grade 7 (substandard - accrual) under the Corporation's risk rating system, which is further described in Note 4 to the consolidated financial statements. The weighted average contractual interest rate of the Corporation's performing and nonperforming TDRs in the commercial loan portfolio was 5.60% at June 30, 2016, compared to 5.55% at March 31, 2016 and 5.57% at December 31, 2015. At June 30, 2016, the Corporation had $29.0 million of nonaccrual TDRs in the commercial loan portfolio, compared to $29.4 million and $32.7 million at March 31, 2016 and December 31, 2015, respectively.

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A summary of changes in the Corporation's performing and nonperforming TDRs in the commercial loan portfolio for the three and six months ended June 30, 2016 follows:

	Three Months Ended June 30, 2016									Six Months Ended June 30, 2016
	Performing			Nonperforming			Total			Performing			Nonperforming			Total
	(In thousands)
Balance at beginning of period	$	31,896		$	15,351		$	47,247		$	29,844		$	16,297		$	46,141
Additions for modifications	—			2,262			2,262			—			5,683			5,683
Transfers to performing TDR status	1,765			(1,765		)	—			7,051			(7,051		)	—
Transfers to nonperforming TDR status	(1,752		)	1,752			—			(3,298		)	3,298			—
Transfers from nonaccrual status	585			337			922			585			385			970
Transfers to nonaccrual status	—			(1,426		)	(1,426		)	(1,080		)	(1,527		)	(2,607		)
Principal payments and pay-offs	(1,628		)	(2,271		)	(3,899		)	(2,236		)	(2,845		)	(5,081		)
Balance at end of period	$	30,866		$	14,240		$	45,106		$	30,866		$	14,240		$	45,106

The Corporation's TDRs in the consumer loan portfolio generally consist of loans where the Corporation has reduced a borrower's monthly payments by decreasing the interest rate charged on the loan (generally to a range of 3% to 5%) for a specified period of time (generally 24 months). Once the borrowers have made at least six consecutive months of principal and interest payments under a formal modification agreement, they are classified as performing TDRs. These loans are moved to nonaccrual TDR status if the loan becomes 90 days past due as to principal or interest, or sooner if conditions warrant.

The Corporation had performing TDRs in the consumer loan portfolio of $18.5 million at June 30, 2015, compared to $18.0 million at both March 31, 2016 and December 31, 2015. The Corporation also had nonperforming TDRs in the consumer loan portfolio of $2.2 million, $3.0 million and $3.1 million at June 30, 2016, March 31, 2016 and December 31, 2015, respectively. The weighted average contractual interest rate on the Corporation's performing and nonperforming TDRs in the consumer loan portfolio was 4.60% at June 30, 2016, compared to 4.64% at March 31, 2016 and 4.66% at December 31, 2015. At June 30, 2016, the Corporation had $3.4 million of nonaccrual TDRs in the consumer loan portfolio, compared to $3.1 million and $3.3 million, at March 31, 2016 and December 31, 2015, respectively.

The Corporation's cumulative redefault rate as of June 30, 2016 on its performing and nonperforming TDRs, which represents the percentage of these TDRs that transferred to nonaccrual status since the Corporation began such modifications in 2009, was 18% for performing and nonperforming TDRs in the commercial loan portfolio and 19% for performing and nonperforming TDRs in the consumer loan portfolio. The Corporation's cumulative redefault rate does not include loans that have been modified while in nonaccrual status that remain in nonaccrual status as the Corporation does not expect to collect the full amount of principal and interest owed from the borrower on these loans.

Other Real Estate and Repossessed Assets

Other real estate and repossessed assets are components of nonperforming assets. These include other real estate ("ORE"), comprised of residential and commercial real estate and land development properties acquired through foreclosure or by acceptance of a deed in lieu of foreclosure, and repossessed assets, comprised of other personal and commercial assets.ORE totaled $8.3 million at June 30, 2016, a decreaseof $0.6 million, or 6.8%, from March 31, 2016 and a decrease of $1.4 million, or 14%,from December 31, 2015. The decrease in ORE during the first six months of 2016 was primarily attributable to the sales of ORE properties. Repossessed assets totaled $0.1 million at June 30, 2016, $0.3 million at March 31, 2016 and $0.2 million at December 31, 2015.

The following schedule provides the composition of ORE at June 30, 2016, March 31, 2016 and December 31, 2015:

	June 30, 2016		March 31, 2016		December 31, 2015
	(In thousands)
Composition of ORE:
Vacant land	$	2,384	$	2,732	$	3,036
Commercial real estate properties	4,803		4,457		4,583
Residential real estate properties	1,138		1,742		2,097
Total ORE	$	8,325	$	8,931	$	9,716

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The following schedule summarizes ORE activity during the three and six months ended June 30, 2016 and 2015.

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(In thousands)
Balance at beginning of period	$	8,931		$	14,482		$	9,716		$	13,953
Additions attributable to acquisitions	—			440			—			440
Other additions	1,217			1,606			2,155			4,686
Write-downs to fair value	(63		)	(298		)	(230		)	(564		)
Dispositions	(1,760		)	(2,189		)	(3,316		)	(4,474		)
Balance at end of period	$	8,325		$	14,041		$	8,325		$	14,041

The Corporation's ORE is carried at the lower of cost or fair value less estimated cost to sell.The Corporation had $6.2 million in ORE at June 30, 2016 that had been held in excess of one year, of which$1.7 million had been held in excess of three years.The Corporation had $4.4 million of nonperforming loans that were in the process of foreclosure at June 30, 2016.

All of the Corporation's ORE properties have been written down to fair value through a charge-off against the allowance for loan losses at the time the loan was transferred to ORE, through a subsequent write-down, recorded as an operating expense, to recognize a further market value decline of the property after the initial transfer date, or due to recording at fair value as a result of acquisition transactions. Accordingly, at June 30, 2016, the carrying value of ORE of $8.3 million was reflective of $16.7 million in charge-offs, write-downs and acquisition-related fair value adjustments and represented 33% of the contractual loan balance remaining at the time these loans were classified as nonperforming.

During the six months endedJune 30, 2016, the Corporation sold 141 ORE properties for net proceeds of $5.4 million. On an average basis, the net proceeds from these sales represented 162% of the carrying value of the property at the time of sale, with the net proceeds representing 69% of the remaining contractual loan balance at the time these loans were classified as nonperforming.

Impaired Loans

A loan is considered impaired when management determines it is probable that payment of principal and interest due will not be paid according to the original contractual terms of the loan agreement. Impaired loans are accounted for at the lower of the present value of expected cash flows discounted at the loan's original effective interest rate or the estimated fair value of the collateral, if the loan is collateral dependent. A portion of the allowance for loan losses is specifically allocated to impaired loans. The process of measuring impaired loans and the allocation of the allowance for loan losses requires judgment and estimation. The eventual outcome may differ from amounts estimated.

Impaired loans include nonaccrual loans (including nonaccrual TDRs), performing and nonperforming TDRs and acquired loans that were not performing in accordance with their original contractual terms. Impaired loans totaled $122.4 million at June 30, 2016, $131.8 million at March 31, 2016 and $142.2 million at December 31, 2015. The decrease in impaired loans during the second quarter of 2016 was primarily attributable to a combination of principal paydowns of $6.4 million on nonaccrual loans, $3.9 million of loans upgraded to accruing status and net loan charge-offs.

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A summary of impaired loans at June 30, 2016, March 31, 2016 and December 31, 2015 follows:

	June 30, 2016		March 31, 2016		December 31, 2015
	(In thousands)
Impaired loans - commercial loan portfolio:
Originated commercial loan portfolio:
Nonaccrual loans	$	36,398	$	45,669	$	54,238
Nonperforming TDRs	14,240		15,351		16,297
Performing TDRs	30,866		31,896		29,844
Subtotal	81,504		92,916		100,379
Acquired commercial loan portfolio	12,538		10,119		12,795
Total impaired loans - commercial loan portfolio	94,042		103,035		113,174
Impaired loans - consumer loan portfolio:
Nonaccrual loans	7,599		7,750		7,987
Nonperforming TDRs	2,233		3,013		3,071
Performing TDRs	18,512		17,990		17,966
Total impaired loans - consumer loan portfolio	28,344		28,753		29,024
Total impaired loans	$	122,386	$	131,788	$	142,198

The following schedule summarizes impaired loans to commercial borrowers and the related valuation allowance at June 30, 2016, March 31, 2016 and December 31, 2015 and partial loan charge-offs (confirmed losses) taken on these impaired loans:

	Amount		Valuation Allowance		Confirmed Losses		Cumulative Inherent Loss Percentage
	(Dollars in thousands)
June 30, 2016
Impaired loans – originated commercial loan portfolio:
With valuation allowance and no charge-offs	$	6,794	$	3,009	$	—	44	%
With valuation allowance and charge-offs	240		45		173		53
With charge-offs and no valuation allowance	16,621		—		16,212		49
Without valuation allowance or charge-offs	57,849		—		—		—
Total	81,504		$	3,054	$	16,385	20	%
Impaired acquired loans	12,538
Total impaired loans to commercial borrowers	$	94,042
March 31, 2016
Impaired loans – originated commercial loan portfolio:
With valuation allowance and no charge-offs	$	8,059	$	2,619	$	—	32	%
With valuation allowance and charge-offs	443		117		463		64
With charge-offs and no valuation allowance	22,275		—		19,470		47
Without valuation allowance or charge-offs	62,139		—		—		—
Total	92,916		$	2,736	$	19,933	20	%
Impaired acquired loans	10,119
Total impaired loans to commercial borrowers	$	103,035
December 31, 2015
Impaired loans – originated commercial loan portfolio:
With valuation allowance and no charge-offs	$	20,635	$	6,019	$	—	29	%
With valuation allowance and charge-offs	2,711		178		768		27
With charge-offs and no valuation allowance	18,718		—		16,373		47
Without valuation allowance or charge-offs	58,315		—		—		—
Total	100,379		$	6,197	$	17,141	20	%
Impaired acquired loans	12,795
Total impaired loans to commercial borrowers	$	113,174

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After analyzing the various components of the customer relationships and evaluating the underlying collateral of impaired loans, the Corporation determined that impaired loans in the commercial loan portfoliototaling $7.0 million at June 30, 2016 required a specific allocation of the allowance for loan losses ("valuation allowance") of $3.1 million, compared to $8.5 million of impaired loans in the commercial loan portfolio at March 31, 2016 which required a valuation allowance of $2.7 million and $23.3 million of impaired loans in the commercial loan portfolio at December 31, 2015 which required a valuation allowance of $6.2 million. Confirmed losses represent partial loan charge-offs on impaired loans due primarily to the receipt of a recent third-party property appraisal indicating the value of the collateral securing the loan was below the loan balance and management determined that full collection of the loan balance is not likely. The Corporation's performing and nonperforming TDRs in the commercial loan portfolio did not require a valuation allowance as the Corporation expected to collect the full principal and interest owed on each of these loans in accordance with their modified terms.

The Corporation generally does not recognize a valuation allowance for impaired loans in the consumer loan portfolio as these loans are comprised of smaller-balance homogeneous loans that are collectively evaluated for impairment. However, the Corporation had avaluation allowance attributable to TDRs in the consumer loan portfolio of $0.2 million at June 30, 2016, March 31, 2016 and December 31, 2015 related to the reduction in the present value of expected future cash flows for these loans discounted at their original effective interest rates.

Impaired loans included acquired loans totaling $12.5 million, $10.1 million and $12.8 million at June 30, 2016, March 31, 2016 and December 31, 2015, respectively, that were not performing in accordance with the original contractual terms of the loans. These loans did not require a valuation allowance as they are recorded in pools at their net realizable value based on the principal and interest the Corporation expects to collect on these loan pools. These loans are not included in the Corporation's nonperforming loans.

Allowance for Loan Losses

The allowance for loan losses ("allowance") provides for probable losses in the originated loan portfolio that have been identified with specific customer relationships and for probable losses believed to be inherent in the remainder of the originated loan portfolio but that have not been specifically identified. The allowance is comprised of specific valuation allowances (assessed for originated loans that have known credit weaknesses), pooled allowances based on assigned risk ratings and historical loan loss experience for each loan type, and a qualitative allowance based on environmental factors that take into consideration risks inherent in the originated loan portfolio that differ from historical loan loss experience. Management evaluates the allowance on a quarterly basis in an effort to ensure the level is adequate to absorb probable losses inherent in the loan portfolio. This evaluation process is inherently subjective as it requires estimates that may be susceptible to significant change and has the potential to affect net income materially. The Corporation's methodology for measuring the adequacy of the allowance is comprised of several key elements, which include a review of the loan portfolio, both individually and by category, and consideration of changes in the mix and volume of the loan portfolio, actual delinquency and loan loss experience, review of collateral values, the size and financial condition of the borrowers, industry and geographical exposures within the portfolio, economic conditions and employment levels of the Corporation's local markets and other factors affecting business sectors. Management believes that the allowance is currently maintained at an appropriate level, considering the inherent risk in the loan portfolio. Future significant adjustments to the allowance may be necessary due to changes in economic conditions, delinquencies or the level of loan losses incurred.

The following schedule summarizes information related to the Corporation's allowance for loan losses:

	June 30, 2016			March 31, 2016			December 31, 2015
	(Dollars in thousands)
Allowance for loan losses:
Originated loans	$	71,506		$	70,318		$	73,328
Acquired loans	—			—			—
Total	$	71,506		$	70,318		$	73,328
Nonperforming loans	$	61,954		$	73,255		$	83,880
Allowance for originated loans as a percent of:
Total originated loans	1.12		%	1.17		%	1.26		%
Nonperforming loans	115		%	96		%	87		%
Nonperforming loans, less impaired originated loans for which the expected loss has been charged-off	158		%	138		%	113		%

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The following schedule summarizes activity related to the Corporation's allowance for loan losses:

	Three Months Ended									Six Months Ended
	June 30, 2016			March 31, 2016			June 30, 2015			June 30, 2016			June 30, 2015
	(Dollars in thousands)
Allowance for loan losses - beginning of period	$	70,318		$	73,328		$	75,256		$	73,328		$	75,683
Provision for loan losses	3,000			1,500			1,500			4,500			3,000
Loan charge-offs:
Commercial	(1,682		)	(3,336		)	(188		)	(5,018		)	(819		)
Commercial real estate	(860		)	(549		)	(678		)	(1,409		)	(1,460		)
Real estate construction and land development	—			(11		)	(49		)	(11		)	(140		)
Residential mortgage	(80		)	(349		)	(790		)	(429		)	(1,329		)
Consumer installment	(911		)	(996		)	(971		)	(1,907		)	(1,974		)
Home equity	(87		)	(217		)	(48		)	(304		)	(145		)
Total loan charge-offs	(3,620		)	(5,458		)	(2,724		)	(9,078		)	(5,867		)
Recoveries of loans previously charged off:
Commercial	529			221			152			750			359
Commercial real estate	673			109			97			782			464
Real estate construction and land development	—			—			—			—			—
Residential mortgage	88			177			129			265			176
Consumer installment	425			394			381			819			735
Home equity	93			47			150			140			391
Total loan recoveries	1,808			948			909			2,756			2,125
Net loan charge-offs	(1,812		)	(4,510		)	(1,815		)	(6,322		)	(3,742		)
Allowance for loan losses - end of period	$	71,506		$	70,318		$	74,941		$	71,506		$	74,941
Net loan charge-offs as a percent of average loans (annualized)	0.10		%	0.25		%	0.12		%	0.17		%	0.13		%

The allowance of the acquired loan portfolio was not carried over on the date of acquisition. The acquired loans were recorded at their estimated fair values at the date of acquisition, with the estimated fair values including a component for expected credit losses. Acquired loans are subsequently evaluated for further credit deterioration in loan pools, which consist of loans with similar credit risk characteristics. If an acquired loan pool experiences a decrease in expected cash flows, as compared to those expected at the acquisition date, a provision for loan losses and corresponding allowance is recorded for acquired loans. There was no allowance needed for the acquired loan portfolio at June 30, 2016, March 31, 2016 and June 30, 2015.

Deposits

Total deposits were $7.46 billion at June 30, 2016, a decrease of $185 million, or 2.4%, from total deposits of $7.65 billion at March 31, 2016, an increase of $8 million from total deposits of $7.46 billion at December 31, 2015 and an increase of $172 million, or 2.4%, from total deposits of $7.29 billion at June 30, 2015. The decrease in total deposits during the second quarter of 2016 was primarily attributable to a decrease in seasonal municipal deposit accounts. The increase in total deposits for the twelve-month period ended June 30, 2016 was attributable to $268 million of organic growth in customer deposit accounts, which was partially offset by a decrease of $96 million related to maturing brokered deposits that were acquired in the Lake Michigan transaction. The organic growth in customer deposit accounts over the last twelve months included an increase of $357 million in interest- and noninterest-bearing demand deposit and savings accounts that was partially offset by a decline of $89 million in certificate of deposit accounts.

It is the Corporation's strategy to develop customer relationships that will drive core deposit growth and stability. The Corporation's competitive position within many of its market areas has historically limited its ability to materially increase core deposits without adversely impacting the weighted average cost of the deposit portfolio. While competition for core deposits remained strong throughout the Corporation's markets during the twelve months ended June 30, 2016, the Corporation's efforts to expand its deposit relationships with existing customers, the Corporation's financial strength and a general trend in customers holding more liquid assets have resulted in the Corporation continuing to experience increases in customer deposits.

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At June 30, 2016, the Corporation's time deposits, which consist of certificates of deposit, totaled $1.56 billion, of which $523 million have stated maturities during the remainder of 2016. The Corporation expects the majority of these maturing time deposits to be renewed by customers. The following schedule summarizes the scheduled maturities of the Corporation's time deposits as of June 30, 2016:

Maturity Schedule	Amount		Weighted Average Interest Rate
	(Dollars in thousands)
2016 maturities:
Third quarter	$	327,833	0.40	%
Fourth quarter	195,386		0.57
2016 remaining maturities	523,219		0.46
2017 maturities	588,902		0.83
2018 maturities	192,282		1.06
2019 maturities	101,045		1.41
2020 maturities	98,041		1.60
2021 maturities and beyond	56,539		1.64
Total time deposits	$	1,560,028	0.85	%

Included in the above maturity schedule are brokered deposits that were acquired as part of the Lake Michigan transaction totaling $173 million at June 30, 2016 that mature as follows: $29 million in 2016; $68 million in 2017; $40 million in 2018; $24 million in 2019; $10 million in 2020; and $2 million in 2021 and beyond.

Borrowed Funds

Borrowed funds consist of securities sold under agreements to repurchase with customers, short-term borrowings and long-term borrowings. Short-term borrowings, which generally have an original term to maturity of 30 days or less, consist of short-term Federal Home Loan Bank ("FHLB") advances and federal funds purchased which are utilized by the Corporation to fund short-term liquidity needs. Long-term borrowings consist of securities sold under agreements to repurchase with an unaffiliated third-party financial institution, long-term FHLB advances, a non-revolving line-of-credit, and subordinated debt obligations.

Securities Sold Under Agreements to Repurchase with Customers

Securities sold under agreements to repurchase with customers represent funds deposited by customers that are collateralized by investment securities owned by Chemical Bank, as these deposits are not covered by Federal Deposit Insurance Corporation (FDIC) insurance. These funds have been a stable source of liquidity for Chemical Bank, much like its core deposit base, and are generally only provided to customers that have an established banking relationship with Chemical Bank. The Corporation's securities sold under agreements to repurchase with customers do not qualify as sales for accounting purposes. Securities sold under agreements to repurchase with customers were $256 million at June 30, 2016, compared to $283 million at March 31, 2016, $297 million at December 31, 2015 and $305 million at June 30, 2015.

Short-term Borrowings

Short-term borrowings were $300 million at June 30, 2016, $100 million at December 31, 2015 and $227 million at June 30, 2015. There were no short-term borrowings outstanding at March 31, 2016. The increase in short-term borrowings during the second quarter of 2016 was attributable to the Corporation's liquidity needs to replace the decrease in seasonal municipal deposit accounts and to partially fund loan growth.

FHLB advances are borrowings from the Federal Home Loan Bank of Indianapolis that are generally used to fund loans and are secured by both a blanket security agreement of residential mortgage first lien and other real estate loans with an aggregate book value equal to at least 140% of the advances and FHLB capital stock owned by Chemical Bank. The carrying value of loans eligible as collateral under the blanket security agreement was $2.98 billion at June 30, 2016. The Corporation relies on short-term FHLB advances to cover short-term liquidity needs.

Federal funds purchased represent unsecured borrowings from nonaffiliated third-party financial institutions, generally on an overnight basis, to cover short-term liquidity needs.

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Long-term Borrowings

Long-term borrowings were $372 million at June 30, 2016, $274 million at March 31, 2016, $242 million at December 31, 2015 and $148 million at June 30, 2015.

A summary of the composition of the Corporation's long-term borrowings follows:

	June 30, 2016		March 31, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Long-term borrowings:
Long-term FHLB advances	$	329,320	$	231,357	$	181,394	$	81,469
Securities sold under agreements to repurchase	17,277		17,365		17,453		23,649
Non-revolving line-of-credit	25,000		25,000		25,000		25,000
Subordinated debt obligations	—		—		18,544		18,372
Total long-term borrowings	$	371,597	$	273,722	$	242,391	$	148,490

During the second quarter of 2016, the Corporation borrowed $100 million of long-term FHLB advances which have a three-year term at a fixed-rate of 1.00%. During the first quarter of 2016, the Corporation borrowed $50 million of long-term FHLB advances which have a four-year term at a fixed-rate of 1.30%. The Corporation borrowed these FHLB advances to fund liquidity needs primarily resulting from loan growth.

Securities sold under agreements to repurchase with an unaffiliated third-party financial institution represent financing arrangements that are secured by available-for-sale investment securities. These borrowings were obtained as part of the Lake Michigan acquisition. The Corporation intends to pay off these borrowings as they mature, with remaining contractual maturities totaling $8.1 million in 2016 and $9.2 million in 2017.

The Corporation has a $25 million secured non-revolving line-of-credit with an unaffiliated third-party financial institution. The line-of-credit originally matured in May 2016 and was extended for a period of three months. The Corporation drew on the entire amount of the line-of-credit in order to partially fund the cash portion of the purchase price consideration for the Lake Michigan transaction. This line-of-credit bears a variable rate of interest which is based on the one-, two- or three-month LIBOR, as periodically selected by the Corporation, plus a fixed stated rate.

As a result of the Lake Michigan transaction on May 31, 2015, the Corporation acquired subordinated debt obligations in the amount of $18.6 million. The Corporation repaid these debt obligations during the first quarter of 2016.

Credit-Related Commitments

The Corporation has credit-related commitments that may impact its liquidity. The following schedule summarizes the Corporation's credit-related commitments and expected expiration dates by period as of June 30, 2016. Because many of these commitments historically have expired without being drawn upon, the total amount of these commitments does not necessarily represent future liquidity requirements of the Corporation.

	Less than 1 year		1-3 years		3-5 years		More than 5 years		Total
	(In thousands)
Unused commitments to extend credit:
Loans to commercial borrowers	$	754,172	$	221,893	$	73,583	$	168,111	$	1,217,759
Loans to consumer borrowers	213,993		141,429		119,489		14,502		489,413
Total unused commitments to extend credit	968,165		363,322		193,072		182,613		1,707,172
Undisbursed loan commitments	442,973		—		—		—		442,973
Standby letters of credit	35,790		5,622		1,503		3,593		46,508
Total credit-related commitments	$	1,446,928	$	368,944	$	194,575	$	186,206	$	2,196,653

Undisbursed loan commitments at June 30, 2016 included $47 million of residential mortgage loans that were expected to be sold in the secondary market.

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Capital

Total shareholders' equity was $1.05 billion at June 30, 2016, compared to $1.03 billion at March 31, 2016, $1.02 billion at December 31, 2015 and $981 million at June 30, 2015. Total shareholders' equity as a percentage of total assets was 11.0% at June 30, 2016, compared to 11.1% at both March 31, 2016 and December 31, 2015, and 10.9% at June 30, 2015. The Corporation's tangible equity, which is defined as total shareholders' equity less goodwill and other acquired intangible assets, totaled $753 million, $734 million, $717 million, and $681 million at June 30, 2016, March 31, 2016, December 31, 2015 and June 30, 2015, respectively. The Corporation's tangible equity to assets ratio was 8.2% at June 30, 2016, compared to 8.2% at March 31, 2016, 8.1% at December 31, 2015 and 7.8% at June 30, 2015.

Shelf Registration

On June 12, 2014, the Corporation filed an automatic shelf registration statement on Form S-3 with the Securities and Exchange Commission (SEC) for an indeterminate amount of securities, which became immediately effective. The shelf registration statement provides the Corporation with the ability to raise capital, subject to SEC rules and limitations, if the board of directors of the Corporation decides to do so.

Regulatory Capital

In July 2013, the Federal Reserve Board and FDIC approved final rules implementing the Basel Committee on Banking Supervision's ("BCBS") capital guidelines for U.S. banks (commonly referred to as "Basel III"). Beginning January 1, 2015, the Basel III capital rules include a new minimum common equity Tier 1 capital to risk-weighted assets ("CET Tier 1") ratio of 4.5%, in addition to raising the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0% and requiring a minimum leverage ratio of 4.0%. The Basel III capital rules also establish a new capital conservation buffer of 2.5% of risk-weighted assets, which is phased-in over a four-year period beginning January 1, 2016.

The Corporation and Chemical Bank continue to maintain strong capital positions, which significantly exceeded the minimum capital adequacy levels prescribed by the Board of Governors of the Federal Reserve System (Federal Reserve) at June 30, 2016, as shown in the following schedule:

	June 30, 2016
	Leverage Ratio		Risk-Based Capital Ratios
			CET Tier 1		Tier 1		Total
Actual Capital Ratios:
Chemical Financial Corporation	8.6	%	10.4	%	10.4	%	11.4	%
Chemical Bank	8.7		10.5		10.5		11.4
Minimum required for capital adequacy purposes	4.0		4.5		6.0		8.0
Minimum required for “well-capitalized” capital adequacy purposes	5.0		6.5		8.0		10.0

The Corporation's and Chemical Bank's capital ratios exceeded the minimum levels required to be well capitalized as defined by applicable regulatory requirements as of June 30, 2016. See Note 8 to the consolidated financial statements for more information regarding the Corporation's and Chemical Bank's regulatory capital ratios.

Results of Operations

Net Interest Income

Net interest income is the difference between interest income on earning assets, such as loans, investment and non-marketable equity securities and interest-bearing deposits with the Federal Reserve Bank (FRB) and other banks, and interest expense on liabilities, such as deposits and borrowings. Net interest income, on a fully taxable equivalent (FTE) basis, is the difference between interest income and interest expense adjusted for the tax benefit received on tax-exempt commercial loans and investment securities. Net interest margin is calculated by dividing net interest income (FTE) by average interest-earning assets, annualized as applicable. Net interest spread is the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. Because noninterest-bearing sources of funds, or free funds (principally demand deposits and shareholders' equity), also support earning assets, the net interest margin exceeds the net interest spread.

Net interest income (FTE) was $79.6 million in the second quarter of 2016, compared to $76.5 million in the first quarter of 2016 and $67.5 million in the second quarter of 2015. Net interest income (FTE) was $156.1 million for the six months ended June 30, 2016, compared to $128.3 million for the six months ended June 30, 2015. The presentation of net interest income on an FTE basis is not in accordance with GAAP but is customary in the banking industry. This non-GAAP measure ensures comparability

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of net interest income arising from both taxable and tax-exempt loans and investment securities. The adjustments to determine net interest income (FTE) were $2.1 million, $2.1 million and $1.8 million for each of the three-month periods ended June 30, 2016, March 31, 2016 and June 30, 2015, respectively, and $4.3 million and $3.4 million for the six-month periods ended June 30, 2016 and June 30, 2015, respectively. These adjustments were computed using a 35% federal income tax rate.

Average Balances, Fully Tax Equivalent (FTE) Interest and Effective Yields and Rates*

The following schedule presents the average daily balances of the Corporation's major categories of assets and liabilities, interest income and expense on an FTE basis, average interest rates earned and paid on the assets and liabilities, net interest income (FTE), net interest spread and net interest margin for the three months ended June 30, 2016, March 31, 2016 and June 30, 2015.

	Three Months Ended
	June 30, 2016						March 31, 2016						June 30, 2015
	Average Balance		Interest (FTE)		Effective Yield/ Rate*		Average Balance		Interest (FTE)		Effective Yield/ Rate*		Average Balance		Interest (FTE)		Effective Yield/ Rate*
ASSETS	(Dollars in Thousands)
Interest-Earning Assets:
Loans**
Commercial	$	1,940,197	$	20,711	4.29	%	$	1,901,879	$	19,774	4.18	%	$	1,516,520	$	16,176	4.28	%
Commercial real estate and real estate construction	2,419,187		30,035		4.99		2,361,105		28,254		4.81		1,979,578		24,034		4.87
Residential mortgage	1,485,267		13,805		3.72		1,453,420		13,588		3.74		1,220,291		11,872		3.89
Consumer installment and home equity	1,666,541		13,744		3.32		1,583,067		13,483		3.43		1,556,425		13,145		3.39
Total loans**	7,511,192		78,295		4.19		7,299,471		75,099		4.13		6,272,814		65,227		4.17
Taxable investment securities	515,303		1,798		1.40		554,524		1,929		1.39		698,521		2,202		1.26
Tax-exempt investment securities	484,271		4,061		3.35		496,304		4,100		3.30		396,295		3,361		3.39
Other interest-earning assets	43,615		777		7.16		39,493		256		2.61		34,269		551		6.45
Interest-bearing deposits with the FRB and other banks	82,246		144		0.70		136,919		213		0.63		132,834		128		0.39
Total interest-earning assets	8,636,627		85,075		3.96		8,526,711		81,597		3.84		7,534,733		71,469		3.80
Less: Allowance for loan losses	71,790						73,547						75,079
Other Assets:
Cash and cash due from banks	148,034						158,277						148,950
Premises and equipment	104,488						105,959						103,907
Interest receivable and other assets	515,039						523,634						404,627
Total Assets	$	9,332,398					$	9,241,034					$	8,117,138
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-Bearing Liabilities:
Interest-bearing demand deposits	$	1,892,512	$	582	0.12	%	$	1,953,626	$	468	0.10	%	$	1,539,348	$	291	0.08	%
Savings deposits	2,073,412		476		0.09		2,048,867		389		0.08		1,951,477		360		0.07
Time deposits	1,582,467		3,202		0.81		1,625,573		3,202		0.79		1,490,753		2,979		0.80
Short-term borrowings	418,232		226		0.22		349,699		100		0.12		398,197		101		0.10
Long-term borrowings	281,327		956		1.37		266,022		975		1.47		62,901		213		1.36
Total interest-bearing liabilities	6,247,950		5,442		0.35		6,243,787		5,134		0.33		5,442,676		3,944		0.29
Noninterest-bearing deposits	1,979,423		—		—		1,906,896		—		—		1,727,850		—		—
Total deposits and borrowed funds	8,227,373		5,442		0.27		8,150,683		5,134		0.25		7,170,526		3,944		0.22
Interest payable and other liabilities	72,011						72,422						61,749
Shareholders’ equity	1,033,014						1,017,929						884,863
Total Liabilities and Shareholders’ Equity	$	9,332,398					$	9,241,034					$	8,117,138
Net Interest Spread (average yield earned minus average rate paid)					3.61	%					3.51	%					3.51	%
Net Interest Income (FTE)			$	79,633					$	76,463					$	67,525
Net Interest Margin (Net Interest Income (FTE) divided by total average interest-earning assets)					3.70	%					3.60	%					3.59	%
* Fully taxable equivalent (FTE) basis using a federal income tax rate of 35%.
** Nonaccrual loans and loans held-for-sale are included in average balances reported and are included in the calculation of yields. Also, tax equivalent interest includes net loan fees.

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The following schedule presents the average daily balances of the Corporation's major categories of assets and liabilities, interest income and expense on an FTE basis, average interest rates earned and paid on the assets and liabilities, net interest income (FTE), net interest spread and net interest margin for the six months ended June 30, 2016 and June 30, 2015.

	Six Months Ended
	June 30, 2016						June 30, 2015
	Average Balance		Interest (FTE)		Effective Yield/ Rate*		Average Balance		Interest (FTE)		Effective Yield/ Rate*
ASSETS	(Dollars in Thousands)
Interest-Earning Assets:
Loans**
Commercial	$	1,921,038	$	40,485	4.24	%	$	1,435,204	$	30,332	4.26	%
Commercial real estate and real estate construction	2,390,146		58,289		4.90		1,855,943		44,887		4.88
Residential mortgage	1,469,344		27,393		3.73		1,172,014		22,853		3.90
Consumer installment and home equity	1,624,804		27,227		3.37		1,527,838		25,815		3.41
Total loans**	7,405,332		153,394		4.16		5,990,999		123,887		4.16
Taxable investment securities	534,914		3,727		1.39		716,606		4,509		1.26
Tax-exempt investment securities	490,287		8,161		3.33		364,264		6,293		3.46
Other interest-earning assets	41,554		1,033		5.00		31,867		749		4.74
Interest-bearing deposits with the FRB and other banks	109,582		357		0.66		125,694		250		0.40
Total interest-earning assets	8,581,669		166,672		3.90		7,229,430		135,688		3.78
Less: Allowance for loan losses	72,669						75,477
Other Assets:
Cash and cash due from banks	153,156						143,658
Premises and equipment	105,223						100,525
Interest receivable and other assets	519,337						363,040
Total Assets	$	9,286,716					$	7,761,176
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-Bearing Liabilities:
Interest-bearing demand deposits	$	1,923,068	$	1,050	0.11	%	$	1,523,240	$	615	0.08	%
Savings deposits	2,061,141		865		0.08		1,864,891		730		0.08
Time deposits	1,604,020		6,404		0.80		1,412,162		5,637		0.80
Short-term borrowings	383,966		326		0.17		370,317		199		0.11
Long-term borrowings	273,675		1,931		1.42		31,624		213		1.36
Total interest-bearing liabilities	6,245,870		10,576		0.34		5,202,234		7,394		0.29
Noninterest-bearing deposits	1,943,159		—		—		1,657,864		—		—
Total deposits and borrowed funds	8,189,029		10,576		0.26		6,860,098		7,394		0.22
Interest payable and other liabilities	72,216						57,697
Shareholders’ equity	1,025,471						843,381
Total Liabilities and Shareholders’ Equity	$	9,286,716					$	7,761,176
Net Interest Spread (average yield earned minus average rate paid)					3.56	%					3.49	%
Net Interest Income (FTE)			$	156,096					$	128,294
Net Interest Margin (Net Interest Income (FTE) divided by total average interest-earning assets)					3.65	%					3.57	%
* Fully taxable equivalent (FTE) basis using a federal income tax rate of 35%.
** Nonaccrual loans and loans held-for-sale are included in average balances reported and are included in the calculation of yields. Also, tax equivalent interest includes net loan fees.

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Net interest income (FTE) of $79.6 million in the second quarter of 2016 was $3.2 million, or 4.1%, higher than net interest income (FTE) of $76.5 million in the first quarter of 2016. The increase in net interest income in the second quarter of 2016, compared to the first quarter of 2016, was primarily attributable to loan growth in the second quarter of 2016 and an increase in the amount of interest accretion recognized on acquired loans resulting from improvements in expected cash flows from certain pools of acquired loans. During the second quarter of 2016, the Corporation transferred $10 million of nonaccretable discount to accretable yield due to lower expected losses on loans acquired in both the 2010 acquisition of OAK and the 2014 acquisition of Northwestern. The Corporation's net interest income included $2.5 million of interest accretion on acquired loans in the second quarter of 2016, compared to $0.7 million in the first quarter of 2016. The net interest margin was 3.70% in the second quarter of 2016, compared to 3.60% in the first quarter of 2016. Interest accretion on acquired loans contributed 11 basis points to the Corporation's net interest margin in the second quarter of 2016, compared to 3 basis points in the first quarter of 2016. The average yield on interest-earning assets was 3.96% in the second quarter of 2016, compared to 3.84% in the first quarter of 2016. The average yield on loans increased 6 basis points to 4.19% in the second quarter of 2016 from 4.13% in the first quarter of 2016. Interest accretion on acquired loans comprised 13 basis points of the yield on the Corporation's loan portfolio in the second quarter of 2016, compared to 4 basis points in the first quarter of 2016. The average cost of funds was 0.27% in the second quarter of 2016, compared to 0.25% in the first quarter of 2016.

Net interest income (FTE) of $79.6 million in the second quarter of 2016 was $12.1 million, or 18%, higher than net interest income (FTE) of $67.5 million in the second quarter of 2015, with the increase primarily attributable to the positive impact of organic loan growth and the impact of the Corporation's acquisitions of Monarch and Lake Michigan. The net interest margin was 3.70% in the second quarter of 2016, compared to 3.59% in the second quarter of 2015. Interest accretion on acquired loans contributed 11 basis points to the Corporation's net interest margin in the second quarter of 2016, compared to 4 basis points in the second quarter of 2015. The average yield on interest-earning assets was 3.96% in the second quarter of 2016, compared to 3.80% in the second quarter of 2015. The average yield on loans increased 2 basis points to 4.19% in the second quarter of 2016 from 4.17% in the second quarter of 2015. Interest accretion on acquired loans contributed 13 basis points to the Corporation's loan portfolio in the second quarter of 2016, compared to 5 basis points in the second quarter of 2015. The average cost of funds was 0.27% in the second quarter of 2016, compared to 0.22% in the second quarter of 2015.

Net interest income (FTE) of $156.1 million for the six months ended June 30, 2016 was $27.8 million, or 22%, higher than net interest income (FTE) of $128.3 million for the six months ended June 30, 2015, with the increase primarily attributable to the positive impact of organic loan growth and the impact of the Corporation's acquisitions of Monarch and Lake Michigan. The net interest margin was 3.65% for the six months ended June 30, 2016, compared to 3.57% for the six months ended June 30, 2015.

Changes in the Corporation's net interest income are influenced by a variety of factors, including changes in the level and mix of interest-earning assets and interest-bearing liabilities, current and prior years' interest rate changes, the level and direction of interest rates, the difference between short-term and long-term interest rates (the steepness of the yield curve) and the general strength of the economies in the Corporation's markets. Risk management plays an important role in the Corporation's level of net interest income. The ineffective management of credit risk, and more significantly interest rate risk, can adversely impact the Corporation's net interest income. Management monitors the Corporation's consolidated statement of financial position to reduce the potential adverse impact on net interest income caused by significant changes in interest rates. The Corporation's policies in this regard are further discussed under the subheading “Market Risk.”

The Federal Reserve influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. The prime interest rate, which is the rate offered on loans to borrowers with strong credit, was 3.25% at the end of 2008 and remained at this historically low rate until December 2015, when it was increased to 3.50%. The prime interest rate has historically been 300 basis points higher than the federal funds rate. The majority of the Corporation's variable interest rate loans in the commercial loan portfolio are tied to the prime rate.

The Corporation is primarily funded by core deposits, which is a lower-cost funding base than wholesale funding and historically has had a positive impact on the Corporation's net interest income and net interest margin. The Corporation anticipates that the loan portfolio will grow at a higher rate than its core deposits, and therefore, expects wholesale funding to provide a portion of its funding base on an ongoing basis in the future. Based on the current historically low level of market interest rates and the Corporation's current low levels of interest rates on its core deposit transaction accounts, further market interest rate reductions would likely not result in a significant decrease in interest expense.

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Volume and Rate Variance Analysis

The following schedules allocate the dollar change in net interest income (FTE) between the portion attributable to changes in the average volume of interest-earning assets and interest-bearing liabilities, including changes in the mix of assets and liabilities, and changes in average interest rates earned and paid, for the three months ended June 30, 2016, compared to the three months ended March 31, 2016 and June 30, 2015, and for the six months ended June 30, 2016, compared to the six months ended June 30, 2015.

	Three Months Ended June 30, 2016
	Compared to Three Months Ended March 31, 2016									Compared to Three Months Ended June 30, 2015
	Increase (Decrease) Due to Changes in									Increase (Decrease) Due to Changes in
	Average Volume**			Average Yield/Rate**			Combined Increase/ (Decrease)			Average Volume**			Average Yield/Rate**			Combined Increase/ (Decrease)
	(In Thousands)
Changes in Interest Income on Interest-Earning Assets:
Loans	$	2,097		$	1,099		$	3,196		$	13,283		$	(215	)	$	13,068
Taxable investment securities/other assets	(101		)	491			390			(460		)	282			(178		)
Tax-exempt investment securities	(101		)	62			(39		)	741			(41		)	700
Interest-bearing deposits with the FRB and other banks	(91		)	22			(69		)	(61		)	77			16
Total change in interest income on interest-earning assets	1,804			1,674			3,478			13,503			103			13,606
Changes in Interest Expense on Interest-Bearing Liabilities:
Interest-bearing demand deposits	(24		)	138			114			76			215			291
Savings deposits	3			84			87			7			109			116
Time deposits	(81		)	81			—			218			5			223
Short-term borrowings	100			26			126			70			44			114
Long-term borrowings	38			(57		)	(19		)	703			51			754
Total change in interest expense on interest-bearing liabilities	36			272			308			1,074			424			1,498
Total Change in Net Interest Income (FTE)*	$	1,768		$	1,402		$	3,170		$	12,429		$	(321	)	$	12,108
* Taxable equivalent basis using a federal income tax rate of 35%.
** The change in interest income and interest expense due to both volume and rate has been allocated to the volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.

	Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015
	Increase (Decrease) Due to Changes in						Combined Increase/ (Decrease)
	Average Volume**			Average Yield/Rate**
	(In Thousands)
Changes in Interest Income on Interest-Earning Assets:
Loans	$	30,956		$	(1,449	)	$	29,507
Taxable investment securities/other assets	(1,007		)	509			(498		)
Tax-exempt investment securities	2,116			(248		)	1,868
Interest-bearing deposits with the FRB and other banks	(36		)	143			107
Total change in interest income on interest-earning assets	32,029			(1,045		)	30,984
Changes in Interest Expense on Interest-Bearing Liabilities:
Interest-bearing demand deposits	172			263			435
Savings deposits	66			69			135
Time deposits	861			(94		)	767
Short-term borrowings	94			22			116
Long-term borrowings	1,655			74			1,729
Total change in interest expense on interest-bearing liabilities	2,848			334			3,182
Total Change in Net Interest Income (FTE)*	$	29,181		$	(1,379	)	$	27,802
* Taxable equivalent basis using a federal income tax rate of 35%.
** The change in interest income and interest expense due to both volume and rate has been allocated to the volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.

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Provision for Loan Losses

The provision for loan losses ("provision") is an increase to the allowance, as determined by management, to provide for probable losses inherent in the originated loan portfolio and for impairment in pools of acquired loans that results from the Corporation experiencing a decrease, if any, in expected cash flows of acquired loans during each reporting period. The provision was $3.0 million in the second quarter of 2016, compared to $1.5 million in both the first quarter of 2016 and the second quarter of 2015. The increase in the provision for loan losses in the second quarter of 2016 was due to loan growth, with loans in the Corporation's originated loan portfolio up $377 million during the second quarter of 2016.

The Corporation experienced net loan charge-offs of $1.8 million in the second quarter of 2016, compared to $4.5 million in the first quarter of 2016 and $1.8 million in the second quarter of 2015. Net loan charge-offs as a percentage of average loans (annualized) were 0.10% in the second quarter of 2016, compared to 0.25% in the first quarter of 2016 and 0.12% in the second quarter of 2015. Net loan charge-offs in the commercial loan portfolio totaled $1.3 million in the second quarter of 2016, compared to net loan charge-offs of $3.6 million in the first quarter of 2016 and net loan charge-offs of $0.7 million in the second quarter of 2015 and represented 74% of total net loan charge-offs during the second quarter of 2016, compared to 79% during the first quarter of 2016 and 37% during the second quarter of 2015. Net loan charge-offs in the second quarter of 2016 and the first quarter of 2016 included $1.0 million and $2.9 million, respectively, from one commercial loan relationship. Net loan charge-offs in the consumer loan portfolio totaled $0.5 million in the second quarter of 2016, compared to $0.9 million in the first quarter of 2016 and $1.1 million in the second quarter of 2015.

The Corporation's provision and net loan charge-offs were $4.5 million and $6.3 million, respectively, for the six months ended June 30, 2016, compared to $3.0 million and $3.7 million, respectively, for the six months ended June 30, 2015.

Noninterest Income

The following summarizes the major components of noninterest income:

	Three Months Ended						Six Months Ended
	June 30, 2016		March 31, 2016		June 30, 2015		June 30, 2016		June 30, 2015
	(In thousands)
Service charges and fees on deposit accounts	$	6,337	$	5,720	$	6,445	$	12,057	$	12,361
Wealth management revenue	5,782		5,201		5,605		10,983		10,676
Electronic banking fees	4,786		4,918		4,775		9,704		9,347
Mortgage banking revenue	1,595		1,405		1,688		3,000		3,091
Other fees for customer services	1,191		1,131		1,132		2,322		2,033
Title insurance commissions	486		343		609		829		1,126
Gain on sale of investment securities	18		19		28		37		607
Bank-owned life insurance	237		196		153		433		236
Rental income	153		137		112		290		237
Gain on sale of closed branch offices and other assets	105		157		19		262		19
Other	207		192		108		399		216
Total noninterest income	$	20,897	$	19,419	$	20,674	$	40,316	$	39,949

Noninterest income was $20.9 million in the second quarter of 2016, compared to $19.4 million in the first quarter of 2016 and $20.7 million in the second quarter of 2015. Noninterest income in the second quarter of 2016 was $1.5 million, or 7.6%, higher than the first quarter of 2016, with the increase primarily attributable to higher seasonal overdraft fees and wealth management revenue.

Service charges and fees on deposit accounts, which include overdraft/non-sufficient funds fees, checking account service fees and other deposit account charges, were $6.3 million in the second quarter of 2016, an increase of $0.6 million, or 11%, from the first quarter of 2016 and a decrease of $0.1 million, or 1.7%, from the second quarter of 2015. The increase in service charges and fees on deposit accounts in the second quarter of 2016, compared to the first quarter of 2016, was due primarily to higher seasonal overdraft fees. Overdraft/non-sufficient funds fees included in service charges and fees on deposit accounts were $4.7 million in both the second quarter of 2016 and the second quarter of 2015, compared to $4.2 million in the first quarter of 2016.

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Wealth management revenue is comprised of investment fees that are generally based on the market value of assets within a trust account, custodial account fees and fees from the sale of investment products. Volatility in the equity and bond markets impacts the market value of trust assets and related investment fees. Wealth management revenue was $5.8 million in the second quarter of 2016, an increase of $0.6 million over the first quarter of 2016 and an increase of $0.2 million over the second quarter of 2015. The increase in wealth management revenue in the second quarter of 2016 over the first quarter of 2016 was primarily attributable to seasonal trust fees earned from the preparation of trust tax returns. Wealth management revenue includes fees from the sale of investment products offered through the Chemical Financial Advisors program. Fees from this program totaled $1.1 million in the second quarter of 2016, compared to $1.2 million in the first quarter of 2016 and $1.0 million in the second quarter of 2015.

Electronic banking fees, which represent income earned by the Corporation from ATM transactions, debit card activity and internet banking fees, were $4.8 million in the second quarter of 2016, a decrease of $0.1 million from the first quarter of 2016 and unchanged compared to the second quarter of 2015.

Mortgage banking revenue ("MBR") includes revenue from originating, selling and servicing residential mortgage loans for the secondary market, net of direct expenses associated with these activities, including mortgage loan originator compensation, amortization of mortgage servicing rights and adjustments to the Corporation's reserve for probable losses related to loans previously sold in the secondary market. MBR was $1.6 million in the second quarter of 2016, an increase of $0.2 million over the first quarter of 2016 and a decrease of $0.1 million compared to the second quarter of 2015. The increase in MBR in the second quarter of 2016, compared to the first quarter of 2016, was largely due to higher gains resulting from an increase in the volume of loans sold in the secondary market, which was partially offset by a $0.4 million impairment of the Corporation's mortgage servicing asset resulting from recent declines in market interest rates. The decrease in MBR in the second quarter of 2016, compared to the second quarter of 2015, was due to the impairment charge, which was partially offset by higher gains resulting from an increase in the volume of loans sold in the secondary market. The Corporation sold $72 million of residential mortgage loans in the secondary market in the second quarter of 2016, compared to $45 million in the first quarter of 2016 and $64 million in the second quarter of 2015.

