8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported):  April 17, 2006

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

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

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

Registrant's telephone number, including area code:  (989) 839-5350

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

                    On April 17, 2006, Chemical Financial Corporation issued the press release attached as Exhibit 99.1 to this Form 8-K, which is here incorporated by reference. This Report and the Exhibit are furnished to, and not filed with, the Commission.

Item 9.01	Financial Statements and Exhibits.
	(d)	Exhibits:
		99.1	Press Release dated April 17, 2006. This Exhibit is furnished to, and not filed with, the Commission.

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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 hereunto duly authorized.

Dated:	April 17, 2006	CHEMICAL FINANCIAL CORPORATION (Registrant)
		/s/ Lori A. Gwizdala
		Lori A. Gwizdala      Executive Vice President, Chief Financial      Officer and Treasurer

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EXHIBIT INDEX

Exhibit Number	Document
99.1	Chemical Financial Corporation Press Release dated April 17, 2006. This Exhibit is furnished to, and not filed with, the Commission.

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EX-99.1

EXHIBIT 99.1

For further information:
Lori A. Gwizdala,
Chief Financial Officer
Chemical Financial Corporation
989 839 5358

For Immediate Release

Chemical Financial Corporation Reports First Quarter 2006 Earnings

          Midland, MI, April 17, 2006 -- Chemical Financial Corporation's (Nasdaq: CHFC) Board of Directors today reported earnings of $0.47 per diluted share for the first quarter of 2006 compared to first quarter 2005 earnings per diluted share of $0.53, a decrease of 11.3 percent. Net income for the first quarter of 2006 was $11.9 million compared to first quarter 2005 net income of $13.5 million.

          "As anticipated, the effects of higher interest rates continued to impact our financial results. During the first quarter of 2006, decreasing net interest income resulted from higher interest paid on deposits and short-term borrowings, which was only partially offset by increases in interest earned on loans," said David B. Ramaker, President and Chief Executive Officer of Chemical Financial Corporation.

          As announced previously, Chemical Financial Corporation is in the midst of a strategic restructuring which strives to position the Company to better capitalize on growth opportunities in high potential markets and enhance operating efficiencies.

          "We have made substantial progress implementing the restructuring plan during the first quarter of 2006 and are on schedule. We have also initiated a comprehensive, system-wide sales and service training program to help bolster our people and the growth initiatives at all of our 124 banking offices. While we believe the steps we are taking to control costs and stimulate revenue growth will translate into improved financial performance in the future, the short-term financial outlook remains challenging," added Ramaker.

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          During the first quarter of 2006, restructuring costs of $385,000 were incurred. Management had estimated that total costs for the restructuring would not exceed $800,000 in 2006 and would be incurred primarily during the first half of the year.

          Net interest income totaled $33.6 million in the first quarter of 2006, a decrease of 6.6 percent from first quarter 2005 net interest income of $35.9 million. Increased interest income from interest-earning assets was insufficient to overcome increased interest expense on interest-bearing liabilities, as well as the effects of a lower level of average earning assets. Net interest margin (on a tax equivalent basis) was 3.90 percent in the first quarter of 2006, down from 3.99 percent in the fourth quarter of 2005 and down from 4.11 percent in the prior year's first quarter. The decrease in the net interest margin during the first quarter of 2006 resulted primarily from increases in deposit rates.

          Total assets were $3.74 billion at March 31, 2006, down slightly from $3.75 billion at December 31, 2005 and down slightly from $3.80 billion at March 31, 2005. At March 31, 2006, total loans were $2.70 billion, versus $2.71 billion at December 31, 2005 and $2.58 billion at March 31, 2005. Investment securities were $673 million at March 31, 2006, down from $722 million at December 31, 2005 and $880 million at March 31, 2005. The decrease in investment securities was primarily attributable to the Corporation using excess liquidity from maturing investment securities to temporarily decrease wholesale borrowings.

