EXHIBIT No. 99.1
 
 
 
 
 
 
Financial Statements and Schedules
 
 
 
Chemical Financial Corporation
401 (k) Savings Plan
 
 
 
Years ended December 31, 1999 and
December 31, 1998 with
Report of Independent Auditors
 
 




Report of Independent Auditors
 

Administrative Committee
Chemical Financial Corporation 401 (k) Savings Plan

 
We have audited the accompanying statements of assets available for plan benefits of the Chemical Financial Corporation 401 (k) Savings Plan as of December 31, 1999 and 1998 and the related statements of changes in assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for plan benefits of the Plan at December 31, 1999 and 1998, and the changes in its assets available for plan benefits for the years then ended in conformity with accounting principles generally accepted in the United States.

Our audits were made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets held for investment purposes as of December 31, 1999 is presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and is not a required part of the financial statements. The fund information in the statements of assets available for plan benefits and the statements of changes in assets available for plan benefits is presented for purposes of additional analysis rather than to present the assets available for plan benefits and changes in assets available for plan benefits of each fund. The supplemental schedule and fund information have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole.

 

/s/ Ernst & Young LLP

January 28, 2000




Statement of Assets Available for Plan Benefits, with Fund Information
Chemical Financial Corporation 401 (k) Savings Plan
December 31, 1999
 
 
Fund Information
 
  Intermediate
Bond
Index
Stock
and
Bond
Middle
Capitalization
Stock
Value
Stock
Growth
Stock
Low-Priced
Stock
International
Stock
Chemical
Financial
Corporation
Stock
Cash and
Money
Market
Participant
Loans
Total
ASSETS:                        
Investments at fair
    value:		                        
  Chemical Financial
     Corporation
     Common Stock		                
$2,119,347
    
$2,119,347
                         
   Federated Investors
     Mutual Funds:		                        
     Short-Intermediate
        Government Trust
$208,823
                    
208,823
     Max-Cap Fund  
$2,537,046
                  
2,537,046
     Mid-Cap Fund      
$14,782
              
14,782
     Stock Trust        
$7,375
            
7,375
     Treasury Obligations
         Fund		                
10,772
$303,048
  
313,820
                         
   Fidelity
     Investments-Mutual
     Funds:		                        
     Puritan Fund    
$736,696
                
736,696
     Blue Chip Growth
        Fund		          
$70,763
          
70,763
     Low-Priced Stock
        Fund		            
$10,356
        
10,356
     Diversified
         International
         Fund		              
$37,350
      
37,350
                         
  Participant Loans  
 
 
 
 
 
 
 
 
 
$46,335
46,335
                         
Total Investments
208,823
2,537,046
736,696
14,782
7,375
70,763
10,356
37,350
2,130,119
303,048
46,335
6,102,693
                         
Employee contributions
    receivable
(34)
(384)
(11)
          
(12)
(45)
  
(486)
                         
Cash and accrued
    income
929
 
 
 
 
 
 
 
73
1,297
 
2,299
                         
Assets Available for
    Plan Benefits
$209,718
$2,536,662
$736,685
$14,782
$7,375
$70,763
$10,356
$37,350
$2,130,180
$304,300
$46,335
$6,104,506
See accompanying notes.                      





Statement of Assets Available for Plan Benefits, with Fund Information
Chemical Financial Corporation 401 (k) Savings Plan
December 31, 1998

Fund Information
 
Intermediate
Bond
 
Index
Stock
and
Bond
Chemical
Financial
Corporation
Stock
Cash and
Money
Market
Participant
Loan
Total
ASSETS:              
  Investments at fair value:              
    Chemical Financial
      Corporation Common
      Stock		      
$2,040,820
    
$2,040,820
    Federated Investors
      Mutual Funds:		              
       Short-Intermediate
      Government Trust
$171,343
          
171,343
      Max-Cap Fund  
$1,923,651
        
1,923,651
      Treasury Obligations
         Fund		      
1,866
$239,862
  
241,728
    Fidelity Investments-
       Puritan Fund		    
$707,512
      
707,512
    Participant loans  
 		 
 		 
 		 
 		 
$38,169
38,169
Total Investments
171,343
1,923,651
707,512
2,042,686
239,862
38,169
5,123,223
               
Employee contributions
    receivable
1,479
13,382
5,097
9,281
1,534
  
30,773
Cash and accrued income
618
 
 		 
35
964
486
2,103
Assets Available for Plan
    Benefits
$173,440
$1,937,033
$712,609
$2,052,002
$242,360
$38,655
$5,156,099
See accompanying notes.              