The Corporation sells residential mortgage loans in the secondary market on both a servicing retained and servicing released basis. These sales include the Corporation entering into residential mortgage loan sale agreements with buyers in the normal course of business. The agreements contain provisions that include various representations and warranties regarding the origination, characteristics and underwriting of the mortgage loans. The recourse of the buyer may result in either indemnification of any loss incurred by the buyer or a requirement for the Corporation to repurchase a loan that the buyer believes does not comply with the representations included in the loan sale agreement. Repurchase and loss indemnification demands received by the Corporation are reviewed by a senior officer on a loan-by-loan basis to validate the claim made by the buyer. The Corporation maintains a reserve for probable losses expected to be incurred from loans previously sold in the secondary market. This contingent liability is based on trends in repurchase and indemnification demands, actual loss experience, information requests, known and inherent risks in the sale of loans in the secondary market and current economic conditions. The Corporation records losses resulting from the repurchase of loans previously sold in the secondary market, as well as adjustments to estimates of future probable losses, as part of its MBR in the period incurred. The Corporation's reserve for probable losses was $3.8 million at both June 30, 2016 and March 31, 2016, compared to $4.5 million at June 30, 2015.

Noninterest income was $40.3 million for the six months ended June 30, 2016, compared to $39.9 million for the six months ended June 30, 2015, with the increase largely attributable to incremental revenue resulting from the impact of the Monarch and Lake Michigan acquisitions being mostly offset by lower gains from the sales of investment securities.

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Operating Expenses

The following summarizes the major categories of operating expenses:

	Three Months Ended								Six Months Ended
	June 30, 2016			March 31, 2016		June 30, 2015			June 30, 2016			June 30, 2015
	(In thousands)
Salaries and wages	$	26,887		$	26,743	$	25,535		$	53,630		$	49,276
Employee benefits	6,240			7,147		6,176			13,387			11,688
Occupancy	5,514			4,905		4,386			10,419			8,812
Equipment and software	4,875			4,404		4,480			9,279			8,878
Outside processing and service fees	4,833			3,711		3,926			8,544			7,484
FDIC insurance premiums	1,338			1,407		1,337			2,745			2,562
Professional fees	1,020			1,036		1,258			2,056			2,495
Intangible asset amortization	1,195			1,194		987			2,389			1,778
Advertising and marketing	793			766		856			1,559			1,519
Postage and express mail	866			984		876			1,850			1,732
Training, travel and other employee expenses	870			797		760			1,667			1,488
Telephone	614			730		606			1,344			1,146
Supplies	631			480		525			1,111			1,044
Donations	379			611		568			990			876
Credit-related expenses	(1,331		)	30		(192		)	(1,301		)	(59		)
Transaction expenses	3,054			2,594		3,457			5,648			4,819
Other	1,307			1,348		1,244			2,655			2,267
Total operating expenses	$	59,085		$	58,887	$	56,785		$	117,972		$	107,805

Operating expenses were $59.1 million in the second quarter of 2016, compared to $58.9 million in the first quarter of 2016 and $56.8 million in the second quarter of 2015. Operating expenses included transaction expenses of $3.1 million in the second quarter of 2016 and $2.6 million in the first quarter of 2016 primarily related to professional fees incurred to facilitate the pending Talmer merger, while operating expenses included transaction expenses of $3.5 million in the second quarter of 2015 related to professional fees and outside processing and service fees, including conversion and integration costs, associated with completing the Monarch and Lake Michigan acquisitions. Excluding these transaction expenses, operating expenses in the second quarter of 2016 were $56.0 million, a decrease of $0.3 million from operating expenses of $56.3 million in the first quarter of 2016 and an increase of $2.7 million, or 5.1%, over operating expenses of $53.3 million in the second quarter of 2015. The decrease in operating expenses in the second quarter of 2016, compared to the first quarter of 2016, was primarily attributable to lower payroll tax expenses, which are highest in the first quarter of the year, and a reduction in credit-related expenses, while the increase in the second quarter of 2016, compared to the second quarter of 2015, was primarily attributable to incremental operating costs associated with the Lake Michigan and Monarch transactions.

Salaries and wages of $26.9 million in the second quarter of 2016 were virtually unchanged compared to the first quarter of 2016. Salaries and wages in the second quarter of 2016increased$1.4 million, or 5.3%, over the second quarter of 2015 due primarily to incremental costs associated with the Lake Michigan and Monarch transactions and merit and inflationary salary adjustments that took effect at the beginning of 2016. Performance-based compensation expense was $2.8 million in the second quarter of 2016, compared to $2.5 million in the first quarter of 2016 and $2.6 million in the second quarter of 2015.

Employee benefit costs of $6.2 million in the second quarter of 2016decreased$0.9 million, or 13%, from the first quarter of 2016 due to a $0.7 million reduction in payroll tax expenses and group health costs being $0.2 million lower. Employee benefit costs were up slightly in the second quarter of 2016, compared to the second quarter of 2015, with higher group health costs being partially offset by lower pension expense. The Corporation's pension expense was lower in the second quarter of 2016, compared to the second quarter of 2015, due to an increase in the discount rate used to measure the present value of expected future benefit obligations and changes in retirement age assumptions for employees.

Occupancy expenses of $5.5 million in the second quarter of 2016increased$0.6 million, or 12%, over the first quarter of 2016 and $1.1 million, or 26%, over the second quarter of 2015 due primarily to $1.0 million of fair value write-downs recognized in the second quarter of 2016 related to eleven branch locations that were closed during the quarter.

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Equipment and software expenses of $4.9 million in the second quarter of 2016 were $0.5 million higher than the first quarter of 2016, and $0.4 million higher than the second quarter of 2015 due in part to upgrades in equipment and software in advance of the pending Talmer merger.

Outside processing and service fees of $4.8 million in the second quarter of 2016 were $1.1 million higher than the first quarter of 2016 and $0.9 million higher than the second quarter of 2015 due largely to increases in project costs, many of which have been accelerated to complete them before the pending Talmer merger.

Credit-related expenses are comprised of other real estate ("ORE") net costs and loan collection costs. ORE net costs are comprised of costs to carry ORE, such as property taxes, insurance and maintenance costs, fair value write-downs after a property is transferred to ORE and net gains/losses from the disposition of ORE. Loan collection costs include legal fees, appraisal fees and other costs recognized in the collection of loans with deteriorated credit quality and in the process of foreclosure. Credit-related expenses in the second quarter of 2016 were $1.4 millionlower than the first quarter of 2016 and $1.1 million lower than the second quarter of 2015. The decrease in credit-related expenses in the second quarter of 2016, compared to the first quarter of 2016, was primarily attributable to higher gains from the sale of ORE properties and a $0.7 million gain resulting from the receipt of life insurance proceeds on a policy the Corporation had previously obtained as collateral on a loan. In addition to the $0.7 million gain, the decrease in credit-related expenses in the second quarter of 2016, compared to the second quarter of 2015, was primarily attributable to lower ORE writedowns and operating costs. The Corporation recognized net gains from the sales/writedowns of ORE properties of $1.3 million in the second quarter of 2016, compared to $0.6 million in the first quarter of 2016 and $1.0 million in the second quarter of 2015. ORE operating costs and loan collection costs, combined, were $0.6 million in both the second quarter of 2016 and the first quarter of 2016, compared to $0.8 million in the second quarter of 2015.

Operating expenses were $118.0 million for the six months ended June 30, 2016, compared to $107.8 million for the six months ended June 30, 2015, with the increase largely attributable to incremental costs resulting from the impact of the Monarch and Lake Michigan acquisitions being partially offset by lower credit-related expenses resulting from an increase in the amount of gains recognized on other real estate and repossessed assets.

Income Tax Expense

The Corporation records its federal income tax expense using its estimate of the effective income tax rate expected for the full year and applies that rate on a year-to-date basis. The fluctuations in the Corporation's effective federal income tax rate reflect changes each period in the proportion of interest income exempt from federal taxation, nondeductible interest expense and other nondeductible expenses relative to pretax income and tax credits.

The differences between the provision for federal income taxes computed at the federal statutory income tax rate and the amounts recorded in the consolidated financial statements were as follows:

	Three Months Ended									Six Months Ended
	June 30, 2016			March 31, 2016			June 30, 2015			June 30, 2016			June 30, 2015
	(Dollars in thousands)
Tax at statutory rate	$	12,707		$	11,677		$	9,843		$	24,384		$	18,921
Changes resulting from:
Tax-exempt interest income	(1,130		)	(1,131		)	(940		)	(2,261		)	(1,776		)
Income tax credits, net	(665		)	(634		)	(512		)	(1,299		)	(861		)
Other, net	(312		)	188			709			(124		)	916
Provision for federal income taxes	$	10,600		$	10,100		$	9,100		$	20,700		$	17,200
Effective federal income tax rate	29.2		%	30.3		%	32.4		%	29.7		%	31.8		%

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Liquidity

Liquidity measures the ability of the Corporation to meet current and future cash flow needs in a timely manner. Liquidity risk is the adverse impact on net interest income if the Corporation was unable to meet its cash flow needs at a reasonable cost.

Liquidity is managed to ensure stable, reliable and cost-effective sources of funds are available to satisfy deposit withdrawals and lending and investment opportunities. The ability of a financial institution to meet its current financial obligations is a function of its balance sheet structure, its ability to liquidate assets and its access to alternative sources of funds. The Corporation manages its funding needs by maintaining a level of liquid funds through its asset/liability management process. The Corporation's largest sources of liquidity on a consolidated basis are the deposit base that comes from consumer, business and municipal customers within the Corporation's local markets, principal payments on loans, maturing investment securities, cash held at the FRB and unpledged investment securities available-for-sale. Total deposits decreased$185 million during the three months ended June 30, 2016, although were up $172 million during the twelve months ended June 30, 2016. The decrease in deposits during the three months ended June 30, 2016 was primarily attributable to a decrease in seasonal municipal deposit accounts. The increase in deposits during the twelve months ended June 30, 2016 was attributable to organic growth in customer deposit accounts of $268 million during the past year, which was partially offset by a reduction of $96 million related to maturing brokered deposits that were acquired in the Lake Michigan transaction. The Corporation's loan-to-deposit ratio was 102.4% at June 30, 2016, 96.3% at March 31, 2016, 97.5% at December 31, 2015 and 96.5% at June 30, 2015. The Corporation had $26 million of cash deposits held at the FRB at June 30, 2016, compared to $90 million at March 31, 2016, $15 million at December 31, 2015 and $16 million at June 30, 2015. At June 30, 2016, the Corporation had unpledged investment securities available-for-sale with an amortized cost of $23 million and available unused wholesale sources of liquidity, including FHLB advances and borrowings from the discount window of the FRB.

Chemical Bank is a member of the FHLB and as such has access to short-term and long-term advances from the FHLB that are generally secured by residential mortgage first lien loans. The Corporation had $629 million of short-term and long-term advances outstanding with the FHLB at June 30, 2016, and had no additional borrowing availability from the FHLB, based on its FHLB capital stock and subject to certain requirements, as of that date. The Corporation can also borrow from the FRB's discount window to meet short-term liquidity requirements. These borrowings are required to be secured by investment securities and/or certain loan types, with each category of assets carrying various borrowing capacity percentages. At June 30, 2016, the Corporation maintained an unused borrowing capacity of $35 million with the FRB's discount window based upon pledged collateral as of that date. The Corporation also had the ability to borrow an additional $75 million of federal funds from multiple third-party financial institutions at June 30, 2016. It is management's opinion that the Corporation's borrowing capacity could be expanded, if deemed necessary, as it has additional borrowing capacity available at the FHLB that could be used if it increased its investment in FHLB capital stock, and the Corporation has a significant amount of additional assets that could be used as collateral at the FRB's discount window.

The Corporation manages its liquidity position to provide the cash necessary to pay dividends to shareholders, invest in new subsidiaries, enter new banking markets, pursue investment opportunities and satisfy other operating requirements. The Corporation's primary source of liquidity is dividends from Chemical Bank.

Federal and state banking laws place certain restrictions on the amount of dividends that a bank may pay to its parent company. During the six months ended June 30, 2016, Chemical Bank paid $25.0 million in cash dividends to the Corporation, and the Corporation paid cash dividends to shareholders of $19.9 million. During 2015, Chemical Bank paid $56.9 million in dividends to the Corporation and the Corporation paid cash dividends to shareholders of $36.9 million. The earnings of Chemical Bank are the principal source of funds to pay cash dividends to the Corporation's shareholders. Chemical Bank had net income of $52.6 million during the six months ended June 30, 2016, compared to net income of $92.8 million during all of 2015. Over the long term, cash dividends to shareholders are dependent upon earnings, capital requirements, regulatory restraints and other factors affecting the Corporation and Chemical Bank.

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Market Risk

Market risk is the risk of loss arising from adverse changes in the fair value of financial instruments due primarily to changes in interest rates. Interest rate risk is the Corporation's primary market risk and results from timing differences in the repricing of interest rate sensitive assets and liabilities and changes in relationships between rate indices due to changes in interest rates. The Corporation's net interest income is largely dependent upon the effective management of interest rate risk. The Corporation's goal is to avoid a significant decrease in net interest income, and thus an adverse impact on the profitability of the Corporation, in periods of changing interest rates. Sensitivity of earnings to interest rate changes arises when yields on assets change differently from the interest costs on liabilities. Interest rate sensitivity is determined by the amount of interest-earning assets and interest-bearing liabilities repricing within a specific time period and the magnitude by which interest rates change on the various types of interest-earning assets and interest-bearing liabilities. The management of interest rate sensitivity includes monitoring the maturities and repricing opportunities of interest-earning assets and interest-bearing liabilities. The Corporation's interest rate risk is managed through policies and risk limits approved by the boards of directors of the Corporation and its subsidiary banks and an Asset and Liability Committee (ALCO). The ALCO, which is comprised of executive and senior management from various areas of the Corporation and Chemical Bank, including finance, lending, investments and deposit gathering, meets regularly to execute asset and liability management strategies. The ALCO establishes guidelines and monitors the sensitivity of earnings to changes in interest rates. The goal of the ALCO process is to manage the impact on net interest income and the net present value of future cash flows of probable changes in interest rates within authorized risk limits.

The primary technique utilized by the Corporation to measure its interest rate risk is simulation analysis. Simulation analysis forecasts the effects on the balance sheet structure and net interest income under a variety of scenarios that incorporate changes in interest rates, the shape of the Treasury yield curve, interest rate relationships and the mix of assets and liabilities and loan prepayments. These forecasts are compared against net interest income projected in a stable interest rate environment. While many assets and liabilities reprice either at maturity or in accordance with their contractual terms, several balance sheet components demonstrate characteristics that require an evaluation to more accurately reflect their repricing behavior. Key assumptions in the simulation analysis include prepayments on loans, probable calls of investment securities, changes in market conditions, loan volumes and loan pricing, deposit sensitivity and customer preferences. These assumptions are inherently uncertain as they are subject to fluctuation and revision in a dynamic environment. As a result, the simulation analysis cannot precisely forecast the impact of rising and falling interest rates on net interest income. Actual results will differ from simulated results due to many other factors, including changes in balance sheet components, interest rate changes, changes in market conditions and management strategies.

The Corporation's interest rate sensitivity is estimated by first forecasting the next twelve months of net interest income under an assumed environment of constant market interest rates. The Corporation then compares the results of various simulation analyses to the constant interest rate forecast (base case). At June 30, 2016, the Corporation projected the change in net interest income during the next twelve months assuming short-term market interest rates were to uniformly and gradually increase or decrease by up to 200 basis points in a parallel fashion over the entire yield curve during the same time period. Additionally, at June 30, 2016, the Corporation projected the change in net interest income of an immediate 400 basis point increase in market interest rates. The Corporation did not project a 400 basis point decrease in interest rates at June 30, 2016 as the likelihood of a decrease of this size was considered unlikely given prevailing interest rate levels. These projections were based on the Corporation's assets and liabilities remaining static over the next twelve months, while factoring in probable calls and prepayments of certain investment securities and residential mortgage and consumer loans. The ALCO regularly monitors the Corporation's forecasted net interest income sensitivity to ensure that it remains within established limits.

A summary of the Corporation's interest rate sensitivity at June 30, 2016 follows:

	Gradual Change									Immediate Change
Twelve month interest rate change projection (in basis points)	-200		-100		0	+100		+200		+400
Percent change in net interest income vs. constant rates	(5.3	)%	(2.4	)%	—	(0.6	)%	(1.5	)%	(4.3	)%

At June 30, 2016, the Corporation's model simulations projected that 100, 200 and 400 basis point increases in interest rates would result in negative variances in net interest income of 0.6%, 1.5% and 4.3%, respectively, relative to the base case over the next twelve-month period. At June 30, 2016, the Corporation's model simulations also projected that decreases in interest rates of 100 and 200 basis points would result in negative variances in net interest income of 2.4% and 5.3%, respectively, relative to the base case over the next twelve-month period. The likelihood of a decrease in interest rates beyond 100 basis points at June 30, 2016 was considered to be unlikely given prevailing interest rate levels.

The Corporation's model simulations at June 30, 2016 for a 200 basis point increase in interest rates resulted in a negative variance in net interest income, relative to the base case, primarily due to the Corporation deploying excess cash and maturing variable-

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rate investment securities into fixed-rate loans during 2015. The Corporation's model simulations at June 30, 2016 for an immediate 400 basis point increase in interest rates also resulted in a negative variance in net interest income, relative to the base case, due to the Corporation's loan portfolio being primarily comprised of fixed-rate loans, while a majority of the Corporation's customer deposit accounts are interest-rate sensitive.

Future increases in market interest rates are not expected to have a significant immediate favorable impact on the Corporation's net interest income at the time of such increases because of the low percentage of variable interest rate loans in the Corporation's loan portfolio and a large percentage of variable interest rate loans at interest rate floors at June 30, 2016. The percentage of variable interest rate loans, which comprised approximately 26% of the Corporation's loan portfolio at June 30, 2016, has remained relatively consistent during the twelve-month period ended June 30, 2016. Approximately two-thirds of the Corporation's variable interest rate loans were at an interest rate floor with a majority expected to remain at their floor until they mature or market interest rates rise more than 50 basis points.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Information concerning quantitative and qualitative disclosures about market risk is contained in the discussion regarding interest rate risk and sensitivity under the captions “Liquidity” and “Market Risk” herein and in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2015 and is here incorporated by reference.

Since December 31, 2015, the Corporation does not believe that there has been a material change in the nature or categories of the Corporation's primary market risk exposure, or the particular markets that present the primary risk of loss to the Corporation. As of the date of this report, the Corporation does not know of or expect there to be any material change in the general nature of its primary market risk exposure in the near term. The methods by which the Corporation manages its primary market risk exposure, as described in its Annual Report on Form 10-K for the year ended December 31, 2015, have not changed materially during the current year. As of the date of this report, the Corporation does not expect to make material changes in those methods in the near term. The Corporation may change those methods in the future to adapt to changes in circumstances or to implement new techniques.

The Corporation's market risk exposure is mainly comprised of its vulnerability to interest rate risk. Prevailing interest rates and interest rate relationships are largely determined by market factors that are beyond the Corporation's control. All information provided in response to this item consists of forward-looking statements. Reference is made to the section captioned “Forward-Looking Statements” in this report for a discussion of the limitations on the Corporation's responsibility for such statements. In this discussion, “near term” means a period of one year following the date of the most recent consolidated statement of financial position contained in this report.

Item 4. Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Corporation's management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Corporation's disclosure controls and procedures as of the end of the period covered by this report. Based on and as of the time of that evaluation, the Corporation's management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Corporation's disclosure controls and procedures were effective to ensure that information required to be disclosed by the Corporation in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. There was no change in the Corporation's internal control over financial reporting that occurred during the three months ended June 30, 2016 that has materially affected, or that is reasonably likely to materially affect, the Corporation's internal control over financial reporting.

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Part II. Other Information

Item 1. Legal Proceedings

Information required under this item is set forth in Part I., Item 1. of this Quarterly Report of Form 1-Q and is contained in Note 1 of the Notes to Consolidated Financial Statements under the heading "Legal Matters" and is here incorporated by reference.

In addition, the Corporation and Chemical Bank are subject to certain legal actions arising in the ordinary course of business.

Item 1A. Risk Factors

Information concerning risk factors is contained in the discussion under "Risk Factors" (including the risk factors under the heading "Risk Factors" in the Corporation's Form S-4 Registration Statement related to its pending merger with Talmer, filed with, and made effective by, the SEC on June 9, 2016, and in Item 1A, “Risk Factors,” in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2015. As of the date of this report, the Corporation does not believe that there has been a material change in the nature or categories of the Corporation's risk factors, as compared to the information disclosed in the Corporation's Form S-4 Registration Statement, filed with, and made effective by, the SEC on June 9, 2016, or in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following schedule summarizes the Corporation's total monthly share repurchase activity for the three months ended June 30, 2016:

	Issuer Purchases of Equity Securities
Period Beginning on First Day of Month Ended	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced  Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under Plans or Programs
April 30, 2016	5,588	$	37.59	—	500,000
May 31, 2016	6,966	38.74		—	500,000
June 30, 2016	2,140	39.13		—	500,000
Total	14,694	$	38.36	—

(1) Represents shares delivered or attested in satisfaction of the exercise price and/or tax withholding obligations by employees who received shares of the Corporation's common stock under the Corporation's share-based compensation plans, as these plans permit employees to use the Corporation's stock to satisfy such obligations based on the market value of the stock on the date of exercise or date of vesting, as applicable.

In January 2008, the board of directors of the Corporation authorized the repurchase of up to 500,000 shares of the Corporation's common stock in the open market. The repurchased shares are available for later reissuance in connection with potential future stock dividends, the Corporation's dividend reinvestment plan, employee benefit plans and other general corporate purposes. In November 2011, the board of directors of the Corporation reaffirmed the stock buy-back authorization with the qualification that the shares may only be repurchased if the share price is below the tangible book value per share of the Corporation’s common stock at the time of the repurchase. No shares have been repurchased under the Corporation's Common Stock Repurchase Program since the authorization.

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Item 6. Exhibits

Exhibits. The following exhibits are filed as part of this report on Form 10-Q:

Exhibit Number	Document
2.1	Agreement and Plan of Merger, dated January 25, 2016. Previously filed as Exhibit 2.1 to the registrant’s Current Report on Form 8-K dated January 25, 2016, filed with the SEC on January 26, 2016. Here incorporated by reference.
3.1	Restated Articles of Incorporation. Previously filed as Exhibit 3.1 to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the SEC on April 30, 2015. Here incorporated by reference.
3.2	Bylaws. Previously filed as Exhibit 3.2 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 26, 2014. Here incorporated by reference.
4.1	Restated Articles of Incorporation. Exhibit 3.1 is here incorporated by reference.
4.2	Bylaws. Exhibit 3.2 is here incorporated by reference.
31.1	Certification of Chief Executive Officer.
31.2	Certification of Chief Financial Officer.
32.1	Certification pursuant to 18 U.S.C. §1350.
101.1	Interactive Data File.

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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 thereunto duly authorized.

		CHEMICAL FINANCIAL CORPORATION
Date:	July 28, 2016	By:	/s/ David B. Ramaker
			David B. Ramaker
			Chairman of the Board, Chief Executive Officer and President
			(Principal Executive Officer)
Date:	July 28, 2016	By:	/s/ Lori A. Gwizdala
			Lori A. Gwizdala
			Executive Vice President, Chief Financial Officer and Treasurer
			(Principal Financial and Accounting Officer)

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Exhibit Index

Exhibits. The following exhibits are filed as part of this report on Form 10-Q:

Exhibit Number	Document
2.1	Agreement and Plan of Merger, dated January 25, 2016. Previously filed as Exhibit 2.1 to the registrant’s Current Report on Form 8-K dated January 25, 2016, filed with the SEC on January 26, 2016. Here incorporated by reference.
3.1	Restated Articles of Incorporation. Previously filed as Exhibit 3.1 to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the SEC on April 30, 2015. Here incorporated by reference.
3.2	Bylaws. Previously filed as Exhibit 3.2 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 26, 2014. Here incorporated by reference.
4.1	Restated Articles of Incorporation. Exhibit 3.1 is here incorporated by reference.
4.2	Bylaws. Exhibit 3.2 is here incorporated by reference.
31.1	Certification of Chief Executive Officer.
31.2	Certification of Chief Financial Officer.
32.1	Certification pursuant to 18 U.S.C. §1350.
101.1	Interactive Data File.

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EX-31.1

Exhibit 31.1

Certifications

I, David B. Ramaker, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 of Chemical Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	July 28, 2016
		/s/ David B. Ramaker
		David B. Ramaker Chairman of the Board, Chief Executive Officer and President Chemical Financial Corporation

EX-31.2

Exhibit 31.2

Certifications

I, Lori A. Gwizdala, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 of Chemical Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	July 28, 2016
		/s/ Lori A. Gwizdala
		Lori A. Gwizdala Executive Vice President, Chief Financial Officer and Treasurer Chemical Financial Corporation

EX-32.1

Exhibit 32.1

Certification

Pursuant to 18 U.S.C. § 1350, each of the undersigned hereby certifies in his or her capacity as an officer of Chemical Financial Corporation (the “Company”) that the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition of the Company at the end of such period and the results of operations of the Company for such period.

Dated:	July 28, 2016	/s/ David B. Ramaker
		David B. Ramaker Chairman of the Board, Chief Executive Officer and President
Dated:	July 28, 2016	/s/ Lori A. Gwizdala
		Lori A. Gwizdala Executive Vice President, Chief Financial Officer and Treasurer

A signed original of this written statement required by Section 906 has been provided to Chemical Financial Corporation and will be retained by Chemical Financial Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 21, 2016
Entity Information [Line Items]
Entity Registrant Name	CHEMICAL FINANCIAL CORP
Entity Central Index Key	0000019612
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		38,268,487

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Consolidated Statements of Financial Position - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Cash and cash equivalents:
Cash and cash due from banks	$ 179,310	$ 194,136	$ 167,054
Interest-bearing deposits with the Federal Reserve Bank and other banks	53,650	44,653	47,980
Total cash and cash equivalents	232,960	238,789	215,034
Investment securities:
Available-for-sale, at fair value	458,552	553,731	685,706
Held-to-maturity (fair value - $568,415 at June 30, 2016, $512,705 at December 31, 2015 and $466,578 at June 30, 2015)	552,828	509,971	469,837
Total investment securities	1,011,380	1,063,702	1,155,543
Loans held-for-sale, at fair value	13,990	10,327	7,798
Loans	7,647,269	7,271,147	7,034,743
Allowance for loan losses	(71,506)	(73,328)	(74,941)
Net loans	7,575,763	7,197,819	6,959,802
Premises and equipment (net of accumulated depreciation of $121,890 at June 30, 2016, $120,382 at December 31, 2015 and $112,530 at June 30, 2015)	102,709	106,317	111,968
Goodwill	286,867	287,393	285,512
Other intangible assets	34,270	38,104	41,201
Interest receivable and other assets	256,233	246,346	243,867
Total Assets	9,514,172	9,188,797	9,020,725
Deposits:
Noninterest-bearing	2,007,629	1,934,583	1,860,863
Interest-bearing	5,457,017	5,522,184	5,432,116
Total deposits	7,464,646	7,456,767	7,292,979
Interest payable and other liabilities	71,417	76,466	66,174
Securities Sold under Agreements to Repurchase	256,213	297,199	305,291
Short-term Borrowings	300,000	100,000	227,000
Other Borrowings	371,597	242,391	148,490
Total liabilities	8,463,873	8,172,823	8,039,934
Shareholders’ equity:
Preferred stock, no par value: Authorized - 2,000,000 shares, none issued	0	0	0
Common stock, $1 par value per share, Authorized - 60,000,000 shares, Issued and outstanding — 38,267,118 shares at June 30, 2016, 38,167,861 shares at December 31, 2015 and 38,110,136 shares at June 30, 2015	38,267	38,168	38,110
Additional paid-in capital	727,145	725,280	722,329
Retained earnings	310,585	281,558	251,456
Accumulated other comprehensive loss	(25,698)	(29,032)	(31,104)
Total shareholders’ equity	1,050,299	1,015,974	980,791
Total Liabilities and Shareholders’ Equity	$ 9,514,172	$ 9,188,797	$ 9,020,725

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Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Held-to-maturity, fair value	$ 568,415	$ 512,705	$ 466,578
Accumulated depreciation of premises and equipment	$ 121,890	$ 120,382	$ 111,270
Preferred stock, no par value
Preferred stock, shares authorized	2,000,000	2,000,000	2,000,000
Preferred stock, shares issued	0	0	0
Common stock, par value	$ 1	$ 1	$ 1
Common stock, shares authorized	60,000,000	60,000,000	60,000,000
Common stock, shares issued	38,267,118	38,167,861	38,110,136
Common stock, shares outstanding	38,267,118	38,167,861	38,110,136

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Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Interest Income
Interest and fees on loans	$ 77,578	$ 64,613	$ 151,979	$ 122,710
Interest on investment securities:
Taxable	1,798	2,202	3,727	4,509
Tax-exempt	2,640	2,185	5,305	4,091
Dividends on nonmarketable equity securities	777	551	1,033	749
Interest on deposits with the Federal Reserve Bank and other banks	144	128	357	250
Total interest income	82,937	69,679	162,401	132,309
Interest Expense
Interest on deposits	4,260	3,630	8,319	6,982
Interest on short-term borrowings	226	101	326	199
Interest Expense, Other	956	213	1,931	213
Total interest expense	5,442	3,944	10,576	7,394
Net Interest Income	77,495	65,735	151,825	124,915
Provision for loan losses	3,000	1,500	4,500	3,000
Net interest income after provision for loan losses	74,495	64,235	147,325	121,915
Noninterest Income
Service charges and fees on deposit accounts	6,337	6,445	12,057	12,361
Wealth management revenue	5,782	5,605	10,983	10,676
Other charges and fees for customer services	6,463	6,516	12,855	12,506
Mortgage banking revenue	1,595	1,688	3,000	3,091
Gain on sale of investment securities	18	28	37	607
Other	702	392	1,384	708
Total noninterest income	20,897	20,674	40,316	39,949
Operating Expenses
Salaries, wages and employee benefits	33,127	31,711	67,017	60,964
Occupancy	5,514	4,386	10,419	8,812
Equipment and software	4,875	4,480	9,279	8,878
Acquisition-related expenses	3,054	3,457	5,648	4,819
Other	12,515	12,751	25,609	24,332
Total operating expenses	59,085	56,785	117,972	107,805
Income before income taxes	36,307	28,124	69,669	54,059
Federal income tax expense	10,600	9,100	20,700	17,200
Net Income	$ 25,707	$ 19,024	$ 48,969	$ 36,859
Net Income Per Common Share:
Basic (in dollars per share)	$ 0.67	$ 0.54	$ 1.28	$ 1.08
Diluted (in dollars per share)	0.67	0.54	1.27	1.08
Cash Dividends Declared Per Common Share (dollars per share)	$ 0.26	$ 0.24	$ 0.52	$ 0.48

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net income	$ 25,707	$ 19,024	$ 48,969	$ 36,859
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on investment securities available-for-sale, net of tax expense (benefit) of $742 and $(1,084) for the three months ended June 30, 2016 and 2015, respectively, and $2,212 and $177 for the six months ended June 30, 2016 and 2015, respectively	1,379	(2,014)	4,108	331
Reclassification adjustment for realized gain on sale of investment securities available-for-sale included in net income, net of tax expense of $6 and $10 for the three months ended June 30, 2016 and 2015, respectively, and $13 and $212 for the six months ended June 30, 2016 and 2015, respectively	(12)	(18)	(24)	(395)
Adjustment for pension and other postretirement benefits, net of tax expense (benefit) of $(202) and $380 for the three months ended June 30, 2016 and 2015, respectively, and $(404) and $761 for the six months ended June 30, 2016 and 2015, respectively	(375)	707	(750)	1,413
Total other comprehensive income (loss), net of tax	992	(1,325)	3,334	1,349
Comprehensive income	$ 26,699	$ 17,699	$ 52,303	$ 38,208

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Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Tax expense (benefit) on net unrealized gains (losses) on investment securities available-for-sale	$ 742	$ (1,084)	$ 2,212	$ 177
Tax expense (benefit) on reclassification adjustment for realized gains on sale of investment securities available-for-sale	(6)	(10)	(13)	(212)
Tax expense (benefit) on adjustment for pension and other postretirement benefits	$ (202)	$ 380	$ (404)	$ 761

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Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Beginning Balance at Dec. 31, 2014	$ 797,133	$ 32,774	$ 565,166	$ 231,646	$ (32,453)
Changes in Stockholders' Equity [Roll Forward]
Comprehensive income	38,208			36,859	1,349
Cash dividends declared and paid, $0.52 and $0.48 per share at June 30, 2016 and June 30, 2015, respectively.	(17,049)			(17,049)
Issuance of common stock in business acquisitions	159,904	5,183	154,721
Stock issued - stock options	1,146	88	1,058
Shares issued – directors’ stock plans	316	11	305
Shares issued – restricted stock units	(328)	53	(381)
Share-based compensation	1,461	1	1,460
Ending Balance at Jun. 30, 2015	980,791	38,110	722,329	251,456	(31,104)
Beginning Balance at Dec. 31, 2015	1,015,974	38,168	725,280	281,558	(29,032)
Changes in Stockholders' Equity [Roll Forward]
Comprehensive income	52,303			48,969	3,334
Cash dividends declared and paid, $0.52 and $0.48 per share at June 30, 2016 and June 30, 2015, respectively.	(19,942)			(19,942)
Stock issued - stock options	528	48	480
Shares issued – directors’ stock plans	125	5	120
Shares issued – restricted stock units	(469)	45	(514)
Share-based compensation	1,780	1	1,779
Ending Balance at Jun. 30, 2016	$ 1,050,299	$ 38,267	$ 727,145	$ 310,585	$ (25,698)

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Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Cash dividends declared per share	$ 0.26	$ 0.24	$ 0.52	$ 0.48

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Operating Activities
Net income	$ 48,969	$ 36,859
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	4,500	3,000
Gains on sales of loans	(3,431)	(3,375)
Proceeds from sales of loans	119,845	119,683
Loans originated for sale	(120,077)	(111,903)
Net gains from sales/writedowns of other real estate and repossessed assets	(2,512)	(1,578)
Depreciation of premises and equipment	5,562	5,239
Amortization of intangible assets	4,751	3,787
Net gains on sale of investment securities	(37)	(607)
Net amortization of premiums and discounts on investment securities	2,891	2,759
Share-based compensation expense	1,780	1,461
Net increase in interest receivable and other assets	(13,642)	(11,695)
Net decrease in interest payable and other liabilities	(4,139)	(15,727)
Net cash provided by operating activities	44,460	27,903
Investment securities – available-for-sale:
Proceeds from sales	0	13,173
Proceeds from maturities, calls and principal reductions	99,528	113,973
Investment securities – held-to-maturity:
Proceeds from maturities, calls and principal reductions	57,518	54,481
Purchases	(101,295)	(205,286)
Net increase in loans	(385,814)	(250,997)
Proceeds from sales of other real estate and repossessed assets	7,377	7,934
Purchases of premises and equipment, net of disposals	(3,897)	(3,333)
Cash acquired, net of cash paid, in business combinations	0	16,551
Net cash used in investing activities	(326,583)	(253,504)
Financing Activities
Net increase in interest- and noninterest-bearing demand deposits and savings accounts	95,263	217,719
Net decrease in time deposits	(87,384)	(72,795)
Net increase in securities sold under agreements to repurchase with customers and other short-term borrowings	159,014	103,824
Proceeds from long-term borrowings	150,000	25,000
Repayment of long-term borrowings	(20,558)	0
Cash dividends paid	(19,942)	(17,049)
Proceeds from directors’ stock plans and exercise of stock options, net of shares withheld	653	1,462
Cash paid for payroll taxes upon conversion of share-based awards	(752)	(546)
Net cash provided by financing activities	276,294	257,615
Net increase (decrease) in cash and cash equivalents	(5,829)	32,014
Cash and cash equivalents at beginning of period	238,789	183,020
Cash and cash equivalents at end of period	232,960	215,034
Supplemental Disclosure of Cash Flow Information:
Interest paid	10,764	6,592
Loans transferred to other real estate and repossessed assets	3,370	5,908
Closed branch offices transferred to other real estate	1,863	359
Federal income taxes paid	11,700	20,800
Fair value of tangible assets acquired (non-cash)	0	1,284,552
Goodwill and identifiable intangible assets acquired	0	116,478
Liabilities assumed	0	1,257,917
Common stock issued	$ 0	$ 159,904

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Significant Accounting Policies

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Nature of Operations

Chemical Financial Corporation ("Corporation" or "Chemical") operates in a single operating segment — commercial banking. The Corporation is a financial holding company, headquartered in Midland, Michigan, that operates through one commercial bank, Chemical Bank. Chemical Bank operates within the State of Michigan as a state-chartered commercial bank. Chemical Bank operates through an internal organizational structure of four regional banking units and offers a full range of traditional banking and fiduciary products and services to the residents and business customers in the bank’s geographical market areas. The products and services offered by the regional banking units, through branch banking offices, are generally consistent throughout the Corporation, as is the pricing of those products and services. The marketing of products and services throughout the Corporation’s regional banking units is generally uniform, as many of the markets served by the regional banking units overlap. The distribution of products and services is uniform throughout the Corporation’s regional banking units and is achieved primarily through retail branch banking offices, automated teller machines and electronically accessed banking products.

The Corporation’s primary sources of revenue are interest from its loan products and investment securities, service charges and fees from customer deposit accounts and wealth management revenue.

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Corporation and its subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the interim consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Corporation’s consolidated financial statements and footnotes thereto included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2015. In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments believed necessary to present fairly the financial condition and results of operations of the Corporation for the periods presented. Operating results for the six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

Use of Estimates

Management makes estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying footnotes. Estimates that are particularly susceptible to significant change include the determination of the allowance for loan losses, expected cash flows from acquired loans, fair value amounts related to business combinations, pension expense, income taxes, goodwill impairment and those assets that require fair value measurement. Actual results could differ from these estimates.

Business Combinations

Pursuant to the guidance of Accounting Standards Codification ("ASC") Topic 805, Business Combinations ("ASC 805"), the Corporation recognizes assets acquired, including identified intangible assets, and the liabilities assumed in acquisitions at their fair values as of the acquisition date, with the acquisition-related transaction and restructuring costs expensed in the period incurred.

ASC 805 affords a measurement period beyond the acquisition date that allows the Corporation the opportunity to finalize the acquisition accounting in the event that new information is identified that existed as of the acquisition date but was not known by the Corporation at that time. The Corporation anticipates that measurement period adjustments may arise from adjustments to the fair values of assets and liabilities recognized at the acquisition date for its May 31, 2015 acquisition of Lake Michigan Financial Corporation ("Lake Michigan"), as additional information is obtained, such as appraisals of collateral securing loans and other borrower information. In the event that a measurement period adjustment is identified, the Corporation will recognize the adjustment as part of its acquisition accounting, which may result in an adjustment to goodwill being recorded in the period the adjustment was identified.

See Note 2 for further information regarding the Corporation's mergers and acquisitions, including its pending merger with Talmer Bancorp, Inc. ("Talmer").

Originated Loans

Originated loans include all of the Corporation's portfolio loans, excluding loans acquired in business combinations, as further discussed below. Originated loans are stated at their principal amount outstanding, net of unearned income, charge-offs and unamortized deferred fees and costs. Loan interest income is recognized on the accrual basis. Deferred loan fees and costs are amortized over the loan term based on the level-yield method. Net loan commitment fees are deferred and amortized into fee income on a straight-line basis over the commitment period.

The past due status of a loan is based on the loan’s contractual terms. A loan is placed in nonaccrual status (accrual of interest is discontinued) when principal or interest is past due 90 days or more (except for a loan that is secured by residential real estate, which is transferred to nonaccrual status at 120 days past due), unless the loan is both well-secured and in the process of collection, or earlier when, in the opinion of management, there is sufficient reason to doubt the collectibility of principal or interest. Interest previously accrued, but not collected, is reversed and charged against interest income at the time the loan is placed in nonaccrual status. Subsequent receipts of interest while a loan is in nonaccrual status are recorded as a reduction of principal. Loans are returned to accrual status when principal and interest payments are brought current, payments have been received consistently for a period of time (generally six months) and collectibility is no longer in doubt.

Loans Acquired in a Business Combination

Loans acquired in a business combination ("acquired loans") consist of loans acquired on May 31, 2015 in the acquisition of Lake Michigan, on April 1, 2015 in the acquisition of Monarch Community Bancorp, Inc. ("Monarch"), on October 31, 2014 in the acquisition of Northwestern Bancorp, Inc. ("Northwestern"), and on April 30, 2010 in the acquisition of O.A.K. Financial Corporation ("OAK"). Acquired loans were recorded at fair value at the date of acquisition, without a carryover of the associated allowance for loan losses related to these loans, through a fair value discount that was, in part, attributable to deterioration in credit quality. The estimate of expected credit losses was determined based on due diligence performed by executive and senior officers of the Corporation, with assistance from third-party consultants. The fair value discount was recorded as a reduction of the acquired loans’ outstanding principal balances in the consolidated statement of financial position at the acquisition date.

The Corporation accounts for acquired loans, which are recorded at fair value at acquisition, in accordance with ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality ("ASC 310-30"). ASC 310-30 allows investors to aggregate loans acquired into loan pools that have common risk characteristics and thereby use a composite interest rate and expectation of cash flows expected to be collected for the loan pools. Under the provisions of ASC 310-30, the Corporation aggregated acquired loans into 2 pools in the acquisition of Lake Michigan, 2 pools in the acquisition of Monarch, 4 pools in the acquisition of Northwestern and 14 pools in the acquisition of OAK based upon common risk characteristics, including types of loans, commercial type loans with similar risk grades and whether loans were performing or nonperforming. A pool is considered a single unit of accounting for the purposes of applying the guidance prescribed in ASC 310-30. A loan will be removed from a pool of acquired loans only if the loan is sold, foreclosed, paid off or written off, and will be removed from the pool at the carrying value. If an individual loan is removed from a pool of loans, the difference between its relative carrying amount and the cash, fair value of the collateral, or other assets received would not affect the effective yield used to recognize the accretable difference on the remaining pool. The Corporation estimated the cash flows expected to be collected over the life of the pools of loans at acquisition and estimates expected cash flows quarterly thereafter, based on a set of assumptions including expectations as to default rates, prepayment rates and loss severities. The Corporation must make numerous assumptions, interpretations and judgments using internal and third-party credit quality information to determine whether it is probable that the Corporation will be able to collect all contractually required payments. This is a point in time assessment and inherently subjective due to the nature of the available information and judgment involved.

The calculation of the fair value of the acquired loan pools entails estimating the amount and timing of cash flows attributable to both principal and interest expected to be collected on such loan pools and then discounting those cash flows at market interest rates. The excess of a loan pool's expected cash flows at the acquisition date over its estimated fair value is referred to as the "accretable yield," which is recognized into interest income over the estimated remaining life of the loan pool on a level-yield basis. The difference between a loan pool's contractually required principal and interest payments at the acquisition date and the cash flows expected to be collected at the acquisition date is referred to as the "nonaccretable difference," which includes an estimate of future credit losses expected to be incurred over the estimated life of the loan pool and interest payments that are not expected to be collected. Decreases to the expected cash flows in each loan pool in subsequent periods will require the Corporation to record a provision for loan losses. Improvements in expected cash flows in each loan pool in subsequent periods will result in reversing a portion of the nonaccretable difference, which is then classified as part of the accretable yield and subsequently recognized into interest income over the estimated remaining life of the loan pool.

Loans Modified Under Troubled Debt Restructurings

Loans modified under troubled debt restructurings ("TDRs") involve granting a concession to a borrower who is experiencing financial difficulty. Concessions generally include modifications to original loan terms, including changes to a loan’s payment schedule or interest rate, which generally would not otherwise be considered. The Corporation’s TDRs include performing and nonperforming TDRs, which consist of originated loans that continue to accrue interest at the loan's original interest rate as the Corporation expects to collect the remaining principal and interest on the loan, and nonaccrual TDRs, which include originated loans that are in a nonaccrual status and are no longer accruing interest, as the Corporation does not expect to collect the full amount of principal and interest owed from the borrower on these loans. In accordance with ASC Topic 310-30, acquired loans are excluded from TDRs as these loans are accounted for in pools at net realizable value based on the principal and interest the Corporation expects to collect on such loans. At the time of modification (except for loans on nonaccrual status), a TDR is reported as a nonperforming TDR until a six-month payment history of principal and interest payments, in accordance with the terms of the loan modification, is sustained, at which time the Corporation moves the loan to a performing status ("performing TDR"). If the Corporation does not expect to collect all principal and interest on the loan, the modified loan is classified as a nonaccrual TDR. All TDRs are accounted for as impaired loans and are included in the Corporation’s analysis of the allowance for loan losses. A TDR that has been renewed by a borrower who is no longer experiencing financial difficulty and which yields a market rate of interest at the time of a renewal is no longer reported as a TDR.

Loans in the Corporation’s commercial loan portfolio (comprised of commercial, commercial real estate, real estate construction and land development loans) that meet the definition of a TDR generally consist of loans where the Corporation has allowed borrowers to defer scheduled principal payments and make interest-only payments for a specified period of time at the stated interest rate of the original loan agreement or reduced payments due to a moderate extension of the loan’s contractual term. If the Corporation does not expect to collect all principal and interest on the loan, the modified loan is classified as a nonaccrual TDR. If the Corporation does not expect to incur a loss on the loan based on its assessment of the borrowers’ expected cash flows, as the pre- and post-modification effective yields are approximately the same, the loan is classified as a nonperforming TDR until a six-month payment history is sustained, at which time the loan is classified as a performing TDR. Since no loss is expected to be incurred on nonperforming TDRs, no additional provision for loan losses has been recognized for these loans and they continue to accrue interest at their contractual interest rate. Nonperforming TDRs are individually evaluated for impairment and transferred to nonaccrual status if they become 90 days past due as to principal or interest payments or if it is probable that any remaining principal and interest payments due on the loan will not be collected in accordance with the modified terms of the loan.

Loans in the Corporation’s consumer loan portfolio (comprised of residential mortgage, consumer installment and home equity loans) that meet the definition of a performing or nonperforming TDR generally consist of residential mortgage loans that include a concession that reduces a borrower’s monthly payments by decreasing the interest rate charged on the loan for a specified period of time (generally 24 months) under a formal modification agreement. The Corporation recognizes an additional provision for loan losses related to impairment on these loans on an individual basis based on the present value of expected future cash flows discounted at the loan’s original effective interest rate. These loans continue to accrue interest at their effective interest rate, which consists of contractual interest under the terms of the modification agreement in addition to an adjustment for the accretion of computed impairment. These loans are moved to nonaccrual status if they become 90 days past due as to principal or interest payments, or sooner if conditions warrant.

Impaired Loans

A loan is defined to be impaired when it is probable that payment of principal and interest will not be paid in accordance with the original contractual terms of the loan agreement. Impaired loans include nonaccrual loans (including nonaccrual TDRs), performing and nonperforming TDRs and acquired loans that were not performing in accordance with original contractual terms. Impaired loans are accounted for at the lower of the present value of expected cash flows discounted at the loan's original effective interest rate or the estimated fair value of the collateral, if the loan is collateral dependent. When the present value of expected cash flows or the fair value of collateral of an impaired loan in the originated loan portfolio is less than the amount of unpaid principal outstanding on the loan, the principal balance of the loan is reduced to its carrying value through either an allocation of the allowance for loan losses or a partial charge-off of the loan balance.

Nonperforming Loans

Nonperforming loans are comprised of loans for which the accrual of interest has been discontinued (nonaccrual loans, including nonaccrual TDRs), accruing originated loans contractually past due 90 days or more as to interest or principal payments and nonperforming TDRs.

Acquired loans that were classified as nonperforming loans prior to being acquired and acquired loans that are not performing in accordance with contractual terms subsequent to acquisition are not classified as nonperforming loans subsequent to acquisition because the loans are recorded in pools at net realizable value based on the principal and interest the Corporation expects to collect on such loans.