          Total deposits were $2.87 billion at March 31, 2006, up from $2.82 billion at December 31, 2005 and down from $2.93 billion at March 31, 2005. In 2005, the markets in which the Company operates saw intense competition for retail deposits translate into increases in deposit pricing and a slight erosion in core deposits. In the first quarter of 2006, the Company experienced an increase in seasonal/municipal customer deposits. Other liabilities, which include Federal Home Loan Bank advances, totaled $367 million at March 31, 2006, down substantially from $428 million at December 31, 2005 and down from $382 million at March 31, 2005.

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          The provision for loan losses was $460,000 in the first quarter of 2006, compared to $1.33 million in the prior year fourth quarter and $730,000 in the first quarter of 2005. Net loan losses were $454,000 in the first quarter of 2006, compared to $1.78 million in the fourth quarter of 2005 and $725,000 in the first quarter of 2005. The allowance for loan losses as a percentage of total loans was 1.27 percent at March 31, 2006, up slightly from 1.26 percent at December 31, 2005 and down from 1.33 percent at March 31, 2005. At March 31, 2006, nonperforming loans as a percentage of total loans were 0.73 percent, unchanged from 0.73 percent at December 31, 2005 and up from 0.42 percent at March 31, 2005.

          Noninterest income was $9.8 million in the first quarter of 2006, reflecting a decrease of approximately $348,000 or 3.4 percent from the first quarter of 2005, as increases in fee income were unable to offset decreases in securities gains and mortgage banking revenue. For the first quarter of 2006, there were no net gains on sales of investment securities, whereas in the first quarter of 2005, the Company booked gains of approximately $1.1 million. Excluding gains on sales of investment securities, noninterest income increased 8.2 percent in the first quarter of 2006 compared to the first quarter of 2005.

          Services charges on deposit accounts increased 8.1 percent to $5.1 million in the first quarter of 2006 from $4.7 million in the first quarter of 2005. Other charges and fees for customer services increased to $2.1 million in the first quarter of 2006 from $1.7 million in the first quarter of 2005. First quarter 2006 trust and investment services revenue was essentially unchanged from the first quarter of 2005, at $2.0 million. Mortgage banking revenue fell by 13.5 percent to $423,000 in the first quarter of 2006 from $489,000 in the first quarter of 2005, but was up from fourth quarter 2005 mortgage banking revenue of $371,000. The Corporation was servicing $533 million of residential mortgage loans that were sold in the secondary market at March 31, 2006, compared to $589 million at March 31, 2005.

          Operating expenses were $25.1 million in the first quarter of 2006, up from $23.9 million in the fourth quarter of 2005 and up slightly from $25.0 million in the first quarter of 2005. Excluding $385,000 in expenses incurred with the strategic restructuring, operating expenses in the first quarter of 2006 were $24.7 million. The Company's efficiency ratio rose to 57.3 percent

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in the first quarter of 2006 from 54.7 percent in the first quarter of 2005, primarily as a result of the decrease in net interest income.

          The Company's return on average assets during the first quarter of 2006 was 1.28 percent, down from 1.43 percent in the prior year's first quarter. Shareholders' equity increased from $487 million at March 31, 2005 to $505 million at March 31, 2006. At March 31, 2006, the Company's book value stood at $20.10 per share versus $19.32 per share at March 31, 2005. The decline in return on assets combined with the increase in shareholders' equity resulted in a decline in return on average equity to 9.6 percent in the first quarter of 2006 from 11.2 percent in the first quarter of 2005.

          Chemical Financial Corporation is the fourth largest bank holding company headquartered in Michigan. The Company operates through a single subsidiary bank, Chemical Bank, with 124 banking offices spread over 32 counties in the lower peninsula of Michigan. At March 31, 2006, the Company had total assets of $3.74 billion. Chemical Financial Corporation common stock trades on The Nasdaq Stock Market under the symbol CHFC and is one of the issues comprising the Nasdaq Financial 100 index.