Statement of Changes in Assets Available for Plan Benefits, with Fund Information
Chemical Financial Corporation 401 (k) Savings Plan
Year Ended December 31, 1999

Fund Information
 
Intermediate
Bond
Index
Stock and
Bond
Mid-Cap
Stock
Value
Stock
Growth
Stock
Low-Priced
Stock
International
Chemical
Financial
Corporation
Stock
Cash and
Money
Market
Fund
Participant
Loans
Total
Additions:                        
  Interest and dividend
    income and capital
    gain distributions
$   8,635 
$    45,394 
$ 57,225 
$ 1,159
$   330
 
 $    110
$    717
$    55,311 
$ 12,935 
$   3,083
$ 184,899 
  Employee                        
    contributions
34,513 
363,097 
157,435 
2,365
2,107
$  2,093
970
1,258
244,734 
44,692 
 
853,264 
                         
 
43,148 
408,491 
214,660 
3,524
2,437
2,093
1,080
1,975
300,045 
57,627 
3,083
1,038,183 
                         
Deductions:                        
  Participants'
   accounts distributed
   upon withdrawal
(3,846)
(83,176)
(83,241)
          
(42,666)
(67,133)
  
(280,062)
  Net transfers
    between funds
681 
(96,014)
(72,051)
10,824
4,866
57,331
8,763
30,999
(21,442)
71,446 
4,597
  
  Net realized and
    unrealized
    appreciation in fair
     value of		                        
     investments
(3,705)
370,328 
(35,292)
434
72
11,339
513
4,376
(157,759)
 
 
 190,306 
                         
               Net increase
36,278 
599,629 
24,076 
14,782
7,375
70,763
10,356
37,350
78,178 
61,940 
7,680
948,407 
                         
    Assets available for
      plan benefits at		                        
      beginning of year
173,440 
1,937,033 
712,609 
 
 
 
 
 
2,052,002 
242,360 
38,655
5,156,099 
                         
    Assets available for
      plan benefits at		                        
      end of year
$209,718 
$2,536,662 
$736,685 
$14,782
$ 7,375
$70,763
$10,356
$ 37,350
$2,130,180 
$304,300 
$46,335
$6,104,506 





Statement of Changes in Assets Available for Plan Benefits, with Fund Information
Chemical Financial Corporation 401 (k) Savings Plan
Year Ended December 31, 1998

Fund Information
 
Intermediate
Bond
Index
Stock and
Bond
Chemical
Financial
Corporation
Stock
Cash and
Money
Market
Participant
Loan
Total
Additions:              
  Interest and dividend income
     and capital gain distributions
$   7,472 
$    38,287 
$   72,496 
$     44,156 
$  10,722 
$   4,576 
$   177,709 
  Employee contributions
29,760 
318,881 
134,072 
232,139 
29,822 
 
744,674 
               
 
37,232 
357,168 
206,568 
276,295 
40,544 
4,576 
922,383 
               
Deductions:              
  Participants' accounts distributed
      upon withdrawal
(1,115)
(24,405)
(38,275)
(41,646)
(70,704)
(1,356)
(177,501)
  Net transfers between funds
(3,236)
(27,593)
(33,158)
20,054 
52,042 
(8,109)
  
  Net realized and unrealized appreciation              
      (depreciation) in  fair value of investments
1,781 
367,217 
23,335 
(118,703)
 
 
273,630 
               
                                Net increase (decrease)
34,662 
672,387 
158,470 
136,000 
21,882 
(4,889)
1,018,512 
               
     Assets available for plan benefits at              
           beginning of year
138,778 
1,264,646 
554,139 
1,916,002 
220,478 
43,544 
4,137,587 
               
      Assets available for plan benefits at              
         end of year
$173,440 
$1,937,033 
$712,609 
$2,052,002 
$242,360 
$38,655 
$5,156,099 
               
See accompanying notes.              





Notes to Financial Statements
 
Chemical Financial Corporation 401 (k) Savings Plan
 
December 31, 1999
 

NOTE A - - DESCRIPTION OF THE PLAN

        The Chemical Financial Corporation 401 (k) Savings Plan (the Plan) is a voluntary, defined-contribution plan covering all eligible employees of Chemical Financial Corporation (the Corporation or employer) and subsidiaries.

        The Plan provides for the deferral of salaries, wages and bonuses in accordance with Section 401 (k) of the Internal Revenue Code. Employees of the Corporation or any of its subsidiaries are eligible for participation upon attaining age 21 and completing one year of service. At December 31, 1999 there were 495 participants in the Plan. Participants may be eligible to contribute up to 15% of their annual compensation, up to a maximum of $10,000 in both 1999 and 1998. The employer made no contributions to the Plan during 1999 or 1998.

        Participants may direct their contributions into an intermediate bond fund, a stock index fund, a stock and bond fund, a money market fund, a Chemical Financial Corporation common stock fund and beginning January 1, 1999, a middle capitalization stock fund, a value stock fund, a growth stock fund, a low-priced stock fund and an international stock fund. Participants may select any combination of these funds, and may elect to change the percentage directed to each fund daily. All participant contributions are fully vested. Participant loans are permitted under the Plan. These loans are subject to a strict set of rules established by laws and regulations. As of December 31, 1999 the Plan had thirteen participant loans outstanding at interest rates ranging from 7.33%-11.45%.

        Information about the plan agreement and the vesting and benefit provisions is contained in the Summary Plan Description contained in the Chemical Financial Corporation Employee Handbook and is available along with information regarding investment alternatives from the Plan Administrator and Personnel Departments.