Allowance for Loan Losses

The allowance for loan losses ("allowance") is presented as a reserve against loans. The allowance represents management’s assessment of probable loan losses inherent in the Corporation’s loan portfolio.

Management’s evaluation of the adequacy of the allowance is based on a continuing review of the loan portfolio, actual loan loss experience, the underlying value of the collateral, risk characteristics of the loan portfolio, the level and composition of nonperforming loans, the financial condition of the borrowers, the balance of the loan portfolio, loan growth, economic conditions, employment levels in the Corporation’s local markets, and special factors affecting specific business sectors. The Corporation maintains formal policies and procedures to monitor and control credit risk. Management evaluates the allowance on a quarterly basis in an effort to ensure the level is appropriate to absorb probable losses inherent in the loan portfolio.

The allowance provides for probable losses that have been identified with specific customer relationships and for probable losses believed to be incurred in the remainder of the originated loan portfolio, but that have not been specifically identified. The Corporation utilizes its own loss experience to estimate inherent losses on loans. Internal risk ratings are assigned to each loan in the commercial loan portfolio (commercial, commercial real estate, real estate construction and land development loans) at the time of origination and are subject to subsequent periodic reviews by senior management. The Corporation performs a detailed credit quality review quarterly on all loans greater than $0.25 million that have deteriorated below certain levels of credit risk, and may allocate a specific portion of the allowance to such loans based upon this review. A portion of the allowance is allocated to the remaining loans by applying projected loss ratios, based on numerous factors. Projected loss ratios incorporate factors such as charge-off experience, trends with respect to adversely risk-rated loans in the commercial loan portfolio, trends with respect to past due and nonaccrual loans, changes in economic conditions and trends, changes in the value of underlying collateral and other credit risk factors. This evaluation involves a high degree of uncertainty.

In determining the allowance and the related provision for loan losses, the Corporation considers four principal elements: (i) valuation allowances based upon probable losses identified during the review of impaired loans in the commercial loan portfolio, (ii) reserves established for adversely-rated loans in the commercial loan portfolio and nonaccrual residential mortgage, consumer installment and home equity loans based on loan loss experience of other adversely-rated loans, (iii) reserves, by loan classes, on all other loans based principally on a five-year historical loan loss experience, with equal weighting placed on all of the years, loan loss trends and giving consideration to estimated loss emergence periods, and (iv) a reserve for qualitative factors that take into consideration risks inherent in the originated loan portfolio that differ from historical loan loss experience.

Although the Corporation allocates portions of the allowance to specific loans and loan types, the entire allowance attributable to originated loans is available for any loan losses that occur in the originated portfolio. Loans that are deemed not collectible are charged off and reduce the allowance. The provision for loan losses and recoveries on loans previously charged off increase the allowance. Collection efforts may continue and recoveries may occur after a loan is charged off.

Acquired loans are aggregated into pools based upon common risk characteristics. An allowance may be recorded related to an acquired loan pool if it experiences a decrease in expected cash flows, as compared to those projected at the acquisition date. On a quarterly basis, the expected future cash flow of each pool is estimated based on various factors, including changes in property values of collateral dependent loans, default rates, loss severities and prepayment speeds. Decreases in estimates of expected cash flows within a pool generally result in a charge to the provision for loan losses and a corresponding increase in the allowance allocated to acquired loans for the particular pool. Increases in estimates of expected cash flows within a pool generally result in a reduction in the allowance allocated to acquired loans for the particular pool, if applicable, and then an adjustment to the accretable yield for the pool, which will increase amounts recognized in interest income in subsequent periods.

Various regulatory agencies, as an integral part of their examination process, periodically review the allowance. Such agencies may require additions to the allowance, based on their judgment, reflecting information available to them at the time of their examinations.

Fair Value Measurements

Fair value for assets and liabilities measured at fair value on a recurring or nonrecurring basis refers to the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants in the market in which the reporting entity transacts such sales or transfers based on the assumptions market participants would use when pricing an asset or liability. Assumptions are developed based on prioritizing information within a fair value hierarchy that gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, such as the reporting entity’s own data.

The Corporation may choose to measure eligible items at fair value at specified election dates. Unrealized gains and losses on items for which the fair value measurement option has been elected are reported in earnings at each subsequent reporting date. The fair value option (i) may be applied instrument by instrument, with certain exceptions, allowing the Corporation to record identical financial assets and liabilities at fair value or by another measurement basis permitted under GAAP, (ii) is irrevocable (unless a new election date occurs) and (iii) is applied only to entire instruments and not to portions of instruments. At June 30, 2016, December 31, 2015 and June 30, 2015, the Corporation had elected the fair value option on all of its residential mortgage loans held-for-sale. The Corporation has not elected the fair value option for any other financial assets or liabilities.

Share-Based Compensation

The Corporation grants stock options, stock awards, restricted stock performance units and restricted stock service-based units to certain executive and senior management employees. The Corporation accounts for share-based compensation expense using the modified-prospective transition method. Under that method, compensation expense is recognized for stock options based on the estimated grant date fair value as computed using the Black-Scholes option pricing model and the probability of issuance. The Corporation accounts for stock awards based on the closing stock price of the Corporation's common stock on the date of the award. The fair values of both stock options and stock awards are recognized as compensation expense on a straight-line basis over the requisite service period. The Corporation accounts for restricted stock performance units based on the closing stock price of the Corporation's common stock on the date of grant, discounted by the present value of estimated future dividends to be declared over the requisite performance or service period. The fair value of restricted stock performance units is recognized as compensation expense over the expected requisite performance period, or requisite service period for awards with multiple performance and service conditions. The Corporation accounts for restricted stock service-based units based on the closing stock price of the Corporation's common stock on the date of grant, as these awards accrue dividend equivalents equal to the amount of any cash dividends that would have been payable to a shareholder owning the number of shares of the Corporation's common stock represented by the restricted stock service-based units. The fair value of the restricted stock service-based units is recognized as compensation expense over the requisite service period.

Cash flows realized from the tax benefits of exercised stock option awards that result from actual tax deductions that are in excess of the recorded tax benefits related to the compensation expense recognized for those options (excess tax benefits) are classified as financing activities on the consolidated statements of cash flows.

Bank-Owned Life Insurance

The Corporation has life insurance policies on certain key officers of Chemical Bank. The majority of the bank-owned life insurance policies of the Corporation were obtained through its acquisition of Lake Michigan. Bank-owned life insurance is recorded at the cash surrender value, net of surrender charges, and is included within other assets on the consolidated statements of financial position and changes in the cash surrender values are recorded as other noninterest income on the consolidated statements of income.

Income and Other Taxes

The Corporation is subject to the income and other tax laws of the United States, the State of Michigan and any other states where nexus has been created. These laws are complex and are subject to different interpretations by the taxpayer and the various taxing authorities. In determining the provision for income and other taxes, management must make judgments and estimates about the application of these inherently complex laws, related regulations and case law. In the process of preparing the Corporation’s tax returns, management attempts to make reasonable interpretations of enacted tax laws. These interpretations are subject to challenge by the tax authorities upon audit or to reinterpretation based on management’s ongoing assessment of facts and evolving case law.

On a quarterly basis, management assesses the reasonableness of its effective federal tax rate based upon its estimate of taxable income and the applicable taxes expected for the full year. Deferred tax assets and liabilities are reassessed on a quarterly basis, including the need for a valuation allowance for deferred tax assets.

Uncertain income tax positions are evaluated to determine whether it is more-likely-than-not that a tax position will be sustained upon examination based on the technical merits of the tax position. If a tax position is more-likely-than-not to be sustained, a tax benefit is recognized for the amount that is greater than 50% likely to be realized. Reserves for contingent income tax liabilities attributable to unrecognized tax benefits associated with uncertain tax positions are reviewed quarterly for adequacy based upon developments in tax law and the status of audits or examinations. The Corporation had no contingent income tax liabilities recorded at June 30, 2016, December 31, 2015 or June 30, 2015.

Investments in Qualified Affordable Housing Projects, Federal Historic Projects and New Market Tax Credits

The Corporation invests in qualified affordable housing projects, federal historic projects, and new market projects for the purpose of community reinvestment and obtaining tax credits. Return on the Corporation's investment in these projects comes in the form of the tax credits and tax losses that pass through to the Corporation. The carrying value of the investments are reflected in other assets on the consolidated statements of financial position. The Corporation utilizes the proportional amortization method to account for investments in qualified affordable housing projects and the equity method to account for investments in other tax credit projects.

Under the proportional amortization method, the Corporation amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits allocated. The Corporation recognized additional income tax expense attributable to the amortization of investments in qualified affordable housing projects of $0.6 million and $1.2 million during the three and six months ended June 30, 2016, respectively, and $0.2 million and $0.3 million during the three and six months ended June 30, 2015, respectively. The Corporation's remaining investment in qualified affordable housing projects accounted for under the proportional amortization method totaled $24.3 million at June 30, 2016, $21.7 million at December 31, 2015 and$21.4 million atJune 30, 2015.

Under the equity method, the Corporation's share of the earnings or losses are included in other operating expenses on the consolidated statements of income. The Corporation's remaining investment in new market projects accounted for under the equity method totaled $7.5 million, $1.7 million and $3.3 million at June 30, 2016, December 31, 2015 and June 30, 2015, respectively.

The Corporation's unfunded equity contributions relating to investments in qualified affordable housing projects, federal historic tax projects and new market projects is recorded in other liabilities on the consolidated statements of financial position. The Corporation's remaining unfunded equity contributions totaled $11.5 million, $8.0 million and $9.7 million at June 30, 2016, December 31, 2015 and June 30, 2015.

Management analyzes these investments for potential impairment when events or changes in circumstances indicate that it is more-likely-than-not that the carrying amount of the investment will not be realized. An impairment loss is measured as the amount by which the carrying amount of an investment exceeds its fair value. There were no impairment losses recognized as of June 30, 2016, December 31, 2015 or June 30, 2015.

The Corporation consolidates variable interest entities ("VIEs") in which it is the primary beneficiary. In general, a VIE is an entity that either (i) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (ii) has a group of equity owners that are unable to make significant decisions about its activities or (iii) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns as generated by its operations. If any of these characteristics are present, the entity is subject to a variable interests consolidation model, and consolidation is based on variable interests, not on ownership of the entity's outstanding voting stock. Variable interests are defined as contractual, ownership, or other monetary interests in an entity that change with fluctuations in the entity's net asset value. The primary beneficiary consolidates the VIE. The primary beneficiary is defined as the enterprise that has the power to direct the activities and absorb losses or the right to receive benefits. The Corporation is a significant limited partner in the qualified affordable housing, federal historic and new market projects it has invested in. These projects meet the definition of VIEs. However, the Corporation is not the primary beneficiary of any of the VIEs in which it holds a limited partnership interest; therefore, the VIEs are not consolidated in the Corporation's consolidated financial statements.

Shareholders’ Equity

Common Stock Repurchase Programs

From time to time, the board of directors of the Corporation approves common stock repurchase programs allowing management to repurchase shares of the Corporation’s common stock in the open market. The repurchased shares are available for later reissuance in connection with potential future stock dividends, the Corporation’s dividend reinvestment plan, employee benefit plans and other general corporate purposes. Under these programs, the timing and actual number of shares subject to repurchase are at the discretion of management and are contingent on a number of factors, including the projected parent company cash flow requirements and the Corporation’s market price per share.

In January 2008, the board of directors of the Corporation authorized the repurchase of up to 500,000 shares of the Corporation’s common stock under a stock repurchase program. In November 2011, the board of directors of the Corporation reaffirmed the stock buy-back authorization with the qualification that the shares may only be repurchased if the share price is below the tangible book value per share of the Corporation’s common stock at the time of the repurchase. Since the January 2008 authorization, no shares have been repurchased. At June 30, 2016, there were 500,000 remaining shares available for repurchase under the Corporation’s stock repurchase program.

Shelf Registration

On June 12, 2014, the Corporation filed an automatic shelf registration statement on Form S-3 with the Securities and Exchange Commission ("SEC") for an indeterminate amount of securities, which became immediately effective. The shelf registration statement provides the Corporation with the ability to raise capital, subject to SEC rules and limitations, if the board of directors of the Corporation decides to do so.

Preferred Stock

On April 20, 2015, the shareholders of the Corporation approved an amendment to the restated articles of incorporation which eliminated and replaced the previous class of 200,000 shares of preferred stock, that had been approved by shareholders on April 20, 2009, with a new class of 2,000,000 shares of preferred stock. At June 30, 2016, no shares of preferred stock were issued and outstanding.

Common Stock

On July 19, 2016, the shareholders of the Corporation approved an amendment to the restated articles of incorporation to increase the number of authorized shares of common stock from 60,000,000 to 100,000,000 in connection with the pending merger with Talmer.

Legal Matters

On February 22, 2016, two putative class action and derivative complaints were filed in the Circuit Court for Oakland County, Michigan by individuals purporting to be a shareholder of Talmer. The actions are styled Regina Gertel Lee v. Chemical Financial Corporation, et. al., Case No. 2016-151642-CB and City of Livonia Employees’ Retirement System v. Chemical Financial Corporation et. al., Case No. 2016-151641-CB. These complaints purport to be brought derivatively on behalf of Talmer against the individual defendants, and individually and on behalf of all others similarly situated against Talmer and Chemical. The complaints allege, among other things, that the directors of Talmer breached their fiduciary duties to Talmer’s shareholders in connection with the merger by approving a transaction pursuant to an allegedly inadequate process that undervalues Talmer and includes preclusive deal protection provisions, and that Chemical allegedly aided and abetted the Talmer directors in breaching their duties to Talmer’s shareholders. The complaints also allege that the individual defendants have been unjustly enriched. Both complaints seek various remedies on behalf of the putative class (consisting of all shareholders of Talmer who are not related to or affiliated with any defendant). They request, among other things, that the Court enjoin the merger from being consummated in accordance with its agreed-upon terms, direct the Talmer directors to exercise their fiduciary duties, rescind the merger agreement to the extent that it is already implemented, award the plaintiff all costs and disbursements in each respective action (including reasonable attorneys’ and experts’ fees), and grant such further relief as the court deems just and proper. The City of Livonia plaintiff amended its complaint on April 21, 2016 to add additional factual allegations, including but not limited to allegations that Keefe Bruyette & Woods, Inc. served as a financial advisor for the proposed merger despite an alleged conflict of interest, that Talmer’s board acted under actual or potential conflicts of interest, and that the defendants omitted and/or misrepresented material information about the proposed merger in the Form S-4 Registration Statement relating to the proposed merger. Talmer, Chemical and the individual defendants all believe that the claims asserted against each of them in the above-described lawsuits are without merit and intend to vigorously defend against these lawsuits. These two cases ere consolidated as In re Talmer Bancorp Shareholder Litigation, case number 2016-151641-CB, per an order entered on May 12, 2016.

On March 22, 2016, an additional putative class action and derivative complaint was filed in the Circuit Court for Oakland County, Michigan, by an individual purporting to be a shareholder of Talmer, styled Stephen Bushansky v. Gary Torgow et. al. Case No. 2016-152112-CB. This action contained similar allegations, claims, and requests for relief as the complaints filed in the Lee and City of Livonia lawsuits discussed above. The Bushansky lawsuit was voluntarily dismissed by the plaintiff as to all defendants, without prejudice, on April 18, 2016. On April 27, 2016, Stephen Bushansky filed a new putative class action complaint in the United State District Court for Eastern District of Michigan, styled Stephen Bushansky v. Talmer Bancorp In. et.al., Docket No. 1:16-cv-11511. This lawsuit alleged violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, and named Talmer, Chemical, and several individuals as defendants. The complaint alleged, among other things, that the Defendants issued materially incomplete and misleading disclosures in the preliminary Form S-4 Registration Statement relating to the proposed merger. The Federal Bushansky lawsuit was voluntarily dismissed by the plaintiff as to all defendants, without prejudice, on June 20, 2016.

On April 6, 2016, a complaint was filed in the United States District Court for the Eastern District of Michigan by another purported shareholder of Talmer, styled Matthew Sciabacucchi v. Chemical Financial Corporation et. al., Docket No. 1:16-cv-11261. Mr. Sciabacucchi purports to bring this action “on behalf of himself and all others similarly situated.” This lawsuit alleges violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, naming Talmer, Chemical, and several individuals as defendants.  The complaint alleges, among other things, that the Defendants issued materially incomplete and misleading disclosures in the Form S-4 Registration Statement relating to the proposed merger. The Complaint contains requests for relief that include, among other things, that the Court enjoin the proposed transaction, rescind the transaction if it is consummated or award rescissory damages, order the Talmer directors to file a revised Registration Statement, declare that the Defendants violated Sections 14(a) and/or Section 20(a) of the Securities Exchange Act, as well as Rule 14a-9 promulgated thereunder, award the plaintiff all costs associated with bringing the action (including reasonable attorneys’ and experts’ fees), and grant such further relief as the court deems just and proper. Talmer, Chemical and the individual defendants all believe that the claims asserted against each of them in this lawsuit are without merit and intend to vigorously defend against this lawsuit.

On April 25, 2016, a complaint was filed in the United States District Court for the Eastern District of Michigan by another purported shareholder of Talmer, styled Kevin Nicholl v. Chemical Financial Corporation et. al., Docket No. 1:16-cv-11482. The plaintiff names Talmer, Chemical, and several individuals as defendants. This lawsuit was styled as a class action and derivative action, and alleged breach of fiduciary duties as well as violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934. The Nicholl lawsuit was voluntarily dismissed by the plaintiff as to all defendants, with prejudice, on June 20, 2016.

On June 16, 2016, a complaint was filed in the United States District Court for the Eastern District of Michigan by a purported Talmer shareholder, styled City of Livonia Employees’ Retirement System v. Chemical Financial Corporation, et. al., Docket No. 2:16-cv-12229. The plaintiff purports to bring the action “individually and on behalf of all others similarly situated,” and requests certification as a class action. This lawsuit alleges violations of Section 14(a) and 20(a) of the Securities Exchange Act of 1934. The Complaint alleges, among other things, that the Defendants issued materially incomplete and misleading disclosures in the Form S-4 Registration Statement relating to the proposed merger. The Complaint contains requests for relief that include, among other things, that the Court enjoin the proposed transaction unless and until additional information is provided to Talmer’s shareholders, declare that the Defendants violated the securities laws in connection with the proposed merger, award compensatory damages, interest, attorneys’ and experts’ fees, and that the Court grant such other relief as it deems just and proper. Talmer, Chemical, and the individual defendants all believe that the claims asserted against each of them in this lawsuit are without merit and intend to vigorously defend against this lawsuit.

In addition, the Corporation and Chemical Bank are subject to certain legal actions arising in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the ultimate disposition of these matters is not expected to have a material adverse effect on the consolidated financial condition or results of operations of the Corporation.

Reclassifications

Certain amounts appearing in the consolidated financial statements and notes thereto for prior periods have been reclassified to conform with the current presentation. The reclassification had no effect on net income or shareholders’ equity as previously reported.

Adopted Accounting Pronouncements

Consolidation of Variable Interest Entities

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis ("ASU 2015-02"). ASU 2015-02 is applicable to reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, ASU 2015-02 (i) modifies the evaluation of whether limited partnerships and similar legal entities are VIEs, (ii) eliminates the presumption that a general partner should consolidate a limited partnership, (iii) affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships and (iv) provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The adoption of ASU 2015-02 effective January 1, 2016 did not have a material impact on the Corporation's consolidated financial condition or results of operations.

Customer's Accounting for Cloud Computing Fees

In April 2015, the FASB issued ASU No. 2015-05, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"). ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU 2015-05 does not change the accounting for a customer’s accounting for service contracts. The purpose of ASU 2015-05 is to clarify which fees paid in a cloud computing arrangement should be capitalized and which fees should be expensed as incurred. The adoption of ASU 2015-05 prospectively effective January 1, 2016 did not have a material impact on the Corporation's consolidated financial condition or results of operations.

Pending Accounting Pronouncements

Recognition and Measurement

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"). ASU 2016-01 amends current guidance by: (i) requiring equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income, (ii) allowing an entity to measure equity investments that do not have readily determinable fair values at either fair value or cost minus impairment, if any, plus or minus changes in observable prices, with changes in measurement recognized in net income, (iii) simplifying the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iv) eliminating the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet; (v) requiring use the of exit price notion when measuring the fair value of financial instruments for disclosure purposes; (vi) requiring recognition of changes in the fair value related to instrument-specific credit risk in other comprehensive income if the fair value option for financial liabilities is elected, (vii) requiring separate presentation in the financial statements of financial assets and financial liabilities by measurement category, and (8) clarifying that an entity should evaluate the need for a valuation allowance on deferred tax assets related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 is effective for interim and annual reporting periods beginning after December 15, 2017. Early application is permitted as of the beginning of the fiscal year of adoption only for items (iv) and (vi) above. Early adoption of the other items mentioned above is not permitted. The adoption of ASU 2016-01 is not expected to have a material impact on the Corporation's consolidated financial condition or results of operations.

Leases

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). Under ASU 2016-02, the Corporation will be required to recognize the following for all leases (with the exception of short-term leases): (i) a right to use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term and (ii) a lease liability, which is a liability that represents lessee's obligation to make lease payments arising from a lease, measured on a discounted basis. ASU 2016-02 requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. ASU 2016-02 is effective for public companies for interim and annual periods beginning after December 15, 2018. The adoption of ASU 2016-02 is not expected to have a material impact on the Corporation's consolidated financial condition or results of operations.

Stock Compensation

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 allows for simplification of several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under ASU 2016-09, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement. ASU 2016-09 also requires recognition of excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. ASU 2016-09 further permits the withholding of an amount up to employees' maximum individual tax rate in the relevant jurisdiction without resulting in a liability classification. ASU 2016-09 also requires any excess tax benefits be classified along with other income tax cash flows as an operating activity and cash paid by an employer when directly withholding shares for tax-withholding purposes to be classified as a financing activity. ASU 2016-09 is effective for public companies for interim and annual periods beginning after December 15, 2016. The Corporation is currently evaluating the impact of ASU 2016-09 on the Corporation's consolidated financial condition and results of operations.

Credit Losses

In June, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

ASU 2016-13 requires an entity measure expected credit losses for financial assets over the estimated lifetime of expected credit loss and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The standard includes the following core concepts in determining the expected credit loss estimate: (a) be based on an asset’s amortized cost (including premiums or discounts, net deferred fees and costs, foreign exchange and fair value hedge accounting adjustments), (b) reflect losses expected over the remaining contractual life of an asset (considering the effect of voluntary prepayments), (c) consider available relevant information about the estimated collectability of cash flows (including information about past events, current conditions, and reasonable and supportable forecasts), and (d) reflect the risk of loss, even when that risk is remote.

ASU 2016-13 also amends the recording of purchased credit-deteriorated assets. Under the new guidance, an allowance will be recognized at acquisition through a gross-up approach whereby an entity will record as the initial amortized cost the sum of (a) the purchase price and (b) an estimate of credit losses as of the date of acquisition. In addition, the guidance also requires immediate recognition in earnings any subsequent changes, both favorable and unfavorable, in expected cash flows by adjusting this allowance.

ASU 2016-13 amends the impairment model for available-for-sale debt securities and requires entities to determine whether all or a portion of the unrealized loss on an available-for-sale debt security is a credit loss. Management may not use the length of time a security has been in an unrealized loss position as a factor in concluding whether a credit loss exists, as is currently permitted. In addition, an entity will recognize an allowance for credit losses on available-for-sale debt securities as a contra-account to the amortized cost basis rather than as a direct reduction of the amortized cost basis of the investment, as is currently required. As a result, entities will recognize improvements to credit losses on available-for-sale debt securities immediately in earnings rather than as interest income over time under current practice.

New disclosures required by ASU 2016-13 include: (a) for financial assets measured at amortized cost, an entity will be required to disclose information about how it developed its allowance, including changes in the factors that influenced management’s estimate of expected credit losses and the reasons for those changes, (b) for financial receivables and net investments in leases measured at amortized cost, an entity will be required to further disaggregate the information it currently discloses about the credit quality of these assets by year or the asset’s origination or vintage for as many as five annual periods, and (c) for available-for-sale debt securities, an entity will be required to provide a roll-forward of the allowance for credit losses and an aging analysis for securities that are past due.

Upon adoption of ASU 2016-13, a cumulative-effect adjustment to retained earnings will be recorded as of the beginning of the first reporting period in which the guidance is effective. ASU 2016-13 is effective for public companies for interim and annual periods beginning after December 15, 2019, with early adoption permitted for annual periods beginning after December 15, 2018. The Corporation is currently evaluating the provisions of ASU 2016-13 to determine the potential impact on the Corporation's consolidated financial condition and results of operations.

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Acquisitions

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Acquisitions

Mergers and Acquisitions

Pending Merger with Talmer Bancorp, Inc.

On January 25, 2016, the Corporation entered into an Agreement and Plan of Merger with Talmer. Under the terms of the merger agreement, each Talmer shareholder will receive $1.61 in cash and 0.4725 shares of the Corporation's common stock for each share of Talmer common stock, subject to adjustment in limited circumstances. Based on the 30-day volume weighted price per share of the Corporation's common stock as of January 25, 2016, the merger had a transaction value of approximately $1.1 billion. Following the completion of the merger, the Corporation intends to consolidate Talmer's wholly-owned subsidiary bank, Talmer Bank and Trust, with and into Chemical Bank. At June 30, 2016, Talmer had total assets of $6.9 billion, total loans of $5.0 billion and total deposits of $5.3 billion, including brokered deposits of $389 million. Talmer Bank and Trust is a full service community bank offering a full suite of commercial banking, retail banking, mortgage banking, wealth management and trust services to small and medium-sized businesses and individuals through 80 full service banking offices located primarily within southeast Michigan and northeast Ohio, as well as in west Michigan, northeast Michigan, Chicago, Illinois, northern Indiana, and Las Vegas, Nevada. At a special meeting of Talmer shareholders, held on July 14, 2016, Talmer shareholders approved the merger. And at a special meeting of Chemical shareholders, held on July 19, 2016, Chemical shareholders approved the merger. Completion of the merger is subject to regulatory approval, in addition to satisfaction of other customary closing conditions.

Acquisition of Lake Michigan Financial Corporation

On May 31, 2015, the Corporation acquired all the outstanding stock of Lake Michigan for total consideration of $187.4 million, which included stock consideration of $132.9 million and cash consideration of $54.5 million. As a result of the acquisition, the Corporation issued approximately 4.3 million shares of its common stock, based on an exchange ratio of 1.326 shares of its common stock, and paid $16.64 in cash, for each share of Lake Michigan common stock outstanding. Lake Michigan, a bank holding company which owned The Bank of Holland and The Bank of Northern Michigan, provided traditional banking services and products with five banking offices in Holland, Grand Haven, Grand Rapids, Petoskey and Traverse City, Michigan. The Bank of Holland and The Bank of Northern Michigan were consolidated with and into Chemical Bank on November 13, 2015.

At the acquisition date, Lake Michigan added total assets of $1.24 billion, including total loans of $986 million, and total deposits of $925 million to the Corporation's consolidated statement of financial position. The Corporation recorded $101 million of goodwill, which was primarily attributable to the synergies and economies of scale expected from combining the operations of the Corporation and Lake Michigan. In addition, the Corporation recorded $8.6 million of core deposit and other intangible assets in conjunction with the acquisition. During the first quarter 2016, the Corporation obtained additional information regarding the valuation of deferred tax assets, which resulted in a decrease to goodwill recognized in the transaction of $0.5 million. In accordance with ASU 2015-16, no amounts were recorded in the consolidated statements of income during 2016 for these adjustments that would have been recorded in a previous reporting period had these adjustments been recognized as of the acquisition date.

Upon acquisition, the Lake Michigan loan portfolio had contractually required principal and interest payments receivable of $1.01 billion and $190.2 million, respectively, expected principal and interest cash flows of $986.1 million and $189.6 million, respectively, and a fair value of $985.5 million. The difference between the contractually required payments receivable and the expected cash flows represents the nonaccretable difference, which totaled $22.6 million at the acquisition date, with $22.0 million attributable to expected credit losses. The difference between the expected cash flows and fair value represents the accretable yield, which totaled $190.2 million at the date of acquisition. The outstanding contractual principal balance and the carrying amount of the Lake Michigan acquired loan portfolio were $756 million and $734 million, respectively, at June 30, 2016, compared to $864 million and $842 million, respectively, at December 31, 2015 and $990 million and $967 million, respectively, at June 30, 2015. There was no related allowance for loan losses at those dates.

Acquisition of Monarch Community Bancorp, Inc.

On April 1, 2015, the Corporation acquired all of the outstanding stock of Monarch in an all-stock transaction valued at $27.2 million. As a result of the acquisition, the Corporation issued 860,575 shares of its common stock based on an exchange ratio of 0.0982 shares of its common stock for each share of Monarch common stock outstanding. Monarch, a bank holding company, owned Monarch Community Bank, which operated five full service branch offices in Coldwater, Marshall, Hillsdale and Union City, Michigan. Monarch Community Bank was consolidated with and into Chemical Bank on May 8, 2015.

As of the April 1, 2015 acquisition date, Monarch added total assets of $183 million, including total loans of $122 million, and total deposits of $144 million to the Corporation's consolidated statement of financial position. In connection with the acquisition of Monarch, the Corporation recorded $5.3 million of goodwill, which was primarily attributable to the synergies and economies of scale expected from combining the operations of the Corporation and Monarch. In addition, the Corporation recorded $1.9 million of core deposit intangible assets in conjunction with the acquisition.

Upon acquisition, the Monarch loan portfolio had contractually required principal and interest payments receivable of $128.9 million and $37.8 million, respectively, expected principal and interest cash flows of $122.6 million and $37.1 million, respectively, and a fair value of $121.8 million. The difference between the contractually required payments receivable and the expected cash flows represents the nonaccretable difference, which totaled $7.1 million at the acquisition date, with $6.3 million attributable to expected credit losses. The difference between the expected cash flows and fair value represents the accretable yield, which totaled $37.9 million at the date of acquisition. The outstanding contractual principal balance and the carrying amount of the Monarch acquired loan portfolio were $101 million and $94 million, respectively, at June 30, 2016, compared to $115 million and $108 million, respectively, at December 31, 2015 and $126 million and $119 million, respectively, at June 30, 2015. There was no related allowance for loan losses at those dates.

Acquisition of Northwestern Bancorp, Inc.

On October 31, 2014, the Corporation acquired all of the outstanding stock of Northwestern Bancorp, Inc. (Northwestern) for total cash consideration of $121 million. Northwestern, a bank holding company which owned Northwestern Bank, provided traditional banking services and products through 25 banking offices serving communities in the northwestern lower peninsula of Michigan. At the acquisition date, Northwestern added total assets of $815 million, including total loans of $475 million, and total deposits of $794 million to the Corporation. Northwestern Bank was consolidated with and into Chemical Bank as of the acquisition date. In connection with the acquisition of Northwestern, the Corporation recorded $60.3 million of goodwill, which was primarily attributable to the synergies and economies of scale expected from combining the operations of the Corporation and Northwestern. In addition, the Corporation recorded $12.9 million of core deposit intangible assets in conjunction with the acquisition.

Upon acquisition, the Northwestern loan portfolio had contractually required principal and interest payments receivable of $507 million and $112 million, respectively, expected principal and interest cash flows of $481 million and $104 million, respectively, and a fair value of $475 million. The difference between the contractually required payments receivable and the expected cash flows represents the nonaccretable difference, which totaled $34 million at the acquisition date, with $26 million attributable to expected credit losses. The difference between the expected cash flows and fair value represents the accretable yield, which totaled $110 million at the acquisition date. The outstanding contractual principal balance and the carrying amount of the Northwestern acquired loan portfolio were $305 million and $275 million, respectively, at June 30, 2016, compared to $361 million and $330 million, respectively, at December 31, 2015 and $415 million and $382 million, respectively, at June 30, 2015.

Acquisition of 21 Branches

On December 7, 2012, Chemical Bank acquired 21 branches from Independent Bank, a subsidiary of Independent Bank Corporation, located in the Northeast and Battle Creek regions of Michigan, including $404 million in deposits and $44 million in loans (branch acquisition transaction). The purchase price of the branch offices, including equipment, was $8.1 million and the Corporation paid a premium on deposits of $11.5 million, or approximately 2.85% of total deposits. The loans were purchased at a discount of 1.75%. In connection with the branch acquisition transaction, the Corporation recorded goodwill of $6.8 million and other intangible assets attributable to customer core deposits of $5.6 million.

Acquisition of O.A.K. Financial Corporation

On April 30, 2010, the Corporation acquired OAK in an all-stock transaction for total consideration of $83.7 million. OAK provided traditional banking services and products through 14 banking offices serving communities in Ottawa, Allegan and Kent counties in west Michigan. At the acquisition date, OAK added total assets of $820 million, including total loans of $627 million, and total deposits of $693 million, including brokered deposits of $193 million. Upon acquisition, the OAK loan portfolio had contractually required principal payments receivable of $683 million and a fair value of $627 million. The outstanding contractual principal balance and the carrying amount of the OAK acquired loan portfolio were $182 million and $166 million, respectively, at June 30, 2016, compared to $204 million and $183 million, respectively, at December 31, 2015 and $236 million and $215 million, respectively, at June 30, 2015.

Accretable Yield

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:

	Lake Michigan			Monarch			North-western			OAK			Total
Six Months Ended June 30, 2016	(In thousands)
Balance at beginning of period	$	152,999		$	34,558		$	82,623		$	28,077		$	298,257
Additions (reductions)*	(10,365		)	(863		)	(5,848		)	(201		)	(17,277		)
Accretion recognized in interest income	(17,291		)	(2,836		)	(8,029		)	(6,284		)	(34,440		)
Reclassification from nonaccretable difference	—			—			5,000			5,000			10,000
Balance at end of period	$	125,343		$	30,859		$	73,746		$	26,592		$	256,540
Six Months Ended June 30, 2015
Balance at beginning of period	$	—		$	—		$	104,675		$	33,286		$	137,961
Additions attributable to acquisitions	190,246			37,914			—			—			228,160
Additions (reductions)*	1,550			(1,141		)	(2,859		)	5,215			2,765
Accretion recognized in interest income	(3,486		)	(968		)	(10,058		)	(6,326		)	(20,838		)
Balance at end of period	$	188,310		$	35,805		$	91,758		$	32,175		$	348,048

*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.

As part of its ongoing assessment of the acquired loan portfolios, management has determined that the overall credit quality of the Northwestern and OAK acquired loan portfolios has improved, which has resulted in an improvement in expected cash flows of certain loan pools in these acquired loan portfolios. Accordingly, management reclassified $5.0 million during the three months ended June 30, 2016 from the nonaccretable difference to the accretable yield for each of these acquired loan portfolios, which will increase amounts recognized into interest income over the estimated remaining lives of the loan pools within these portfolios.

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Investment Securities

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

The following is a summary of the amortized cost and fair value of investment securities available-for-sale and investment securities held-to-maturity at June 30, 2016, December 31, 2015 and June 30, 2015:

	Investment Securities Available-for-Sale
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(In thousands)
June 30, 2016
U.S. Treasury securities	$	5,781	$	29	$	—	$	5,810
Government sponsored agencies	156,843		715		536		157,022
State and political subdivisions	12,901		319		—		13,220
Residential mortgage-backed securities	166,582		2,034		—		168,616
Collateralized mortgage obligations	100,433		611		195		100,849
Corporate bonds	9,746		30		64		9,712
Preferred stock and trust preferred securities	2,888		436		1		3,323
Total	$	455,174	$	4,174	$	796	$	458,552
December 31, 2015
U.S. Treasury securities	$	5,773	$	—	$	8	$	5,765
Government sponsored agencies	195,711		78		800		194,989
State and political subdivisions	14,731		395		6		15,120
Residential mortgage-backed securities	189,452		538		2,222		187,768
Collateralized mortgage obligations	133,256		111		1,137		132,230
Corporate bonds	14,825		2		200		14,627
Preferred stock and trust preferred securities	2,888		344		—		3,232
Total	$	556,636	$	1,468	$	4,373	$	553,731
June 30, 2015
U.S. Treasury securities	$	8,270	$	24	$	—	$	8,294
Government sponsored agencies	227,424		683		200		227,907
State and political subdivisions	26,476		503		14		26,965
Residential mortgage-backed securities	213,621		742		1,694		212,669
Collateralized mortgage obligations	167,768		245		981		167,032
Corporate bonds	39,680		76		78		39,678
Preferred stock and trust preferred securities	2,889		272		—		3,161
Total	$	686,128	$	2,545	$	2,967	$	685,706

	Investment Securities Held-to-Maturity
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(In thousands)
June 30, 2016
State and political subdivisions	$	552,328	$	16,123	$	321	$	568,130
Trust preferred securities	500		—		215		285
Total	$	552,828	$	16,123	$	536	$	568,415
December 31, 2015
State and political subdivisions	$	509,471	$	7,446	$	4,512	$	512,405
Trust preferred securities	500		—		200		300
Total	$	509,971	$	7,446	$	4,712	$	512,705
June 30, 2015
State and political subdivisions	$	469,337	$	4,853	$	7,912	$	466,278
Trust preferred securities	500		—		200		300
Total	$	469,837	$	4,853	$	8,112	$	466,578

The majority of the Corporation’s residential mortgage-backed securities and collateralized mortgage obligations are backed by a U.S. government agency (Government National Mortgage Association) or a government sponsored enterprise (Federal Home Loan Mortgage Corporation or Federal National Mortgage Association).

The following is a summary of the amortized cost and fair value of investment securities at June 30, 2016, by maturity, for both available-for-sale and held-to-maturity investment securities. The maturities of residential mortgage-backed securities and collateralized mortgage obligations are based on scheduled principal payments. The maturities of all other debt securities are based on final contractual maturity.

	June 30, 2016
	Amortized Cost		Fair Value
	(In thousands)
Investment Securities Available-for-Sale:
Due in one year or less	$	154,820	$	155,386
Due after one year through five years	257,040		258,856
Due after five years through ten years	37,877		38,374
Due after ten years	4,049		4,112
Preferred stock	1,388		1,824
Total	$	455,174	$	458,552
Investment Securities Held-to-Maturity:
Due in one year or less	$	59,330	$	59,633
Due after one year through five years	275,988		280,491
Due after five years through ten years	130,304		136,879
Due after ten years	87,206		91,412
Total	$	552,828	$	568,415

The following schedule summarizes information for both available-for-sale and held-to-maturity investment securities with gross unrealized losses at June 30, 2016, December 31, 2015 and June 30, 2015, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position.

	Less Than 12 Months				12 Months or More				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In thousands)
June 30, 2016
Government sponsored agencies	$	14,110	$	19	$	18,787	$	517	$	32,897	$	536
State and political subdivisions	73,532		237		25,713		84		99,245		321
Collateralized mortgage obligations	8,461		13		22,955		182		31,416		195
Corporate bonds	—		—		4,936		64		4,936		64
Preferred stock and trust preferred securities	1,499		1		285		215		1,784		216
Total	$	97,602	$	270	$	72,676	$	1,062	$	170,278	$	1,332
December 31, 2015
U.S. Treasury securities	$	5,765	$	8	$	—	$	—	$	5,765	$	8
Government sponsored agencies	114,640		292		21,681		508		136,321		800
State and political subdivisions	195,285		2,891		68,361		1,627		263,646		4,518
Residential mortgage-backed securities	169,226		2,146		3,435		76		172,661		2,222
Collateralized mortgage obligations	60,459		408		39,382		729		99,841		1,137
Corporate bonds	9,532		200		—		—		9,532		200
Trust preferred securities	—		—		300		200		300		200
Total	$	554,907	$	5,945	$	133,159	$	3,140	$	688,066	$	9,085
June 30, 2015
Government sponsored agencies	$	24,789	$	163	$	14,715	$	37	$	39,504	$	200
State and political subdivisions	258,503		5,433		63,584		2,493		322,087		7,926
Residential mortgage-backed securities	187,858		1,592		3,643		102		191,501		1,694
Collateralized mortgage obligations	49,845		155		48,881		826		98,726		981
Corporate bonds	9,670		49		14,971		29		24,641		78
Trust preferred securities	—		—		300		200		300		200
Total	$	530,665	$	7,392	$	146,094	$	3,687	$	676,759	$	11,079

An assessment is performed quarterly by the Corporation to determine whether unrealized losses in its investment securities portfolio are temporary or other-than-temporary by carefully considering all reasonably available information. The Corporation reviews factors such as financial statements, credit ratings, news releases and other pertinent information of the underlying issuer or company to make its determination. Management did not believe any individual unrealized loss on any investment security, as of June 30, 2016, represented an other-than-temporary impairment (OTTI). Management believed that the unrealized losses on investment securities at June 30, 2016 were temporary in nature and due primarily to changes in interest rates and reduced market liquidity and not as a result of credit-related issues.

At June 30, 2016, the Corporation did not have the intent to sell any of its impaired investment securities and believed that it was more-likely-than-not that the Corporation will not have to sell any such investment securities before a full recovery of amortized cost. Accordingly, at June 30, 2016, the Corporation believed the impairments in its investment securities portfolio were temporary in nature. However, there is no assurance that OTTI may not occur in the future.

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Loans

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

Loans

Loans

Loan portfolio segments are defined as the level at which an entity develops and documents a systematic methodology to determine its allowance. The Corporation has two loan portfolio segments (commercial loans and consumer loans) that it uses in determining the allowance. Both quantitative and qualitative factors are used by management at the loan portfolio segment level in determining the adequacy of the allowance for the Corporation. Classes of loans are a disaggregation of an entity’s loan portfolio segments. Classes of loans are defined as a group of loans which share similar initial measurement attributes, risk characteristics, and methods for monitoring and assessing credit risk. The Corporation has six classes of loans, which are set forth below.

Commercial — Loans and lines of credit to varying types of businesses, including municipalities, school districts and nonprofit organizations, for the purpose of supporting working capital, operational needs and term financing of equipment. Repayment of such loans is generally provided through operating cash flows of the business. Commercial loans are predominately secured by equipment, inventory, accounts receivable, personal guarantees of the owner and other sources of repayment, although the Corporation may also secure commercial loans with real estate.

Commercial real estate — Loans secured by real estate occupied by the borrower for ongoing operations, non-owner occupied real estate leased to one or more tenants and vacant land that has been acquired for investment or future land development.

Real estate construction and land development — Real estate construction loans represent secured loans for the construction of business properties. Real estate construction loans often convert to a commercial real estate loan at the completion of the construction period. Land development loans represent secured development loans made to borrowers for the purpose of infrastructure improvements to vacant land to create finished marketable residential and commercial lots/land. Most land development loans are originated with the intention that the loans will be paid through the sale of developed lots/land by the developers within twelve months of the completion date. Land development loans are primarily comprised of loans to develop residential properties.

Residential mortgage — Loans secured by one- to four-family residential properties, generally with fixed interest rates for periods of fifteen years or less. The loan-to-value ratio at the time of origination is generally 80% or less. Residential mortgage loans with a loan-to-value ratio of more than 80% generally require private mortgage insurance.

Consumer installment — Loans to consumers primarily for the purpose of acquiring automobiles, recreational vehicles and personal watercraft and comprised primarily of indirect loans purchased from dealers. These loans consist of relatively small amounts that are spread across many individual borrowers.

Home equity — Loans and lines of credit whereby consumers utilize equity in their personal residence, generally through a second mortgage, as collateral to secure the loan.

Commercial, commercial real estate, real estate construction and land development loans are referred to as the Corporation’s commercial loan portfolio, while residential mortgage, consumer installment and home equity loans are referred to as the Corporation’s consumer loan portfolio. A summary of loans follows:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Commercial loan portfolio:
Commercial	$	1,953,301	$	1,905,879	$	1,754,873
Commercial real estate	2,157,733		2,112,162		2,243,513
Real estate construction and land development	285,848		232,076		112,312
Subtotal	4,396,882		4,250,117		4,110,698
Consumer loan portfolio:
Residential mortgage	1,494,192		1,429,636		1,310,167
Consumer installment	1,048,622		877,457		887,907
Home equity	707,573		713,937		725,971
Subtotal	3,250,387		3,021,030		2,924,045
Total loans	$	7,647,269	$	7,271,147	$	7,034,743

Credit Quality Monitoring

The Corporation maintains loan policies and credit underwriting standards as part of the process of managing credit risk. These standards include making loans generally only within the Corporation’s market areas. The Corporation’s lending markets generally consist of communities across the lower peninsula of Michigan, except for the southeastern portion of Michigan. The Corporation has no foreign loans.

The Corporation, through Chemical Bank, has a commercial loan portfolio approval process involving underwriting and individual and group loan approval authorities to consider credit quality and loss exposure at loan origination. The loans in the Corporation’s commercial loan portfolio are risk rated at origination based on the grading system set forth below. The approval authority of relationship managers is established based on experience levels, with credit decisions greater than $1.0 million requiring group loan authority approval, except for six executive and senior officers who have varying loan limits exceeding $1.5 million and up to $3.5 million. With respect to the group loan authorities, Chemical Bank has a loan committee, consisting of certain executive and senior officers, that meets weekly to consider loans ranging in amounts from $1.0 million to $10.0 million, depending on risk rating and credit action required. A directors’ loan committee of Chemical Bank, consisting of eight independent members of the board of directors of Chemical Bank, the chief executive officer of Chemical Bank and the senior credit officer of Chemical Bank, meets bi-weekly to consider loans in amounts over $10.0 million, and certain loans under $10.0 million depending on a loan’s risk rating and credit action required. Loans over $15.0 million require the approval of the board of directors of Chemical Bank.

The majority of the Corporation’s consumer loan portfolio is comprised of secured loans that are relatively small. The Corporation’s consumer loan portfolio has a centralized approval process which utilizes standardized underwriting criteria. The ongoing measurement of credit quality of the consumer loan portfolio is largely done on an exception basis. If payments are made on schedule, as agreed, then no further monitoring is performed. However, if delinquency occurs, the delinquent loans are turned over to the Corporation’s collection department for resolution, resulting in repossession or foreclosure if payments are not brought current. Credit quality for the entire consumer loan portfolio is measured by the periodic delinquency rate, nonaccrual amounts and actual losses incurred.

Loans in the commercial loan portfolio tend to be larger and more complex than those in the consumer loan portfolio, and therefore, are subject to more intensive monitoring. All loans in the commercial loan portfolio have an assigned relationship manager, and most borrowers provide periodic financial and operating information that allows the relationship managers to stay abreast of credit quality during the life of the loans. The risk ratings of loans in the commercial loan portfolio are reassessed at least annually, with loans below an acceptable risk rating reassessed more frequently and reviewed by various loan committees within the Corporation at least quarterly.

The Corporation maintains a centralized independent loan review function that monitors the approval process and ongoing asset quality of the loan portfolio, including the accuracy of loan grades. The Corporation also maintains an independent appraisal review function that participates in the review of all appraisals obtained by the Corporation for loans in the commercial loan portfolio.

Credit Quality Indicators

Commercial Loan Portfolio

The Corporation uses a nine grade risk rating system to monitor the ongoing credit quality of its commercial loan portfolio. These loan grades rank the credit quality of a borrower by measuring liquidity, debt capacity, coverage and payment behavior as shown in the borrower’s financial statements. The loan grades also measure the quality of the borrower’s management and the repayment support offered by any guarantors. A summary of the Corporation’s loan grades (or characteristics of the loans within each grade) follows:

Risk Grades 1-5 (Acceptable Credit Quality) — All loans in risk grades 1 through 5 are considered to be acceptable credit risks by the Corporation and are grouped for purposes of allowance for loan loss considerations and financial reporting. The five grades essentially represent a ranking of loans that are all viewed to be of acceptable credit quality, taking into consideration the various factors mentioned above, but with varying degrees of financial strength, debt coverage, management and factors that could impact credit quality. Business credits within risk grades 1 through 5 range from Risk Grade 1: Prime Quality (factors include: excellent business credit; excellent debt capacity and coverage; outstanding management; strong guarantors; superior liquidity and net worth; favorable loan-to-value ratios; debt secured by cash or equivalents, or backed by the full faith and credit of the U.S. Government) to Risk Grade 5: Acceptable Quality With Care (factors include: acceptable business credit, but with added risk due to specific industry or internal situations).