Forward-Looking Statements

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

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Chemical Financial Corporation Announces First Quarter Operating Results

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

(In thousands, except per share data)	March 31, 2006			December 31, 2005			March 31, 2005
Assets:
Cash due from banks	$	92,404		$	145,575		$	94,135
Federal funds sold		85,600			6,600			51,500
Interest-bearing deposits with unaffiliated banks		22,448			5,321			37,151
Investment securities - available for sale		571,262			594,491			720,752
Investment securities - held to maturity		102,222			127,806			159,467
Total Investment Securities		673,484			722,297			880,219
Other securities		25,683			21,051			19,986
Commercial loans		521,792			517,852			480,553
Real estate commercial loans		704,547			704,684			696,018
Real estate construction loans		157,087			158,376			122,951
Real estate residential loans		791,869			788,679			756,468
Consumer loans		522,558			540,623			520,800
Total Loans		2,697,853			2,710,214			2,576,790
Less: Allowance for loan losses		34,154			34,148			34,171
Net Loans		2,663,699			2,676,066			2,542,619
Premises and equipment		44,699			45,058			46,671
Intangible assets		70,822			71,496			73,728
Other assets		59,240			55,852			50,881
Total Assets	$	3,738,079		$	3,749,316		$	3,796,890
Liabilities:
Noninterest-bearing deposits	$	522,790		$	542,014		$	525,272
Interest-bearing deposits		2,343,349			2,277,866			2,402,675
Total Deposits		2,866,139			2,819,880			2,927,947
Interest payable and other liabilities		34,934			28,008			33,828
Securities sold under agreements to repurchase		129,392			125,598			94,445
Reverse repurchase agreements		10,000			10,000			-
Federal Home Loan Bank advances - short-term		35,000			68,000			-
Federal Home Loan Bank advances - long-term		158,093			196,765			253,979
Total Liabilities		3,233,558			3,248,251			3,310,199
Shareholders' Equity:
Common stock, $1 par value		25,101			25,079			25,185
Surplus		376,501			376,046			379,149
Retained earnings		111,501			106,507			87,096
Accumulated other comprehensive loss		(8,582	)		(6,567	)		(4,739	)
Total Shareholders' Equity		504,521			501,065			486,691
Total Liabilities and Shareholders' Equity	$	3,738,079		$	3,749,316		$	3,796,890

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Chemical Financial Corporation Announces First Quarter Operating Results

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

	Three Months Ended March 31,
(In thousands, except per share data)	2006		2005
Interest Income:
Interest and fees on loans	$	43,710	$	38,811
Interest on investment securities:
Taxable		6,342		7,564
Nontaxable		620		490
Total Interest on Investment Securities		6,962		8,054
Interest on other securities		341		217
Interest on federal funds sold		951		653
Interest on deposits with unaffiliated banks		313		225
Total Interest Income		52,277		47,960
Interest Expense:
Interest on deposits		15,074		9,193
Interest on securities sold under agreements to repurchase		1,059		348
Interest on reverse repurchase agreements		92		-
Interest on Federal Home Loan Bank advances - short-term		417		-
Interest on Federal Home Loan Bank advances - long-term		2,044		2,472
Total Interest Expense		18,686		12,013
Net Interest Income		33,591		35,947
Provision for loan losses		460		730
Net Interest Income after
Provision for Loan Losses		33,131		35,217
Noninterest Income:
Service charges on deposit accounts		5,097		4,716
Trust and investment services revenue		2,005		2,017
Other charges and fees for customer services		2,132		1,688
Mortgage banking revenue		423		489
Net gains on sales of investment securities		-		1,089
Other		175		181
Total Noninterest Income		9,832		10,180
Operating Expenses:
Salaries, wages and employee benefits		14,590		14,544
Occupancy and equipment		4,786		4,756
Other		5,745		5,683
Total Operating Expenses		25,121		24,983
Income Before Income Taxes		17,842		20,414
Provision for federal income taxes		5,945		6,910
Net Income	$	11,897	$	13,504
Net income per share:
Basic	$	0.47	$	0.54
Diluted		0.47		0.53
Cash dividends per share	$	0.275	$	0.265
Average shares outstanding:
Basic		25,097		25,183
Diluted		25,140		25,247