        The Corporation, acting through its Board of Directors, has the right to amend or terminate the Plan at any time.




Notes to Financial Statements (Continued)
 
Chemical Financial Corporation 401 (k) Savings Plan
 
December 31, 1999
 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES

        The financial statements have been prepared under the accrual basis of accounting in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

        Investments are stated at aggregate fair value. Securities traded on a national securities exchange are valued at the last reported sales price on the last business day of the Plan year. Investments traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the last reported bid price. Mutual funds are stated at the net asset value thereof on the last business day of the Plan year.

        Expenses incurred in connection with the operation of the Plan are borne by the Corporation.




Notes to Financial Statements (Continued)
 
Chemical Financial Corporation 401 (k) Savings Plan
 
December 31, 1999


NOTE C - - INVESTMENTS

During the years ended December 31, 1999 and December 31, 1998 the Plan's net appreciation (depreciation) in the fair value of investments (including investments bought, sold, as well as held during the year) is summarized as follows:

 
 
1999
  
1998
  
         
Intermediate Bond Fund
$   (3,705
 )
$    1,781
  
Index Fund
370,328
  
367,217
  
Stock and Bond Fund
(35,292
 )
23,335
  
Chemical Financial Corporation Common Stock Fund
(157,759
 )
(118,703
 )
Middle Capitalization Stock Fund
434
  
0
  
Value Stock Fund
72
  
0
  
Growth Stock Fund
11,339
  
0
  
Low-Priced Stock Fund
513
  
0
  
International Stock Fund
4,376
  
0
  
         
 
$ 190,306
  
$ 273,630
  

The fair value of individual investments that represent 5% or more of the Plan's net assets are as follows:

 
 
December 31
  
 
1999
  
1998
  
         
Federated Investors Mutual Funds:        
    Max-Cap Fund
$2,537,046
  
$1,923,651
  
    Treasury Obligations Fund
313,820
  
241,728
  
Fidelity Investments-Puritan Fund
736,696
  
707,512
  
Chemical Financial Common Stock
2,119,347
  
2,040,820
  







Notes to Financial Statements (continued)
 
Chemical Financial Corporation 401 (k) Savings Plan
 
December 31, 1999


NOTE D - - TRANSACTIONS WITH PARTIES-IN-INTEREST

The following is a summary of transactions (at cost) with parties-in-interest:

 

 
Chemical
Financial
Corporation
Common Stock
 
     
Balance at January 1, 1998
$1,234,153 
  
     
Purchases in 1998
379,041 
  
Sales in 1998
(62,840)
  
Distributions in 1998
(25,846)
  
Balance at December 31, 1998
1,524,508 
  
     
Purchases in 1999
418,904 
  
Sales in 1999
(116,728)
  
Distributions in 1999
(28,091)
  
Balance at December 31, 1999
$1,798,593
  
 

NOTE E - - INCOME TAX STATUS

        The Plan has received a determination letter from the Internal Revenue Service dated August 23,1994, stating that the Plan is qualified under section 401(a) of the Internal Revenue Code (the "Code") and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax exempt.

NOTE F - - YEAR 2000 READINESS DISCLOSURE (unaudited)

        The Corporation experienced no Year 2000 difficulties and, based on its knowledge as of the date of this report, does not expect any unforeseen Year 2000 problems.




Employee ID# 38-2022454
Plan # 002
Item 27a - Schedule of Assets Held for Investment Purposes
Chemical Financial Corporation 401 (k) Savings Plan
December 31, 1999
 
 Identity of Issue, Borrower, Lessor or
Similar Party
Description of Investment Including
Maturity Date, Rate of Interest,
Collateral, Par or Maturity Value
Fair Value
 
*Chemical Financial Corporation
    Common Stock		 Common Stock - 68,366 shares
$  2,119,347
  
       
Federated Investors Mutual Funds:      
    Short-Intermediate
     Government Trust		 Intermediate Bond Fund - 20,231 shares
208,823
  
    Max-Cap Fund Index Fund - 84,639 shares
2,537,046
  
    Mid-Cap Fund Middle Capitalization Stock Fund - 855 shares
14,782
  
    Stock Trust Value Fund - 204 shares
7,375
  
    Treasury Obligations Fund Money Market Fund - 313,764 shares
313,820
  
       
Fidelity Investments:      
    Puritan Fund Stock and Bond Fund - 38,711
736,696
  
    Diversified International International Stock Fund - 1,457 shares
37,350
  
    Low-Priced Stock Low-Priced Stock Fund - 457 shares
10,356
  
     Blue Chip Growth  Growth Stock Fund - 1,177 shares
70,763
 
       
 Total Mutual Funds  
3,937,011
 
       
Participant Loans Thirteen loans at interest rates ranging from
7.33%-11.45% and maturing 2/29/00-9/30/04
46,335
 
       
       
TOTAL INVESTMENTS  
$6,102,693
 
     
*Indicates party-in-interest to the Plan
There were no investment assets reportable as acquired and disposed of during the year.