Risk Grade 6 (Watch) — A business credit that is not acceptable within the Corporation’s loan origination criteria; cash flow may not be adequate or is continually inconsistent to service current debt; financial condition has deteriorated as company trends/management have become inconsistent; the company is slow in furnishing quality financial information; working capital needs of the company are reliant on short-term borrowings; personal guarantees are weak and/or with little or no liquidity; the net worth of the company has deteriorated after recent or continued losses; the loan requires constant monitoring and attention from the Corporation; payment delinquencies becoming more serious; if left uncorrected, these potential weaknesses may, at some future date, result in deterioration of repayment prospects.

Risk Grade 7 (Substandard — Accrual) — A business credit that is inadequately protected by the current financial net worth and paying capacity of the obligor or of the collateral pledged, if any; management has deteriorated or has become non-existent; quality financial information is not available; a high level of maintenance is required by the Corporation; cash flow can no longer support debt requirements; loan payments are continually and/or severely delinquent; negative net worth; personal guaranty has become insignificant; a credit that has a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. The Corporation still expects a full recovery of all contractual principal and interest payments; however, a possibility exists that the Corporation will sustain some loss if deficiencies are not corrected.

Risk Grade 8 (Substandard — Nonaccrual) — A business credit accounted for on a nonaccrual basis that has all the weaknesses inherent in a loan classified as risk grade 7 with the added characteristic that the weaknesses are so pronounced that, on the basis of current financial information, conditions and values, collection in full is highly questionable; a partial loss is possible and interest is no longer being accrued. This loan meets the definition of an impaired loan. The risk of loss requires analysis to determine whether a valuation allowance needs to be established.

Risk Grade 9 (Substandard — Doubtful) — A business credit that has all the weaknesses inherent in a loan classified as risk grade 8 and interest is no longer being accrued, but additional deficiencies make it highly probable that liquidation will not satisfy the majority of the obligation; the primary source of repayment is nonexistent and there is doubt as to the value of the secondary source of repayment; the possibility of loss is likely, but current pending factors could strengthen the credit. This loan meets the definition of an impaired loan. A loan charge-off is recorded when management deems an amount uncollectible; however, the Corporation will establish a valuation allowance for probable losses, if required.

The Corporation considers all loans graded 1 through 5 as acceptable credit risks and structures and manages such relationships accordingly. Periodic financial and operating data combined with regular loan officer interactions are deemed adequate to monitor borrower performance. Loans graded 6 and 7 are considered higher-risk credits than loans graded 1 through 5 and the frequency of loan officer contact and receipt of financial data is increased to stay abreast of borrower performance. Loans graded 8 and 9 are considered problematic and require special care. Further, loans graded 6 through 9 are managed and monitored regularly through a number of processes, procedures and committees, including oversight by a loan administration committee comprised of executive and senior management of the Corporation, and include highly structured reporting of financial and operating data, intensive loan officer intervention and strategies to exit, as well as potential management by the Corporation’s special assets group.

The following schedule presents the recorded investment of loans in the commercial loan portfolio by risk rating categories at June 30, 2016, December 31, 2015 and June 30, 2015:

	Commercial		Commercial Real Estate		Real Estate Construction and Land Development		Total
	(In thousands)
June 30, 2016
Originated Portfolio:
Risk Grades 1-5	$	1,537,612	$	1,479,365	$	239,194	$	3,256,171
Risk Grade 6	46,202		36,814		843		83,859
Risk Grade 7	35,602		15,434		517		51,553
Risk Grade 8	14,577		21,324		496		36,397
Risk Grade 9	—		1		—		1
Subtotal	1,633,993		1,552,938		241,050		3,427,981
Acquired Portfolio:
Risk Grades 1-5	292,492		554,352		40,671		887,515
Risk Grade 6	15,352		20,746		1,500		37,598
Risk Grade 7	8,448		23,879		1,229		33,556
Risk Grade 8	3,016		5,818		1,398		10,232
Risk Grade 9	—		—		—		—
Subtotal	319,308		604,795		44,798		968,901
Total	$	1,953,301	$	2,157,733	$	285,848	$	4,396,882
December 31, 2015
Originated Portfolio:
Risk Grades 1-5	$	1,418,301	$	1,341,202	$	183,323	$	2,942,826
Risk Grade 6	34,727		31,036		180		65,943
Risk Grade 7	39,933		26,658		1,123		67,714
Risk Grade 8	26,459		25,163		521		52,143
Risk Grade 9	2,095		—		—		2,095
Subtotal	1,521,515		1,424,059		185,147		3,130,721
Acquired Portfolio:
Risk Grades 1-5	340,782		629,430		41,683		1,011,895
Risk Grade 6	28,321		23,926		2,556		54,803
Risk Grade 7	11,607		29,975		1,537		43,119
Risk Grade 8	3,654		4,772		1,153		9,579
Risk Grade 9	—		—		—		—
Subtotal	384,364		688,103		46,929		1,119,396
Total	$	1,905,879	$	2,112,162	$	232,076	$	4,250,117
June 30, 2015
Originated Portfolio:
Risk Grades 1-5	$	1,269,091	$	1,273,725	$	97,364	$	2,640,180
Risk Grade 6	32,189		34,677		433		67,299
Risk Grade 7	41,316		29,737		2,127		73,180
Risk Grade 8	17,260		25,283		502		43,045
Risk Grade 9	—		4		—		4
Subtotal	1,359,856		1,363,426		100,426		2,823,708
Acquired Portfolio:
Risk Grades 1-5	347,914		820,400		10,139		1,178,453
Risk Grade 6	29,412		22,796		71		52,279
Risk Grade 7	13,910		30,288		119		44,317
Risk Grade 8	3,781		6,603		1,557		11,941
Risk Grade 9	—		—		—		—
Subtotal	395,017		880,087		11,886		1,286,990
Total	$	1,754,873	$	2,243,513	$	112,312	$	4,110,698

Consumer Loan Portfolio

The Corporation evaluates the credit quality of loans in the consumer loan portfolio based on the performing or nonperforming status of the loan. Loans in the consumer loan portfolio that are performing in accordance with original contractual terms and are less than 90 days past due and accruing interest are considered to be in a performing status, while those that are in nonaccrual status, contractually past due 90 days or more as to interest or principal payments or classified as a nonperforming TDR are considered to be in a nonperforming status. Nonaccrual TDRs in the consumer loan portfolio are included with nonaccrual loans, while other TDRs in the consumer loan portfolio are considered to be in a nonperforming status until they meet the Corporation’s definition of a performing TDR, at which time they are considered to be in a performing status.

The following schedule presents the recorded investment of loans in the consumer loan portfolio based on loans in a performing status and loans in a nonperforming status at June 30, 2016, December 31, 2015 and June 30, 2015:

	Residential Mortgage		Consumer Installment		Home Equity		Total Consumer
	(In thousands)
June 30, 2016
Originated Loans:
Performing	$	1,299,382	$	1,041,978	$	598,283	$	2,939,643
Nonperforming	7,983		285		3,042		11,310
Subtotal	1,307,365		1,042,263		601,325		2,950,953
Acquired Loans:
Performing	185,492		6,298		105,360		297,150
Nonperforming	1,335		61		888		2,284
Subtotal	186,827		6,359		106,248		299,434
Total	$	1,494,192	$	1,048,622	$	707,573	$	3,250,387
December 31, 2015
Originated Loans:
Performing	$	1,207,945	$	868,975	$	587,566	$	2,664,486
Nonperforming	9,030		451		3,246		12,727
Subtotal	1,216,975		869,426		590,812		2,677,213
Acquired Loans:
Performing	210,580		7,984		122,118		340,682
Nonperforming	2,081		47		1,007		3,135
Subtotal	212,661		8,031		123,125		343,817
Total	$	1,429,636	$	877,457	$	713,937	$	3,021,030
June 30, 2015
Originated Loans:
Performing	$	1,058,696	$	871,543	$	584,520	$	2,514,759
Nonperforming	9,793		393		2,357		12,543
Subtotal	1,068,489		871,936		586,877		2,527,302
Acquired Loans:
Performing	238,698		15,966		138,086		392,750
Nonperforming	2,980		5		1,008		3,993
Subtotal	241,678		15,971		139,094		396,743
Total	$	1,310,167	$	887,907	$	725,971	$	2,924,045

Nonperforming Loans

A summary of nonperforming loans follows:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Nonaccrual loans:
Commercial	$	14,577	$	28,554	$	17,260
Commercial real estate	21,325		25,163		25,287
Real estate construction and land development	496		521		502
Residential mortgage	5,343		5,557		6,004
Consumer installment	285		451		393
Home equity	1,971		1,979		1,769
Total nonaccrual loans	43,997		62,225		51,215
Accruing loans contractually past due 90 days or more as to interest or principal payments:
Commercial	3		364		711
Commercial real estate	3		254		56
Residential mortgage	407		402		424
Home equity	1,071		1,267		588
Total accruing loans contractually past due 90 days or more as to interest or principal payments	1,484		2,287		1,779
Nonperforming TDRs:
Commercial loan portfolio	14,240		16,297		14,547
Consumer loan portfolio	2,233		3,071		3,365
Total nonperforming TDRs	16,473		19,368		17,912
Total nonperforming loans	$	61,954	$	83,880	$	70,906

The Corporation’s nonaccrual loans at June 30, 2016, December 31, 2015 and June 30, 2015 included $32.4 million, $35.9 million and $35.7 million, respectively, of nonaccrual TDRs.

The Corporation had $0.9 million of residential mortgage loans that were in the process of foreclosure at June 30, 2016, compared to $2.9 million and $2.0 million at December 31, 2015 and June 30, 2015, respectively.

Impaired Loans

The following schedule presents impaired loans by classes of loans at June 30, 2016, December 31, 2015 and June 30, 2015:

	Recorded Investment		Unpaid Principal Balance		Related Valuation Allowance
	(In thousands)
June 30, 2016
Impaired loans with a valuation allowance:
Commercial	$	3,764	$	3,769	$	2,582
Commercial real estate	3,270		3,438		472
Residential mortgage	20,745		20,745		163
Subtotal	27,779		27,952		3,217
Impaired loans with no related valuation allowance:
Commercial	34,633		43,576		—
Commercial real estate	47,894		58,312		—
Real estate construction and land development	2,196		3,770		—
Residential mortgage	6,678		7,365		—
Consumer installment	347		365		—
Home equity	2,859		3,084		—
Subtotal	94,607		116,472		—
Total impaired loans:
Commercial	38,397		47,345		2,582
Commercial real estate	51,164		61,750		472
Real estate construction and land development	2,196		3,770		—
Residential mortgage	27,423		28,110		163
Consumer installment	347		365		—
Home equity	2,859		3,084		—
Total	$	122,386	$	144,424	$	3,217
December 31, 2015
Impaired loans with a valuation allowance:
Commercial	$	18,898	$	19,426	$	5,700
Commercial real estate	4,448		4,688		497
Residential mortgage	21,037		21,037		192
Subtotal	44,383		45,151		6,389
Impaired loans with no related valuation allowance:
Commercial	31,039		37,703		—
Commercial real estate	53,518		69,130		—
Real estate construction and land development	2,136		3,108		—
Residential mortgage	7,638		8,644		—
Consumer installment	498		512		—
Home equity	2,986		3,270		—
Subtotal	97,815		122,367		—
Total impaired loans:
Commercial	49,937		57,129		5,700
Commercial real estate	57,966		73,818		497
Real estate construction and land development	2,136		3,108		—
Residential mortgage	28,675		29,681		192
Consumer installment	498		512		—
Home equity	2,986		3,270		—
Total	$	142,198	$	167,518	$	6,389

	Recorded Investment		Unpaid Principal Balance		Related Valuation Allowance
	(In thousands)
June 30, 2015
Impaired loans with a valuation allowance:
Commercial	$	4,044	$	4,137	$	718
Commercial real estate	2,789		2,948		603
Residential mortgage	20,970		20,970		260
Subtotal	27,803		28,055		1,581
Impaired loans with no related valuation allowance:
Commercial	32,461		38,160		—
Commercial real estate	56,052		78,490		—
Real estate construction and land development	2,393		4,175		—
Residential mortgage	8,984		8,984		—
Consumer installment	398		398		—
Home equity	2,778		2,778		—
Subtotal	103,066		132,985		—
Total impaired loans:
Commercial	36,505		42,297		718
Commercial real estate	58,841		81,438		603
Real estate construction and land development	2,393		4,175		—
Residential mortgage	29,954		29,954		260
Consumer installment	398		398		—
Home equity	2,778		2,778		—
Total	$	130,869	$	161,040	$	1,581

The difference between an impaired loan’s recorded investment and the unpaid principal balance for originated loans represents a partial charge-off resulting from a confirmed loss due to the value of the collateral securing the loan being below the loan balance and management’s assessment that full collection of the loan balance is not likely, and for acquired loans that meet the definition of an impaired loan represents fair value adjustments recognized at the acquisition date attributable to expected credit losses and the discounting of expected cash flows at market interest rates. The difference between the recorded investment and the unpaid principal balance of $22.0 million, $25.3 million and $30.2 million at June 30, 2016, December 31, 2015 and June 30, 2015, respectively, includes confirmed losses (partial charge-offs) of $16.3 million, $17.1 million and $15.2 million, respectively, and fair value discount adjustments of $5.7 million, $8.2 million and $15.0 million, respectively.

Impaired loans included $12.5 million, $12.8 million and $15.9 million at June 30, 2016, December 31, 2015 and June 30, 2015, respectively, of acquired loans that were not performing in accordance with original contractual terms. Acquired loans that are not performing in accordance with contractual terms are not reported as nonperforming loans because these loans are recorded in pools at their net realizable value based on the principal and interest the Corporation expects to collect on these loans. Impaired loans also included $49.4 million, $47.8 million and $45.8 million at June 30, 2016, December 31, 2015 and June 30, 2015, respectively, of performing TDRs.

The following schedule presents information related to impaired loans for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	Average Recorded Investment		Interest Income Recognized While on Impaired Status		Average Recorded Investment		Interest Income Recognized While on Impaired Status
	(In thousands)
Commercial	$	38,606	$	348	$	41,811	$	677
Commercial real estate	53,723		391		55,839		849
Real estate construction and land development	2,265		26		2,166		51
Residential mortgage	27,418		356		27,755		722
Consumer installment	330		1		359		2
Home equity	2,791		13		3,022		28
Total	$	125,133	$	1,135	$	130,952	$	2,329

	Three Months Ended June 30, 2015				Six Months Ended June 30, 2015
	Average Recorded Investment		Interest Income Recognized While on Impaired Status		Average Recorded Investment		Interest Income Recognized While on Impaired Status
	(In thousands)
Commercial	$	36,735	$	263	$	37,655	$	552
Commercial real estate	60,393		458		60,317		983
Real estate construction and land development	2,290		36		2,403		63
Residential mortgage	29,432		380		28,392		711
Consumer installment	426		1		463		1
Home equity	2,529		14		2,440		22
Total	$	131,805	$	1,152	$	131,670	$	2,332

The following schedule presents the aging status of the recorded investment in loans by classes of loans at June 30, 2016, December 31, 2015 and June 30, 2015:

	31-60 Days Past Due		61-89 Days Past Due		Accruing Loans Past Due 90 Days or More		Non-accrual Loans		Total Past Due		Current		Total Loans
	(In thousands)
June 30, 2016
Originated Portfolio:
Commercial	$	4,522	$	822	$	3	$	14,577	$	19,924	$	1,614,069	$	1,633,993
Commercial real estate	8,842		343		3		21,325		30,513		1,522,425		1,552,938
Real estate construction and land development	62		—		—		496		558		240,492		241,050
Residential mortgage	1,955		—		407		5,343		7,705		1,299,660		1,307,365
Consumer installment	2,856		554		—		285		3,695		1,038,568		1,042,263
Home equity	2,594		366		1,071		1,971		6,002		595,323		601,325
Total	$	20,831	$	2,085	$	1,484	$	43,997	$	68,397	$	6,310,537	$	6,378,934
Acquired Portfolio:
Commercial	$	547	$	—	$	3,038	$	—	$	3,585	$	315,723	$	319,308
Commercial real estate	90		—		5,817		—		5,907		598,888		604,795
Real estate construction and land development	389		—		1,398		—		1,787		43,011		44,798
Residential mortgage	407		—		1,335		—		1,742		185,085		186,827
Consumer installment	58		25		62		—		145		6,214		6,359
Home equity	416		38		888		—		1,342		104,906		106,248
Total	$	1,907	$	63	$	12,538	$	—	$	14,508	$	1,253,827	$	1,268,335

	31-60 Days Past Due		61-89 Days Past Due		Accruing Loans Past Due 90 Days or More		Non-accrual Loans		Total Past Due		Current		Total Loans
	(In thousands)
December 31, 2015
Originated Portfolio:
Commercial	$	3,685	$	1,230	$	364	$	28,554	$	33,833	$	1,487,682	$	1,521,515
Commercial real estate	4,168		1,603		254		25,163		31,188		1,392,871		1,424,059
Real estate construction and land development	—		—		—		521		521		184,626		185,147
Residential mortgage	1,737		—		402		5,557		7,696		1,209,279		1,216,975
Consumer installment	3,145		644		—		451		4,240		865,186		869,426
Home equity	1,767		788		1,267		1,979		5,801		585,011		590,812
Total	$	14,502	$	4,265	$	2,287	$	62,225	$	83,279	$	5,724,655	$	5,807,934
Acquired Portfolio:
Commercial	$	490	$	532	$	3,735	$	—	$	4,757	$	379,607	$	384,364
Commercial real estate	3,557		691		4,771		—		9,019		679,084		688,103
Real estate construction and land development	—		—		1,154		—		1,154		45,775		46,929
Residential mortgage	1,370		—		2,081		—		3,451		209,210		212,661
Consumer installment	55		—		47		—		102		7,929		8,031
Home equity	847		78		1,007		—		1,932		121,193		123,125
Total	$	6,319	$	1,301	$	12,795	$	—	$	20,415	$	1,442,798	$	1,463,213
June 30, 2015
Originated Portfolio:
Commercial	$	4,055	$	2,317	$	711	$	17,260	$	24,343	$	1,335,513	$	1,359,856
Commercial real estate	2,754		1,117		56		25,287		29,214		1,334,212		1,363,426
Real estate construction and land development	413		—		—		502		915		99,511		100,426
Residential mortgage	1,536		—		424		6,004		7,964		1,060,525		1,068,489
Consumer installment	2,526		302		—		393		3,221		868,715		871,936
Home equity	2,334		204		588		1,769		4,895		581,982		586,877
Total	$	13,618	$	3,940	$	1,779	$	51,215	$	70,552	$	5,280,458	$	5,351,010
Acquired Portfolio:
Commercial	$	690	$	—	$	3,781	$	—	$	4,471	$	390,546	$	395,017
Commercial real estate	969		291		6,603		—		7,863		872,224		880,087
Real estate construction and land development	—		—		1,557		—		1,557		10,329		11,886
Residential mortgage	1,077		138		2,980		—		4,195		237,483		241,678
Consumer installment	—		56		5		—		61		15,910		15,971
Home equity	1,153		210		1,008		—		2,371		136,723		139,094
Total	$	3,889	$	695	$	15,934	$	—	$	20,518	$	1,663,215	$	1,683,733

Loans Modified Under Troubled Debt Restructurings (TDRs)

The following schedule presents the Corporation’s TDRs at June 30, 2016, December 31, 2015 and June 30, 2015:

	Performing TDRs		Non-Performing TDRs		Nonaccrual TDRs		Total
	(In thousands)
June 30, 2016
Commercial loan portfolio	$	30,866	$	14,240	$	28,979	$	74,085
Consumer loan portfolio	18,512		2,233		3,402		24,147
Total	$	49,378	$	16,473	$	32,381	$	98,232
December 31, 2015
Commercial loan portfolio	$	29,844	$	16,297	$	32,682	$	78,823
Consumer loan portfolio	17,966		3,071		3,251		24,288
Total	$	47,810	$	19,368	$	35,933	$	103,111
June 30, 2015
Commercial loan portfolio	$	28,203	$	14,547	$	32,001	$	74,751
Consumer loan portfolio	17,605		3,365		3,707		24,677
Total	$	45,808	$	17,912	$	35,708	$	99,428

The following schedule provides information on the Corporation's TDRs that were modified during the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30, 2016					Six Months Ended June 30, 2016
	Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment
	(Dollars in thousands)
Commercial loan portfolio:
Commercial	21	$	4,149	$	4,149	28	$	7,981	$	7,981
Commercial real estate	2	1,454		1,454		6	2,441		2,441
Subtotal – commercial loan portfolio	23	5,603		5,603		34	10,422		10,422
Consumer loan portfolio	14	490		490		21	694		694
Total	37	$	6,093	$	6,093	55	$	11,116	$	11,116

	Three Months Ended June 30, 2015					Six Months Ended June 30, 2015
	Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment
	(Dollars in thousands)
Commercial loan portfolio:
Commercial	13	$	2,332	$	2,332	18	$	4,264	$	4,264
Commercial real estate	4	527		527		9	3,061		3,061
Real estate construction and land development	1	305		305		1	305		305
Subtotal – commercial loan portfolio	18	3,164		3,164		28	7,630		7,630
Consumer loan portfolio	29	1,633		1,631		39	1,969		1,967
Total	47	$	4,797	$	4,795	67	$	9,599	$	9,597

The pre-modification and post-modification recorded investment represents amounts as of the date of loan modification. The difference between the pre-modification and post-modification recorded investment of residential mortgage TDRs represents impairment recognized by the Corporation through the provision for loan losses computed based on a loan's post-modification present value of expected future cash flows discounted at the loan's original effective interest rate.

The following schedule includes TDRs for which there was a payment default during the three and six months ended June 30, 2016 and 2015, whereby the borrower was past due with respect to principal and/or interest for 90 days or more, and the loan became a TDR during the twelve-month period prior to the default:

	Three Months Ended June 30, 2016			Six Months Ended June 30, 2016
	Number of Loans	Principal Balance at End of Period		Number of Loans	Principal Balance at End of Period
	(Dollars in thousands)
Commercial loan portfolio:
Commercial	—	$	—	—	$	—
Commercial real estate	1	788		2	1,721
Subtotal – commercial loan portfolio	1	788		2	1,721
Consumer loan portfolio	1	—		2	—
Total	2	$	788	4	$	1,721
	Three Months Ended June 30, 2015			Six Months Ended June 30, 2015
	Number of Loans	Principal Balance at End of Period		Number of Loans	Principal Balance at End of Period
	(Dollars in thousands)
Commercial loan portfolio:
Commercial	—	$	—	—	$	—
Commercial real estate	1	183		4	942
Subtotal – commercial loan portfolio	1	183		4	942
Consumer loan portfolio	—	—		1	33
Total	1	$	183	5	$	975

Allowance for Loan Losses

The following schedule presents, by loan portfolio segment, the changes in the allowance for the three and six months ended June 30, 2016 and details regarding the balance in the allowance and the recorded investment in loans at June 30, 2016 by impairment evaluation method.

	Commercial Loan Portfolio			Consumer Loan Portfolio			Unallocated		Total
	(In thousands)
Changes in allowance for loan losses for the three months ended June 30, 2016:
Beginning balance	$	44,668		$	25,650		$	—	$	70,318
Provision for loan losses	900			2,100			—		3,000
Charge-offs	(2,542		)	(1,078		)	—		(3,620		)
Recoveries	1,202			606			—		1,808
Ending balance	$	44,228		$	27,278		$	—	$	71,506
Changes in allowance for loan losses for the six months ended June 30, 2016:
Beginning balance	$	47,234		$	26,094		$	—	$	73,328
Provision for loan losses	1,900			2,600			—		4,500
Charge-offs	(6,438		)	(2,640		)	—		(9,078		)
Recoveries	1,532			1,224			—		2,756
Ending balance	$	44,228		$	27,278		$	—	$	71,506
Allowance for loan losses balance at June 30, 2016 attributable to:
Loans individually evaluated for impairment	$	3,054		$	163		$	—	$	3,217
Loans collectively evaluated for impairment	41,174			27,115			—		68,289
Loans acquired with deteriorated credit quality	—			—			—		—
Total	$	44,228		$	27,278		$	—	$	71,506
Recorded investment (loan balance) at June 30, 2016:
Loans individually evaluated for impairment	$	81,504		$	20,745		$	—	$	102,249
Loans collectively evaluated for impairment	3,346,477			2,930,208			—		6,276,685
Loans acquired with deteriorated credit quality	968,901			299,434			—		1,268,335
Total	$	4,396,882		$	3,250,387		$	—	$	7,647,269

The following schedule presents, by loan portfolio segment, details regarding the balance in the allowance and the recorded investment in loans at December 31, 2015 by impairment evaluation method.

	Commercial Loan Portfolio		Consumer Loan Portfolio		Unallocated		Total
	(In thousands)
Allowance for loan losses balance at December 31, 2015 attributable to:
Loans individually evaluated for impairment	$	6,197	$	192	$	—	$	6,389
Loans collectively evaluated for impairment	41,037		25,902		—		66,939
Loans acquired with deteriorated credit quality	—		—		—		—
Total	$	47,234	$	26,094	$	—	$	73,328
Recorded investment (loan balance) at December 31, 2015:
Loans individually evaluated for impairment	$	100,379	$	21,037	$	—	$	121,416
Loans collectively evaluated for impairment	3,030,342		2,656,176		—		5,686,518
Loans acquired with deteriorated credit quality	1,119,396		343,817		—		1,463,213
Total	$	4,250,117	$	3,021,030	$	—	$	7,271,147

The following schedule presents, by loan portfolio segment, the changes in the allowance for the three and six months ended June 30, 2015 and details regarding the balance in the allowance and the recorded investment in loans at June 30, 2015 by impairment evaluation method.

	Commercial Loan Portfolio			Consumer Loan Portfolio			Unallocated		Total
	(In thousands)
Changes in allowance for loan losses for the three months ended June 30, 2015:
Beginning balance	$	46,819		$	24,579		$	3,858	$	75,256
Provision for loan losses	(626		)	(109		)	2,235		1,500
Charge-offs	(915		)	(1,809		)	—		(2,724		)
Recoveries	249			660			—		909
Ending balance	$	45,527		$	23,321		$	6,093	$	74,941
Changes in allowance for loan losses for the six months ended June 30, 2015:
Beginning balance	$	44,156		$	28,803		$	2,724	$	75,683
Provision for loan losses	2,967			(3,336		)	3,369		3,000
Charge-offs	(2,419		)	(3,448		)	—		(5,867		)
Recoveries	823			1,302			—		2,125
Ending balance	$	45,527		$	23,321		$	6,093	$	74,941
Allowance for loan losses balance at June 30, 2015 attributable to:
Loans individually evaluated for impairment	$	1,321		$	260		$	—	$	1,581
Loans collectively evaluated for impairment	44,206			23,061			6,093		73,360
Loans acquired with deteriorated credit quality	—			—			—		—
Total	$	45,527		$	23,321		$	6,093	$	74,941
Recorded investment (loan balance) at June 30, 2015:
Loans individually evaluated for impairment	$	85,799		$	20,970		$	—	$	106,769
Loans collectively evaluated for impairment	2,737,909			2,506,332			—		5,244,241
Loans acquired with deteriorated credit quality	1,286,990			396,743			—		1,683,733
Total	$	4,110,698		$	2,924,045		$	—	$	7,034,743

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Intangible Assets

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

The Corporation has the following types of intangible assets: goodwill, core deposit intangible assets, non-compete intangible assets and mortgage servicing rights (MSRs). Goodwill, core deposit intangible assets, and non-compete intangible assets arose as a result of business combinations or other acquisitions. MSRs arose as a result of selling residential mortgage loans in the secondary market while retaining the right to service these loans and receive servicing income over the life of the loan and from acquisitions of other banks that had MSRs. Amortization is recorded on the core deposit intangible assets, non-compete intangible assets and MSRs.

Goodwill recorded is primarily attributable to the synergies and economies of scale expected from combining the operations of the Corporation and other acquisitions. The Corporation recorded additional goodwill in the first quarter of 2016 of $0.5 million related to the 2015 acquisition of Lake Michigan resulting from adjustments to the original acquisition date valuation of acquired assets and liabilities. Goodwill is not amortized but is evaluated at least annually for impairment. The Corporation’s most recent annual goodwill impairment test performed as of October 31, 2015 did not indicate that an impairment of goodwill existed. The Corporation also determined that no triggering events have occurred that indicated impairment from the most recent valuation date through June 30, 2016 and that the Corporation's goodwill was not impaired at June 30, 2016.

The following table shows the net carrying value of the Corporation’s intangible assets:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Goodwill	$	286,867	$	287,393	$	285,512
Other intangible assets:
Core deposit intangible assets	$	24,429	$	26,654	$	28,353
Non-compete intangible assets	164		328		541
Mortgage servicing rights	9,677		11,122		12,307
Total other intangible assets	$	34,270	$	38,104	$	41,201

The following table sets forth the carrying amount, accumulated amortization and amortization expense of core deposit intangible assets that are amortizable and arose from business combinations or other acquisitions:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Gross original amount	$	40,055	$	40,055	$	39,355
Accumulated amortization	15,626		13,401		11,002
Carrying amount	$	24,429	$	26,654	$	28,353
Amortization expense for the three months ended June 30	$	1,113			$	952
Amortization expense for the six months ended June 30	$	2,225			$	1,743

The estimated future amortization expense on core deposit intangible assets for periods ending after June 30, 2016 is as follows: 2016 — $2.1 million; 2017 — $3.8 million; 2018 — $3.6 million; 2019 — $3.4 million; 2020 — $2.9 million; 2021 and thereafter — $8.6 million. The non-compete intangible assets will be fully amortized during 2016.

The following shows the net carrying value and fair value of MSRs and the total loans that the Corporation is servicing for others:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Net carrying value of MSRs	$	9,677	$	11,122	$	12,307
Fair value of MSRs	$	12,493	$	15,542	$	16,602
Valuation allowance	$	412	$	—	$	—
Loans serviced for others that have servicing rights capitalized	$	2,014,986	$	2,082,899	$	2,193,067

MSRs are stratified into servicing assets originated by the Corporation and those acquired in acquisitions of other institutions and further stratified into relatively homogeneous pools based on products with similar characteristics. There was a valuation allowance of $0.4 million as of June 30, 2016 related to impairment within certain pools attributable to the Corporation's servicing portfolios that were acquired in the Northwestern and Monarch transactions. There was no impairment valuation allowance recorded on the Corporation's MSRs at and December 31, 2015 and June 30, 2015.

The following table shows the activity for capitalized MSRs:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(In thousands)
Balance at beginning of period	$	10,478		$	11,583		$	11,122		$	12,217
Acquired in Monarch acquisition	—			1,284			—			1,284
Additions	586			415			917			815
Amortization	(975		)	(1,175		)	(1,950		)	(2,209		)
Change in valuation allowance	(412		)	200			(412		)	200
Balance at end of period	$	9,677		$	12,307		$	9,677		$	12,307

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Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of related tax benefit/expense, were as follows:

	June 30, 2016			December 31, 2015			June 30, 2015
	(In thousands)
Net unrealized gains (losses) on investment securities – available-for-sale, net of related tax expense (benefit) of $1,182 at June 30, 2016, $(1,017) at December 31, 2015 and $(148) at June 30, 2015	$	2,196		$	(1,888	)	$	(274	)
Pension and other postretirement benefits adjustment, net of related tax benefit of $15,020 at June 30, 2016, $14,616 at December 31, 2015 and $16,601 at June 30, 2015	(27,894		)	(27,144		)	(30,830		)
Accumulated other comprehensive loss	$	(25,698	)	$	(29,032	)	$	(31,104	)

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Borrowings Borrowings (Notes)

6 Months Ended

Jun. 30, 2016

Borrowings [Abstract]

Borrowings [Text Block]

Borrowings

Short-term Borrowings

The Corporation's short-term borrowings, which generally have an original term to maturity of 30 days or less, consisted of short-term FHLB advances outstanding of $300 million at June 30, 2016, $100 million at December 31, 2015 and $205 million at June 30, 2015, and federal funds purchased of $22 million at June 30, 2015. There were no federal funds purchased at June 30, 2016 and December 31, 2015.

Long-term Borrowings

A summary of the Corporation's long-term borrowings follows:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Long-term borrowings:
Long-term FHLB advances	$	329,320	$	181,394	$	81,469
Securities sold under agreements to repurchase	17,277		17,453		23,649
Non-revolving line-of-credit	25,000		25,000		25,000
Subordinated debt obligations	—		18,544		18,372
Total long-term borrowings	$	371,597	$	242,391	$	148,490

During the second quarter of 2016, the Corporation borrowed $100 million of long-term FHLB advances which have a three-year term at a fixed-rate of 1.00%. During the first quarter of 2016, the Corporation borrowed $50 million of long-term FHLB advances which have a four-year term at a fixed-rate of 1.30%. The Corporation's long-term FHLB advances have a combined weighted-average interest rate of 1.27% as of June 30, 2016. The Corporation's FHLB advances, including both short-term and long-term, require monthly interest payments and are collateralized by eligible loans totaling $2.98 billion as of June 30, 2016. The scheduled reductions of long-term FHLB advances as of June 30, 2016 were as follows: 2016 - $5.1 million; 2017 - $47.1 million; 2018 - $67.1 million; 2019; - $100.0 million; and 2020 - $110.0 million.

Securities sold under agreements to repurchase are with an unaffiliated financial institution and are secured by available for-sale-securities. As of June 30, 2016, these agreements had scheduled maturities of $8.1 million in 2016 and $9.2 million in 2017.

The Corporation has a $25 million secured non-revolving line-of-credit with an unaffiliated third-party financial institution. The line-of-credit originally matured in May 2016 and was extended for a period of three months. The Corporation is fully drawn on the entire amount of the line-of-credit. This line-of-credit bears a variable rate of interest which is based on the one-, two- or three-month LIBOR, as periodically selected by the Corporation, plus a fixed stated rate (effective interest rate of 2.41% at June 30, 2016). The line-of-credit agreement contains certain restrictive covenants. The Corporation was in compliance with all of the covenants at June 30, 2016.

As a result of the Lake Michigan transaction on May 31, 2015, the Corporation acquired subordinated debt obligations in the amount of $18.6 million. The Corporation fully repaid these debt obligations during the first quarter of 2016.

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Regulatory Capital

6 Months Ended

Jun. 30, 2016

Banking and Thrift [Abstract]

Regulatory Capital

Regulatory Capital

Federal and state banking regulations place certain restrictions on the transfer of assets, in the form of dividends, loans, or advances, from Chemical Bank to the Corporation. As of June 30, 2016, substantially all of the assets of Chemical Bank were restricted from transfer to the Corporation in the form of loans or advances. Dividends from Chemical Bank are the principal source of funds for the Corporation. In addition to the statutory limits, the Corporation considers the overall financial and capital position of Chemical Bank prior to making any cash dividend decisions.

The Corporation and Chemical Bank are subject to various regulatory capital requirements administered by federal banking agencies. Under these capital requirements, Chemical Bank must meet specific capital guidelines that involve quantitative measures of assets and certain off-balance sheet items as calculated under regulatory accounting practices. In addition, capital amounts and classifications are subject to qualitative judgments by regulators. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Corporation’s consolidated financial statements.

Quantitative measures established by regulation to ensure capital adequacy require minimum ratios of Tier 1 capital to average assets (Leverage Ratio) and common equity Tier 1, Tier 1 and Total capital to risk-weighted assets. These capital guidelines assign risk weights to on- and off-balance sheet items in arriving at total risk-weighted assets. Minimum capital levels are based upon the perceived risk of various asset categories and certain off-balance sheet instruments. Risk weighted assets of the Corporation totaled $7.50 billion, $7.14 billion and $6.99 billion at June 30, 2016, December 31, 2015 and June 30, 2015, respectively.

In July 2013, the Board of Governors of the Federal Reserve System ("Reserve Board") and FDIC approved final rules implementing the Basel Committee on Banking Supervision's ("BCBS") capital guidelines for U.S. banks (commonly referred to as "Basel III"). Beginning January 1, 2015, the Basel III capital rules include a new minimum common equity Tier 1 capital to risk-weighted assets ("CET Tier 1") ratio of 4.5%, in addition to raising the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0% and requiring a minimum leverage ratio of 4.0%. The Basel III capital rules also establish a new capital conservation buffer of 2.5% of risk-weighted assets, which is phased-in over a four-year period beginning January 1, 2016.

At June 30, 2016, December 31, 2015 and June 30, 2015, Chemical Bank’s capital ratios exceeded the quantitative capital ratios required for an institution to be considered “well-capitalized.” Significant factors that may affect capital adequacy include, but are not limited to, a disproportionate growth in assets versus capital and a change in mix or credit quality of assets.

The summary below compares the actual capital amounts and ratios with the quantitative measures established by regulation to ensure capital adequacy:

	Actual				Minimum Required for Capital Adequacy Purposes				Required to be Well Capitalized Under Prompt Corrective Action Regulations
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
	(Dollars in thousands)
June 30, 2016
Total Capital to Risk-Weighted Assets:
Corporation	$	851,114	11.4	%	$	599,743	8.0	%	N/A		N/A
Chemical Bank	854,189		11.4		598,142		8.0		$	747,677	10.0	%
Tier 1 Capital to Risk-Weighted Assets:
Corporation	779,608		10.4		449,807		6.0		N/A		N/A
Chemical Bank	782,683		10.5		448,606		6.0		598,142		8.0
Common Equity Tier 1 Capital to Risk-Weighted Assets:
Corporation	779,608		10.4		337,355		4.5		N/A		N/A
Chemical Bank	782,683		10.5		336,455		4.5		485,990		6.5
Leverage Ratio:
Corporation	779,608		8.6		361,408		4.0		N/A		N/A
Chemical Bank	782,683		8.7		360,746		4.0		450,932		5.0

	Actual				Minimum Required for Capital Adequacy Purposes				Required to be Well Capitalized Under Prompt Corrective Action Regulations
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
	(Dollars in thousands)
December 31, 2015
Total Capital to Risk-Weighted Assets:
Corporation	$	841,257	11.8	%	$	571,509	8.0	%	N/A		N/A
Chemical Bank	830,294		11.7		570,073		8.0		$	712,591	10.0	%
Tier 1 Capital to Risk-Weighted Assets:
Corporation	767,929		10.7		428,631		6.0		N/A		N/A
Chemical Bank	756,966		10.6		427,555		6.0		570,073		8.0
Common Equity Tier 1 Capital to Risk-Weighted Assets:
Corporation	753,815		10.6		321,474		4.5		N/A		N/A
Chemical Bank	756,966		10.6		320,666		4.5		463,184		6.5
Leverage Ratio:
Corporation	767,929		8.6		356,396		4.0		N/A		N/A
Chemical Bank	756,966		8.5		355,911		4.0		444,888		5.0
June 30, 2015
Total Capital to Risk-Weighted Assets:
Corporation	$	816,595	11.6	%	$	559,273	8.0	%	N/A		N/A
Chemical Bank	713,999		12.0		471,422		8.0		$	589,277	10.0	%
The Bank of Holland	77,648		10.2		61,028		8.0		76,285		10.0
The Bank of Northern Michigan	32,779		10.1		25,878		8.0		32,347		10.0
Tier 1 Capital to Risk-Weighted Assets:
Corporation	741,654		10.6		419,455		6.0		N/A		N/A
Chemical Bank	640,324		10.9		353,566		6.0		471,422		8.0
The Bank of Holland	76,312		10.0		45,771		6.0		61,028		8.0
The Bank of Northern Michigan	32,779		10.1		19,408		6.0		25,878		8.0
Common Equity Tier 1 Capital to Risk-Weighted Assets:
Corporation	723,654		10.4		314,591		4.5		N/A		N/A
Chemical Bank	640,324		10.9		265,175		4.5		383,030		6.5
The Bank of Holland	76,312		10.0		34,328		4.5		49,585		6.5
The Bank of Northern Michigan	32,779		10.1		14,556		4.5		21,025		6.5
Leverage Ratio:
Corporation	741,654		9.4		314,344		4.0		N/A		N/A
Chemical Bank	640,324		8.5		300,703		4.0		375,878		5.0
The Bank of Holland	76,312		9.9		30,710		4.0		38,388		5.0
The Bank of Northern Michigan	32,779		9.1		14,421		4.0		18,026		5.0

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Fair Value Measurements

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value, as defined by GAAP, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for market activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

The Corporation utilizes fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Investment securities — available-for-sale and loans held-for-sale are recorded at fair value on a recurring basis. Additionally, the Corporation may be required to record other assets, such as impaired loans, goodwill, other intangible assets, other real estate and repossessed assets, at fair value on a nonrecurring basis. These nonrecurring fair value adjustments typically involve the application of lower of cost or market accounting or write-downs of individual assets.

The Corporation determines the fair value of its financial instruments based on a three-level hierarchy established by GAAP. The classification and disclosure of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. Observable inputs reflect market-derived or market-based information obtained from independent sources, while unobservable inputs reflect management’s estimates about market data. The three levels of inputs that may be used to measure fair value within the GAAP hierarchy are as follows:

Level 1 Valuation is based upon quoted prices for identical instruments traded in active markets. Level 1 valuations for the Corporation would include U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets. Valuations are obtained from a third-party pricing service for these investment securities.

Level 2 Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 2 valuations for the Corporation include government sponsored agency securities, including securities issued by the Federal Home Loan Bank, Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, Federal Farm Credit Bank, Student Loan Marketing Corporation and the Small Business Administration, securities issued by certain state and political subdivisions, residential mortgage-backed securities, collateralized mortgage obligations, corporate bonds, preferred stock and available-for-sale trust preferred securities. Valuations are obtained from a third-party pricing service for these investment securities.

Level 3 Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models, yield curves and similar techniques. The determination of fair value requires management judgment or estimation and generally is corroborated by external data, which includes third-party pricing services. Level 3 valuations for the Corporation include securities issued by certain state and political subdivisions, held-to-maturity trust preferred investment securities, impaired loans, goodwill, core deposit intangible assets, non-compete intangible assets, MSRs and other real estate and repossessed assets.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Corporation’s financial assets and financial liabilities carried at fair value and all financial instruments disclosed at fair value. In general, fair value is based upon quoted market prices, where available. If quoted market prices are not available, fair value is based upon third-party pricing services when available. Fair value may also be based on internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be required to record financial instruments at fair value. Any such valuation adjustments are applied consistently over time. The Corporation’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.

While management believes the Corporation’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Furthermore, the fair value amounts may change significantly after the date of the statement of financial position from the amounts reported in the consolidated financial statements and related notes.

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

Investment securities — available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are generally measured using independent pricing models or other model-based valuation techniques that include market inputs, such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data and industry and economic events.

The Corporation elected the fair value option for all residential mortgage loans held-for-sale originated on or after July 1, 2012. Accordingly, loans held-for-sale are recorded at fair value on a recurring basis. The fair values of loans held-for-sale are based on the market price for similar loans sold in the secondary market, and therefore, are classified as Level 2 valuations.

Disclosure of Recurring Basis Fair Value Measurements

For assets measured at fair value on a recurring basis, quantitative disclosures about the fair value measurements for each major category of assets were as follows:

	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In thousands)
June 30, 2016
Investment securities – available-for-sale:
U.S. Treasury securities	$	5,810	$	—	$	—	$	5,810
Government sponsored agencies	—		157,022		—		157,022
State and political subdivisions	—		13,220		—		13,220
Residential mortgage-backed securities	—		168,616		—		168,616
Collateralized mortgage obligations	—		100,849		—		100,849
Corporate bonds	—		9,712		—		9,712
Preferred stock and trust preferred securities	—		3,323		—		3,323
Total investment securities – available-for-sale	5,810		452,742		—		458,552
Loans held-for-sale	—		13,990		—		13,990
Total assets measured at fair value on a recurring basis	$	5,810	$	466,732	$	—	$	472,542
December 31, 2015
Investment securities – available-for-sale:
U.S. Treasury securities	$	5,765	$	—	$	—	$	5,765
Government sponsored agencies	—		194,989		—		194,989
State and political subdivisions	—		15,120		—		15,120
Residential mortgage-backed securities	—		187,768		—		187,768
Collateralized mortgage obligations	—		132,230		—		132,230
Corporate bonds	—		14,627		—		14,627
Preferred stock and trust preferred securities	—		3,232		—		3,232
Total investment securities – available-for-sale	5,765		547,966		—		553,731
Loans held-for-sale	—		10,327		—		10,327
Total assets measured at fair value on a recurring basis	$	5,765	$	558,293	$	—	$	564,058
June 30, 2015
Investment securities – available-for-sale:
U.S. Treasury securities	$	8,294	$	—	$	—	$	8,294
Government sponsored agencies	—		227,907		—		227,907
State and political subdivisions	—		26,965		—		26,965
Residential mortgage-backed securities	—		212,669		—		212,669
Collateralized mortgage obligations	—		167,032		—		167,032
Corporate bonds	—		39,678		—		39,678
Preferred stock	—		3,161		—		3,161
Total investment securities – available-for-sale	8,294		677,412		—		685,706
Loans held-for-sale	—		7,798		—		7,798
Total assets measured at fair value on a recurring basis	$	8,294	$	685,210	$	—	$	693,504

There were no liabilities recorded at fair value on a recurring basis at June 30, 2016, December 31, 2015 or June 30, 2015.

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

The Corporation does not record loans held for investment at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allocation of the allowance (valuation allowance) may be established or a portion of the loan is charged off. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. The fair value of impaired loans is estimated using one of several methods, including the loan’s observable market price, the fair value of the collateral or the present value of the expected future cash flows discounted at the loan’s effective interest rate. Those impaired loans not requiring a valuation allowance represent loans for which the fair value of the expected repayments or collateral exceed the remaining carrying amount of such loans. Impaired loans where a valuation allowance is established or a portion of the loan is charged off based on the fair value of collateral are subject to nonrecurring fair value measurement and require classification in the fair value hierarchy. The Corporation records impaired loans as Level 3 valuations as there is generally no observable market price or independent appraised value, or management determines the fair value of the collateral is further impaired below the appraised value. When management determines the fair value of the collateral is further impaired below appraised value, discount factors ranging between 70% and 80% of the appraised value are used depending on the nature of the collateral and the age of the most recent appraisal.

Goodwill is subject to impairment testing on an annual basis. The assessment of goodwill for impairment requires a significant degree of judgment. In the event the assessment indicates that it is more-likely-than-not that the fair value is less than the carrying value, the asset is considered impaired and recorded at fair value. Goodwill that is impaired and subject to nonrecurring fair value measurements is a Level 3 valuation. At June 30, 2016, December 31, 2015 and June 30, 2015, no goodwill was impaired, and therefore, goodwill was not recorded at fair value on a nonrecurring basis.

Other intangible assets consist of core deposit intangible assets, non-compete intangible assets, and MSRs. These items are recorded at fair value when initially recorded. Subsequently, core deposit intangible assets and non-compete intangible assets are amortized primarily on an accelerated basis over periods ranging from ten to fifteen years and are subject to impairment testing whenever events or changes in circumstances indicate that the carrying amount exceeds the fair value of the asset. If core deposit intangible asset or non-compete intangible asset impairment is identified, the Corporation classifies impaired core deposit intangible assets and impaired non-compete intangible assets subject to nonrecurring fair value measurements as Level 3 valuations. At June 30, 2016, December 31, 2015 and June 30, 2015, there was no impairment identified for core deposit intangible assets or non-compete intangible assets. The fair value of MSRs is initially estimated using a model that calculates the net present value of estimated future cash flows using various assumptions, including prepayment speeds, the discount rate and servicing costs. If the valuation model reflects a value less than the carrying value, MSRs are adjusted to fair value, as determined by the model, through a valuation allowance. The Corporation classifies MSRs subject to nonrecurring fair value measurements as Level 3 valuations. At June 30, 2016 , the Corporation recognized a valuation allowance of $0.4 million related to impairment within certain pools attributable to the Corporation's servicing portfolios that were acquired in the Northwestern and Monarch transactions. As a result, the MSRs related to these servicing portfolios were considered to be recorded at fair value on a nonrecurring basis as of June 30, 2016. At December 31, 2015 and June 30, 2015, there was no impairment identified for MSRs and, therefore, no other intangible assets were recorded at fair value on a nonrecurring basis.

The carrying amounts for other real estate (ORE) and repossessed assets (RA) are reported in the consolidated statements of financial position under “Interest receivable and other assets.” ORE and RA include real estate and other types of assets repossessed by the Corporation. ORE and RA are recorded at the lower of cost or fair value upon the transfer of a loan to ORE or RA and, subsequently, ORE and RA continue to be measured and carried at the lower of cost or fair value. Fair value is based upon independent market prices, appraised values of the property or management’s estimation of the value of the property. The Corporation records ORE and RA as Level 3 valuations as management generally determines that the fair value of the property is impaired below the appraised value. When management determines the fair value of the property is further impaired below appraised value, discount factors ranging between 70% and 75% of the appraised value are used depending on the nature of the property and the age of the most recent appraisal.

Disclosure of Nonrecurring Basis Fair Value Measurements

For assets measured at fair value on a nonrecurring basis, quantitative disclosures about fair value measurements for each major category of assets were as follows:

	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In thousands)
June 30, 2016
Impaired originated loans	$	—	$	—	$	23,655	$	23,655
Other real estate/repossessed assets	—		—		8,440		8,440
Mortgage servicing rights	—		—		6,153		6,153
Total	$	—	$	—	$	38,248	$	38,248
December 31, 2015
Impaired originated loans	$	—	$	—	$	42,065	$	42,065
Other real estate/repossessed assets	—		—		9,935		9,935
Total	$	—	$	—	$	52,000	$	52,000
June 30, 2015
Impaired originated loans	$	—	$	—	$	24,517	$	24,517
Other real estate/repossessed assets	—		—		14,197		14,197
Total	$	—	$	—	$	38,714	$	38,714

There were no liabilities recorded at fair value on a nonrecurring basis at June 30, 2016, December 31, 2015 and June 30, 2015.

The following table presents additional information about the significant unobservable inputs used in the fair value measurement of financial assets measured on a nonrecurring basis that were categorized within the Level 3 of the fair value hierarchy (fair value in thousands):

	Fair Value at June 30, 2016		Valuation Technique	Significant Unobservable Inputs	Range
Impaired originated loans	$	23,655	Appraisal of collateral	Discount for type of collateral and age of appraisal	20%-30%
Other real estate/repossessed assets	8,440		Appraisal of property	Discount for type of property and age of appraisal	25%-30%
Mortgage servicing rights	6,153		Discounted cash flow	Constant prepayment rate	12%-22%
				Discount rate	10%-11%

Disclosures about Fair Value of Financial Instruments

GAAP requires disclosures about the estimated fair value of the Corporation's financial instruments, including those financial assets and liabilities that are not measured and reported at fair value on a recurring or nonrecurring basis. However, the method of estimating fair value for certain financial instruments, such as loans, that are not required to be measured on a recurring or nonrecurring basis, as prescribed by ASC 820, Fair Value Measurements and Disclosures, does not incorporate the exit-price concept of fair value. The Corporation utilized the fair value hierarchy in computing the fair values of its financial instruments. In cases where quoted market prices were not available, the Corporation employed present value methods using unobservable inputs requiring management's judgment to estimate the fair values of its financial instruments, which are considered Level 3 valuations. These Level 3 valuations are affected by the assumptions made and, accordingly, do not necessarily indicate amounts that could be realized in a current market exchange. It is also the Corporation's general practice and intent to hold the majority of its financial instruments until maturity and, therefore, the Corporation does not expect to realize the estimated amounts disclosed.

The methodologies for estimating the fair value of financial assets and financial liabilities on a recurring or nonrecurring basis are discussed above. At June 30, 2016, December 31, 2015 and June 30, 2015, the estimated fair values of cash and cash equivalents, interest receivable and interest payable approximated their carrying values at those dates. The methodologies for other financial assets and financial liabilities follow.

Fair value measurement for investment securities — held-to-maturity is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques that include market inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data and industry and economic events. Fair value measurements using Level 2 valuations of investment securities — held-to-maturity include the majority of the Corporation's investment securities issued by state and political subdivisions. Level 3 valuations include certain securities issued by state and political subdivisions and trust preferred investment securities.

Fair value measurements of nonmarketable equity securities, which consisted of Federal Home Loan Bank (FHLB) and Federal Reserve Bank (FRB) stock, are based on their redeemable value, which is cost. The market for these securities is restricted to the issuer of the stock and subject to impairment evaluation. It is not practicable to determine the fair value of these securities within the fair value hierarchy due to the restrictions placed on their transferability.

Loans held-for-sale are carried at fair value, as the Corporation elected the fair value option on these loans. The fair values of loans held-for-sale are based on the market price for similar loans sold in the secondary market, and therefore, are classified as Level 2 valuations.

The fair value of variable interest rate loans that reprice regularly with changes in market interest rates are based on carrying values. The fair values for fixed interest rate loans are estimated using discounted cash flow analyses, using the Corporation’s interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. The resulting fair value amounts are adjusted to estimate the impact of changes in the credit quality of borrowers after the loans were originated. The fair value measurements for loans are Level 3 valuations.

The fair values of deposit accounts without defined maturities, such as interest- and noninterest-bearing checking, savings and money market accounts, are equal to the amounts payable on demand. The fair values for variable-interest rate time deposits with defined maturities approximate their carrying amounts. Fair value measurements for fixed-interest rate time deposits with defined maturities are based on the discounted value of contractual cash flows, using the Corporation’s interest rates currently being offered for deposits of similar maturities, and are Level 3 valuations. However, if the estimated fair value is less than the carrying value, the carrying value is reported as the fair value.

Short-term borrowings consist of securities sold under agreements to repurchase with customers, short-term FHLB advances and federal funds purchased. Fair value measurements for short-term borrowings are based on the present value of future estimated cash flows using current interest rates offered to the Corporation for debt with similar terms and are Level 2 valuations.

Long-term borrowings consist of long-term FHLB advances, securities sold under agreements to repurchase with an unaffiliated financial institution, a non-revolving line-of-credit and subordinated debt obligations. Fair value measurements for long-term borrowings are based on the present value of future estimated cash flows using current interest rates offered to the Corporation for debt with similar terms. Long-term FHLB advances and the non-revolving line-of-credit included in long-term borrowings are Level 2 valuations, while securities sold under agreements to repurchase with an unaffiliated financial institution and subordinated debt obligations are Level 3 valuations.

The Corporation’s unused commitments to extend credit, standby letters of credit and loan commitments have no carrying amount and have been estimated to have no realizable fair value. Historically, a majority of the unused commitments to extend credit have not been drawn upon and, generally, the Corporation does not receive fees in connection with these commitments other than standby letter of credit fees, which are not significant.

Fair value measurements have not been made for items that are not defined by GAAP as financial instruments, including such items as the value of the Corporation’s Wealth Management department and the value of the Corporation’s core deposit base. The Corporation believes it is impractical to estimate a representative fair value for these types of assets, even though management believes they add significant value to the Corporation.

A summary of carrying amounts and estimated fair values of the Corporation’s financial instruments included in the consolidated statements of financial position was as follows:

	Level in Fair Value Measurement Hierarchy	June 30, 2016				December 31, 2015				June 30, 2015
		Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(In thousands)
Assets:
Cash and cash equivalents	Level 1	$	232,960	$	232,960	$	238,789	$	238,789	$	215,034	$	215,034
Investment securities:
Available-for-sale	Level 1	5,810		5,810		5,765		5,765		8,294		8,294
Available-for-sale	Level 2	452,742		452,742		547,966		547,966		677,412		677,412
Held-to-maturity	Level 2	552,328		568,130		509,471		512,405		469,337		466,278
Held-to-maturity	Level 3	500		285		500		300		500		300
Nonmarketable equity securities	NA	47,775		47,775		36,907		36,907		36,142		36,142
Loans held-for-sale	Level 2	13,990		13,990		10,327		10,327		7,798		7,798
Net loans	Level 3	7,575,763		7,593,013		7,197,819		7,201,994		6,959,802		6,969,655
Interest receivable	Level 2	23,111		23,111		21,953		21,953		21,668		21,668
Liabilities:
Deposits without defined maturities	Level 2	$	5,904,618	$	5,904,618	$	5,809,355	$	5,809,355	$	5,547,764	$	5,547,764
Time deposits	Level 3	1,560,028		1,563,446		1,647,412		1,647,412		1,745,215		1,745,215
Interest payable	Level 2	1,389		1,389		1,578		1,578		1,557		1,557
Short-term borrowings	Level 2	556,213		556,213		397,199		397,199		532,291		532,291
Long-term borrowings	Level 2	354,320		359,043		206,394		206,394		106,469		106,469
Long-term borrowings	Level 3	17,277		17,228		35,997		35,997		42,021		42,021

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Earnings Per Common Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

Basic earnings per common share for the Corporation is computed by dividing net income by the weighted average number of common shares outstanding during the period. Basic earnings per common share excludes any dilutive effect of common stock equivalents.

Diluted earnings per common share for the Corporation is computed by dividing net income by the sum of the weighted average number of common shares outstanding and the dilutive effect of common stock equivalents using the treasury stock method. Average shares of common stock for diluted net income per common share include shares to be issued upon the exercise of stock options granted under the Corporation’s share-based compensation plans, restricted stock units that may be converted to stock and stock to be issued under the deferred stock compensation plan for non-employee directors. For any period in which a net loss is recorded, the assumed exercise of stock options, restricted stock units that may be converted to stock and stock to be issued under the deferred stock compensation plan would have an anti-dilutive impact on the net loss per common share and thus are excluded in the diluted earnings per common share calculation.

The following summarizes the numerator and denominator of the basic and diluted earnings per common share computations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(In thousands, except per share data)
Numerator for both basic and diluted earnings per common share, net income	$	25,707	$	19,024	$	48,969	$	36,859
Denominator for basic earnings per common share, weighted average common shares outstanding	38,258		35,162		38,228		33,992
Weighted average common stock equivalents	342		235		332		235
Denominator for diluted earnings per common share	38,600		35,397		38,560		34,227
Basic earnings per common share	$	0.67	$	0.54	$	1.28	$	1.08
Diluted earnings per common share	$	0.67	$	0.54	$	1.27	$	1.08

The average number of exercisable employee stock option awards outstanding that were “out-of-the-money,” whereby the option exercise price per share exceeded the market price per share and, therefore, were not included in the computation of diluted earnings per common share because they would have been anti-dilutive totaled zero and 80,700 for the three months ended June 30, 2016 and 2015, respectively, and zero and 100,875 for the six months ended June 30, 2016 and 2015, respectively.

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Share-Based Compensation

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Share-Based Compensation

The Corporation maintains share-based compensation plans under which it periodically grants share-based awards for a fixed number of shares to certain officers of the Corporation. The fair value of share-based awards is recognized as compensation expense over the requisite service or performance period. During the three-month periods ended June 30, 2016 and 2015, share-based compensation expense related to stock options, restricted stock units and other share-based awards totaled $1.0 million and $0.8 million, respectively. During the six months ended June 30, 2016 and 2015, share-based compensation expense related to stock options, restricted stock units and other share-based awards totaled $1.8 million and $1.5 million, respectively.

During the six-month period ended June 30, 2016, the Corporation granted options to purchase 441,167 shares of common stock, 99,208 restricted stock units and 940 shares of common stock to certain officers of the Corporation. On April 20, 2015, the shareholders of the Corporation approved the Stock Incentive Plan of 2015, which provides for 1,300,000 shares of the Corporation's common stock to be made available for future equity-based awards and canceled the amount of shares available for future grant under prior share-based compensation plans. At June 30, 2016, there were 703,493 shares of common stock available for future grants under the Stock Incentive Plan of 2015.

Stock Options

The Corporation issues stock options to certain officers. Stock options are issued at the current market price of the Corporation's common stock on the date of grant and expire ten years from the date of grant. Stock options granted after 2012 vest ratably over a five-year period. Stock options granted prior to 2013 generally vest ratably over a three-year period.

A summary of activity for the Corporation’s stock options as of and for the six months ended June 30, 2016 is presented below:

	Non-Vested Stock Options Outstanding						Stock Options Outstanding
	Number of Options		Weighted- Average Exercise Price Per Share		Weighted- Average Grant Date Fair Value Per Share		Number of Options		Weighted- Average Exercise Price Per Share
Outstanding at December 31, 2015	479,755		$	28.75	$	8.49	1,054,739		$	25.38
Granted	441,167		32.81		6.15		441,167		32.81
Exercised	—		—		—		(96,058	)	21.81
Vested	(118,273	)	28.30		8.40		—		—
Forfeited/expired	(33,901	)	31.00		7.25		(33,901	)	31.00
Outstanding at June 30, 2016	768,748		$	31.04	$	7.21	1,365,947		$	27.89
Exercisable/vested at June 30, 2016							597,199		$	23.84

The weighted-average remaining contractual terms were 7.1 years for all outstanding stock options and 4.9 years for exercisable stock options at June 30, 2016. The intrinsic value of all outstanding in-the-money stock options and exercisable in-the-money stock options was $11.2 million and $8.1 million, respectively, at June 30, 2016. The aggregate intrinsic values of outstanding and exercisable options at June 30, 2016 were calculated based on the closing market price of the Corporation’s common stock on June 30, 2016 of $37.29 per share less the exercise price. Options with intrinsic values less than zero, or “out-of-the-money” options, are not included in the aggregate intrinsic value reported.

At June 30, 2016, unrecognized compensation expense related to stock options totaled $5.2 million and is expected to be recognized over a remaining weighted average period of 3.8 years. Stock options granted prior to 2016 contain change-of-control provisions that may get triggered if the merger with Talmer is completed. In the event the change-of control provisions are triggered, unrecognized compensation expense related to these stock options will become immediately recognized by the Corporation.

The fair value of the stock options granted during the six months ended June 30, 2016 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions.

Expected dividend yield	3.30		%
Risk-free interest rate	1.39		%
Expected stock price volatility	27.9		%
Expected life of options – in years	6.5
Weighted average fair value of options granted	$	6.15

Restricted Stock Units

In addition to stock options, the Corporation grants restricted stock performance units and restricted stock service-based units (collectively referred to as restricted stock units) to certain officers. The restricted stock performance units vest based on the Corporation achieving certain performance target levels and the grantee completing the requisite service period. The restricted stock performance units are eligible to vest from 0.5x to 1.5x the number of units originally granted depending on which, if any, of the performance target levels are met. However, if the minimum performance target levels are not achieved, no shares will become vested or be issued for that respective year’s restricted stock performance units. The restricted stock service-based units vest upon satisfaction of a service condition. Upon achievement of the performance target level and/or satisfaction of a service condition, if applicable, the restricted stock units are converted into shares of the Corporation’s common stock on a one-to-one basis. Compensation expense related to restricted stock units is recognized over the expected requisite performance or service period, as applicable.

A summary of the activity for restricted stock units as of and for the six months ended June 30, 2016 is presented below:

	Number of Units		Weighted- Average Grant Date Fair Value  Per Unit
Outstanding at December 31, 2015	207,989		$	26.41
Granted	99,208		30.78
Converted into shares of common stock	(45,787	)	22.89
Forfeited/expired	(4,126	)	29.65
Outstanding at June 30, 2016	257,284		$	28.67

At June 30, 2016, unrecognized compensation expense related to restricted stock units totaled $4.9 million and is expected to be recognized over a remaining weighted average period of 2.7 years. Restricted stock units granted prior to 2016 contain change-of-control provisions that may get triggered if the merger with Talmer is completed. In the event the change-of control provisions are triggered, unrecognized compensation expense related to these restricted stock units will become immediately recognized by the Corporation.

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Pension and Other Postretirement Benefit Plans

6 Months Ended

Jun. 30, 2016

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefit Plans

Pension and Other Postretirement Benefit Plans

The Corporation's retirement plans include a qualified pension plan, a nonqualified pension plan, a nonqualified postretirement benefit plan, a 401(k) savings plan, and a multi-employer defined benefit plan.

Qualified and Nonqualified Pension Plans and Nonqualified Postretirement Benefit Plans

The components of net periodic benefit cost for the Corporation’s qualified and nonqualified pension plans and nonqualified postretirement benefit plan are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(In thousands)
Defined Benefit Pension Plans
Service cost	$	277		$	273		$	554		$	545
Interest cost	1,358			1,332			2,716			2,664
Expected return on plan assets	(2,140		)	(2,161		)	(4,281		)	(4,322		)
Amortization of prior service credit	—			(1		)	—			(2		)
Amortization of unrecognized net loss	572			1,056			1,144			2,112
Net periodic benefit cost	$	67		$	499		$	133		$	997
Postretirement Benefit Plan
Service cost	$	2		$	4		$	4		$	8
Interest cost	33			33			66			67
Amortization of prior service cost	29			32			58			65
Amortization of unrecognized net gain	(25		)	—			(49		)	(1		)
Net periodic benefit cost	$	39		$	69		$	79		$	139

The Corporation’s pension plan does not have a contribution requirement in 2016. The Corporation did not make a contribution to the pension plan during 2015. The discount rate used to compute the Corporation's pension plan expense for 2016 is 4.55%.

401(k) Savings Plan

401(k) Savings Plan expense for the Corporation’s match of participants’ base compensation contributions and a 4% of eligible pay contribution to certain employees who are not grandfathered under the pension plan was $1.4 million and $1.3 million for the three months ended June 30, 2016 and 2015, respectively, and $2.7 million and $2.4 million for the six months ended June 30, 2016 and 2015, respectively.

Multi-Employer Defined Benefit Plan

In conjunction with the April 1, 2015 acquisition of Monarch, the Corporation acquired a participation in the Pentegra Defined Benefit Plan for Financial Institutions (Pentegra DB Plan), a qualified defined benefit pension plan. Employee benefits for Monarch employees under the Plan were frozen effective April 1, 2004. The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and as a multiple-employer plan under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code (IRC). The Pentegra DB Plan is a single plan under IRC Section 413(c) and, as a result, all of the plan's assets stand behind all of the plan's liabilities. Accordingly, contributions made by a participating employer may be used to provide benefits to participants of other participating employers. No contributions were made by the Corporation to the Pentegra DB Plan for the three and six months ended June 30, 2016.

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Financial Guarantees

6 Months Ended

Jun. 30, 2016

Guarantees [Abstract]

Financial Guarantees

Financial Guarantees

In the normal course of business, the Corporation is a party to financial instruments containing credit risk that are not required to be reflected in the consolidated statements of financial position. For the Corporation, these financial instruments are financial and performance standby letters of credit. The Corporation has risk management policies to identify, monitor and limit exposure to credit risk. To mitigate credit risk for these financial guarantees, the Corporation generally determines the need for specific covenant, guarantee and collateral requirements on a case-by-case basis, depending on the nature of the financial instrument and the customer’s creditworthiness. At June 30, 2016, December 31, 2015 and June 30, 2015, the Corporation had $47 million, $39 million and $45 million, respectively, of outstanding financial and performance standby letters of credit that expire in five years or less. The majority of these standby letters of credit are collateralized. The Corporation determined that there were no potential losses from standby letters of credit at June 30, 2016, December 31, 2015 and June 30, 2015.

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Nature of Operations

Nature of Operations

Chemical Financial Corporation ("Corporation" or "Chemical") operates in a single operating segment — commercial banking. The Corporation is a financial holding company, headquartered in Midland, Michigan, that operates through one commercial bank, Chemical Bank. Chemical Bank operates within the State of Michigan as a state-chartered commercial bank. Chemical Bank operates through an internal organizational structure of four regional banking units and offers a full range of traditional banking and fiduciary products and services to the residents and business customers in the bank’s geographical market areas. The products and services offered by the regional banking units, through branch banking offices, are generally consistent throughout the Corporation, as is the pricing of those products and services. The marketing of products and services throughout the Corporation’s regional banking units is generally uniform, as many of the markets served by the regional banking units overlap. The distribution of products and services is uniform throughout the Corporation’s regional banking units and is achieved primarily through retail branch banking offices, automated teller machines and electronically accessed banking products.

The Corporation’s primary sources of revenue are interest from its loan products and investment securities, service charges and fees from customer deposit accounts and wealth management revenue.

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Corporation and its subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the interim consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Corporation’s consolidated financial statements and footnotes thereto included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2015. In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments believed necessary to present fairly the financial condition and results of operations of the Corporation for the periods presented. Operating results for the six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

Use of Estimates

Use of Estimates

Management makes estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying footnotes. Estimates that are particularly susceptible to significant change include the determination of the allowance for loan losses, expected cash flows from acquired loans, fair value amounts related to business combinations, pension expense, income taxes, goodwill impairment and those assets that require fair value measurement. Actual results could differ from these estimates.

Business Combinations Policy [Policy Text Block]

Business Combinations

Pursuant to the guidance of Accounting Standards Codification ("ASC") Topic 805, Business Combinations ("ASC 805"), the Corporation recognizes assets acquired, including identified intangible assets, and the liabilities assumed in acquisitions at their fair values as of the acquisition date, with the acquisition-related transaction and restructuring costs expensed in the period incurred.

ASC 805 affords a measurement period beyond the acquisition date that allows the Corporation the opportunity to finalize the acquisition accounting in the event that new information is identified that existed as of the acquisition date but was not known by the Corporation at that time. The Corporation anticipates that measurement period adjustments may arise from adjustments to the fair values of assets and liabilities recognized at the acquisition date for its May 31, 2015 acquisition of Lake Michigan Financial Corporation ("Lake Michigan"), as additional information is obtained, such as appraisals of collateral securing loans and other borrower information. In the event that a measurement period adjustment is identified, the Corporation will recognize the adjustment as part of its acquisition accounting, which may result in an adjustment to goodwill being recorded in the period the adjustment was identified.

See Note 2 for further information regarding the Corporation's mergers and acquisitions, including its pending merger with Talmer Bancorp, Inc. ("Talmer").

Originated Loans

Originated Loans

Originated loans include all of the Corporation's portfolio loans, excluding loans acquired in business combinations, as further discussed below. Originated loans are stated at their principal amount outstanding, net of unearned income, charge-offs and unamortized deferred fees and costs. Loan interest income is recognized on the accrual basis. Deferred loan fees and costs are amortized over the loan term based on the level-yield method. Net loan commitment fees are deferred and amortized into fee income on a straight-line basis over the commitment period.

The past due status of a loan is based on the loan’s contractual terms. A loan is placed in nonaccrual status (accrual of interest is discontinued) when principal or interest is past due 90 days or more (except for a loan that is secured by residential real estate, which is transferred to nonaccrual status at 120 days past due), unless the loan is both well-secured and in the process of collection, or earlier when, in the opinion of management, there is sufficient reason to doubt the collectibility of principal or interest. Interest previously accrued, but not collected, is reversed and charged against interest income at the time the loan is placed in nonaccrual status. Subsequent receipts of interest while a loan is in nonaccrual status are recorded as a reduction of principal. Loans are returned to accrual status when principal and interest payments are brought current, payments have been received consistently for a period of time (generally six months) and collectibility is no longer in doubt.

Loans Acquired in a Business Combination

Loans Acquired in a Business Combination

Loans acquired in a business combination ("acquired loans") consist of loans acquired on May 31, 2015 in the acquisition of Lake Michigan, on April 1, 2015 in the acquisition of Monarch Community Bancorp, Inc. ("Monarch"), on October 31, 2014 in the acquisition of Northwestern Bancorp, Inc. ("Northwestern"), and on April 30, 2010 in the acquisition of O.A.K. Financial Corporation ("OAK"). Acquired loans were recorded at fair value at the date of acquisition, without a carryover of the associated allowance for loan losses related to these loans, through a fair value discount that was, in part, attributable to deterioration in credit quality. The estimate of expected credit losses was determined based on due diligence performed by executive and senior officers of the Corporation, with assistance from third-party consultants. The fair value discount was recorded as a reduction of the acquired loans’ outstanding principal balances in the consolidated statement of financial position at the acquisition date.

The Corporation accounts for acquired loans, which are recorded at fair value at acquisition, in accordance with ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality ("ASC 310-30"). ASC 310-30 allows investors to aggregate loans acquired into loan pools that have common risk characteristics and thereby use a composite interest rate and expectation of cash flows expected to be collected for the loan pools. Under the provisions of ASC 310-30, the Corporation aggregated acquired loans into 2 pools in the acquisition of Lake Michigan, 2 pools in the acquisition of Monarch, 4 pools in the acquisition of Northwestern and 14 pools in the acquisition of OAK based upon common risk characteristics, including types of loans, commercial type loans with similar risk grades and whether loans were performing or nonperforming. A pool is considered a single unit of accounting for the purposes of applying the guidance prescribed in ASC 310-30. A loan will be removed from a pool of acquired loans only if the loan is sold, foreclosed, paid off or written off, and will be removed from the pool at the carrying value. If an individual loan is removed from a pool of loans, the difference between its relative carrying amount and the cash, fair value of the collateral, or other assets received would not affect the effective yield used to recognize the accretable difference on the remaining pool. The Corporation estimated the cash flows expected to be collected over the life of the pools of loans at acquisition and estimates expected cash flows quarterly thereafter, based on a set of assumptions including expectations as to default rates, prepayment rates and loss severities. The Corporation must make numerous assumptions, interpretations and judgments using internal and third-party credit quality information to determine whether it is probable that the Corporation will be able to collect all contractually required payments. This is a point in time assessment and inherently subjective due to the nature of the available information and judgment involved.

The calculation of the fair value of the acquired loan pools entails estimating the amount and timing of cash flows attributable to both principal and interest expected to be collected on such loan pools and then discounting those cash flows at market interest rates. The excess of a loan pool's expected cash flows at the acquisition date over its estimated fair value is referred to as the "accretable yield," which is recognized into interest income over the estimated remaining life of the loan pool on a level-yield basis. The difference between a loan pool's contractually required principal and interest payments at the acquisition date and the cash flows expected to be collected at the acquisition date is referred to as the "nonaccretable difference," which includes an estimate of future credit losses expected to be incurred over the estimated life of the loan pool and interest payments that are not expected to be collected. Decreases to the expected cash flows in each loan pool in subsequent periods will require the Corporation to record a provision for loan losses. Improvements in expected cash flows in each loan pool in subsequent periods will result in reversing a portion of the nonaccretable difference, which is then classified as part of the accretable yield and subsequently recognized into interest income over the estimated remaining life of the loan pool.

Loans Modified Under Troubled Debt Restructurings

Loans Modified Under Troubled Debt Restructurings

Loans modified under troubled debt restructurings ("TDRs") involve granting a concession to a borrower who is experiencing financial difficulty. Concessions generally include modifications to original loan terms, including changes to a loan’s payment schedule or interest rate, which generally would not otherwise be considered. The Corporation’s TDRs include performing and nonperforming TDRs, which consist of originated loans that continue to accrue interest at the loan's original interest rate as the Corporation expects to collect the remaining principal and interest on the loan, and nonaccrual TDRs, which include originated loans that are in a nonaccrual status and are no longer accruing interest, as the Corporation does not expect to collect the full amount of principal and interest owed from the borrower on these loans. In accordance with ASC Topic 310-30, acquired loans are excluded from TDRs as these loans are accounted for in pools at net realizable value based on the principal and interest the Corporation expects to collect on such loans. At the time of modification (except for loans on nonaccrual status), a TDR is reported as a nonperforming TDR until a six-month payment history of principal and interest payments, in accordance with the terms of the loan modification, is sustained, at which time the Corporation moves the loan to a performing status ("performing TDR"). If the Corporation does not expect to collect all principal and interest on the loan, the modified loan is classified as a nonaccrual TDR. All TDRs are accounted for as impaired loans and are included in the Corporation’s analysis of the allowance for loan losses. A TDR that has been renewed by a borrower who is no longer experiencing financial difficulty and which yields a market rate of interest at the time of a renewal is no longer reported as a TDR.

Loans in the Corporation’s commercial loan portfolio (comprised of commercial, commercial real estate, real estate construction and land development loans) that meet the definition of a TDR generally consist of loans where the Corporation has allowed borrowers to defer scheduled principal payments and make interest-only payments for a specified period of time at the stated interest rate of the original loan agreement or reduced payments due to a moderate extension of the loan’s contractual term. If the Corporation does not expect to collect all principal and interest on the loan, the modified loan is classified as a nonaccrual TDR. If the Corporation does not expect to incur a loss on the loan based on its assessment of the borrowers’ expected cash flows, as the pre- and post-modification effective yields are approximately the same, the loan is classified as a nonperforming TDR until a six-month payment history is sustained, at which time the loan is classified as a performing TDR. Since no loss is expected to be incurred on nonperforming TDRs, no additional provision for loan losses has been recognized for these loans and they continue to accrue interest at their contractual interest rate. Nonperforming TDRs are individually evaluated for impairment and transferred to nonaccrual status if they become 90 days past due as to principal or interest payments or if it is probable that any remaining principal and interest payments due on the loan will not be collected in accordance with the modified terms of the loan.

Loans in the Corporation’s consumer loan portfolio (comprised of residential mortgage, consumer installment and home equity loans) that meet the definition of a performing or nonperforming TDR generally consist of residential mortgage loans that include a concession that reduces a borrower’s monthly payments by decreasing the interest rate charged on the loan for a specified period of time (generally 24 months) under a formal modification agreement. The Corporation recognizes an additional provision for loan losses related to impairment on these loans on an individual basis based on the present value of expected future cash flows discounted at the loan’s original effective interest rate. These loans continue to accrue interest at their effective interest rate, which consists of contractual interest under the terms of the modification agreement in addition to an adjustment for the accretion of computed impairment. These loans are moved to nonaccrual status if they become 90 days past due as to principal or interest payments, or sooner if conditions warrant.

Impaired Loans

Impaired Loans

A loan is defined to be impaired when it is probable that payment of principal and interest will not be paid in accordance with the original contractual terms of the loan agreement. Impaired loans include nonaccrual loans (including nonaccrual TDRs), performing and nonperforming TDRs and acquired loans that were not performing in accordance with original contractual terms. Impaired loans are accounted for at the lower of the present value of expected cash flows discounted at the loan's original effective interest rate or the estimated fair value of the collateral, if the loan is collateral dependent. When the present value of expected cash flows or the fair value of collateral of an impaired loan in the originated loan portfolio is less than the amount of unpaid principal outstanding on the loan, the principal balance of the loan is reduced to its carrying value through either an allocation of the allowance for loan losses or a partial charge-off of the loan balance.

Nonperforming Loans

Nonperforming Loans

Nonperforming loans are comprised of loans for which the accrual of interest has been discontinued (nonaccrual loans, including nonaccrual TDRs), accruing originated loans contractually past due 90 days or more as to interest or principal payments and nonperforming TDRs.

Acquired loans that were classified as nonperforming loans prior to being acquired and acquired loans that are not performing in accordance with contractual terms subsequent to acquisition are not classified as nonperforming loans subsequent to acquisition because the loans are recorded in pools at net realizable value based on the principal and interest the Corporation expects to collect on such loans.

Allowance for Loan Losses

Allowance for Loan Losses

The allowance for loan losses ("allowance") is presented as a reserve against loans. The allowance represents management’s assessment of probable loan losses inherent in the Corporation’s loan portfolio.

Management’s evaluation of the adequacy of the allowance is based on a continuing review of the loan portfolio, actual loan loss experience, the underlying value of the collateral, risk characteristics of the loan portfolio, the level and composition of nonperforming loans, the financial condition of the borrowers, the balance of the loan portfolio, loan growth, economic conditions, employment levels in the Corporation’s local markets, and special factors affecting specific business sectors. The Corporation maintains formal policies and procedures to monitor and control credit risk. Management evaluates the allowance on a quarterly basis in an effort to ensure the level is appropriate to absorb probable losses inherent in the loan portfolio.

The allowance provides for probable losses that have been identified with specific customer relationships and for probable losses believed to be incurred in the remainder of the originated loan portfolio, but that have not been specifically identified. The Corporation utilizes its own loss experience to estimate inherent losses on loans. Internal risk ratings are assigned to each loan in the commercial loan portfolio (commercial, commercial real estate, real estate construction and land development loans) at the time of origination and are subject to subsequent periodic reviews by senior management. The Corporation performs a detailed credit quality review quarterly on all loans greater than $0.25 million that have deteriorated below certain levels of credit risk, and may allocate a specific portion of the allowance to such loans based upon this review. A portion of the allowance is allocated to the remaining loans by applying projected loss ratios, based on numerous factors. Projected loss ratios incorporate factors such as charge-off experience, trends with respect to adversely risk-rated loans in the commercial loan portfolio, trends with respect to past due and nonaccrual loans, changes in economic conditions and trends, changes in the value of underlying collateral and other credit risk factors. This evaluation involves a high degree of uncertainty.

In determining the allowance and the related provision for loan losses, the Corporation considers four principal elements: (i) valuation allowances based upon probable losses identified during the review of impaired loans in the commercial loan portfolio, (ii) reserves established for adversely-rated loans in the commercial loan portfolio and nonaccrual residential mortgage, consumer installment and home equity loans based on loan loss experience of other adversely-rated loans, (iii) reserves, by loan classes, on all other loans based principally on a five-year historical loan loss experience, with equal weighting placed on all of the years, loan loss trends and giving consideration to estimated loss emergence periods, and (iv) a reserve for qualitative factors that take into consideration risks inherent in the originated loan portfolio that differ from historical loan loss experience.

Although the Corporation allocates portions of the allowance to specific loans and loan types, the entire allowance attributable to originated loans is available for any loan losses that occur in the originated portfolio. Loans that are deemed not collectible are charged off and reduce the allowance. The provision for loan losses and recoveries on loans previously charged off increase the allowance. Collection efforts may continue and recoveries may occur after a loan is charged off.

Acquired loans are aggregated into pools based upon common risk characteristics. An allowance may be recorded related to an acquired loan pool if it experiences a decrease in expected cash flows, as compared to those projected at the acquisition date. On a quarterly basis, the expected future cash flow of each pool is estimated based on various factors, including changes in property values of collateral dependent loans, default rates, loss severities and prepayment speeds. Decreases in estimates of expected cash flows within a pool generally result in a charge to the provision for loan losses and a corresponding increase in the allowance allocated to acquired loans for the particular pool. Increases in estimates of expected cash flows within a pool generally result in a reduction in the allowance allocated to acquired loans for the particular pool, if applicable, and then an adjustment to the accretable yield for the pool, which will increase amounts recognized in interest income in subsequent periods.

Various regulatory agencies, as an integral part of their examination process, periodically review the allowance. Such agencies may require additions to the allowance, based on their judgment, reflecting information available to them at the time of their examinations.

Fair Value Measurements

Fair Value Measurements

Fair value for assets and liabilities measured at fair value on a recurring or nonrecurring basis refers to the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants in the market in which the reporting entity transacts such sales or transfers based on the assumptions market participants would use when pricing an asset or liability. Assumptions are developed based on prioritizing information within a fair value hierarchy that gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, such as the reporting entity’s own data.

The Corporation may choose to measure eligible items at fair value at specified election dates. Unrealized gains and losses on items for which the fair value measurement option has been elected are reported in earnings at each subsequent reporting date. The fair value option (i) may be applied instrument by instrument, with certain exceptions, allowing the Corporation to record identical financial assets and liabilities at fair value or by another measurement basis permitted under GAAP, (ii) is irrevocable (unless a new election date occurs) and (iii) is applied only to entire instruments and not to portions of instruments. At June 30, 2016, December 31, 2015 and June 30, 2015, the Corporation had elected the fair value option on all of its residential mortgage loans held-for-sale. The Corporation has not elected the fair value option for any other financial assets or liabilities.

Share-Based Compensation

Share-Based Compensation

The Corporation grants stock options, stock awards, restricted stock performance units and restricted stock service-based units to certain executive and senior management employees. The Corporation accounts for share-based compensation expense using the modified-prospective transition method. Under that method, compensation expense is recognized for stock options based on the estimated grant date fair value as computed using the Black-Scholes option pricing model and the probability of issuance. The Corporation accounts for stock awards based on the closing stock price of the Corporation's common stock on the date of the award. The fair values of both stock options and stock awards are recognized as compensation expense on a straight-line basis over the requisite service period. The Corporation accounts for restricted stock performance units based on the closing stock price of the Corporation's common stock on the date of grant, discounted by the present value of estimated future dividends to be declared over the requisite performance or service period. The fair value of restricted stock performance units is recognized as compensation expense over the expected requisite performance period, or requisite service period for awards with multiple performance and service conditions. The Corporation accounts for restricted stock service-based units based on the closing stock price of the Corporation's common stock on the date of grant, as these awards accrue dividend equivalents equal to the amount of any cash dividends that would have been payable to a shareholder owning the number of shares of the Corporation's common stock represented by the restricted stock service-based units. The fair value of the restricted stock service-based units is recognized as compensation expense over the requisite service period.

Cash flows realized from the tax benefits of exercised stock option awards that result from actual tax deductions that are in excess of the recorded tax benefits related to the compensation expense recognized for those options (excess tax benefits) are classified as financing activities on the consolidated statements of cash flows.

Life Insurance, Corporate or Bank Owned [Text Block]

Bank-Owned Life Insurance

The Corporation has life insurance policies on certain key officers of Chemical Bank. The majority of the bank-owned life insurance policies of the Corporation were obtained through its acquisition of Lake Michigan. Bank-owned life insurance is recorded at the cash surrender value, net of surrender charges, and is included within other assets on the consolidated statements of financial position and changes in the cash surrender values are recorded as other noninterest income on the consolidated statements of income.

Income and Other Taxes

Income and Other Taxes

The Corporation is subject to the income and other tax laws of the United States, the State of Michigan and any other states where nexus has been created. These laws are complex and are subject to different interpretations by the taxpayer and the various taxing authorities. In determining the provision for income and other taxes, management must make judgments and estimates about the application of these inherently complex laws, related regulations and case law. In the process of preparing the Corporation’s tax returns, management attempts to make reasonable interpretations of enacted tax laws. These interpretations are subject to challenge by the tax authorities upon audit or to reinterpretation based on management’s ongoing assessment of facts and evolving case law.

On a quarterly basis, management assesses the reasonableness of its effective federal tax rate based upon its estimate of taxable income and the applicable taxes expected for the full year. Deferred tax assets and liabilities are reassessed on a quarterly basis, including the need for a valuation allowance for deferred tax assets.

Uncertain income tax positions are evaluated to determine whether it is more-likely-than-not that a tax position will be sustained upon examination based on the technical merits of the tax position. If a tax position is more-likely-than-not to be sustained, a tax benefit is recognized for the amount that is greater than 50% likely to be realized. Reserves for contingent income tax liabilities attributable to unrecognized tax benefits associated with uncertain tax positions are reviewed quarterly for adequacy based upon developments in tax law and the status of audits or examinations. The Corporation had no contingent income tax liabilities recorded at June 30, 2016, December 31, 2015 or June 30, 2015.

Investments in Tax Credit Projects [Policy Text Block]

Investments in Qualified Affordable Housing Projects, Federal Historic Projects and New Market Tax Credits

The Corporation invests in qualified affordable housing projects, federal historic projects, and new market projects for the purpose of community reinvestment and obtaining tax credits. Return on the Corporation's investment in these projects comes in the form of the tax credits and tax losses that pass through to the Corporation. The carrying value of the investments are reflected in other assets on the consolidated statements of financial position. The Corporation utilizes the proportional amortization method to account for investments in qualified affordable housing projects and the equity method to account for investments in other tax credit projects.

Under the proportional amortization method, the Corporation amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits allocated. The Corporation recognized additional income tax expense attributable to the amortization of investments in qualified affordable housing projects of $0.6 million and $1.2 million during the three and six months ended June 30, 2016, respectively, and $0.2 million and $0.3 million during the three and six months ended June 30, 2015, respectively. The Corporation's remaining investment in qualified affordable housing projects accounted for under the proportional amortization method totaled $24.3 million at June 30, 2016, $21.7 million at December 31, 2015 and$21.4 million atJune 30, 2015.

Under the equity method, the Corporation's share of the earnings or losses are included in other operating expenses on the consolidated statements of income. The Corporation's remaining investment in new market projects accounted for under the equity method totaled $7.5 million, $1.7 million and $3.3 million at June 30, 2016, December 31, 2015 and June 30, 2015, respectively.

The Corporation's unfunded equity contributions relating to investments in qualified affordable housing projects, federal historic tax projects and new market projects is recorded in other liabilities on the consolidated statements of financial position. The Corporation's remaining unfunded equity contributions totaled $11.5 million, $8.0 million and $9.7 million at June 30, 2016, December 31, 2015 and June 30, 2015.

Management analyzes these investments for potential impairment when events or changes in circumstances indicate that it is more-likely-than-not that the carrying amount of the investment will not be realized. An impairment loss is measured as the amount by which the carrying amount of an investment exceeds its fair value. There were no impairment losses recognized as of June 30, 2016, December 31, 2015 or June 30, 2015.

The Corporation consolidates variable interest entities ("VIEs") in which it is the primary beneficiary. In general, a VIE is an entity that either (i) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (ii) has a group of equity owners that are unable to make significant decisions about its activities or (iii) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns as generated by its operations. If any of these characteristics are present, the entity is subject to a variable interests consolidation model, and consolidation is based on variable interests, not on ownership of the entity's outstanding voting stock. Variable interests are defined as contractual, ownership, or other monetary interests in an entity that change with fluctuations in the entity's net asset value. The primary beneficiary consolidates the VIE. The primary beneficiary is defined as the enterprise that has the power to direct the activities and absorb losses or the right to receive benefits. The Corporation is a significant limited partner in the qualified affordable housing, federal historic and new market projects it has invested in. These projects meet the definition of VIEs. However, the Corporation is not the primary beneficiary of any of the VIEs in which it holds a limited partnership interest; therefore, the VIEs are not consolidated in the Corporation's consolidated financial statements.

Shareholders' Equity

Shareholders’ Equity

Common Stock Repurchase Programs

From time to time, the board of directors of the Corporation approves common stock repurchase programs allowing management to repurchase shares of the Corporation’s common stock in the open market. The repurchased shares are available for later reissuance in connection with potential future stock dividends, the Corporation’s dividend reinvestment plan, employee benefit plans and other general corporate purposes. Under these programs, the timing and actual number of shares subject to repurchase are at the discretion of management and are contingent on a number of factors, including the projected parent company cash flow requirements and the Corporation’s market price per share.

In January 2008, the board of directors of the Corporation authorized the repurchase of up to 500,000 shares of the Corporation’s common stock under a stock repurchase program. In November 2011, the board of directors of the Corporation reaffirmed the stock buy-back authorization with the qualification that the shares may only be repurchased if the share price is below the tangible book value per share of the Corporation’s common stock at the time of the repurchase. Since the January 2008 authorization, no shares have been repurchased. At June 30, 2016, there were 500,000 remaining shares available for repurchase under the Corporation’s stock repurchase program.

Shelf Registration

On June 12, 2014, the Corporation filed an automatic shelf registration statement on Form S-3 with the Securities and Exchange Commission ("SEC") for an indeterminate amount of securities, which became immediately effective. The shelf registration statement provides the Corporation with the ability to raise capital, subject to SEC rules and limitations, if the board of directors of the Corporation decides to do so.

Preferred Stock

On April 20, 2015, the shareholders of the Corporation approved an amendment to the restated articles of incorporation which eliminated and replaced the previous class of 200,000 shares of preferred stock, that had been approved by shareholders on April 20, 2009, with a new class of 2,000,000 shares of preferred stock. At June 30, 2016, no shares of preferred stock were issued and outstanding.

Common Stock

Legal Matters

Legal Matters

On February 22, 2016, two putative class action and derivative complaints were filed in the Circuit Court for Oakland County, Michigan by individuals purporting to be a shareholder of Talmer. The actions are styled Regina Gertel Lee v. Chemical Financial Corporation, et. al., Case No. 2016-151642-CB and City of Livonia Employees’ Retirement System v. Chemical Financial Corporation et. al., Case No. 2016-151641-CB. These complaints purport to be brought derivatively on behalf of Talmer against the individual defendants, and individually and on behalf of all others similarly situated against Talmer and Chemical. The complaints allege, among other things, that the directors of Talmer breached their fiduciary duties to Talmer’s shareholders in connection with the merger by approving a transaction pursuant to an allegedly inadequate process that undervalues Talmer and includes preclusive deal protection provisions, and that Chemical allegedly aided and abetted the Talmer directors in breaching their duties to Talmer’s shareholders. The complaints also allege that the individual defendants have been unjustly enriched. Both complaints seek various remedies on behalf of the putative class (consisting of all shareholders of Talmer who are not related to or affiliated with any defendant). They request, among other things, that the Court enjoin the merger from being consummated in accordance with its agreed-upon terms, direct the Talmer directors to exercise their fiduciary duties, rescind the merger agreement to the extent that it is already implemented, award the plaintiff all costs and disbursements in each respective action (including reasonable attorneys’ and experts’ fees), and grant such further relief as the court deems just and proper. The City of Livonia plaintiff amended its complaint on April 21, 2016 to add additional factual allegations, including but not limited to allegations that Keefe Bruyette & Woods, Inc. served as a financial advisor for the proposed merger despite an alleged conflict of interest, that Talmer’s board acted under actual or potential conflicts of interest, and that the defendants omitted and/or misrepresented material information about the proposed merger in the Form S-4 Registration Statement relating to the proposed merger. Talmer, Chemical and the individual defendants all believe that the claims asserted against each of them in the above-described lawsuits are without merit and intend to vigorously defend against these lawsuits. These two cases ere consolidated as In re Talmer Bancorp Shareholder Litigation, case number 2016-151641-CB, per an order entered on May 12, 2016.

On March 22, 2016, an additional putative class action and derivative complaint was filed in the Circuit Court for Oakland County, Michigan, by an individual purporting to be a shareholder of Talmer, styled Stephen Bushansky v. Gary Torgow et. al. Case No. 2016-152112-CB. This action contained similar allegations, claims, and requests for relief as the complaints filed in the Lee and City of Livonia lawsuits discussed above. The Bushansky lawsuit was voluntarily dismissed by the plaintiff as to all defendants, without prejudice, on April 18, 2016. On April 27, 2016, Stephen Bushansky filed a new putative class action complaint in the United State District Court for Eastern District of Michigan, styled Stephen Bushansky v. Talmer Bancorp In. et.al., Docket No. 1:16-cv-11511. This lawsuit alleged violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, and named Talmer, Chemical, and several individuals as defendants. The complaint alleged, among other things, that the Defendants issued materially incomplete and misleading disclosures in the preliminary Form S-4 Registration Statement relating to the proposed merger. The Federal Bushansky lawsuit was voluntarily dismissed by the plaintiff as to all defendants, without prejudice, on June 20, 2016.

On April 6, 2016, a complaint was filed in the United States District Court for the Eastern District of Michigan by another purported shareholder of Talmer, styled Matthew Sciabacucchi v. Chemical Financial Corporation et. al., Docket No. 1:16-cv-11261. Mr. Sciabacucchi purports to bring this action “on behalf of himself and all others similarly situated.” This lawsuit alleges violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, naming Talmer, Chemical, and several individuals as defendants.  The complaint alleges, among other things, that the Defendants issued materially incomplete and misleading disclosures in the Form S-4 Registration Statement relating to the proposed merger. The Complaint contains requests for relief that include, among other things, that the Court enjoin the proposed transaction, rescind the transaction if it is consummated or award rescissory damages, order the Talmer directors to file a revised Registration Statement, declare that the Defendants violated Sections 14(a) and/or Section 20(a) of the Securities Exchange Act, as well as Rule 14a-9 promulgated thereunder, award the plaintiff all costs associated with bringing the action (including reasonable attorneys’ and experts’ fees), and grant such further relief as the court deems just and proper. Talmer, Chemical and the individual defendants all believe that the claims asserted against each of them in this lawsuit are without merit and intend to vigorously defend against this lawsuit.

On April 25, 2016, a complaint was filed in the United States District Court for the Eastern District of Michigan by another purported shareholder of Talmer, styled Kevin Nicholl v. Chemical Financial Corporation et. al., Docket No. 1:16-cv-11482. The plaintiff names Talmer, Chemical, and several individuals as defendants. This lawsuit was styled as a class action and derivative action, and alleged breach of fiduciary duties as well as violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934. The Nicholl lawsuit was voluntarily dismissed by the plaintiff as to all defendants, with prejudice, on June 20, 2016.

On June 16, 2016, a complaint was filed in the United States District Court for the Eastern District of Michigan by a purported Talmer shareholder, styled City of Livonia Employees’ Retirement System v. Chemical Financial Corporation, et. al., Docket No. 2:16-cv-12229. The plaintiff purports to bring the action “individually and on behalf of all others similarly situated,” and requests certification as a class action. This lawsuit alleges violations of Section 14(a) and 20(a) of the Securities Exchange Act of 1934. The Complaint alleges, among other things, that the Defendants issued materially incomplete and misleading disclosures in the Form S-4 Registration Statement relating to the proposed merger. The Complaint contains requests for relief that include, among other things, that the Court enjoin the proposed transaction unless and until additional information is provided to Talmer’s shareholders, declare that the Defendants violated the securities laws in connection with the proposed merger, award compensatory damages, interest, attorneys’ and experts’ fees, and that the Court grant such other relief as it deems just and proper. Talmer, Chemical, and the individual defendants all believe that the claims asserted against each of them in this lawsuit are without merit and intend to vigorously defend against this lawsuit.

In addition, the Corporation and Chemical Bank are subject to certain legal actions arising in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the ultimate disposition of these matters is not expected to have a material adverse effect on the consolidated financial condition or results of operations of the Corporation.

Reclassifications [Text Block]

Reclassifications

Certain amounts appearing in the consolidated financial statements and notes thereto for prior periods have been reclassified to conform with the current presentation. The reclassification had no effect on net income or shareholders’ equity as previously reported.

Adopted Accounting Pronouncements

Adopted Accounting Pronouncements

Consolidation of Variable Interest Entities

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis ("ASU 2015-02"). ASU 2015-02 is applicable to reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, ASU 2015-02 (i) modifies the evaluation of whether limited partnerships and similar legal entities are VIEs, (ii) eliminates the presumption that a general partner should consolidate a limited partnership, (iii) affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships and (iv) provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The adoption of ASU 2015-02 effective January 1, 2016 did not have a material impact on the Corporation's consolidated financial condition or results of operations.

Customer's Accounting for Cloud Computing Fees

In April 2015, the FASB issued ASU No. 2015-05, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"). ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU 2015-05 does not change the accounting for a customer’s accounting for service contracts. The purpose of ASU 2015-05 is to clarify which fees paid in a cloud computing arrangement should be capitalized and which fees should be expensed as incurred. The adoption of ASU 2015-05 prospectively effective January 1, 2016 did not have a material impact on the Corporation's consolidated financial condition or results of operations.

Pending Accounting Pronouncements

Pending Accounting Pronouncements

Recognition and Measurement

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"). ASU 2016-01 amends current guidance by: (i) requiring equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income, (ii) allowing an entity to measure equity investments that do not have readily determinable fair values at either fair value or cost minus impairment, if any, plus or minus changes in observable prices, with changes in measurement recognized in net income, (iii) simplifying the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iv) eliminating the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet; (v) requiring use the of exit price notion when measuring the fair value of financial instruments for disclosure purposes; (vi) requiring recognition of changes in the fair value related to instrument-specific credit risk in other comprehensive income if the fair value option for financial liabilities is elected, (vii) requiring separate presentation in the financial statements of financial assets and financial liabilities by measurement category, and (8) clarifying that an entity should evaluate the need for a valuation allowance on deferred tax assets related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 is effective for interim and annual reporting periods beginning after December 15, 2017. Early application is permitted as of the beginning of the fiscal year of adoption only for items (iv) and (vi) above. Early adoption of the other items mentioned above is not permitted. The adoption of ASU 2016-01 is not expected to have a material impact on the Corporation's consolidated financial condition or results of operations.

Leases

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). Under ASU 2016-02, the Corporation will be required to recognize the following for all leases (with the exception of short-term leases): (i) a right to use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term and (ii) a lease liability, which is a liability that represents lessee's obligation to make lease payments arising from a lease, measured on a discounted basis. ASU 2016-02 requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. ASU 2016-02 is effective for public companies for interim and annual periods beginning after December 15, 2018. The adoption of ASU 2016-02 is not expected to have a material impact on the Corporation's consolidated financial condition or results of operations.

Stock Compensation

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 allows for simplification of several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under ASU 2016-09, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement. ASU 2016-09 also requires recognition of excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. ASU 2016-09 further permits the withholding of an amount up to employees' maximum individual tax rate in the relevant jurisdiction without resulting in a liability classification. ASU 2016-09 also requires any excess tax benefits be classified along with other income tax cash flows as an operating activity and cash paid by an employer when directly withholding shares for tax-withholding purposes to be classified as a financing activity. ASU 2016-09 is effective for public companies for interim and annual periods beginning after December 15, 2016. The Corporation is currently evaluating the impact of ASU 2016-09 on the Corporation's consolidated financial condition and results of operations.

Credit Losses

In June, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

ASU 2016-13 requires an entity measure expected credit losses for financial assets over the estimated lifetime of expected credit loss and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The standard includes the following core concepts in determining the expected credit loss estimate: (a) be based on an asset’s amortized cost (including premiums or discounts, net deferred fees and costs, foreign exchange and fair value hedge accounting adjustments), (b) reflect losses expected over the remaining contractual life of an asset (considering the effect of voluntary prepayments), (c) consider available relevant information about the estimated collectability of cash flows (including information about past events, current conditions, and reasonable and supportable forecasts), and (d) reflect the risk of loss, even when that risk is remote.

ASU 2016-13 also amends the recording of purchased credit-deteriorated assets. Under the new guidance, an allowance will be recognized at acquisition through a gross-up approach whereby an entity will record as the initial amortized cost the sum of (a) the purchase price and (b) an estimate of credit losses as of the date of acquisition. In addition, the guidance also requires immediate recognition in earnings any subsequent changes, both favorable and unfavorable, in expected cash flows by adjusting this allowance.

ASU 2016-13 amends the impairment model for available-for-sale debt securities and requires entities to determine whether all or a portion of the unrealized loss on an available-for-sale debt security is a credit loss. Management may not use the length of time a security has been in an unrealized loss position as a factor in concluding whether a credit loss exists, as is currently permitted. In addition, an entity will recognize an allowance for credit losses on available-for-sale debt securities as a contra-account to the amortized cost basis rather than as a direct reduction of the amortized cost basis of the investment, as is currently required. As a result, entities will recognize improvements to credit losses on available-for-sale debt securities immediately in earnings rather than as interest income over time under current practice.

New disclosures required by ASU 2016-13 include: (a) for financial assets measured at amortized cost, an entity will be required to disclose information about how it developed its allowance, including changes in the factors that influenced management’s estimate of expected credit losses and the reasons for those changes, (b) for financial receivables and net investments in leases measured at amortized cost, an entity will be required to further disaggregate the information it currently discloses about the credit quality of these assets by year or the asset’s origination or vintage for as many as five annual periods, and (c) for available-for-sale debt securities, an entity will be required to provide a roll-forward of the allowance for credit losses and an aging analysis for securities that are past due.

Upon adoption of ASU 2016-13, a cumulative-effect adjustment to retained earnings will be recorded as of the beginning of the first reporting period in which the guidance is effective. ASU 2016-13 is effective for public companies for interim and annual periods beginning after December 15, 2019, with early adoption permitted for annual periods beginning after December 15, 2018. The Corporation is currently evaluating the provisions of ASU 2016-13 to determine the potential impact on the Corporation's consolidated financial condition and results of operations.

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2016

Business Acquisition [Line Items]

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:

	Lake Michigan			Monarch			North-western			OAK			Total
Six Months Ended June 30, 2016	(In thousands)
Balance at beginning of period	$	152,999		$	34,558		$	82,623		$	28,077		$	298,257
Additions (reductions)*	(10,365		)	(863		)	(5,848		)	(201		)	(17,277		)
Accretion recognized in interest income	(17,291		)	(2,836		)	(8,029		)	(6,284		)	(34,440		)
Reclassification from nonaccretable difference	—			—			5,000			5,000			10,000
Balance at end of period	$	125,343		$	30,859		$	73,746		$	26,592		$	256,540
Six Months Ended June 30, 2015
Balance at beginning of period	$	—		$	—		$	104,675		$	33,286		$	137,961
Additions attributable to acquisitions	190,246			37,914			—			—			228,160
Additions (reductions)*	1,550			(1,141		)	(2,859		)	5,215			2,765
Accretion recognized in interest income	(3,486		)	(968		)	(10,058		)	(6,326		)	(20,838		)
Balance at end of period	$	188,310		$	35,805		$	91,758		$	32,175		$	348,048

*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.

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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Available-for-sale Securities

The following is a summary of the amortized cost and fair value of investment securities available-for-sale and investment securities held-to-maturity at June 30, 2016, December 31, 2015 and June 30, 2015:

	Investment Securities Available-for-Sale
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(In thousands)
June 30, 2016
U.S. Treasury securities	$	5,781	$	29	$	—	$	5,810
Government sponsored agencies	156,843		715		536		157,022
State and political subdivisions	12,901		319		—		13,220
Residential mortgage-backed securities	166,582		2,034		—		168,616
Collateralized mortgage obligations	100,433		611		195		100,849
Corporate bonds	9,746		30		64		9,712
Preferred stock and trust preferred securities	2,888		436		1		3,323
Total	$	455,174	$	4,174	$	796	$	458,552
December 31, 2015
U.S. Treasury securities	$	5,773	$	—	$	8	$	5,765
Government sponsored agencies	195,711		78		800		194,989
State and political subdivisions	14,731		395		6		15,120
Residential mortgage-backed securities	189,452		538		2,222		187,768
Collateralized mortgage obligations	133,256		111		1,137		132,230
Corporate bonds	14,825		2		200		14,627
Preferred stock and trust preferred securities	2,888		344		—		3,232
Total	$	556,636	$	1,468	$	4,373	$	553,731
June 30, 2015
U.S. Treasury securities	$	8,270	$	24	$	—	$	8,294
Government sponsored agencies	227,424		683		200		227,907
State and political subdivisions	26,476		503		14		26,965
Residential mortgage-backed securities	213,621		742		1,694		212,669
Collateralized mortgage obligations	167,768		245		981		167,032
Corporate bonds	39,680		76		78		39,678
Preferred stock and trust preferred securities	2,889		272		—		3,161
Total	$	686,128	$	2,545	$	2,967	$	685,706

Held-to-maturity Securities

	Investment Securities Held-to-Maturity
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(In thousands)
June 30, 2016
State and political subdivisions	$	552,328	$	16,123	$	321	$	568,130
Trust preferred securities	500		—		215		285
Total	$	552,828	$	16,123	$	536	$	568,415
December 31, 2015
State and political subdivisions	$	509,471	$	7,446	$	4,512	$	512,405
Trust preferred securities	500		—		200		300
Total	$	509,971	$	7,446	$	4,712	$	512,705
June 30, 2015
State and political subdivisions	$	469,337	$	4,853	$	7,912	$	466,278
Trust preferred securities	500		—		200		300
Total	$	469,837	$	4,853	$	8,112	$	466,578

Amortized cost and fair value of debt securities by contractual maturity

The following is a summary of the amortized cost and fair value of investment securities at June 30, 2016, by maturity, for both available-for-sale and held-to-maturity investment securities. The maturities of residential mortgage-backed securities and collateralized mortgage obligations are based on scheduled principal payments. The maturities of all other debt securities are based on final contractual maturity.

	June 30, 2016
	Amortized Cost		Fair Value
	(In thousands)
Investment Securities Available-for-Sale:
Due in one year or less	$	154,820	$	155,386
Due after one year through five years	257,040		258,856
Due after five years through ten years	37,877		38,374
Due after ten years	4,049		4,112
Preferred stock	1,388		1,824
Total	$	455,174	$	458,552
Investment Securities Held-to-Maturity:
Due in one year or less	$	59,330	$	59,633
Due after one year through five years	275,988		280,491
Due after five years through ten years	130,304		136,879
Due after ten years	87,206		91,412
Total	$	552,828	$	568,415

Summary of continuous unrealized loss position of securities

The following schedule summarizes information for both available-for-sale and held-to-maturity investment securities with gross unrealized losses at June 30, 2016, December 31, 2015 and June 30, 2015, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position.

	Less Than 12 Months				12 Months or More				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In thousands)
June 30, 2016
Government sponsored agencies	$	14,110	$	19	$	18,787	$	517	$	32,897	$	536
State and political subdivisions	73,532		237		25,713		84		99,245		321
Collateralized mortgage obligations	8,461		13		22,955		182		31,416		195
Corporate bonds	—		—		4,936		64		4,936		64
Preferred stock and trust preferred securities	1,499		1		285		215		1,784		216
Total	$	97,602	$	270	$	72,676	$	1,062	$	170,278	$	1,332
December 31, 2015
U.S. Treasury securities	$	5,765	$	8	$	—	$	—	$	5,765	$	8
Government sponsored agencies	114,640		292		21,681		508		136,321		800
State and political subdivisions	195,285		2,891		68,361		1,627		263,646		4,518
Residential mortgage-backed securities	169,226		2,146		3,435		76		172,661		2,222
Collateralized mortgage obligations	60,459		408		39,382		729		99,841		1,137
Corporate bonds	9,532		200		—		—		9,532		200
Trust preferred securities	—		—		300		200		300		200
Total	$	554,907	$	5,945	$	133,159	$	3,140	$	688,066	$	9,085
June 30, 2015
Government sponsored agencies	$	24,789	$	163	$	14,715	$	37	$	39,504	$	200
State and political subdivisions	258,503		5,433		63,584		2,493		322,087		7,926
Residential mortgage-backed securities	187,858		1,592		3,643		102		191,501		1,694
Collateralized mortgage obligations	49,845		155		48,881		826		98,726		981
Corporate bonds	9,670		49		14,971		29		24,641		78
Trust preferred securities	—		—		300		200		300		200
Total	$	530,665	$	7,392	$	146,094	$	3,687	$	676,759	$	11,079

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Loans (Tables)

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

Summary of loans under portfolio

A summary of loans follows:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Commercial loan portfolio:
Commercial	$	1,953,301	$	1,905,879	$	1,754,873
Commercial real estate	2,157,733		2,112,162		2,243,513
Real estate construction and land development	285,848		232,076		112,312
Subtotal	4,396,882		4,250,117		4,110,698
Consumer loan portfolio:
Residential mortgage	1,494,192		1,429,636		1,310,167
Consumer installment	1,048,622		877,457		887,907
Home equity	707,573		713,937		725,971
Subtotal	3,250,387		3,021,030		2,924,045
Total loans	$	7,647,269	$	7,271,147	$	7,034,743

Recorded investment of loans in the commercial loan portfolio by risk rating categories

The following schedule presents the recorded investment of loans in the commercial loan portfolio by risk rating categories at June 30, 2016, December 31, 2015 and June 30, 2015:

	Commercial		Commercial Real Estate		Real Estate Construction and Land Development		Total
	(In thousands)
June 30, 2016
Originated Portfolio:
Risk Grades 1-5	$	1,537,612	$	1,479,365	$	239,194	$	3,256,171
Risk Grade 6	46,202		36,814		843		83,859
Risk Grade 7	35,602		15,434		517		51,553
Risk Grade 8	14,577		21,324		496		36,397
Risk Grade 9	—		1		—		1
Subtotal	1,633,993		1,552,938		241,050		3,427,981
Acquired Portfolio:
Risk Grades 1-5	292,492		554,352		40,671		887,515
Risk Grade 6	15,352		20,746		1,500		37,598
Risk Grade 7	8,448		23,879		1,229		33,556
Risk Grade 8	3,016		5,818		1,398		10,232
Risk Grade 9	—		—		—		—
Subtotal	319,308		604,795		44,798		968,901
Total	$	1,953,301	$	2,157,733	$	285,848	$	4,396,882
December 31, 2015
Originated Portfolio:
Risk Grades 1-5	$	1,418,301	$	1,341,202	$	183,323	$	2,942,826
Risk Grade 6	34,727		31,036		180		65,943
Risk Grade 7	39,933		26,658		1,123		67,714
Risk Grade 8	26,459		25,163		521		52,143
Risk Grade 9	2,095		—		—		2,095
Subtotal	1,521,515		1,424,059		185,147		3,130,721
Acquired Portfolio:
Risk Grades 1-5	340,782		629,430		41,683		1,011,895
Risk Grade 6	28,321		23,926		2,556		54,803
Risk Grade 7	11,607		29,975		1,537		43,119
Risk Grade 8	3,654		4,772		1,153		9,579
Risk Grade 9	—		—		—		—
Subtotal	384,364		688,103		46,929		1,119,396
Total	$	1,905,879	$	2,112,162	$	232,076	$	4,250,117
June 30, 2015
Originated Portfolio:
Risk Grades 1-5	$	1,269,091	$	1,273,725	$	97,364	$	2,640,180
Risk Grade 6	32,189		34,677		433		67,299
Risk Grade 7	41,316		29,737		2,127		73,180
Risk Grade 8	17,260		25,283		502		43,045
Risk Grade 9	—		4		—		4
Subtotal	1,359,856		1,363,426		100,426		2,823,708
Acquired Portfolio:
Risk Grades 1-5	347,914		820,400		10,139		1,178,453
Risk Grade 6	29,412		22,796		71		52,279
Risk Grade 7	13,910		30,288		119		44,317
Risk Grade 8	3,781		6,603		1,557		11,941
Risk Grade 9	—		—		—		—
Subtotal	395,017		880,087		11,886		1,286,990
Total	$	1,754,873	$	2,243,513	$	112,312	$	4,110,698

Recorded investment of loans in the consumer loan portfolio based on the credit risk profile of loans in a performing and nonperforming status

The following schedule presents the recorded investment of loans in the consumer loan portfolio based on loans in a performing status and loans in a nonperforming status at June 30, 2016, December 31, 2015 and June 30, 2015:

	Residential Mortgage		Consumer Installment		Home Equity		Total Consumer
	(In thousands)
June 30, 2016
Originated Loans:
Performing	$	1,299,382	$	1,041,978	$	598,283	$	2,939,643
Nonperforming	7,983		285		3,042		11,310
Subtotal	1,307,365		1,042,263		601,325		2,950,953
Acquired Loans:
Performing	185,492		6,298		105,360		297,150
Nonperforming	1,335		61		888		2,284
Subtotal	186,827		6,359		106,248		299,434
Total	$	1,494,192	$	1,048,622	$	707,573	$	3,250,387
December 31, 2015
Originated Loans:
Performing	$	1,207,945	$	868,975	$	587,566	$	2,664,486
Nonperforming	9,030		451		3,246		12,727
Subtotal	1,216,975		869,426		590,812		2,677,213
Acquired Loans:
Performing	210,580		7,984		122,118		340,682
Nonperforming	2,081		47		1,007		3,135
Subtotal	212,661		8,031		123,125		343,817
Total	$	1,429,636	$	877,457	$	713,937	$	3,021,030
June 30, 2015
Originated Loans:
Performing	$	1,058,696	$	871,543	$	584,520	$	2,514,759
Nonperforming	9,793		393		2,357		12,543
Subtotal	1,068,489		871,936		586,877		2,527,302
Acquired Loans:
Performing	238,698		15,966		138,086		392,750
Nonperforming	2,980		5		1,008		3,993
Subtotal	241,678		15,971		139,094		396,743
Total	$	1,310,167	$	887,907	$	725,971	$	2,924,045

Summary of nonperforming loans

A summary of nonperforming loans follows:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Nonaccrual loans:
Commercial	$	14,577	$	28,554	$	17,260
Commercial real estate	21,325		25,163		25,287
Real estate construction and land development	496		521		502
Residential mortgage	5,343		5,557		6,004
Consumer installment	285		451		393
Home equity	1,971		1,979		1,769
Total nonaccrual loans	43,997		62,225		51,215
Accruing loans contractually past due 90 days or more as to interest or principal payments:
Commercial	3		364		711
Commercial real estate	3		254		56
Residential mortgage	407		402		424
Home equity	1,071		1,267		588
Total accruing loans contractually past due 90 days or more as to interest or principal payments	1,484		2,287		1,779
Nonperforming TDRs:
Commercial loan portfolio	14,240		16,297		14,547
Consumer loan portfolio	2,233		3,071		3,365
Total nonperforming TDRs	16,473		19,368		17,912
Total nonperforming loans	$	61,954	$	83,880	$	70,906

Schedule of Impaired loans by classes

The following schedule presents impaired loans by classes of loans at June 30, 2016, December 31, 2015 and June 30, 2015:

	Recorded Investment		Unpaid Principal Balance		Related Valuation Allowance
	(In thousands)
June 30, 2016
Impaired loans with a valuation allowance:
Commercial	$	3,764	$	3,769	$	2,582
Commercial real estate	3,270		3,438		472
Residential mortgage	20,745		20,745		163
Subtotal	27,779		27,952		3,217
Impaired loans with no related valuation allowance:
Commercial	34,633		43,576		—
Commercial real estate	47,894		58,312		—
Real estate construction and land development	2,196		3,770		—
Residential mortgage	6,678		7,365		—
Consumer installment	347		365		—
Home equity	2,859		3,084		—
Subtotal	94,607		116,472		—
Total impaired loans:
Commercial	38,397		47,345		2,582
Commercial real estate	51,164		61,750		472
Real estate construction and land development	2,196		3,770		—
Residential mortgage	27,423		28,110		163
Consumer installment	347		365		—
Home equity	2,859		3,084		—
Total	$	122,386	$	144,424	$	3,217
December 31, 2015
Impaired loans with a valuation allowance:
Commercial	$	18,898	$	19,426	$	5,700
Commercial real estate	4,448		4,688		497
Residential mortgage	21,037		21,037		192
Subtotal	44,383		45,151		6,389
Impaired loans with no related valuation allowance:
Commercial	31,039		37,703		—
Commercial real estate	53,518		69,130		—
Real estate construction and land development	2,136		3,108		—
Residential mortgage	7,638		8,644		—
Consumer installment	498		512		—
Home equity	2,986		3,270		—
Subtotal	97,815		122,367		—
Total impaired loans:
Commercial	49,937		57,129		5,700
Commercial real estate	57,966		73,818		497
Real estate construction and land development	2,136		3,108		—
Residential mortgage	28,675		29,681		192
Consumer installment	498		512		—
Home equity	2,986		3,270		—
Total	$	142,198	$	167,518	$	6,389

	Recorded Investment		Unpaid Principal Balance		Related Valuation Allowance
	(In thousands)
June 30, 2015
Impaired loans with a valuation allowance:
Commercial	$	4,044	$	4,137	$	718
Commercial real estate	2,789		2,948		603
Residential mortgage	20,970		20,970		260
Subtotal	27,803		28,055		1,581
Impaired loans with no related valuation allowance:
Commercial	32,461		38,160		—
Commercial real estate	56,052		78,490		—
Real estate construction and land development	2,393		4,175		—
Residential mortgage	8,984		8,984		—
Consumer installment	398		398		—
Home equity	2,778		2,778		—
Subtotal	103,066		132,985		—
Total impaired loans:
Commercial	36,505		42,297		718
Commercial real estate	58,841		81,438		603
Real estate construction and land development	2,393		4,175		—
Residential mortgage	29,954		29,954		260
Consumer installment	398		398		—
Home equity	2,778		2,778		—
Total	$	130,869	$	161,040	$	1,581

Schedule presents information related to impaired loans

The following schedule presents information related to impaired loans for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	Average Recorded Investment		Interest Income Recognized While on Impaired Status		Average Recorded Investment		Interest Income Recognized While on Impaired Status
	(In thousands)
Commercial	$	38,606	$	348	$	41,811	$	677
Commercial real estate	53,723		391		55,839		849
Real estate construction and land development	2,265		26		2,166		51
Residential mortgage	27,418		356		27,755		722
Consumer installment	330		1		359		2
Home equity	2,791		13		3,022		28
Total	$	125,133	$	1,135	$	130,952	$	2,329

	Three Months Ended June 30, 2015				Six Months Ended June 30, 2015
	Average Recorded Investment		Interest Income Recognized While on Impaired Status		Average Recorded Investment		Interest Income Recognized While on Impaired Status
	(In thousands)
Commercial	$	36,735	$	263	$	37,655	$	552
Commercial real estate	60,393		458		60,317		983
Real estate construction and land development	2,290		36		2,403		63
Residential mortgage	29,432		380		28,392		711
Consumer installment	426		1		463		1
Home equity	2,529		14		2,440		22
Total	$	131,805	$	1,152	$	131,670	$	2,332

Schedule representing the aging status of the recorded investment in loans by classes

The following schedule presents the aging status of the recorded investment in loans by classes of loans at June 30, 2016, December 31, 2015 and June 30, 2015:

	31-60 Days Past Due		61-89 Days Past Due		Accruing Loans Past Due 90 Days or More		Non-accrual Loans		Total Past Due		Current		Total Loans
	(In thousands)
June 30, 2016
Originated Portfolio:
Commercial	$	4,522	$	822	$	3	$	14,577	$	19,924	$	1,614,069	$	1,633,993
Commercial real estate	8,842		343		3		21,325		30,513		1,522,425		1,552,938
Real estate construction and land development	62		—		—		496		558		240,492		241,050
Residential mortgage	1,955		—		407		5,343		7,705		1,299,660		1,307,365
Consumer installment	2,856		554		—		285		3,695		1,038,568		1,042,263
Home equity	2,594		366		1,071		1,971		6,002		595,323		601,325
Total	$	20,831	$	2,085	$	1,484	$	43,997	$	68,397	$	6,310,537	$	6,378,934
Acquired Portfolio:
Commercial	$	547	$	—	$	3,038	$	—	$	3,585	$	315,723	$	319,308
Commercial real estate	90		—		5,817		—		5,907		598,888		604,795
Real estate construction and land development	389		—		1,398		—		1,787		43,011		44,798
Residential mortgage	407		—		1,335		—		1,742		185,085		186,827
Consumer installment	58		25		62		—		145		6,214		6,359
Home equity	416		38		888		—		1,342		104,906		106,248
Total	$	1,907	$	63	$	12,538	$	—	$	14,508	$	1,253,827	$	1,268,335

	31-60 Days Past Due		61-89 Days Past Due		Accruing Loans Past Due 90 Days or More		Non-accrual Loans		Total Past Due		Current		Total Loans
	(In thousands)
December 31, 2015
Originated Portfolio:
Commercial	$	3,685	$	1,230	$	364	$	28,554	$	33,833	$	1,487,682	$	1,521,515
Commercial real estate	4,168		1,603		254		25,163		31,188		1,392,871		1,424,059
Real estate construction and land development	—		—		—		521		521		184,626		185,147
Residential mortgage	1,737		—		402		5,557		7,696		1,209,279		1,216,975
Consumer installment	3,145		644		—		451		4,240		865,186		869,426
Home equity	1,767		788		1,267		1,979		5,801		585,011		590,812
Total	$	14,502	$	4,265	$	2,287	$	62,225	$	83,279	$	5,724,655	$	5,807,934
Acquired Portfolio:
Commercial	$	490	$	532	$	3,735	$	—	$	4,757	$	379,607	$	384,364
Commercial real estate	3,557		691		4,771		—		9,019		679,084		688,103
Real estate construction and land development	—		—		1,154		—		1,154		45,775		46,929
Residential mortgage	1,370		—		2,081		—		3,451		209,210		212,661
Consumer installment	55		—		47		—		102		7,929		8,031
Home equity	847		78		1,007		—		1,932		121,193		123,125
Total	$	6,319	$	1,301	$	12,795	$	—	$	20,415	$	1,442,798	$	1,463,213
June 30, 2015
Originated Portfolio:
Commercial	$	4,055	$	2,317	$	711	$	17,260	$	24,343	$	1,335,513	$	1,359,856
Commercial real estate	2,754		1,117		56		25,287		29,214		1,334,212		1,363,426
Real estate construction and land development	413		—		—		502		915		99,511		100,426
Residential mortgage	1,536		—		424		6,004		7,964		1,060,525		1,068,489
Consumer installment	2,526		302		—		393		3,221		868,715		871,936
Home equity	2,334		204		588		1,769		4,895		581,982		586,877
Total	$	13,618	$	3,940	$	1,779	$	51,215	$	70,552	$	5,280,458	$	5,351,010
Acquired Portfolio:
Commercial	$	690	$	—	$	3,781	$	—	$	4,471	$	390,546	$	395,017
Commercial real estate	969		291		6,603		—		7,863		872,224		880,087
Real estate construction and land development	—		—		1,557		—		1,557		10,329		11,886
Residential mortgage	1,077		138		2,980		—		4,195		237,483		241,678
Consumer installment	—		56		5		—		61		15,910		15,971
Home equity	1,153		210		1,008		—		2,371		136,723		139,094
Total	$	3,889	$	695	$	15,934	$	—	$	20,518	$	1,663,215	$	1,683,733

Schedule of Corporation's TDRs

The following schedule presents the Corporation’s TDRs at June 30, 2016, December 31, 2015 and June 30, 2015:

	Performing TDRs		Non-Performing TDRs		Nonaccrual TDRs		Total
	(In thousands)
June 30, 2016
Commercial loan portfolio	$	30,866	$	14,240	$	28,979	$	74,085
Consumer loan portfolio	18,512		2,233		3,402		24,147
Total	$	49,378	$	16,473	$	32,381	$	98,232
December 31, 2015
Commercial loan portfolio	$	29,844	$	16,297	$	32,682	$	78,823
Consumer loan portfolio	17,966		3,071		3,251		24,288
Total	$	47,810	$	19,368	$	35,933	$	103,111
June 30, 2015
Commercial loan portfolio	$	28,203	$	14,547	$	32,001	$	74,751
Consumer loan portfolio	17,605		3,365		3,707		24,677
Total	$	45,808	$	17,912	$	35,708	$	99,428

Schedule providing information on TDRs

The following schedule provides information on the Corporation's TDRs that were modified during the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30, 2016					Six Months Ended June 30, 2016
	Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment
	(Dollars in thousands)
Commercial loan portfolio:
Commercial	21	$	4,149	$	4,149	28	$	7,981	$	7,981
Commercial real estate	2	1,454		1,454		6	2,441		2,441
Subtotal – commercial loan portfolio	23	5,603		5,603		34	10,422		10,422
Consumer loan portfolio	14	490		490		21	694		694
Total	37	$	6,093	$	6,093	55	$	11,116	$	11,116

	Three Months Ended June 30, 2015					Six Months Ended June 30, 2015
	Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment
	(Dollars in thousands)
Commercial loan portfolio:
Commercial	13	$	2,332	$	2,332	18	$	4,264	$	4,264
Commercial real estate	4	527		527		9	3,061		3,061
Real estate construction and land development	1	305		305		1	305		305
Subtotal – commercial loan portfolio	18	3,164		3,164		28	7,630		7,630
Consumer loan portfolio	29	1,633		1,631		39	1,969		1,967
Total	47	$	4,797	$	4,795	67	$	9,599	$	9,597

Troubled debt restructurings on financing receivables with defaults payment

The following schedule includes TDRs for which there was a payment default during the three and six months ended June 30, 2016 and 2015, whereby the borrower was past due with respect to principal and/or interest for 90 days or more, and the loan became a TDR during the twelve-month period prior to the default:

	Three Months Ended June 30, 2016			Six Months Ended June 30, 2016
	Number of Loans	Principal Balance at End of Period		Number of Loans	Principal Balance at End of Period
	(Dollars in thousands)
Commercial loan portfolio:
Commercial	—	$	—	—	$	—
Commercial real estate	1	788		2	1,721
Subtotal – commercial loan portfolio	1	788		2	1,721
Consumer loan portfolio	1	—		2	—
Total	2	$	788	4	$	1,721
	Three Months Ended June 30, 2015			Six Months Ended June 30, 2015
	Number of Loans	Principal Balance at End of Period		Number of Loans	Principal Balance at End of Period
	(Dollars in thousands)
Commercial loan portfolio:
Commercial	—	$	—	—	$	—
Commercial real estate	1	183		4	942
Subtotal – commercial loan portfolio	1	183		4	942
Consumer loan portfolio	—	—		1	33
Total	1	$	183	5	$	975

Schedule of allowance and recorded investment related to financing receivables segregated by portfolio segment

The following schedule presents, by loan portfolio segment, the changes in the allowance for the three and six months ended June 30, 2016 and details regarding the balance in the allowance and the recorded investment in loans at June 30, 2016 by impairment evaluation method.

	Commercial Loan Portfolio			Consumer Loan Portfolio			Unallocated		Total
	(In thousands)
Changes in allowance for loan losses for the three months ended June 30, 2016:
Beginning balance	$	44,668		$	25,650		$	—	$	70,318
Provision for loan losses	900			2,100			—		3,000
Charge-offs	(2,542		)	(1,078		)	—		(3,620		)
Recoveries	1,202			606			—		1,808
Ending balance	$	44,228		$	27,278		$	—	$	71,506
Changes in allowance for loan losses for the six months ended June 30, 2016:
Beginning balance	$	47,234		$	26,094		$	—	$	73,328
Provision for loan losses	1,900			2,600			—		4,500
Charge-offs	(6,438		)	(2,640		)	—		(9,078		)
Recoveries	1,532			1,224			—		2,756
Ending balance	$	44,228		$	27,278		$	—	$	71,506
Allowance for loan losses balance at June 30, 2016 attributable to:
Loans individually evaluated for impairment	$	3,054		$	163		$	—	$	3,217
Loans collectively evaluated for impairment	41,174			27,115			—		68,289
Loans acquired with deteriorated credit quality	—			—			—		—
Total	$	44,228		$	27,278		$	—	$	71,506
Recorded investment (loan balance) at June 30, 2016:
Loans individually evaluated for impairment	$	81,504		$	20,745		$	—	$	102,249
Loans collectively evaluated for impairment	3,346,477			2,930,208			—		6,276,685
Loans acquired with deteriorated credit quality	968,901			299,434			—		1,268,335
Total	$	4,396,882		$	3,250,387		$	—	$	7,647,269

The following schedule presents, by loan portfolio segment, details regarding the balance in the allowance and the recorded investment in loans at December 31, 2015 by impairment evaluation method.

	Commercial Loan Portfolio		Consumer Loan Portfolio		Unallocated		Total
	(In thousands)
Allowance for loan losses balance at December 31, 2015 attributable to:
Loans individually evaluated for impairment	$	6,197	$	192	$	—	$	6,389
Loans collectively evaluated for impairment	41,037		25,902		—		66,939
Loans acquired with deteriorated credit quality	—		—		—		—
Total	$	47,234	$	26,094	$	—	$	73,328
Recorded investment (loan balance) at December 31, 2015:
Loans individually evaluated for impairment	$	100,379	$	21,037	$	—	$	121,416
Loans collectively evaluated for impairment	3,030,342		2,656,176		—		5,686,518
Loans acquired with deteriorated credit quality	1,119,396		343,817		—		1,463,213
Total	$	4,250,117	$	3,021,030	$	—	$	7,271,147

The following schedule presents, by loan portfolio segment, the changes in the allowance for the three and six months ended June 30, 2015 and details regarding the balance in the allowance and the recorded investment in loans at June 30, 2015 by impairment evaluation method.

	Commercial Loan Portfolio			Consumer Loan Portfolio			Unallocated		Total
	(In thousands)
Changes in allowance for loan losses for the three months ended June 30, 2015:
Beginning balance	$	46,819		$	24,579		$	3,858	$	75,256
Provision for loan losses	(626		)	(109		)	2,235		1,500
Charge-offs	(915		)	(1,809		)	—		(2,724		)
Recoveries	249			660			—		909
Ending balance	$	45,527		$	23,321		$	6,093	$	74,941
Changes in allowance for loan losses for the six months ended June 30, 2015:
Beginning balance	$	44,156		$	28,803		$	2,724	$	75,683
Provision for loan losses	2,967			(3,336		)	3,369		3,000
Charge-offs	(2,419		)	(3,448		)	—		(5,867		)
Recoveries	823			1,302			—		2,125
Ending balance	$	45,527		$	23,321		$	6,093	$	74,941
Allowance for loan losses balance at June 30, 2015 attributable to:
Loans individually evaluated for impairment	$	1,321		$	260		$	—	$	1,581
Loans collectively evaluated for impairment	44,206			23,061			6,093		73,360
Loans acquired with deteriorated credit quality	—			—			—		—
Total	$	45,527		$	23,321		$	6,093	$	74,941
Recorded investment (loan balance) at June 30, 2015:
Loans individually evaluated for impairment	$	85,799		$	20,970		$	—	$	106,769
Loans collectively evaluated for impairment	2,737,909			2,506,332			—		5,244,241
Loans acquired with deteriorated credit quality	1,286,990			396,743			—		1,683,733
Total	$	4,110,698		$	2,924,045		$	—	$	7,034,743

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Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Net carrying value of intangible assets

The following table shows the net carrying value of the Corporation’s intangible assets:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Goodwill	$	286,867	$	287,393	$	285,512
Other intangible assets:
Core deposit intangible assets	$	24,429	$	26,654	$	28,353
Non-compete intangible assets	164		328		541
Mortgage servicing rights	9,677		11,122		12,307
Total other intangible assets	$	34,270	$	38,104	$	41,201

Carrying amount, accumulated amortization and amortization expense of core deposit intangible assets

The following table sets forth the carrying amount, accumulated amortization and amortization expense of core deposit intangible assets that are amortizable and arose from business combinations or other acquisitions:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Gross original amount	$	40,055	$	40,055	$	39,355
Accumulated amortization	15,626		13,401		11,002
Carrying amount	$	24,429	$	26,654	$	28,353
Amortization expense for the three months ended June 30	$	1,113			$	952
Amortization expense for the six months ended June 30	$	2,225			$	1,743

Net carrying value, fair value of MSRs and loans Corporation servicing for others

The following shows the net carrying value and fair value of MSRs and the total loans that the Corporation is servicing for others:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Net carrying value of MSRs	$	9,677	$	11,122	$	12,307
Fair value of MSRs	$	12,493	$	15,542	$	16,602
Valuation allowance	$	412	$	—	$	—
Loans serviced for others that have servicing rights capitalized	$	2,014,986	$	2,082,899	$	2,193,067

Activity for capitalized MSRs

The following table shows the activity for capitalized MSRs:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(In thousands)
Balance at beginning of period	$	10,478		$	11,583		$	11,122		$	12,217
Acquired in Monarch acquisition	—			1,284			—			1,284
Additions	586			415			917			815
Amortization	(975		)	(1,175		)	(1,950		)	(2,209		)
Change in valuation allowance	(412		)	200			(412		)	200
Balance at end of period	$	9,677		$	12,307		$	9,677		$	12,307

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Components of accumulated other comprehensive loss, net of related tax benefit/expense

The components of accumulated other comprehensive loss, net of related tax benefit/expense, were as follows:

	June 30, 2016			December 31, 2015			June 30, 2015
	(In thousands)
Net unrealized gains (losses) on investment securities – available-for-sale, net of related tax expense (benefit) of $1,182 at June 30, 2016, $(1,017) at December 31, 2015 and $(148) at June 30, 2015	$	2,196		$	(1,888	)	$	(274	)
Pension and other postretirement benefits adjustment, net of related tax benefit of $15,020 at June 30, 2016, $14,616 at December 31, 2015 and $16,601 at June 30, 2015	(27,894		)	(27,144		)	(30,830		)
Accumulated other comprehensive loss	$	(25,698	)	$	(29,032	)	$	(31,104	)

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Borrowings Borrowings (Tables)

6 Months Ended

Jun. 30, 2016

Borrowings [Abstract]

Schedule of Other Borrowings [Table Text Block]

A summary of the Corporation's long-term borrowings follows:

	June 30, 2016		December 31, 2015		June 30, 2015
	(In thousands)
Long-term borrowings:
Long-term FHLB advances	$	329,320	$	181,394	$	81,469
Securities sold under agreements to repurchase	17,277		17,453		23,649
Non-revolving line-of-credit	25,000		25,000		25,000
Subordinated debt obligations	—		18,544		18,372
Total long-term borrowings	$	371,597	$	242,391	$	148,490

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Regulatory Capital (Tables)

6 Months Ended

Jun. 30, 2016

Banking and Thrift [Abstract]

Corporation's and Chemical Bank's actual capital amounts and ratios with the quantitative measures established by regulation to ensure capital adequacy

The summary below compares the actual capital amounts and ratios with the quantitative measures established by regulation to ensure capital adequacy:

	Actual				Minimum Required for Capital Adequacy Purposes				Required to be Well Capitalized Under Prompt Corrective Action Regulations
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
	(Dollars in thousands)
June 30, 2016
Total Capital to Risk-Weighted Assets:
Corporation	$	851,114	11.4	%	$	599,743	8.0	%	N/A		N/A
Chemical Bank	854,189		11.4		598,142		8.0		$	747,677	10.0	%
Tier 1 Capital to Risk-Weighted Assets:
Corporation	779,608		10.4		449,807		6.0		N/A		N/A
Chemical Bank	782,683		10.5		448,606		6.0		598,142		8.0
Common Equity Tier 1 Capital to Risk-Weighted Assets:
Corporation	779,608		10.4		337,355		4.5		N/A		N/A
Chemical Bank	782,683		10.5		336,455		4.5		485,990		6.5
Leverage Ratio:
Corporation	779,608		8.6		361,408		4.0		N/A		N/A
Chemical Bank	782,683		8.7		360,746		4.0		450,932		5.0

	Actual				Minimum Required for Capital Adequacy Purposes				Required to be Well Capitalized Under Prompt Corrective Action Regulations
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
	(Dollars in thousands)
December 31, 2015
Total Capital to Risk-Weighted Assets:
Corporation	$	841,257	11.8	%	$	571,509	8.0	%	N/A		N/A
Chemical Bank	830,294		11.7		570,073		8.0		$	712,591	10.0	%
Tier 1 Capital to Risk-Weighted Assets:
Corporation	767,929		10.7		428,631		6.0		N/A		N/A
Chemical Bank	756,966		10.6		427,555		6.0		570,073		8.0
Common Equity Tier 1 Capital to Risk-Weighted Assets:
Corporation	753,815		10.6		321,474		4.5		N/A		N/A
Chemical Bank	756,966		10.6		320,666		4.5		463,184		6.5
Leverage Ratio:
Corporation	767,929		8.6		356,396		4.0		N/A		N/A
Chemical Bank	756,966		8.5		355,911		4.0		444,888		5.0
June 30, 2015
Total Capital to Risk-Weighted Assets:
Corporation	$	816,595	11.6	%	$	559,273	8.0	%	N/A		N/A
Chemical Bank	713,999		12.0		471,422		8.0		$	589,277	10.0	%
The Bank of Holland	77,648		10.2		61,028		8.0		76,285		10.0
The Bank of Northern Michigan	32,779		10.1		25,878		8.0		32,347		10.0
Tier 1 Capital to Risk-Weighted Assets:
Corporation	741,654		10.6		419,455		6.0		N/A		N/A
Chemical Bank	640,324		10.9		353,566		6.0		471,422		8.0
The Bank of Holland	76,312		10.0		45,771		6.0		61,028		8.0
The Bank of Northern Michigan	32,779		10.1		19,408		6.0		25,878		8.0
Common Equity Tier 1 Capital to Risk-Weighted Assets:
Corporation	723,654		10.4		314,591		4.5		N/A		N/A
Chemical Bank	640,324		10.9		265,175		4.5		383,030		6.5
The Bank of Holland	76,312		10.0		34,328		4.5		49,585		6.5
The Bank of Northern Michigan	32,779		10.1		14,556		4.5		21,025		6.5
Leverage Ratio:
Corporation	741,654		9.4		314,344		4.0		N/A		N/A
Chemical Bank	640,324		8.5		300,703		4.0		375,878		5.0
The Bank of Holland	76,312		9.9		30,710		4.0		38,388		5.0
The Bank of Northern Michigan	32,779		9.1		14,421		4.0		18,026		5.0

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Summary of assets measured at fair value on a recurring basis

For assets measured at fair value on a recurring basis, quantitative disclosures about the fair value measurements for each major category of assets were as follows:

	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In thousands)
June 30, 2016
Investment securities – available-for-sale:
U.S. Treasury securities	$	5,810	$	—	$	—	$	5,810
Government sponsored agencies	—		157,022		—		157,022
State and political subdivisions	—		13,220		—		13,220
Residential mortgage-backed securities	—		168,616		—		168,616
Collateralized mortgage obligations	—		100,849		—		100,849
Corporate bonds	—		9,712		—		9,712
Preferred stock and trust preferred securities	—		3,323		—		3,323
Total investment securities – available-for-sale	5,810		452,742		—		458,552
Loans held-for-sale	—		13,990		—		13,990
Total assets measured at fair value on a recurring basis	$	5,810	$	466,732	$	—	$	472,542
December 31, 2015
Investment securities – available-for-sale:
U.S. Treasury securities	$	5,765	$	—	$	—	$	5,765
Government sponsored agencies	—		194,989		—		194,989
State and political subdivisions	—		15,120		—		15,120
Residential mortgage-backed securities	—		187,768		—		187,768
Collateralized mortgage obligations	—		132,230		—		132,230
Corporate bonds	—		14,627		—		14,627
Preferred stock and trust preferred securities	—		3,232		—		3,232
Total investment securities – available-for-sale	5,765		547,966		—		553,731
Loans held-for-sale	—		10,327		—		10,327
Total assets measured at fair value on a recurring basis	$	5,765	$	558,293	$	—	$	564,058
June 30, 2015
Investment securities – available-for-sale:
U.S. Treasury securities	$	8,294	$	—	$	—	$	8,294
Government sponsored agencies	—		227,907		—		227,907
State and political subdivisions	—		26,965		—		26,965
Residential mortgage-backed securities	—		212,669		—		212,669
Collateralized mortgage obligations	—		167,032		—		167,032
Corporate bonds	—		39,678		—		39,678
Preferred stock	—		3,161		—		3,161
Total investment securities – available-for-sale	8,294		677,412		—		685,706
Loans held-for-sale	—		7,798		—		7,798
Total assets measured at fair value on a recurring basis	$	8,294	$	685,210	$	—	$	693,504

Summary of assets measured at fair value on a nonrecurring basis

For assets measured at fair value on a nonrecurring basis, quantitative disclosures about fair value measurements for each major category of assets were as follows:

	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In thousands)
June 30, 2016
Impaired originated loans	$	—	$	—	$	23,655	$	23,655
Other real estate/repossessed assets	—		—		8,440		8,440
Mortgage servicing rights	—		—		6,153		6,153
Total	$	—	$	—	$	38,248	$	38,248
December 31, 2015
Impaired originated loans	$	—	$	—	$	42,065	$	42,065
Other real estate/repossessed assets	—		—		9,935		9,935
Total	$	—	$	—	$	52,000	$	52,000
June 30, 2015
Impaired originated loans	$	—	$	—	$	24,517	$	24,517
Other real estate/repossessed assets	—		—		14,197		14,197
Total	$	—	$	—	$	38,714	$	38,714

Summary of carrying amounts and estimated fair values of the financial instruments

A summary of carrying amounts and estimated fair values of the Corporation’s financial instruments included in the consolidated statements of financial position was as follows:

	Level in Fair Value Measurement Hierarchy	June 30, 2016				December 31, 2015				June 30, 2015
		Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(In thousands)
Assets:
Cash and cash equivalents	Level 1	$	232,960	$	232,960	$	238,789	$	238,789	$	215,034	$	215,034
Investment securities:
Available-for-sale	Level 1	5,810		5,810		5,765		5,765		8,294		8,294
Available-for-sale	Level 2	452,742		452,742		547,966		547,966		677,412		677,412
Held-to-maturity	Level 2	552,328		568,130		509,471		512,405		469,337		466,278
Held-to-maturity	Level 3	500		285		500		300		500		300
Nonmarketable equity securities	NA	47,775		47,775		36,907		36,907		36,142		36,142
Loans held-for-sale	Level 2	13,990		13,990		10,327		10,327		7,798		7,798
Net loans	Level 3	7,575,763		7,593,013		7,197,819		7,201,994		6,959,802		6,969,655
Interest receivable	Level 2	23,111		23,111		21,953		21,953		21,668		21,668
Liabilities:
Deposits without defined maturities	Level 2	$	5,904,618	$	5,904,618	$	5,809,355	$	5,809,355	$	5,547,764	$	5,547,764
Time deposits	Level 3	1,560,028		1,563,446		1,647,412		1,647,412		1,745,215		1,745,215
Interest payable	Level 2	1,389		1,389		1,578		1,578		1,557		1,557
Short-term borrowings	Level 2	556,213		556,213		397,199		397,199		532,291		532,291
Long-term borrowings	Level 2	354,320		359,043		206,394		206,394		106,469		106,469
Long-term borrowings	Level 3	17,277		17,228		35,997		35,997		42,021		42,021

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

The following table presents additional information about the significant unobservable inputs used in the fair value measurement of financial assets measured on a nonrecurring basis that were categorized within the Level 3 of the fair value hierarchy (fair value in thousands):

	Fair Value at June 30, 2016		Valuation Technique	Significant Unobservable Inputs	Range
Impaired originated loans	$	23,655	Appraisal of collateral	Discount for type of collateral and age of appraisal	20%-30%
Other real estate/repossessed assets	8,440		Appraisal of property	Discount for type of property and age of appraisal	25%-30%
Mortgage servicing rights	6,153		Discounted cash flow	Constant prepayment rate	12%-22%
				Discount rate	10%-11%

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Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Numerator and denominator of the basic and diluted earnings per common share computations

The following summarizes the numerator and denominator of the basic and diluted earnings per common share computations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(In thousands, except per share data)
Numerator for both basic and diluted earnings per common share, net income	$	25,707	$	19,024	$	48,969	$	36,859
Denominator for basic earnings per common share, weighted average common shares outstanding	38,258		35,162		38,228		33,992
Weighted average common stock equivalents	342		235		332		235
Denominator for diluted earnings per common share	38,600		35,397		38,560		34,227
Basic earnings per common share	$	0.67	$	0.54	$	1.28	$	1.08
Diluted earnings per common share	$	0.67	$	0.54	$	1.27	$	1.08

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Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of activity for Corporation's stock options

A summary of activity for the Corporation’s stock options as of and for the six months ended June 30, 2016 is presented below:

	Non-Vested Stock Options Outstanding						Stock Options Outstanding
	Number of Options		Weighted- Average Exercise Price Per Share		Weighted- Average Grant Date Fair Value Per Share		Number of Options		Weighted- Average Exercise Price Per Share
Outstanding at December 31, 2015	479,755		$	28.75	$	8.49	1,054,739		$	25.38
Granted	441,167		32.81		6.15		441,167		32.81
Exercised	—		—		—		(96,058	)	21.81
Vested	(118,273	)	28.30		8.40		—		—
Forfeited/expired	(33,901	)	31.00		7.25		(33,901	)	31.00
Outstanding at June 30, 2016	768,748		$	31.04	$	7.21	1,365,947		$	27.89
Exercisable/vested at June 30, 2016							597,199		$	23.84

Assumptions of Black-Scholes option pricing model

The fair value of the stock options granted during the six months ended June 30, 2016 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions.

Expected dividend yield	3.30		%
Risk-free interest rate	1.39		%
Expected stock price volatility	27.9		%
Expected life of options – in years	6.5
Weighted average fair value of options granted	$	6.15

Summary of activity for restricted stock performance units

A summary of the activity for restricted stock units as of and for the six months ended June 30, 2016 is presented below:

	Number of Units		Weighted- Average Grant Date Fair Value  Per Unit
Outstanding at December 31, 2015	207,989		$	26.41
Granted	99,208		30.78
Converted into shares of common stock	(45,787	)	22.89
Forfeited/expired	(4,126	)	29.65
Outstanding at June 30, 2016	257,284		$	28.67

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Pension and Other Postretirement Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2016

Compensation and Retirement Disclosure [Abstract]

Components of net periodic benefit cost (income) for the Corporation's qualified and nonqualified pension plans and nonqualified postretirement benefits plan

The components of net periodic benefit cost for the Corporation’s qualified and nonqualified pension plans and nonqualified postretirement benefit plan are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(In thousands)
Defined Benefit Pension Plans
Service cost	$	277		$	273		$	554		$	545
Interest cost	1,358			1,332			2,716			2,664
Expected return on plan assets	(2,140		)	(2,161		)	(4,281		)	(4,322		)
Amortization of prior service credit	—			(1		)	—			(2		)
Amortization of unrecognized net loss	572			1,056			1,144			2,112
Net periodic benefit cost	$	67		$	499		$	133		$	997
Postretirement Benefit Plan
Service cost	$	2		$	4		$	4		$	8
Interest cost	33			33			66			67
Amortization of prior service cost	29			32			58			65
Amortization of unrecognized net gain	(25		)	—			(49		)	(1		)
Net periodic benefit cost	$	39		$	69		$	79		$	139

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Significant Accounting Policies (Details)			3 Months Ended		6 Months Ended
	May 31, 2015 USD ($)	Apr. 01, 2015 USD ($)	Jun. 30, 2016 USD ($) shares	Jun. 30, 2015 USD ($) shares	Jun. 30, 2016 USD ($) Bank Pools shares	Jun. 30, 2015 USD ($) shares	Jul. 19, 2016 shares	Dec. 31, 2015 USD ($) shares	Apr. 20, 2015 shares	Apr. 20, 2009 shares	Jan. 31, 2008 shares
Business Acquisition [Line Items]
Number of banks through which company operates | Bank					1
Number of regional banking units Chemical Bank operates through | Bank					4
Number of minimum days when principal or interest is past due is placed in nonaccrual category					90 days
Number of minimum days in real estate residential loan when principal or interest is past due is placed in nonaccrual category					120 days
Time period in which payments receive consistently and loans are returned to accrual status					6 months
Time period sustained for payment history of principal and interest payments to move them to performing status					6 months
Time period of real estate residential troubled debt restructurings reducing borrower's monthly payments by decreasing the interest rate charged on the loan					24 months
Minimum number of days past due as to interest or principal payments in accruing loans moves to nonperforming loans					90 days
Minimum amount of loan reviewed for detailed credit quality					$ 250,000
Time period for historical loan loss experience					5 years
Minimum percentage of tax benefit is recognized for the amount likely to be realized					50.00%
Reserve for contingent income tax liabilities recorded			$ 0	$ 0	$ 0	$ 0		$ 0
Expense related to qualified affordable housing projects			600,000	200,000	1,200,000	300,000
Remaining investment in qualified affordable housing projects			24,300,000	21,400,000	24,300,000	21,400,000		21,700,000
Equity Method Investments			7,500,000	3,300,000	7,500,000	3,300,000		1,700,000
Variable Interest Entity, Reporting Entity Involvement, Unfunded Obligation, Amount			11,500,000	9,700,000	11,500,000	9,700,000		8,000,000
Impairment on tax credit projects			$ 0	$ 0	$ 0	$ 0		$ 0
Number of shares authorized to be repurchased | shares											500,000
Stock repurchased (shares) | shares					0
Number of remaining shares authorized to be repurchased (shares) | shares			500,000		500,000
Preferred stock, shares authorized | shares			2,000,000	2,000,000	2,000,000	2,000,000		2,000,000	2,000,000	200,000
Preferred stock, shares issued | shares			0	0	0	0		0
Preferred stock, shares outstanding | shares			0		0
Common Stock, Shares, Issued | shares			38,267,118	38,110,136	38,267,118	38,110,136		38,167,861
Common Stock, Shares Authorized | shares			60,000,000	60,000,000	60,000,000	60,000,000		60,000,000
Goodwill			$ 286,867,000	$ 285,512,000	$ 286,867,000	$ 285,512,000		$ 287,393,000
Lake Michigan Financial Corp [Member]
Business Acquisition [Line Items]
Number of pools of aggregate acquired loans based upon common risk characteristics | Pools					2
Monarch Community Bancorp [Member]
Business Acquisition [Line Items]
Number of pools of aggregate acquired loans based upon common risk characteristics | Pools					2
Northwestern Bancorp [Member]
Business Acquisition [Line Items]
Number of pools of aggregate acquired loans based upon common risk characteristics | Pools					4
OAK [Member]
Business Acquisition [Line Items]
Number of pools of aggregate acquired loans based upon common risk characteristics | Pools					14
Monarch Community Bancorp [Member]
Business Acquisition [Line Items]
Business Combination, Consideration Transferred		$ 27,200,000
Goodwill		$ 5,300,000
Lake Michigan Financial Corp [Member]
Business Acquisition [Line Items]
Business Combination, Consideration Transferred	$ 187,400,000
Business Combination, Consideration Transferred, Value of Stock and Options Issued	132,900,000
Business Combination, Consideration Transferred, Cash Paid for Outstanding Stock	54,500,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill	8,600,000
Goodwill	$ 101,000,000
Subsequent Event [Member]
Business Acquisition [Line Items]
Common Stock, Shares Authorized | shares							100,000,000

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Acquisitions (Activity for Acquired Loans) (Details) - USD ($) $ in Thousands					6 Months Ended
		May 31, 2015	Apr. 01, 2015	Oct. 31, 2014	Jun. 30, 2016	Jun. 30, 2015
Activity for accretable yield includes contractually due interest of acquired loans
Balance at beginning of period					$ 298,257	$ 137,961
Additions attributable to acquisitions						228,160
Additions (reductions)	[1]				(17,277)	2,765
Accretion recognized in interest income					(34,440)	(20,838)
Reclassification from nonaccretable difference					10,000
Balance at end of period					256,540	348,048
Northwestern Bancorp [Member]
Activity for accretable yield includes contractually due interest of acquired loans
Balance at beginning of period					82,623	104,675
Additions attributable to acquisitions				$ 110,000		0
Additions (reductions)	[1]				(5,848)	(2,859)
Accretion recognized in interest income					(8,029)	(10,058)
Reclassification from nonaccretable difference					5,000
Balance at end of period					73,746	91,758
OAK [Member]
Activity for accretable yield includes contractually due interest of acquired loans
Balance at beginning of period					28,077	33,286
Additions attributable to acquisitions						0
Additions (reductions)	[1]				(201)	5,215
Accretion recognized in interest income					(6,284)	(6,326)
Reclassification from nonaccretable difference					5,000
Balance at end of period					26,592	32,175
Lake Michigan Financial Corp [Member]
Activity for accretable yield includes contractually due interest of acquired loans
Balance at beginning of period					152,999	0
Additions attributable to acquisitions		$ 190,200				190,246
Additions (reductions)	[1]				(10,365)	1,550
Accretion recognized in interest income					(17,291)	(3,486)
Reclassification from nonaccretable difference					0
Balance at end of period					125,343	188,310
Monarch Community Bancorp [Member]
Activity for accretable yield includes contractually due interest of acquired loans
Balance at beginning of period					34,558	0
Additions attributable to acquisitions			$ 37,900			37,914
Additions (reductions)	[1]				(863)	(1,141)
Accretion recognized in interest income					(2,836)	(968)
Reclassification from nonaccretable difference					0
Balance at end of period					$ 30,859	$ 35,805

[1] 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.

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Acquisitions (Textual) (Details)							3 Months Ended	6 Months Ended
	Jan. 25, 2016 USD ($) Offices $ / shares	May 31, 2015 USD ($) Offices $ / shares shares	Apr. 01, 2015 USD ($) shares	Oct. 31, 2014 USD ($) Offices	Dec. 07, 2012 USD ($) Branches	Apr. 30, 2010 USD ($) Offices	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Business Acquisition [Line Items]
Goodwill							$ 286,867,000	$ 285,512,000	$ 287,393,000
Additions attributable to acquisitions								228,160,000
Talmer Bancorp, Inc. [Member]
Business Acquisition [Line Items]
Business Acquisition, Share Price | $ / shares	$ 1.61
Exchange Ratio of Common Stock Issued, Business Combinations	0.4725
Acquisition purchase price	$ 1,100,000,000
Assets of acquiree company	6,900,000,000
Brokered deposits of acquiree company	389,000,000
Business Combination, Acquired Receivables, Fair Value	$ 5,000,000,000
Service provided by acquiree bank through number of branches | Offices	80
Deposits of acquiree company	$ 5,300,000,000.0
Lake Michigan Financial Corp [Member]
Business Acquisition [Line Items]
Business Acquisition, Share Price | $ / shares		$ 16.64
Exchange Ratio of Common Stock Issued, Business Combinations		1.326
Acquisition purchase price		$ 187,400,000
Assets of acquiree company		1,240,000,000
Business Combination, Acquired Receivables, Gross Contractual Amount		1,010,000,000
Expected Principal Cash Flows of Contractually Required Acquired Loan Portfolio		986,100,000
Expected Interest Cash Flows of Contractually Required Acquired Loan Portfolio		189,600,000
Business Combination, Acquired Receivables, Fair Value		985,500,000
Certain Loans Acquired in Transfer, Nonaccretable Difference		$ 22,600,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares		4,322,101
Goodwill		$ 101,000,000
Service provided by acquiree bank through number of branches | Offices		5
Deposits of acquiree company		$ 925,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill		8,600,000
Business Combination, Provision Information, Initial Accounting Incomplete, Goodwill							500,000
Outstanding contractual principal balance of acquired loan portfolio							756,000,000	990,000,000	864,000,000
Carrying amount of acquired loan portfolio							734,000,000	967,000,000	842,000,000
Interest Payments Receivable of Acquired Loan Portfolio		190,200,000
Business Combination, Acquired Receivables, Estimated Uncollectible		22,000,000
Additions attributable to acquisitions		190,200,000						190,246,000
Business Combination, Consideration Transferred, Value of Stock and Options Issued		132,900,000
Business Combination, Consideration Transferred, Cash Paid for Outstanding Stock		$ 54,500,000
Monarch Community Bancorp [Member]
Business Acquisition [Line Items]
Exchange Ratio of Common Stock Issued, Business Combinations			0.0982
Acquisition purchase price			$ 27,200,000
Assets of acquiree company			183,000,000
Purchase Accounting Fair Value Adjustment, Core Deposit Intangible Asset			1,900,000
Business Combination, Acquired Receivables, Gross Contractual Amount			128,900,000
Expected Principal Cash Flows of Contractually Required Acquired Loan Portfolio			122,600,000
Expected Interest Cash Flows of Contractually Required Acquired Loan Portfolio			37,100,000
Business Combination, Acquired Receivables, Fair Value			121,800,000
Certain Loans Acquired in Transfer, Nonaccretable Difference			$ 7,100,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares			860,575
Goodwill			$ 5,300,000
Deposits of acquiree company			144,000,000
Outstanding contractual principal balance of acquired loan portfolio							101,000,000	126,000,000	115,000,000
Carrying amount of acquired loan portfolio							94,000,000	119,000,000	108,000,000
Interest Payments Receivable of Acquired Loan Portfolio			37,800,000
Business Combination, Acquired Receivables, Estimated Uncollectible			6,300,000
Additions attributable to acquisitions			$ 37,900,000					37,914,000
Northwestern Bancorp [Member]
Business Acquisition [Line Items]
Acquisition purchase price				$ 121,000,000
Assets of acquiree company				815,000,000
Business Combination, Acquired Receivables, Gross Contractual Amount				507,000,000
Expected Principal Cash Flows of Contractually Required Acquired Loan Portfolio				481,000,000
Expected Interest Cash Flows of Contractually Required Acquired Loan Portfolio				104,000,000
Business Combination, Acquired Receivables, Fair Value				475,000,000
Certain Loans Acquired in Transfer, Nonaccretable Difference				34,000,000
Goodwill				60,300,000
Intangibles acquired				$ 12,900,000
Service provided by acquiree bank through number of branches | Offices				25
Deposits of acquiree company				$ 794,000,000
Outstanding contractual principal balance of acquired loan portfolio							305,000,000	415,000,000	361,000,000
Carrying amount of acquired loan portfolio							275,000,000	382,000,000	330,000,000
Interest Payments Receivable of Acquired Loan Portfolio				112,000,000
Business Combination, Acquired Receivables, Estimated Uncollectible				26,000,000
Additions attributable to acquisitions				$ 110,000,000				0
Independent Bank [Member]
Business Acquisition [Line Items]
Acquisition purchase price					$ 8,100,000
Loans acquired					44,000,000
Deposits acquired					$ 404,000,000
Number of branches acquired (branches) | Branches					21
Premium paid on deposits purchased					$ 11,500,000
Premium paid as a percentage of deposits purchased (percent)					2.85%
Discount on loans purchased (percent)					1.75%
Goodwill					$ 6,800,000
Independent Bank [Member] | Core deposit intangible assets [Member]
Business Acquisition [Line Items]
Intangibles acquired					$ 5,600,000
OAK [Member]
Business Acquisition [Line Items]
Acquisition purchase price						$ 83,700,000
Assets of acquiree company						820,000,000
Loans acquired						627,000,000
Brokered deposits of acquiree company						$ 193,000,000
Service provided by acquiree bank through number of branches | Offices						14
Deposits of acquiree company						$ 693,000,000
Contractually required principal payments of loan portfolio, acquisition date						683,000,000
Acquired loan portfolio acquisition date fair value						$ 627,000,000
Outstanding contractual principal balance of acquired loan portfolio							182,000,000	236,000,000	204,000,000
Carrying amount of acquired loan portfolio							166,000,000	215,000,000	$ 183,000,000
Additions attributable to acquisitions								$ 0
OAK and Northwestern [Member]
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield, Reclassifications to Nonaccretable Difference							$ 5,000,000

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Investment Securities (Summary of Amortized Cost and Fair Value of Available-For-Sale Investment Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Available-for-sale Securities
Investment securities available-for-sale, Amortized Cost	$ 455,174	$ 556,636	$ 686,128
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	4,174	1,468	2,545
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	796	4,373	2,967
Available-for-sale Securities, Total	458,552	553,731	685,706
US Treasury Securities [Member]
Available-for-sale Securities
Investment securities available-for-sale, Amortized Cost	5,781	5,773	8,270
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	29	0	24
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	0	8	0
Available-for-sale Securities, Total	5,810	5,765	8,294
Government sponsored agencies [Member]
Available-for-sale Securities
Investment securities available-for-sale, Amortized Cost	156,843	195,711	227,424
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	715	78	683
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	536	800	200
Available-for-sale Securities, Total	157,022	194,989	227,907
State and political subdivisions [Member]
Available-for-sale Securities
Investment securities available-for-sale, Amortized Cost	12,901	14,731	26,476
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	319	395	503
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	0	6	14
Available-for-sale Securities, Total	13,220	15,120	26,965
Residential mortgage-backed securities [Member]
Available-for-sale Securities
Investment securities available-for-sale, Amortized Cost	166,582	189,452	213,621
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	2,034	538	742
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	0	2,222	1,694
Available-for-sale Securities, Total	168,616	187,768	212,669
Collateralized Mortgage Obligations [Member]
Available-for-sale Securities
Investment securities available-for-sale, Amortized Cost	100,433	133,256	167,768
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	611	111	245
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	195	1,137	981
Available-for-sale Securities, Total	100,849	132,230	167,032
Corporate bonds [Member]
Available-for-sale Securities
Investment securities available-for-sale, Amortized Cost	9,746	14,825	39,680
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	30	2	76
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	64	200	78
Available-for-sale Securities, Total	9,712	14,627	39,678
Preferred stock [Member]
Available-for-sale Securities
Investment securities available-for-sale, Amortized Cost	2,888	2,888	2,889
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	436	344	272
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	1	0	0
Available-for-sale Securities, Total	$ 3,323	$ 3,232	$ 3,161

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Investment Securities (Summary of Amortized Cost and Fair Value of Held-To-Maturity Investment Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Held-to-maturity Securities
Investment securities held-to-maturity, Amortized Cost	$ 552,828	$ 509,971	$ 469,837
Investment securities held-to-maturity, Unrealized Gains	16,123	7,446	4,853
Investment securities held-to-maturity, Unrealized Losses	536	4,712	8,112
Total Held-to-maturity securities, Debt maturities, Fair Value	568,415	512,705	466,578
State and political subdivisions [Member]
Held-to-maturity Securities
Investment securities held-to-maturity, Amortized Cost	552,328	509,471	469,337
Investment securities held-to-maturity, Unrealized Gains	16,123	7,446	4,853
Investment securities held-to-maturity, Unrealized Losses	321	4,512	7,912
Total Held-to-maturity securities, Debt maturities, Fair Value	568,130	512,405	466,278
Trust Preferred Securities [Member]
Held-to-maturity Securities
Investment securities held-to-maturity, Amortized Cost	500	500	500
Investment securities held-to-maturity, Unrealized Gains	0	0	0
Investment securities held-to-maturity, Unrealized Losses	215	200	200
Total Held-to-maturity securities, Debt maturities, Fair Value	$ 285	$ 300	$ 300

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Investment Securities (Maturities of Debt Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Investment Securities Available-for-Sale:
Due in one year or less, Amortized Cost	$ 154,820
Due after one year through five years, Amortized Cost	257,040
Due after five years through ten years, Amortized Cost	37,877
Due after ten years, Amortized Cost	4,049
Preferred stock, Amortized Cost	1,388
Total Available-for-sale Securities, Debt Maturities, Amortized Cost	455,174
Due in one year or less , Fair Value	155,386
Due after one year through five years, Fair Value	258,856
Due after five years through ten years, Fair Value	38,374
Due after ten years, Fair Value	4,112
Preferred stock, Fair Value	1,824
Total Available-for-sale securities, Debt maturities, Fair Value	458,552
Investment Securities Held-to-Maturity:
Due in one year or less, Amortized Cost	59,330
Due after one year through five years, Amortized Cost	275,988
Due after five years through ten years, Amortized Cost	130,304
Due after ten years, Amortized Cost	87,206
Total Held-to-maturity securities, Debt maturities, Amortized Cost	552,828	$ 509,971	$ 469,837
Due in one year or less , Fair Value	59,633
Due after one year through five years, Fair Value	280,491
Due after five years through ten years, Fair Value	136,879
Due after ten years, Fair Value	91,412
Total Held-to-maturity securities, Debt maturities, Fair Value	$ 568,415	$ 512,705	$ 466,578

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Investment Securities (Summary of Investment Securities with Gross Unrealized Losses) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Summary of continuous unrealized loss position of securities
Less Than 12 Months, Fair Value	$ 97,602	$ 554,907	$ 530,665
Less Than 12 Months, Gross Unrealized Losses	270	5,945	7,392
12 Months or More, Fair Value	72,676	133,159	146,094
12 Months or More, Gross Unrealized Losses	1,062	3,140	3,687
Total, Fair Value	170,278	688,066	676,759
Total, Gross Unrealized Losses	1,332	9,085	11,079
Government sponsored agencies [Member]
Summary of continuous unrealized loss position of securities
Less Than 12 Months, Fair Value	14,110	114,640	24,789
Less Than 12 Months, Gross Unrealized Losses	19	292	163
12 Months or More, Fair Value	18,787	21,681	14,715
12 Months or More, Gross Unrealized Losses	517	508	37
Total, Fair Value	32,897	136,321	39,504
Total, Gross Unrealized Losses	536	800	200
State and political subdivisions [Member]
Summary of continuous unrealized loss position of securities
Less Than 12 Months, Fair Value	73,532	195,285	258,503
Less Than 12 Months, Gross Unrealized Losses	237	2,891	5,433
12 Months or More, Fair Value	25,713	68,361	63,584
12 Months or More, Gross Unrealized Losses	84	1,627	2,493
Total, Fair Value	99,245	263,646	322,087
Total, Gross Unrealized Losses	321	4,518	7,926
Residential mortgage-backed securities [Member]
Summary of continuous unrealized loss position of securities
Less Than 12 Months, Fair Value		169,226	187,858
Less Than 12 Months, Gross Unrealized Losses		2,146	1,592
12 Months or More, Fair Value		3,435	3,643
12 Months or More, Gross Unrealized Losses		76	102
Total, Fair Value		172,661	191,501
Total, Gross Unrealized Losses		2,222	1,694
Collateralized Mortgage Obligations [Member]
Summary of continuous unrealized loss position of securities
Less Than 12 Months, Fair Value	8,461	60,459	49,845
Less Than 12 Months, Gross Unrealized Losses	13	408	155
12 Months or More, Fair Value	22,955	39,382	48,881
12 Months or More, Gross Unrealized Losses	182	729	826
Total, Fair Value	31,416	99,841	98,726
Total, Gross Unrealized Losses	195	1,137	981
Corporate bonds [Member]
Summary of continuous unrealized loss position of securities
Less Than 12 Months, Fair Value	0	9,532	9,670
Less Than 12 Months, Gross Unrealized Losses	0	200	49
12 Months or More, Fair Value	4,936	0	14,971
12 Months or More, Gross Unrealized Losses	64	0	29
Total, Fair Value	4,936	9,532	24,641
Total, Gross Unrealized Losses	64	200	78
Trust Preferred Securities [Member]
Summary of continuous unrealized loss position of securities
Less Than 12 Months, Fair Value	1,499	0	0
Less Than 12 Months, Gross Unrealized Losses	1	0	0
12 Months or More, Fair Value	285	300	300
12 Months or More, Gross Unrealized Losses	215	200	200
Total, Fair Value	1,784	300	300
Total, Gross Unrealized Losses	$ 216	200	$ 200
US Treasury Securities [Member]
Summary of continuous unrealized loss position of securities
Less Than 12 Months, Fair Value		5,765
Less Than 12 Months, Gross Unrealized Losses		8
12 Months or More, Fair Value		0
12 Months or More, Gross Unrealized Losses		0
Total, Fair Value		5,765
Total, Gross Unrealized Losses		$ 8

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Loans (Summary of Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Summary of loans under portfolio
Commercial loan	$ 4,396,882	$ 4,250,117	$ 4,110,698
Consumer loan	3,250,387	3,021,030	2,924,045
Total loans	7,647,269	7,271,147	7,034,743
Commercial [Member]
Summary of loans under portfolio
Commercial loan	1,953,301	1,905,879	1,754,873
Real estate commercial [Member]
Summary of loans under portfolio
Commercial loan	2,157,733	2,112,162	2,243,513
Real estate construction [Member]
Summary of loans under portfolio
Commercial loan	285,848	232,076	112,312
Real estate residential [Member]
Summary of loans under portfolio
Consumer loan	1,494,192	1,429,636	1,310,167
Consumer installment [Member]
Summary of loans under portfolio
Consumer loan	1,048,622	877,457	887,907
Home equity [Member]
Summary of loans under portfolio
Consumer loan	$ 707,573	$ 713,937	$ 725,971

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Loans (Summary of Recorded Investment of Commercial Loans by Risk Rating Categories) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	$ 4,396,882	$ 4,250,117	$ 4,110,698
Commercial [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	1,953,301	1,905,879	1,754,873
Real estate commercial [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	2,157,733	2,112,162	2,243,513
Real estate construction [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	285,848	232,076	112,312
Originated Portfolio [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	3,427,981	3,130,721	2,823,708
Originated Portfolio [Member] | Risk Grades 1-5 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	3,256,171	2,942,826	2,640,180
Originated Portfolio [Member] | Risk Grade 6 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	83,859	65,943	67,299
Originated Portfolio [Member] | Risk Grade 7 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	51,553	67,714	73,180
Originated Portfolio [Member] | Risk Grade 8 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	36,397	52,143	43,045
Originated Portfolio [Member] | Risk Grade 9 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	1	2,095	4
Originated Portfolio [Member] | Commercial [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	1,633,993	1,521,515	1,359,856
Originated Portfolio [Member] | Commercial [Member] | Risk Grades 1-5 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	1,537,612	1,418,301	1,269,091
Originated Portfolio [Member] | Commercial [Member] | Risk Grade 6 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	46,202	34,727	32,189
Originated Portfolio [Member] | Commercial [Member] | Risk Grade 7 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	35,602	39,933	41,316
Originated Portfolio [Member] | Commercial [Member] | Risk Grade 8 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	14,577	26,459	17,260
Originated Portfolio [Member] | Commercial [Member] | Risk Grade 9 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	0	2,095	0
Originated Portfolio [Member] | Real estate commercial [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	1,552,938	1,424,059	1,363,426
Originated Portfolio [Member] | Real estate commercial [Member] | Risk Grades 1-5 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	1,479,365	1,341,202	1,273,725
Originated Portfolio [Member] | Real estate commercial [Member] | Risk Grade 6 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	36,814	31,036	34,677
Originated Portfolio [Member] | Real estate commercial [Member] | Risk Grade 7 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	15,434	26,658	29,737
Originated Portfolio [Member] | Real estate commercial [Member] | Risk Grade 8 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	21,324	25,163	25,283
Originated Portfolio [Member] | Real estate commercial [Member] | Risk Grade 9 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	1	0	4
Originated Portfolio [Member] | Real estate construction [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	241,050	185,147	100,426
Originated Portfolio [Member] | Real estate construction [Member] | Risk Grades 1-5 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	239,194	183,323	97,364
Originated Portfolio [Member] | Real estate construction [Member] | Risk Grade 6 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	843	180	433
Originated Portfolio [Member] | Real estate construction [Member] | Risk Grade 7 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	517	1,123	2,127
Originated Portfolio [Member] | Real estate construction [Member] | Risk Grade 8 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	496	521	502
Originated Portfolio [Member] | Real estate construction [Member] | Risk Grade 9 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	0	0	0
Acquired Portfolio [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	968,901	1,119,396	1,286,990
Acquired Portfolio [Member] | Risk Grades 1-5 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	887,515	1,011,895	1,178,453
Acquired Portfolio [Member] | Risk Grade 6 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	37,598	54,803	52,279
Acquired Portfolio [Member] | Risk Grade 7 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	33,556	43,119	44,317
Acquired Portfolio [Member] | Risk Grade 8 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	10,232	9,579	11,941
Acquired Portfolio [Member] | Risk Grade 9 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	0	0	0
Acquired Portfolio [Member] | Commercial [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	319,308	384,364	395,017
Acquired Portfolio [Member] | Commercial [Member] | Risk Grades 1-5 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	292,492	340,782	347,914
Acquired Portfolio [Member] | Commercial [Member] | Risk Grade 6 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	15,352	28,321	29,412
Acquired Portfolio [Member] | Commercial [Member] | Risk Grade 7 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	8,448	11,607	13,910
Acquired Portfolio [Member] | Commercial [Member] | Risk Grade 8 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	3,016	3,654	3,781
Acquired Portfolio [Member] | Commercial [Member] | Risk Grade 9 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	0	0	0
Acquired Portfolio [Member] | Real estate commercial [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	604,795	688,103	880,087
Acquired Portfolio [Member] | Real estate commercial [Member] | Risk Grades 1-5 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	554,352	629,430	820,400
Acquired Portfolio [Member] | Real estate commercial [Member] | Risk Grade 6 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	20,746	23,926	22,796
Acquired Portfolio [Member] | Real estate commercial [Member] | Risk Grade 7 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	23,879	29,975	30,288
Acquired Portfolio [Member] | Real estate commercial [Member] | Risk Grade 8 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	5,818	4,772	6,603
Acquired Portfolio [Member] | Real estate commercial [Member] | Risk Grade 9 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	0	0	0
Acquired Portfolio [Member] | Real estate construction [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	44,798	46,929	11,886
Acquired Portfolio [Member] | Real estate construction [Member] | Risk Grades 1-5 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	40,671	41,683	10,139
Acquired Portfolio [Member] | Real estate construction [Member] | Risk Grade 6 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	1,500	2,556	71
Acquired Portfolio [Member] | Real estate construction [Member] | Risk Grade 7 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	1,229	1,537	119
Acquired Portfolio [Member] | Real estate construction [Member] | Risk Grade 8 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	1,398	1,153	1,557
Acquired Portfolio [Member] | Real estate construction [Member] | Risk Grade 9 [Member]
Recorded investment of loans in commercial loan portfolio by risk rating categories
Recorded investment (loan balance), Commercial, Total	$ 0	$ 0	$ 0

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Loans (Summary of Recorded Investment of Consumer Loans by Risk Rating Categories) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	$ 3,250,387	$ 3,021,030	$ 2,924,045
Real estate residential [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	1,494,192	1,429,636	1,310,167
Consumer installment [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	1,048,622	877,457	887,907
Home equity [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	707,573	713,937	725,971
Originated Loans [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	2,950,953	2,677,213	2,527,302
Originated Loans [Member] | Real estate residential [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	1,307,365	1,216,975	1,068,489
Originated Loans [Member] | Consumer installment [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	1,042,263	869,426	871,936
Originated Loans [Member] | Home equity [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	601,325	590,812	586,877
Originated Loans [Member] | Performing [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	2,939,643	2,664,486	2,514,759
Originated Loans [Member] | Performing [Member] | Real estate residential [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	1,299,382	1,207,945	1,058,696
Originated Loans [Member] | Performing [Member] | Consumer installment [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	1,041,978	868,975	871,543
Originated Loans [Member] | Performing [Member] | Home equity [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	598,283	587,566	584,520
Originated Loans [Member] | Nonperforming [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	11,310	12,727	12,543
Originated Loans [Member] | Nonperforming [Member] | Real estate residential [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	7,983	9,030	9,793
Originated Loans [Member] | Nonperforming [Member] | Consumer installment [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	285	451	393
Originated Loans [Member] | Nonperforming [Member] | Home equity [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	3,042	3,246	2,357
Acquired Loans [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	299,434	343,817	396,743
Acquired Loans [Member] | Real estate residential [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	186,827	212,661	241,678
Acquired Loans [Member] | Consumer installment [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	6,359	8,031	15,971
Acquired Loans [Member] | Home equity [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	106,248	123,125	139,094
Acquired Loans [Member] | Performing [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	297,150	340,682	392,750
Acquired Loans [Member] | Performing [Member] | Real estate residential [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	185,492	210,580	238,698
Acquired Loans [Member] | Performing [Member] | Consumer installment [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	6,298	7,984	15,966
Acquired Loans [Member] | Performing [Member] | Home equity [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	105,360	122,118	138,086
Acquired Loans [Member] | Nonperforming [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	2,284	3,135	3,993
Acquired Loans [Member] | Nonperforming [Member] | Real estate residential [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	1,335	2,081	2,980
Acquired Loans [Member] | Nonperforming [Member] | Consumer installment [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	61	47	5
Acquired Loans [Member] | Nonperforming [Member] | Home equity [Member]
Recorded investment of loans in consumer loan portfolio based on credit risk profile of loans in performing and nonperforming status
Recorded investment (loan balance), Consumer, Total	$ 888	$ 1,007	$ 1,008

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Loans (Summary of Nonperforming Loans) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Financing Receivable, Recorded Investment [Line Items]
Modified Loans Not Reported as TDR Included in Nonaccrual Loans	$ 32,400	$ 35,900	$ 35,700
Summary of nonperforming loans
Total TDRs	98,232	103,111	99,428
Total loans	$ 7,647,269	7,271,147	7,034,743
Minimum number of days accruing loans past due move to nonaccrual status	90 days
Commercial Loan Portfolio [Member]
Summary of nonperforming loans
Total TDRs	$ 74,085	78,823	74,751
Total loans	4,396,882	4,250,117	4,110,698
Consumer Loan Portfolio [Member]
Summary of nonperforming loans
Total TDRs	24,147	24,288	24,677
Total loans	3,250,387	3,021,030	2,924,045
Nonperforming [Member]
Summary of nonperforming loans
Total nonaccrual loans	43,997	62,225	51,215
Total accruing loans contractually past due 90 days or more as to interest or principal payments	1,484	2,287	1,779
Total TDRs	16,473	19,368	17,912
Total loans	61,954	$ 83,880	70,906
Nonperforming [Member] | Commercial Loan Portfolio [Member]
Summary of nonperforming loans
Total TDRs	14,240		14,547
Nonperforming [Member] | Consumer Loan Portfolio [Member]
Summary of nonperforming loans
Total TDRs	2,233		3,365
Nonperforming [Member] | Commercial [Member]
Summary of nonperforming loans
Total nonaccrual loans	14,577		17,260
Total accruing loans contractually past due 90 days or more as to interest or principal payments	3		711
Nonperforming [Member] | Real estate commercial [Member]
Summary of nonperforming loans
Total nonaccrual loans	21,325		25,287
Total accruing loans contractually past due 90 days or more as to interest or principal payments	3		56
Nonperforming [Member] | Real Estate Construction Loans [Member]
Summary of nonperforming loans
Total nonaccrual loans	496		502
Nonperforming [Member] | Real estate residential [Member]
Summary of nonperforming loans
Total nonaccrual loans	5,343		6,004
Total accruing loans contractually past due 90 days or more as to interest or principal payments	407		424
Nonperforming [Member] | Consumer Installment Loans [Member]
Summary of nonperforming loans
Total nonaccrual loans	285		393
Nonperforming [Member] | Home Equity Loans [Member]
Summary of nonperforming loans
Total nonaccrual loans	1,971		1,769
Total accruing loans contractually past due 90 days or more as to interest or principal payments	$ 1,071		$ 588

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Loans (Summary of Impaired Loans by Classes of Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Impaired loans with a valuation allowance [Member]
Schedule of Impaired loans by classes
Recorded Investment	$ 27,779	$ 44,383	$ 27,803
Unpaid Principal Balance	27,952	45,151	28,055
Related Valuation Allowance	3,217	6,389	1,581
Impaired loans with no valuation allowance [Member]
Schedule of Impaired loans by classes
Recorded Investment	94,607	97,815	103,066
Unpaid Principal Balance	116,472	122,367	132,985
Related Valuation Allowance	0	0	0
Total Impaired Loans [Member]
Schedule of Impaired loans by classes
Recorded Investment	122,386	142,198	130,869
Unpaid Principal Balance	144,424	167,518	161,040
Related Valuation Allowance	3,217	6,389	1,581
Commercial [Member] | Impaired loans with a valuation allowance [Member]
Schedule of Impaired loans by classes
Recorded Investment	3,764	18,898	4,044
Unpaid Principal Balance	3,769	19,426	4,137
Related Valuation Allowance	2,582	5,700	718
Commercial [Member] | Impaired loans with no valuation allowance [Member]
Schedule of Impaired loans by classes
Recorded Investment	34,633	31,039	32,461
Unpaid Principal Balance	43,576	37,703	38,160
Related Valuation Allowance	0	0	0
Commercial [Member] | Total Impaired Loans [Member]
Schedule of Impaired loans by classes
Recorded Investment	38,397	49,937	36,505
Unpaid Principal Balance	47,345	57,129	42,297
Related Valuation Allowance	2,582	5,700	718
Real estate commercial [Member] | Impaired loans with a valuation allowance [Member]
Schedule of Impaired loans by classes
Recorded Investment	3,270	4,448	2,789
Unpaid Principal Balance	3,438	4,688	2,948
Related Valuation Allowance	472	497	603
Real estate commercial [Member] | Impaired loans with no valuation allowance [Member]
Schedule of Impaired loans by classes
Recorded Investment	47,894	53,518	56,052
Unpaid Principal Balance	58,312	69,130	78,490
Related Valuation Allowance	0	0	0
Real estate commercial [Member] | Total Impaired Loans [Member]
Schedule of Impaired loans by classes
Recorded Investment	51,164	57,966	58,841
Unpaid Principal Balance	61,750	73,818	81,438
Related Valuation Allowance	472	497	603
Real estate construction [Member] | Impaired loans with no valuation allowance [Member]
Schedule of Impaired loans by classes
Recorded Investment	2,196	2,136	2,393
Unpaid Principal Balance	3,770	3,108	4,175
Related Valuation Allowance	0	0	0
Real estate construction [Member] | Total Impaired Loans [Member]
Schedule of Impaired loans by classes
Recorded Investment	2,196	2,136	2,393
Unpaid Principal Balance	3,770	3,108	4,175
Related Valuation Allowance	0	0	0
Real estate residential [Member] | Impaired loans with a valuation allowance [Member]
Schedule of Impaired loans by classes
Recorded Investment	20,745	21,037	20,970
Unpaid Principal Balance	20,745	21,037	20,970
Related Valuation Allowance	163	192	260
Real estate residential [Member] | Impaired loans with no valuation allowance [Member]
Schedule of Impaired loans by classes
Recorded Investment	6,678	7,638	8,984
Unpaid Principal Balance	7,365	8,644	8,984
Related Valuation Allowance	0	0	0
Real estate residential [Member] | Total Impaired Loans [Member]
Schedule of Impaired loans by classes
Recorded Investment	27,423	28,675	29,954
Unpaid Principal Balance	28,110	29,681	29,954
Related Valuation Allowance	163	192	260
Consumer installment [Member] | Impaired loans with no valuation allowance [Member]
Schedule of Impaired loans by classes
Recorded Investment	347	498	398
Unpaid Principal Balance	365	512	398
Related Valuation Allowance	0	0	0
Consumer installment [Member] | Total Impaired Loans [Member]
Schedule of Impaired loans by classes
Recorded Investment	347	498	398
Unpaid Principal Balance	365	512	398
Related Valuation Allowance	0	0	0
Home equity [Member] | Impaired loans with no valuation allowance [Member]
Schedule of Impaired loans by classes
Recorded Investment	2,859	2,986	2,778
Unpaid Principal Balance	3,084	3,270	2,778
Related Valuation Allowance	0	0	0
Home equity [Member] | Total Impaired Loans [Member]
Schedule of Impaired loans by classes
Recorded Investment	2,859	2,986	2,778
Unpaid Principal Balance	3,084	3,270	2,778
Related Valuation Allowance	$ 0	$ 0	$ 0

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Loans (Summary of Information Related to Impaired Loans) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Schedule representing information related to impaired loans
Average recorded investment related to impaired loans	$ 125,133	$ 131,805	$ 130,952	$ 131,670
Interest income recognized related to loans with impaired status	1,135	1,152	2,329	2,332
Commercial [Member]
Schedule representing information related to impaired loans
Average recorded investment related to impaired loans	38,606	36,735	41,811	37,655
Interest income recognized related to loans with impaired status	348	263	677	552
Real estate commercial [Member]
Schedule representing information related to impaired loans
Average recorded investment related to impaired loans	53,723	60,393	55,839	60,317
Interest income recognized related to loans with impaired status	391	458	849	983
Real estate construction [Member]
Schedule representing information related to impaired loans
Average recorded investment related to impaired loans	2,265	2,290	2,166	2,403
Interest income recognized related to loans with impaired status	26	36	51	63
Real estate residential [Member]
Schedule representing information related to impaired loans
Average recorded investment related to impaired loans	27,418	29,432	27,755	28,392
Interest income recognized related to loans with impaired status	356	380	722	711
Consumer installment [Member]
Schedule representing information related to impaired loans
Average recorded investment related to impaired loans	330	426	359	463
Interest income recognized related to loans with impaired status	1	1	2	1
Home equity [Member]
Schedule representing information related to impaired loans
Average recorded investment related to impaired loans	2,791	2,529	3,022	2,440
Interest income recognized related to loans with impaired status	$ 13	$ 14	$ 28	$ 22

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Loans (Summary of the Aging Status of the Recorded Investment in Loans by Portfolio Segment/Class) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Originated Portfolio [Member]
Schedule representing the aging status of the recorded investment in loans by classes
Financing receivable, recorded investment 31 to 60 days past due	$ 20,831	$ 14,502	$ 13,618
Financing receivable, recorded investment 61 to 89 days past due	2,085	4,265	3,940
Financing receivable, recorded investment accruing loans past due 90 days or more	1,484	2,287	1,779
Financing receivable, recorded investment, Nonaccrual loans	43,997	62,225	51,215
Financing receivable recorded investment, Total past due	68,397	83,279	70,552
Financing receivable, recorded investment, current	6,310,537	5,724,655	5,280,458
Financing receivable, recorded investment, Total loans	6,378,934	5,807,934	5,351,010
Originated Portfolio [Member] | Commercial [Member]
Schedule representing the aging status of the recorded investment in loans by classes
Financing receivable, recorded investment 31 to 60 days past due	4,522	3,685	4,055
Financing receivable, recorded investment 61 to 89 days past due	822	1,230	2,317
Financing receivable, recorded investment accruing loans past due 90 days or more	3	364	711
Financing receivable, recorded investment, Nonaccrual loans	14,577	28,554	17,260
Financing receivable recorded investment, Total past due	19,924	33,833	24,343
Financing receivable, recorded investment, current	1,614,069	1,487,682	1,335,513
Financing receivable, recorded investment, Total loans	1,633,993	1,521,515	1,359,856
Originated Portfolio [Member] | Real estate commercial [Member]
Schedule representing the aging status of the recorded investment in loans by classes
Financing receivable, recorded investment 31 to 60 days past due	8,842	4,168	2,754
Financing receivable, recorded investment 61 to 89 days past due	343	1,603	1,117
Financing receivable, recorded investment accruing loans past due 90 days or more	3	254	56
Financing receivable, recorded investment, Nonaccrual loans	21,325	25,163	25,287
Financing receivable recorded investment, Total past due	30,513	31,188	29,214
Financing receivable, recorded investment, current	1,522,425	1,392,871	1,334,212
Financing receivable, recorded investment, Total loans	1,552,938	1,424,059	1,363,426
Originated Portfolio [Member] | Real estate construction [Member]
Schedule representing the aging status of the recorded investment in loans by classes
Financing receivable, recorded investment 31 to 60 days past due	62	0	413
Financing receivable, recorded investment 61 to 89 days past due	0	0	0
Financing receivable, recorded investment accruing loans past due 90 days or more	0	0	0
Financing receivable, recorded investment, Nonaccrual loans	496	521	502
Financing receivable recorded investment, Total past due	558	521	915
Financing receivable, recorded investment, current	240,492	184,626	99,511
Financing receivable, recorded investment, Total loans	241,050	185,147	100,426
Originated Portfolio [Member] | Real estate residential [Member]
Schedule representing the aging status of the recorded investment in loans by classes
Financing receivable, recorded investment 31 to 60 days past due	1,955	1,737	1,536
Financing receivable, recorded investment 61 to 89 days past due	0	0	0
Financing receivable, recorded investment accruing loans past due 90 days or more	407	402	424
Financing receivable, recorded investment, Nonaccrual loans	5,343	5,557	6,004
Financing receivable recorded investment, Total past due	7,705	7,696	7,964
Financing receivable, recorded investment, current	1,299,660	1,209,279	1,060,525
Financing receivable, recorded investment, Total loans	1,307,365	1,216,975	1,068,489
Originated Portfolio [Member] | Consumer installment [Member]
Schedule representing the aging status of the recorded investment in loans by classes
Financing receivable, recorded investment 31 to 60 days past due	2,856	3,145	2,526
Financing receivable, recorded investment 61 to 89 days past due	554	644	302
Financing receivable, recorded investment accruing loans past due 90 days or more	0	0	0
Financing receivable, recorded investment, Nonaccrual loans	285	451	393
Financing receivable recorded investment, Total past due	3,695	4,240	3,221
Financing receivable, recorded investment, current	1,038,568	865,186	868,715
Financing receivable, recorded investment, Total loans	1,042,263	869,426	871,936
Originated Portfolio [Member] | Home equity [Member]
Schedule representing the aging status of the recorded investment in loans by classes
Financing receivable, recorded investment 31 to 60 days past due	2,594	1,767	2,334
Financing receivable, recorded investment 61 to 89 days past due	366	788	204
Financing receivable, recorded investment accruing loans past due 90 days or more	1,071	1,267	588
Financing receivable, recorded investment, Nonaccrual loans	1,971	1,979	1,769
Financing receivable recorded investment, Total past due	6,002	5,801	4,895
Financing receivable, recorded investment, current	595,323	585,011	581,982
Financing receivable, recorded investment, Total loans	601,325	590,812	586,877
Acquired Portfolio [Member]
Schedule representing the aging status of the recorded investment in loans by classes
Financing receivable, recorded investment 31 to 60 days past due	1,907	6,319	3,889
Financing receivable, recorded investment 61 to 89 days past due	63	1,301	695
Financing receivable, recorded investment accruing loans past due 90 days or more	12,538	12,795	15,934
Financing receivable, recorded investment, Nonaccrual loans	0	0	0
Financing receivable recorded investment, Total past due	14,508	20,415	20,518
Financing receivable, recorded investment, current	1,253,827	1,442,798	1,663,215
Financing receivable, recorded investment, Total loans	1,268,335	1,463,213	1,683,733
Acquired Portfolio [Member] | Commercial [Member]
Schedule representing the aging status of the recorded investment in loans by classes
Financing receivable, recorded investment 31 to 60 days past due	547	490	690
Financing receivable, recorded investment 61 to 89 days past due	0	532	0
Financing receivable, recorded investment accruing loans past due 90 days or more	3,038	3,735	3,781
Financing receivable, recorded investment, Nonaccrual loans	0	0	0
Financing receivable recorded investment, Total past due	3,585	4,757	4,471
Financing receivable, recorded investment, current	315,723	379,607	390,546
Financing receivable, recorded investment, Total loans	319,308	384,364	395,017
Acquired Portfolio [Member] | Real estate commercial [Member]
Schedule representing the aging status of the recorded investment in loans by classes
Financing receivable, recorded investment 31 to 60 days past due	90	3,557	969
Financing receivable, recorded investment 61 to 89 days past due	0	691	291
Financing receivable, recorded investment accruing loans past due 90 days or more	5,817	4,771	6,603
Financing receivable, recorded investment, Nonaccrual loans	0	0	0
Financing receivable recorded investment, Total past due	5,907	9,019	7,863
Financing receivable, recorded investment, current	598,888	679,084	872,224
Financing receivable, recorded investment, Total loans	604,795	688,103	880,087
Acquired Portfolio [Member] | Real estate construction [Member]
Schedule representing the aging status of the recorded investment in loans by classes
Financing receivable, recorded investment 31 to 60 days past due	389	0	0
Financing receivable, recorded investment 61 to 89 days past due	0	0	0
Financing receivable, recorded investment accruing loans past due 90 days or more	1,398	1,154	1,557
Financing receivable, recorded investment, Nonaccrual loans	0	0	0
Financing receivable recorded investment, Total past due	1,787	1,154	1,557
Financing receivable, recorded investment, current	43,011	45,775	10,329
Financing receivable, recorded investment, Total loans	44,798	46,929	11,886
Acquired Portfolio [Member] | Real estate residential [Member]
Schedule representing the aging status of the recorded investment in loans by classes
Financing receivable, recorded investment 31 to 60 days past due	407	1,370	1,077
Financing receivable, recorded investment 61 to 89 days past due	0	0	138
Financing receivable, recorded investment accruing loans past due 90 days or more	1,335	2,081	2,980
Financing receivable, recorded investment, Nonaccrual loans	0	0	0
Financing receivable recorded investment, Total past due	1,742	3,451	4,195
Financing receivable, recorded investment, current	185,085	209,210	237,483
Financing receivable, recorded investment, Total loans	186,827	212,661	241,678
Acquired Portfolio [Member] | Consumer installment [Member]
Schedule representing the aging status of the recorded investment in loans by classes
Financing receivable, recorded investment 31 to 60 days past due	58	55	0
Financing receivable, recorded investment 61 to 89 days past due	25	0	56
Financing receivable, recorded investment accruing loans past due 90 days or more	62	47	5
Financing receivable, recorded investment, Nonaccrual loans	0	0	0
Financing receivable recorded investment, Total past due	145	102	61
Financing receivable, recorded investment, current	6,214	7,929	15,910
Financing receivable, recorded investment, Total loans	6,359	8,031	15,971
Acquired Portfolio [Member] | Home equity [Member]
Schedule representing the aging status of the recorded investment in loans by classes
Financing receivable, recorded investment 31 to 60 days past due	416	847	1,153
Financing receivable, recorded investment 61 to 89 days past due	38	78	210
Financing receivable, recorded investment accruing loans past due 90 days or more	888	1,007	1,008
Financing receivable, recorded investment, Nonaccrual loans	0	0	0
Financing receivable recorded investment, Total past due	1,342	1,932	2,371
Financing receivable, recorded investment, current	104,906	121,193	136,723
Financing receivable, recorded investment, Total loans	$ 106,248	$ 123,125	$ 139,094

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Loans (Summary of TDRs) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Schedule of corporation's TDRs
Total TDRs	$ 98,232	$ 103,111	$ 99,428
Commercial Loan Portfolio [Member]
Schedule of corporation's TDRs
Total TDRs	74,085	78,823	74,751
Consumer Loan Portfolio [Member]
Schedule of corporation's TDRs
Total TDRs	24,147	24,288	24,677
Substandard Nonaccrual [Member]
Schedule of corporation's TDRs
Total TDRs	32,381	35,933	35,708
Substandard Nonaccrual [Member] | Commercial Loan Portfolio [Member]
Schedule of corporation's TDRs
Total TDRs	28,979	32,682	32,001
Substandard Nonaccrual [Member] | Consumer Loan Portfolio [Member]
Schedule of corporation's TDRs
Total TDRs	3,402	3,251	3,707
Nonperforming Financial Instruments [Member]
Schedule of corporation's TDRs
Total TDRs	16,473	19,368	17,912
Nonperforming Financial Instruments [Member] | Commercial Loan Portfolio [Member]
Schedule of corporation's TDRs
Total TDRs	14,240	16,297	14,547
Nonperforming Financial Instruments [Member] | Consumer Loan Portfolio [Member]
Schedule of corporation's TDRs
Total TDRs	2,233	3,071	3,365
Performing Financial Instruments [Member]
Schedule of corporation's TDRs
Total TDRs	49,378	47,810	45,808
Performing Financial Instruments [Member] | Commercial Loan Portfolio [Member]
Schedule of corporation's TDRs
Total TDRs	30,866	29,844	28,203
Performing Financial Instruments [Member] | Consumer Loan Portfolio [Member]
Schedule of corporation's TDRs
Total TDRs	$ 18,512	$ 17,966	$ 17,605

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Loans (Summary of TDRs Modified During the Period) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016 USD ($) Loans	Jun. 30, 2015 USD ($) Loans	Jun. 30, 2016 USD ($) Loans	Jun. 30, 2015 USD ($) Loans
Schedule providing information on TDRs
Modified TDRs, Number of loans | Loans	37	47	55	67
Modified TDRs, Pre-modification recorded investment	$ 6,093	$ 4,797	$ 11,116	$ 9,599
Modified TDRs, Post-modification recorded investment	$ 6,093	$ 4,795	$ 11,116	$ 9,597
Subtotal-commercial loan portfolio [Member] | Commercial Loan Portfolio [Member]
Schedule providing information on TDRs
Modified TDRs, Number of loans | Loans	23	18	34	28
Modified TDRs, Pre-modification recorded investment	$ 5,603	$ 3,164	$ 10,422	$ 7,630
Modified TDRs, Post-modification recorded investment	$ 5,603	$ 3,164	$ 10,422	$ 7,630
Consumer loan portfolio [Member] | Consumer Portfolio Segment [Member]
Schedule providing information on TDRs
Modified TDRs, Number of loans | Loans	14	29	21	39
Modified TDRs, Pre-modification recorded investment	$ 490	$ 1,633	$ 694	$ 1,969
Modified TDRs, Post-modification recorded investment	$ 490	$ 1,631	$ 694	$ 1,967
Commercial [Member] | Commercial Loan Portfolio [Member]
Schedule providing information on TDRs
Modified TDRs, Number of loans | Loans	21	13	28	18
Modified TDRs, Pre-modification recorded investment	$ 4,149	$ 2,332	$ 7,981	$ 4,264
Modified TDRs, Post-modification recorded investment	$ 4,149	$ 2,332	$ 7,981	$ 4,264
Real estate commercial [Member] | Commercial Loan Portfolio [Member]
Schedule providing information on TDRs
Modified TDRs, Number of loans | Loans	2	4	6	9
Modified TDRs, Pre-modification recorded investment	$ 1,454	$ 527	$ 2,441	$ 3,061
Modified TDRs, Post-modification recorded investment	$ 1,454	$ 527	$ 2,441	$ 3,061
Real Estate Construction Loans [Member] | Commercial Loan Portfolio [Member]
Schedule providing information on TDRs
Modified TDRs, Number of loans | Loans		1		1
Modified TDRs, Pre-modification recorded investment		$ 305		$ 305
Modified TDRs, Post-modification recorded investment		$ 305		$ 305

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Loans (Summary of TDRs with a Payment Default During the Period) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016 USD ($) Loans	Jun. 30, 2015 USD ($) Loans	Jun. 30, 2016 USD ($) Loans	Jun. 30, 2015 USD ($) Loans
Troubled debt restructurings on financing receivables with defaults payment
Financing receivable modifications subsequent default number of contract | Loans	2	1	4	5
Financing receivable modification subsequent default recorded investment | $	$ 788	$ 183	$ 1,721	$ 975
Consumer Portfolio Segment [Member]
Troubled debt restructurings on financing receivables with defaults payment
Financing receivable modifications subsequent default number of contract | Loans	1	0	2	1
Financing receivable modification subsequent default recorded investment | $	$ 0	$ 0	$ 0	$ 33
Commercial [Member] | Commercial Loan Portfolio [Member]
Troubled debt restructurings on financing receivables with defaults payment
Financing receivable modifications subsequent default number of contract | Loans	0	0	0	0
Financing receivable modification subsequent default recorded investment | $	$ 0	$ 0	$ 0	$ 0
Real estate commercial [Member] | Commercial Loan Portfolio [Member]
Troubled debt restructurings on financing receivables with defaults payment
Financing receivable modifications subsequent default number of contract | Loans	1	1	2	4
Financing receivable modification subsequent default recorded investment | $	$ 788	$ 183	$ 1,721	$ 942
Subtotal-commercial loan portfolio [Member] | Commercial Loan Portfolio [Member]
Troubled debt restructurings on financing receivables with defaults payment
Financing receivable modifications subsequent default number of contract | Loans	1	1	2	4
Financing receivable modification subsequent default recorded investment | $	$ 788	$ 183	$ 1,721	$ 942

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Loans (Schedule of the Allowance for Loan Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Schedule of allowance and recorded investment related to financing receivables segregated by portfolio segment
Beginning balance	$ 70,318	$ 75,256	$ 73,328	$ 75,683
Provision for loan losses	3,000	1,500	4,500	3,000
Charge-offs	(3,620)	(2,724)	(9,078)	(5,867)
Recoveries	1,808	909	2,756	2,125
Ending balance	71,506	74,941	71,506	74,941
Allowance for loan losses
Loans individually evaluated for impairment related to allowance for loan losses					$ 3,217	$ 6,389	$ 1,581
Loans collectively evaluated for impairment related to allowance for loan losses					68,289	66,939	73,360
Total	70,318	75,256	73,328	75,683	71,506	73,328	74,941
Loans individually evaluated for impairment related to recorded investment (loan balance)					102,249	121,416	106,769
Loans collectively evaluated for impairment related to recorded investment (loan balance)					6,276,685	5,686,518	5,244,241
Total loans					7,647,269	7,271,147	7,034,743
Commercial Loan Portfolio [Member]
Schedule of allowance and recorded investment related to financing receivables segregated by portfolio segment
Beginning balance	44,668	46,819	47,234	44,156
Provision for loan losses	900	(626)	1,900	2,967
Charge-offs	(2,542)	(915)	(6,438)	(2,419)
Recoveries	1,202	249	1,532	823
Ending balance	44,228	45,527	44,228	45,527
Allowance for loan losses
Loans individually evaluated for impairment related to allowance for loan losses					3,054	6,197	1,321
Loans collectively evaluated for impairment related to allowance for loan losses					41,174	41,037	44,206
Total	44,668	46,819	47,234	44,156	44,228	47,234	45,527
Loans individually evaluated for impairment related to recorded investment (loan balance)					81,504	100,379	85,799
Loans collectively evaluated for impairment related to recorded investment (loan balance)					3,346,477	3,030,342	2,737,909
Total loans					4,396,882	4,250,117	4,110,698
Consumer Loan Portfolio [Member]
Schedule of allowance and recorded investment related to financing receivables segregated by portfolio segment
Beginning balance	25,650	24,579	26,094	28,803
Provision for loan losses	2,100	(109)	2,600	(3,336)
Charge-offs	(1,078)	(1,809)	(2,640)	(3,448)
Recoveries	606	660	1,224	1,302
Ending balance	27,278	23,321	27,278	23,321
Allowance for loan losses
Loans individually evaluated for impairment related to allowance for loan losses					163	192	260
Loans collectively evaluated for impairment related to allowance for loan losses					27,115	25,902	23,061
Total	25,650	24,579	26,094	28,803	27,278	26,094	23,321
Loans individually evaluated for impairment related to recorded investment (loan balance)					20,745	21,037	20,970
Loans collectively evaluated for impairment related to recorded investment (loan balance)					2,930,208	2,656,176	2,506,332
Total loans					3,250,387	3,021,030	2,924,045
Unallocated [Member]
Schedule of allowance and recorded investment related to financing receivables segregated by portfolio segment
Beginning balance	0	3,858	0	2,724
Provision for loan losses	0	2,235	0	3,369
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Ending balance	0	6,093	0	6,093
Allowance for loan losses
Loans individually evaluated for impairment related to allowance for loan losses					0	0	0
Loans collectively evaluated for impairment related to allowance for loan losses					0	0	6,093
Total	$ 0	$ 3,858	$ 0	$ 2,724	0	0	6,093
Loans individually evaluated for impairment related to recorded investment (loan balance)					0	0	0
Loans collectively evaluated for impairment related to recorded investment (loan balance)					0	0	0
Total loans					0	0	0
Receivables Acquired with Deteriorated Credit Quality [Member]
Allowance for loan losses
Financing Receivable, Allowance for Credit Losses					0	0	0
Loans acquired with deteriorated credit quality					1,268,335	1,463,213	1,683,733
Receivables Acquired with Deteriorated Credit Quality [Member] | Commercial Loan Portfolio [Member]
Allowance for loan losses
Financing Receivable, Allowance for Credit Losses					0	0	0
Loans acquired with deteriorated credit quality					968,901	1,119,396	1,286,990
Receivables Acquired with Deteriorated Credit Quality [Member] | Consumer Loan Portfolio [Member]
Allowance for loan losses
Financing Receivable, Allowance for Credit Losses					0	0	0
Loans acquired with deteriorated credit quality					299,434	343,817	396,743
Receivables Acquired with Deteriorated Credit Quality [Member] | Unallocated [Member]
Allowance for loan losses
Financing Receivable, Allowance for Credit Losses					0	0	0
Loans acquired with deteriorated credit quality					$ 0	$ 0	$ 0

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Loans (Textual) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($) Segment Loans BaordOfDirectors Tenants	Dec. 31, 2015 USD ($)	Jun. 30, 2015 USD ($)
Loans (Textual) [Abstract]
Number of portfolio segment | Segment	2
Number of classes of loans | Loans	6
Number of minimum tenants under lease of non-owner occupied commercial real estate | Tenants	1
Number of members of the board of directors in loan committee | BaordOfDirectors	8
Minimum due period of loans consider in a nonperforming status	90 days
Total nonaccrual TDR loans	$ 32,400	$ 35,900	$ 35,700
Residential Mortgage Loans in Process of Foreclosure	900	2,900	2,000
Difference between recorded investment and unpaid principal balance of loan	22,000	25,300	30,200
Confirmed losses (partial charge-offs)	16,300	17,100	15,200
Fair value of discount adjustment	5,700	8,200	15,000
Acquired impaired loans	12,500	12,800	15,900
Performing trouble debt restructuring under impaired loans	49,400	47,800	45,800
Financing Receivable, Modifications, Recorded Investment	98,232	103,111	99,428
Commercial Loan Portfolio [Member]
Loans (Textual) [Abstract]
Minimum value of loan requires executive and senior officer approval	1,500
Financing Receivable, Modifications, Recorded Investment	$ 74,085	78,823	74,751
Consumer Portfolio Segment [Member]
Loans (Textual) [Abstract]
Maximum due period of loans consider in performing status	90 days
Minimum due period of loans consider in a nonperforming status	90 days
Financing Receivable, Modifications, Recorded Investment	$ 24,147	$ 24,288	$ 24,677
Commercial [Member]
Loans (Textual) [Abstract]
Minimum value of loan requires group loan authority approval	1,000
Maximum value of loan requires executive and senior officer approval	$ 3,500
Real Estate Residential Loans [Member]
Loans (Textual) [Abstract]
Period for loan secured under real estate residential security	15 years
Loan-to-value ratio at the time of origination	80.00%
Land Development Loans [Member]
Loans (Textual) [Abstract]
Maximum period for payment of loan	12 months
Maximum [Member] | Commercial Loan Portfolio [Member]
Loans (Textual) [Abstract]
Maximum value of loan requires group loan authority approval	$ 10,000
Other loans requiring director loan committee approval depending on risk rating and credit action required	$ 10,000
Maximum [Member] | Real Estate Residential Loans [Member]
Loans (Textual) [Abstract]
Upper limit of number of family residential properties | Tenants	4
Minimum [Member] | Commercial Loan Portfolio [Member]
Loans (Textual) [Abstract]
Minimum value of loan requires group loan authority approval	$ 1,000
Minimum value of loans depending on risk rating and requires credit action from board of directors	15,000
Minimum [Member] | Commercial [Member]
Loans (Textual) [Abstract]
Minimum value of loans requiring only director loan committee approval	$ 10,000
Minimum [Member] | Real Estate Residential Loans [Member]
Loans (Textual) [Abstract]
Lower limit of number of family residential properties | Tenants	1

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Intangible Assets (Net Carrying Value) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	May 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Net carrying value of intangible assets
Goodwill	$ 286,867		$ 287,393	$ 285,512
Other intangible assets:
Total other intangible assets	34,270		38,104	41,201
Core deposit intangible assets [Member]
Other intangible assets:
Finite-Lived Core Deposits, Gross	24,429		26,654	28,353
Total other intangible assets	24,429		26,654	28,353
Noncompete Agreements [Member]
Other intangible assets:
Finite-Lived Noncompete Agreements, Gross	164		328	541
Mortgage Servicing Rights [Member]
Other intangible assets:
Servicing Asset at Amortized Cost	9,677		11,122	12,307
Total other intangible assets	$ 9,677	$ 10,478	$ 11,122	$ 12,307		$ 11,583	$ 12,217
Lake Michigan Financial Corp [Member]
Net carrying value of intangible assets
Goodwill					$ 101,000

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Intangible Assets (Amortization Expense of Core Deposit Intangible Assets) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Carrying amount, accumulated amortization and amortization expense of core deposit intangible assets
Carrying amount	$ 34,270	$ 41,201	$ 34,270	$ 41,201	$ 38,104
Amortization of intangible assets			4,751	3,787
Core deposit intangible assets [Member]
Carrying amount, accumulated amortization and amortization expense of core deposit intangible assets
Gross original amount	40,055	39,355	40,055	39,355	40,055
Accumulated amortization	15,626	11,002	15,626	11,002	13,401
Carrying amount	24,429	28,353	24,429	28,353	$ 26,654
Amortization of intangible assets	$ 1,113	$ 952	$ 2,225	$ 1,743

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Intangible Assets (Carrying and Fair Value of MSRs) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Net carrying value, fair value of MSRs and loans Corporation servicing for others
Valuation Allowance for Impairment of Recognized Servicing Assets, Balance	$ 400
Loans serviced for others that have servicing rights capitalized	2,014,986	$ 2,082,899	$ 2,193,067
Mortgage Servicing Rights [Member]
Net carrying value, fair value of MSRs and loans Corporation servicing for others
Net carrying value of MSRs	9,677	11,122	12,307
Fair value of MSRs	12,493	15,542	16,602
Valuation Allowance for Impairment of Recognized Servicing Assets, Balance	$ 412	$ 0	$ 0

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Intangible Assets (Activity for Capitalized MSRs) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Capitalized MSRs [Roll Forward]
Balance at beginning of period			$ 38,104
Amortization			(4,751)	$ (3,787)
Balance at end of period	$ 34,270	$ 41,201	34,270	41,201
Mortgage Servicing Rights [Member]
Capitalized MSRs [Roll Forward]
Balance at beginning of period	10,478	11,583	11,122	12,217
Acquired in Monarch acquisition	0	1,284	0	1,284
Additions	586	415	917	815
Amortization	(975)	(1,175)	(1,950)	(2,209)
Change in valuation allowance	(412)	200	(412)	200
Balance at end of period	$ 9,677	$ 12,307	$ 9,677	$ 12,307

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Intangible Assets (Textual) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Mar. 31, 2016	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Goodwill and identifiable intangible assets acquired	$ 500	$ 0	$ 116,478
Goodwill		286,867	285,512	$ 287,393
Intangible Assets (Textual) [Abstract]
Impairment valuation allowance		(400)
Core deposit intangible assets [Member]
Intangible Assets (Textual) [Abstract]
Impairment valuation allowance		0
Estimated Future Amortization Expense, Fiscal Year Maturity [Abstract]
2016		2,100
2017		3,800
2018		3,600
2019		3,400
2020		2,900
2021 and thereafter		8,600
Mortgage Servicing Rights [Member]
Intangible Assets (Textual) [Abstract]
Impairment valuation allowance		$ (412)	$ 0	$ 0

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Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Components of accumulated other comprehensive loss, net of related tax benefit/expense
Net unrealized gains (losses) on investment securities – available-for-sale, net of related tax expense (benefit) of $1,182 at June 30, 2016, $(1,017) at December 31, 2015 and $(148) at June 30, 2015	$ 2,196	$ (1,888)	$ (274)
Pension and other postretirement benefits adjustment, net of related tax benefit of $15,020 at June 30, 2016, $14,616 at December 31, 2015 and $16,601 at June 30, 2015	(27,894)	(27,144)	(30,830)
Accumulated other comprehensive loss	$ (25,698)	$ (29,032)	$ (31,104)

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Accumulated Other Comprehensive Loss (Textual) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Accumulated Other Comprehensive Loss (Textual) [Abstract]
Net unrealized gains (losses) on investment securities-available-for-sale, tax expense (benefit)	$ 1,182	$ (1,017)	$ 148
Pension and other postretirement benefits adjustment, tax benefit	$ 15,020	$ 14,616	$ 16,601

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Borrowings Schedule of Short-term Borrowings (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Schedule of Short-Term Borrowings [Abstract]
Federal Home Loan Bank Advances, Short Term	$ 300,000	$ 100,000	$ 205,000
Short-term borrowings	$ 300,000	$ 100,000	$ 227,000

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Borrowings Schedule of Other Borrowings (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	May 31, 2015
Schedule of Other Borrowings [Abstract]
Long-term Federal Home Loan Bank Advances	$ 329,320	$ 181,394	$ 81,469
nonrevolving line of credit	25,000	25,000	25,000
Other Securities Sold under Agreements to Repurchase	17,277	17,453	23,649
Subordinated Debt	0	18,544	18,372	$ 18,600
Other Borrowings	$ 371,597	$ 242,391	$ 148,490

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Borrowings Textuals (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	May 31, 2015
Borrowings [Line Items]
Proceeds from Federal Home Loan Bank Advances	$ 100,000	$ 50,000
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Weighted Average Interest Rate	1.00%	1.30%	1.00%
Federal Home Loan Bank, Advances, Weighted Average Interest Rate	1.27%		1.27%
Maximum original maturity term of short-term borrowings			30 days
Long-term Federal Home Loan Bank Advances	$ 329,320		$ 329,320	$ 181,394	$ 81,469
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	2,980,000		2,980,000
Federal Home Loan Bank, Advances, Maturities Summary, Due in Next Twelve Months	5,100		5,100
Federal Home Loan Bank, Advances, Maturities Summary, Due in Year Two	47,100		47,100
Federal Home Loan Bank, Advances, Maturities Summary, Due in Year Three	67,100		67,100
Federal Home Loan Bank, Advances, Maturities Summary, Due in Year Four	100,000		100,000
Federal Home Loan Bank, Advances, Maturities Summary, Due in Year Five	110,000		110,000
Securities Sold under Agreements to Repurchase	256,213		256,213	297,199	305,291
Securities Sold Under Agreements to Repurchase, Maturities Summary, Due Remainder of Current Year	8,100		8,100
Securities Sold Under Agreements to Repurchase, Maturities, Due in Year Two	9,200		9,200
nonrevolving line of credit	$ 25,000		$ 25,000	25,000	25,000
Line of Credit Facility, Interest Rate at Period End	2.41%		2.41%
Subordinated Debt	$ 0		$ 0	18,544	18,372	$ 18,600
Federal Home Loan Bank Advances	300,000		300,000	100,000	205,000
Federal Funds Purchased	$ 0		$ 0	$ 0	$ 22,000

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Regulatory Capital (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Risk weighted assets	$ 7,500,000	$ 7,140,000	$ 6,990,000
Chemical Financial Corporation [Member]
Total Capital to Risk-Weighted Assets:
Actual, Capital Amount	851,114	841,257	816,595
Minimum Required for Capital Adequacy Purposes, Capital Amount	$ 599,743	$ 571,509	$ 559,273
Actual, Ratio	11.40%	11.80%	11.60%
Minimum Required for Capital Adequacy Purposes, Ratio	8.00%	8.00%	8.00%
Tier 1 Capital to Risk-Weighted Assets:
Actual, Capital Amount	$ 779,608	$ 767,929	$ 741,654
Minimum Required for Capital Adequacy Purposes, Capital Amount	$ 449,807	$ 428,631	$ 419,455
Actual, Ratio	10.40%	10.70%	10.60%
Minimum Required for Capital Adequacy Purposes, Ratio	6.00%	6.00%	6.00%
Common Equity Tier 1 Capital to Risk-Weighted Assets:
Actual, Capital Amount	$ 779,608	$ 753,815	$ 723,654
Minimum Required for Capital Adequacy Purposes, Capital Amount	$ 337,355	$ 321,474	$ 314,591
Actual, Ratio	10.40%	10.60%	10.40%
Minimum Required for Capital Adequacy Purposes, Ratio	4.50%	4.50%	4.50%
Leverage Ratio:
Actual, Capital Amount	$ 779,608	$ 767,929	$ 741,654
Minimum Required for Capital Adequacy Purposes, Capital Amount	$ 361,408	$ 356,396	$ 314,344
Actual, Ratio	8.60%	8.60%	9.40%
Minimum Required for Capital Adequacy Purposes, Ratio	4.00%	4.00%	4.00%
Chemical Bank [Member]
Total Capital to Risk-Weighted Assets:
Actual, Capital Amount	$ 854,189	$ 830,294	$ 713,999
Minimum Required for Capital Adequacy Purposes, Capital Amount	598,142	570,073	471,422
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Capital Amount	$ 747,677	$ 712,591	$ 589,277
Actual, Ratio	11.40%	11.70%	12.00%
Minimum Required for Capital Adequacy Purposes, Ratio	8.00%	8.00%	8.00%
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Ratio	10.00%	10.00%	10.00%
Tier 1 Capital to Risk-Weighted Assets:
Actual, Capital Amount	$ 782,683	$ 756,966	$ 640,324
Minimum Required for Capital Adequacy Purposes, Capital Amount	448,606	427,555	353,566
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Capital Amount	$ 598,142	$ 570,073	$ 471,422
Actual, Ratio	10.50%	10.60%	10.90%
Minimum Required for Capital Adequacy Purposes, Ratio	6.00%	6.00%	6.00%
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Ratio	8.00%	8.00%	8.00%
Common Equity Tier 1 Capital to Risk-Weighted Assets:
Actual, Capital Amount	$ 782,683	$ 756,966	$ 640,324
Minimum Required for Capital Adequacy Purposes, Capital Amount	336,455	320,666	265,175
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Capital Amount	$ 485,990	$ 463,184	$ 383,030
Actual, Ratio	10.50%	10.60%	10.90%
Minimum Required for Capital Adequacy Purposes, Ratio	4.50%	4.50%	4.50%
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Ratio	6.50%	6.50%	6.50%
Leverage Ratio:
Actual, Capital Amount	$ 782,683	$ 756,966	$ 640,324
Minimum Required for Capital Adequacy Purposes, Capital Amount	360,746	355,911	300,703
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Capital Amount	$ 450,932	$ 444,888	$ 375,878
Actual, Ratio	8.70%	8.50%	8.50%
Minimum Required for Capital Adequacy Purposes, Ratio	4.00%	4.00%	4.00%
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Ratio	5.00%	5.00%	5.00%
The Bank of Holland [Member]
Total Capital to Risk-Weighted Assets:
Actual, Capital Amount			$ 77,648
Minimum Required for Capital Adequacy Purposes, Capital Amount			61,028
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Capital Amount			$ 76,285
Actual, Ratio			10.20%
Minimum Required for Capital Adequacy Purposes, Ratio			8.00%
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Ratio			10.00%
Tier 1 Capital to Risk-Weighted Assets:
Actual, Capital Amount			$ 76,312
Minimum Required for Capital Adequacy Purposes, Capital Amount			45,771
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Capital Amount			$ 61,028
Actual, Ratio			10.00%
Minimum Required for Capital Adequacy Purposes, Ratio			6.00%
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Ratio			8.00%
Common Equity Tier 1 Capital to Risk-Weighted Assets:
Actual, Capital Amount			$ 76,312
Minimum Required for Capital Adequacy Purposes, Capital Amount			34,328
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Capital Amount			$ 49,585
Actual, Ratio			10.00%
Minimum Required for Capital Adequacy Purposes, Ratio			4.50%
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Ratio			6.50%
Leverage Ratio:
Actual, Capital Amount			$ 76,312
Minimum Required for Capital Adequacy Purposes, Capital Amount			30,710
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Capital Amount			$ 38,388
Actual, Ratio			9.90%
Minimum Required for Capital Adequacy Purposes, Ratio			4.00%
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Ratio			5.00%
The Bank of Northern Michigan [Member]
Total Capital to Risk-Weighted Assets:
Actual, Capital Amount			$ 32,779
Minimum Required for Capital Adequacy Purposes, Capital Amount			25,878
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Capital Amount			$ 32,347
Actual, Ratio			10.10%
Minimum Required for Capital Adequacy Purposes, Ratio			8.00%
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Ratio			10.00%
Tier 1 Capital to Risk-Weighted Assets:
Actual, Capital Amount			$ 32,779
Minimum Required for Capital Adequacy Purposes, Capital Amount			19,408
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Capital Amount			$ 25,878
Actual, Ratio			10.10%
Minimum Required for Capital Adequacy Purposes, Ratio			6.00%
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Ratio			8.00%
Common Equity Tier 1 Capital to Risk-Weighted Assets:
Actual, Capital Amount			$ 32,779
Minimum Required for Capital Adequacy Purposes, Capital Amount			14,556
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Capital Amount			$ 21,025
Actual, Ratio			10.10%
Minimum Required for Capital Adequacy Purposes, Ratio			4.50%
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Ratio			6.50%
Leverage Ratio:
Actual, Capital Amount			$ 32,779
Minimum Required for Capital Adequacy Purposes, Capital Amount			14,421
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Capital Amount			$ 18,026
Actual, Ratio			9.10%
Minimum Required for Capital Adequacy Purposes, Ratio			4.00%
Required to be Well Capitalized Under Prompt Corrective Action Regulations, Ratio			5.00%

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Fair Value Measurements (Fair Value of Assets on a Recurring Basis) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	$ 458,552	$ 553,731	$ 685,706
Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	458,552	553,731	685,706
Loans Held-for-sale	13,990	10,327	7,798
Total assets measured at fair value on a recurring basis	472,542	564,058	693,504
Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	5,810	5,765	8,294
Loans Held-for-sale	0	0	0
Total assets measured at fair value on a recurring basis	5,810	5,765	8,294
Significant Other Observable Inputs (Level 2) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	452,742	547,966	677,412
Loans Held-for-sale	13,990	10,327	7,798
Total assets measured at fair value on a recurring basis	466,732	558,293	685,210
Significant Unobservable Inputs (Level 3) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	0	0	0
Loans Held-for-sale	0	0	0
Total assets measured at fair value on a recurring basis	0	0	0
US Treasury Securities [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	5,810	5,765	8,294
US Treasury Securities [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	5,810	5,765	8,294
US Treasury Securities [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	5,810	5,765	8,294
US Treasury Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	0	0	0
US Treasury Securities [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	0	0	0
Government sponsored agencies [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	157,022	194,989	227,907
Government sponsored agencies [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	157,022	194,989	227,907
Government sponsored agencies [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	0	0	0
Government sponsored agencies [Member] | Significant Other Observable Inputs (Level 2) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	157,022	194,989	227,907
Government sponsored agencies [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	0	0	0
State and political subdivisions [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	13,220	15,120	26,965
State and political subdivisions [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	13,220	15,120	26,965
State and political subdivisions [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	0	0	0
State and political subdivisions [Member] | Significant Other Observable Inputs (Level 2) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	13,220	15,120	26,965
State and political subdivisions [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	0	0	0
Residential mortgage-backed securities [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	168,616	187,768	212,669
Residential mortgage-backed securities [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	168,616	187,768	212,669
Residential mortgage-backed securities [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	0	0	0
Residential mortgage-backed securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	168,616	187,768	212,669
Residential mortgage-backed securities [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	0	0	0
Collateralized mortgage obligations [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	100,849	132,230	167,032
Collateralized mortgage obligations [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	100,849	132,230	167,032
Collateralized mortgage obligations [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	0	0	0
Collateralized mortgage obligations [Member] | Significant Other Observable Inputs (Level 2) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	100,849	132,230	167,032
Collateralized mortgage obligations [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	0	0	0
Corporate bonds [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	9,712	14,627	39,678
Corporate bonds [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	9,712	14,627	39,678
Corporate bonds [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	0	0	0
Corporate bonds [Member] | Significant Other Observable Inputs (Level 2) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	9,712	14,627	39,678
Corporate bonds [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	0	0	0
Preferred stock [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	3,323	3,232	3,161
Preferred stock [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	3,323	3,232	3,161
Preferred stock [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	0	0	0
Preferred stock [Member] | Significant Other Observable Inputs (Level 2) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	3,323	3,232	3,161
Preferred stock [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fair Value Measurements Recurring [Member]
Summary of assets measured at fair value on a recurring basis
Available-for-sale, at fair value	$ 0	$ 0	$ 0

XML

Fair Value Measurements (Fair Value of Assets on a Nonrecurring Basis) (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	$ 38,248	$ 52,000	$ 38,714
Quoted Prices In Active Markets for Identical Assets (Level 1) [Member]
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	0	0	0
Significant Other Observable Inputs (Level 2) [Member]
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	0	0	0
Significant Unobservable Inputs (Level 3) [Member]
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	38,248	52,000	38,714
Impaired Originated Loans [Member]
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	23,655	42,065	24,517
Impaired Originated Loans [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member]
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	0	0	0
Impaired Originated Loans [Member] | Significant Other Observable Inputs (Level 2) [Member]
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	0	0	0
Impaired Originated Loans [Member] | Significant Unobservable Inputs (Level 3) [Member]
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	23,655	42,065	24,517
Other real estate/repossessed assets [Member]
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	8,440	9,935	14,197
Other real estate/repossessed assets [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member]
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	0	0	0
Other real estate/repossessed assets [Member] | Significant Other Observable Inputs (Level 2) [Member]
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	0	0	0
Other real estate/repossessed assets [Member] | Significant Unobservable Inputs (Level 3) [Member]
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	8,440	$ 9,935	$ 14,197
Mortgage Servicing Rights [Member]
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	6,153
Mortgage Servicing Rights [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) [Member]
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	0
Mortgage Servicing Rights [Member] | Significant Other Observable Inputs (Level 2) [Member]
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	0
Mortgage Servicing Rights [Member] | Significant Unobservable Inputs (Level 3) [Member]
Summary of assets measured at fair value on a nonrecurring basis
Total assets measured at fair value on a nonrecurring basis	$ 6,153

XML

Fair Value Measurements (Schedule of Carrying Amounts and Estimated Fair Value of Financial Instruments) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Investment securities:
Available-for-sale	$ 458,552	$ 553,731	$ 685,706
Held-to-maturity	568,415	512,705	466,578
Carrying Amount [Member]
Investment securities:
Nonmarketable equity securities	47,775	36,907	36,142
Carrying Amount [Member] | Level 1[Member]
Assets:
Cash and cash equivalents	232,960	238,789	215,034
Investment securities:
Available-for-sale	5,810	5,765	8,294
Carrying Amount [Member] | Level 2 [Member]
Investment securities:
Available-for-sale	452,742	547,966	677,412
Held-to-maturity	552,328	509,471	469,337
Loans Held-for-sale	13,990	10,327	7,798
Interest receivable	23,111	21,953	21,668
Liabilities:
Deposits without defined maturities	5,904,618	5,809,355	5,547,764
Interest payable	1,389	1,578	1,557
Short-term borrowings	556,213	397,199	532,291
Long-term borrowings	354,320	206,394	106,469
Carrying Amount [Member] | Level 3 [Member]
Investment securities:
Held-to-maturity	500	500	500
Net loans	7,575,763	7,197,819	6,959,802
Liabilities:
Time deposits	1,560,028	1,647,412	1,745,215
Long-term borrowings	17,277	35,997	42,021
Fair Value [Member]
Investment securities:
Nonmarketable equity securities	47,775	36,907	36,142
Fair Value [Member] | Level 1[Member]
Assets:
Cash and cash equivalents	232,960	238,789	215,034
Investment securities:
Available-for-sale	5,810	5,765	8,294
Fair Value [Member] | Level 2 [Member]
Investment securities:
Available-for-sale	452,742	547,966	677,412
Held-to-maturity	568,130	512,405	466,278
Loans Held-for-sale	13,990	10,327	7,798
Interest receivable	23,111	21,953	21,668
Liabilities:
Deposits without defined maturities	5,904,618	5,809,355	5,547,764
Interest payable	1,389	1,578	1,557
Short-term borrowings	556,213	397,199	532,291
Long-term borrowings	359,043	206,394	106,469
Fair Value [Member] | Level 3 [Member]
Investment securities:
Held-to-maturity	285	300	300
Net loans	7,593,013	7,201,994	6,969,655
Liabilities:
Time deposits	1,563,446	1,647,412	1,745,215
Long-term borrowings	$ 17,228	$ 35,997	$ 42,021

XML

Fair Value Measurements (Textual) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Fair Value Measurements (Textual) [Abstract]
Impairment of goodwill	$ 0	$ 0	$ 0
Valuation Allowance for Impairment of Recognized Servicing Assets, Balance	400
Impairment identified for intangible assets	0
Core deposit intangible assets [Member]
Fair Value Measurements (Textual) [Abstract]
Valuation Allowance for Impairment of Recognized Servicing Assets, Balance	0
Impairment identified for intangible assets		0	0
Mortgage Servicing Rights [Member]
Fair Value Measurements (Textual) [Abstract]
Valuation Allowance for Impairment of Recognized Servicing Assets, Balance	$ 412	0	0
Minimum [Member]
Fair Value Measurements (Textual) [Abstract]
Expected life of intangible assets	10 years
Maximum [Member]
Fair Value Measurements (Textual) [Abstract]
Expected life of intangible assets	15 years
Impaired Originated Loans [Member] | Minimum [Member]
Fair Value Measurements (Textual) [Abstract]
Fair Value Inputs, Discount Rate	20.00%
Impaired Originated Loans [Member] | Maximum [Member]
Fair Value Measurements (Textual) [Abstract]
Fair Value Inputs, Discount Rate	30.00%
Total Impaired Loans [Member] | Minimum [Member]
Fair Value Measurements (Textual) [Abstract]
Percentage of discount factors used to determine fair value	70.00%
Total Impaired Loans [Member] | Maximum [Member]
Fair Value Measurements (Textual) [Abstract]
Percentage of discount factors used to determine fair value	80.00%
Other Real Estate and Repossessed Assets [Member] | Minimum [Member]
Fair Value Measurements (Textual) [Abstract]
Percentage of discount factors used to determine fair value	70.00%
Fair Value Inputs, Discount Rate	25.00%
Other Real Estate and Repossessed Assets [Member] | Maximum [Member]
Fair Value Measurements (Textual) [Abstract]
Percentage of discount factors used to determine fair value	75.00%
Fair Value Inputs, Discount Rate	30.00%
Fair Value Inputs, Prepayment Rate	22.00%
Mortgage Servicing Rights [Member] | Minimum [Member]
Fair Value Measurements (Textual) [Abstract]
Fair Value Inputs, Discount Rate	10.00%
Fair Value Inputs, Prepayment Rate	12.00%
Mortgage Servicing Rights [Member] | Maximum [Member]
Fair Value Measurements (Textual) [Abstract]
Fair Value Inputs, Discount Rate	11.00%
Fair Value Measurements Recurring [Member]
Fair Value Measurements (Textual) [Abstract]
Liabilities recorded at fair value	$ 0	0	0
Fair Value Measurements Nonrecurring [Member]
Fair Value Measurements (Textual) [Abstract]
Liabilities recorded at fair value	$ 0	$ 0	$ 0

XML

Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Numerator and denominator of the basic and diluted earnings per common share computations
Numerator for both basic and diluted earnings per common share, net income	$ 25,707	$ 19,024	$ 48,969	$ 36,859
Denominator for basic earnings per common share, weighted average common shares outstanding	38,258,000	35,162,000	38,228,000	33,992,000
Weighted average common stock equivalents	342,000	235,000	332,000	235,000
Denominator for diluted earnings per common share	38,600,000	35,397,000	38,560,000	34,227,000
Basic earnings per common share (dollars per share)	$ 0.67	$ 0.54	$ 1.28	$ 1.08
Diluted earnings per common share (dollars per share)	$ 0.67	$ 0.54	$ 1.27	$ 1.08
Stock Option [Member]
Earnings Per Common Share (Textual) [Abstract]
Average number of exercisable employee stock option awards that were not included in the computation of diluted earnings per common share	0	80,700	0	100,875

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Share-Based Compensation (Stock Option Activity) (Details)	6 Months Ended
	Jun. 30, 2016 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Grant Date Fair Value [Roll Forward]
Weighted average fair value of options granted	$ 6.15
Stock Options [Member] | Non Vested [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Beginning balance, Number of Options | shares	479,755
Granted, Number of Options | shares	441,167
Exercised, Number of Options | shares	0
Vested, Number of Options | shares	(118,273)
Forfeited/expired, Number of Options | shares	(33,901)
Ending balance, Number of Options | shares	768,748
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Beginning balance, Weighted Average Exercise Price	$ 28.75
Granted, Weighted Average Exercise Price	32.81
Exercised, Weighted Average Exercise Price	0.00
Vested, Weighted Average Exercise Price	28.30
Forfeited/expired, Weighted Average Exercise Price	31.00
Ending balance, Weighted Average Exercise Price	31.04
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Grant Date Fair Value [Roll Forward]
Beginning balance, Weighted average grant date fair value	8.49
Weighted average fair value of options granted	6.15
Exercised, Weighted Average Grant Date Fair Value	0.00
Vested, Weighted Average Grant Date Fair Value	8.40
Forfeited/expired, Weighted Average Grant Date Fair Value	7.25
Ending balance, Weighted average grant date fair value	$ 7.21
Stock Options [Member] | Vested & Nonvested [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Beginning balance, Number of Options | shares	1,054,739
Granted, Number of Options | shares	441,167
Exercised, Number of Options | shares	(96,058)
Vested, Number of Options | shares	0
Forfeited/expired, Number of Options | shares	(33,901)
Ending balance, Number of Options | shares	1,365,947
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Beginning balance, Weighted Average Exercise Price	$ 25.38
Granted, Weighted Average Exercise Price	32.81
Exercised, Weighted Average Exercise Price	21.81
Vested, Weighted Average Exercise Price	0.00
Forfeited/expired, Weighted Average Exercise Price	31.00
Ending balance, Weighted Average Exercise Price	$ 27.89
Stock Options [Member] | Vested [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Grant Date Fair Value [Roll Forward]
Exercisable/vested, Number of Options | shares	597,199
Exercisable/vested, Weighted Average Exercise Price	$ 23.84

XML

Share-Based Compensation (Black-Scholes Pricing Model Assumptions) (Details)	6 Months Ended
	Jun. 30, 2016 $ / shares
Assumptions of Black-Scholes option pricing model
Expected dividend yield	3.30%
Risk-free interest rate	1.39%
Expected stock price volatility	27.90%
Expected life of options - in years	6 years 6 months
Weighted average fair value of options granted	$ 6.15

XML

Share-Based Compensation (Restricted Stock Unit Activity) (Details) - Restricted Stock Units (RSUs) [Member]	6 Months Ended
	Jun. 30, 2016 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Number of Shares [Roll Forward]
Beginning balance, Number of shares | shares	207,989
Granted, Number of shares | shares	99,208
Converted into shares of common stock, Number of shares | shares	(45,787)
Forfeited/expired, Number of shares | shares	(4,126)
Ending balance, Number of shares | shares	257,284
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Grant Date Fair Value [Abstract]
Beginning balance, Weighted average grant date fair value | $ / shares	$ 26.41
Granted, Weighted Average grant date fair value | $ / shares	30.78
Converted into shares of common stock, Weighted average grant date fair value | $ / shares	22.89
Forfeited/expired, Weighted average grant date fair value | $ / shares	29.65
Ending balance, Weighted average grant date fair value | $ / shares	$ 28.67

XML

(Textual) (Details) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016 USD ($) $ / shares shares	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($) $ / shares shares	Jun. 30, 2015 USD ($)	Apr. 20, 2015 shares
Share-Based Compensation Plans (Textual) [Abstract]
Share-based compensation expense | $	$ 1.0	$ 0.8	$ 1.8	$ 1.5
Corporation granted shares of common stock | shares			940
Common stock available for future grants under share-based compensation plans | shares					1,300,000
Stock Option Vesting Period, Post 2012 Grants			5 years
Stock Option Vesting Period Pre 2013 Grants			3 years
Restricted Stock Units (RSUs) [Member]
Share-Based Compensation Plans (Textual) [Abstract]
Corporation granted options to purchase restricted stock performance units | shares			99,208
Unrecognized compensation expense | $	$ 4.9		$ 4.9
Unrecognized compensation expense, period for recognition			2 years 8 months 12 days
Restricted Stock Units (RSUs) [Member] | Maximum [Member]
Share-Based Compensation Plans (Textual) [Abstract]
Restricted stock performance units eligible to vest as a multiple of number of units granted			1.5
Restricted Stock Units (RSUs) [Member] | Minimum [Member]
Share-Based Compensation Plans (Textual) [Abstract]
Restricted stock performance units eligible to vest as a multiple of number of units granted			0.5
Equity Option [Member]
Share-Based Compensation Plans (Textual) [Abstract]
Common stock available for future grants under share-based compensation plans | shares	703,493		703,493
Weighted-average remaining contractual terms for outstanding stock options			7 years 1 month 6 days
Weighted-average remaining contractual terms for exercisable stock options			4 years 10 months 24 days
Outstanding in-the-money stock options, intrinsic value | $	$ 11.2		$ 11.2
Exercisable in-the-money stock options, intrinsic value | $	$ 8.1		$ 8.1
Closing price of common stock | $ / shares	$ 37.29		$ 37.29
Unrecognized compensation expense | $	$ 5.2		$ 5.2
Unrecognized compensation expense, period for recognition			3 years 9 months 18 days
Employee Stock Option [Member]
Share-Based Compensation Plans (Textual) [Abstract]
Stock Option Award Vesting Period			10 years
Vested & Nonvested [Member] | Employee Stock Option [Member]
Share-Based Compensation Plans (Textual) [Abstract]
Corporation granted options to purchase common stock | shares			441,167

XML

Pension and Other Postretirement Benefit Plans (Components of Net Periodic Benefit Cost (Income)) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Defined Benefit Pension Plans [Member]
Components of net periodic benefit cost (income) for the Corporation's qualified and nonqualified pension plans and nonqualified postretirement benefits plan
Service cost	$ 277	$ 273	$ 554	$ 545
Interest cost	1,358	1,332	2,716	2,664
Expected return on plan assets	(2,140)	(2,161)	(4,281)	(4,322)
Amortization of prior service cost	0	(1)	0	(2)
Amortization of unrecognized net loss (gain)	572	1,056	1,144	2,112
Net periodic benefit cost	67	499	133	997
Postretirement Benefit Plan [Member]
Components of net periodic benefit cost (income) for the Corporation's qualified and nonqualified pension plans and nonqualified postretirement benefits plan
Service cost	2	4	4	8
Interest cost	33	33	66	67
Amortization of prior service cost	29	32	58	65
Amortization of unrecognized net loss (gain)	(25)	0	(49)	(1)
Net periodic benefit cost	$ 39	$ 69	$ 79	$ 139

XML

Pension and Other Postretirement Benefit Plans (Textual) (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Mar. 31, 2015	Jun. 30, 2016	Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Multiemployer Plan, Period Contributions				$ 0.0
Pension Plans, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Contribution to defined benefit pension plan				$ 0.0	$ 0.0
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate				4.55%
Chemical Financial Corporation [Member]
Defined Benefit Plan Disclosure [Line Items]
Percentage of eligible pay contribution to certain employees				4.00%
Defined Contribution Plan, Employer Total Contribution Amount	$ 1.4	$ 1.3	$ 2.4	$ 2.7

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Financial Guarantees (Textual) (Details) - Financial Standby Letter of Credit [Member] - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Financial Guarantees (Textual) [Abstract]
Letters of credit outstanding	$ 47	$ 39	$ 45
Expiration period for letters of credit, maximum	5 years