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Chemical Financial Corporation Announces First Quarter Operating Results

Financial Summary (Unaudited)
Chemical Financial Corporation and Subsidiaries

	Three Months Ended March 31,
(Dollars in thousands)	2006		2005
Average Balances
Total assets	$	3,770,833	$	3,822,046
Total interest-earning assets		3,535,728		3,585,659
Total loans		2,695,742		2,575,331
Total deposits		2,872,473		2,929,347
Total shareholders' equity		503,990		487,557

	Three Months Ended March 31,
	2006		2005
Key Ratios (annualized where applicable)
Net interest margin		3.90%		4.11%
Efficiency ratio		57.3%		54.7%
Return on average assets		1.28%		1.43%
Return on average shareholders' equity		9.6%		11.2%
Average shareholders' equity as a
percent of average assets		13.4%		12.8%
Tangible shareholders' equity as a
percent of total assets		11.8%		11.1%
Total risk-based capital ratio		18.1%		17.7%

	March 31, 2006		December 31, 2005		September 30, 2005		June 30, 2005		March 31, 2005
Credit Quality Statistics
Nonaccrual loans	$	13,902	$	14,561	$	9,913	$	8,639	$	7,823
Loans 90 or more days past due
and still accruing		5,773		5,136		10,364		7,426		2,914
Total nonperforming loans		19,675		19,697		20,277		16,065		10,737
Repossessed assets (RA)		8,411		6,801		6,511		5,848		6,544
Total nonperforming assets		28,086		26,498		26,788		21,913		17,281
Net loan charge-offs (year-to-date)		454		4,303		2,523		1,804		725
Allowance for loan losses as a
percent of total loans		1.27%		1.26%		1.28%		1.27%		1.33%
Allowance for loan losses as a
percent of nonperforming loans		174%		173%		171%		211%		318%
Nonperforming loans as a
percent of total loans		0.73%		0.73%		0.75%		0.61%		0.42%
Nonperforming assets as a
percent of total loans plus RA		1.04%		0.98%		0.99%		0.82%		0.67%
Nonperforming assets as a
percent of total assets		0.75%		0.71%		0.70%		0.59%		0.46%
Net loan charge-offs as a percent of
average loans (year-to-date, annualized)		0.07%		0.16%		0.13%		0.14%		0.11%

	March 31, 2006		December 31, 2005		September 30, 2005		June 30, 2005		March 31, 2005
Additional Data
Goodwill	$	63,293	$	63,293	$	63,293	$	63,293	$	63,293
Core deposits and other intangibles		5,246		5,780		6,306		6,797		7,324
Mortgage servicing rights (MSR)		2,283		2,423		2,595		2,941		3,111
Amortization of intangibles (quarter-to-date)		718		776		903		793		800

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Chemical Financial Corporation Announces First Quarter Operating Results

Selected Quarterly Information (Unaudited)
Chemical Financial Corporation and Subsidiaries

(In thousands, except per share data)	1st Qtr. 2006	4th Qtr. 2005	3rd Qtr. 2005	2nd Qtr. 2005	1st Qtr. 2005
Summary of Operations
Interest income	$52,277	$51,912	$50,420	$49,012	$47,960
Interest expense	18,686	16,852	15,274	13,314	12,013
Net interest income	33,591	35,060	35,146	35,698	35,947
Provision for loan losses	460	1,325	1,500	730	730
Net interest income after provision
for loan losses	33,131	33,735	33,646	34,968	35,217
Noninterest income	9,832	9,038	10,249	9,753	10,180
Noninterest expense	25,121	23,878	24,839	24,763	24,983
Income taxes	5,945	6,341	5,451	6,743	6,910
Net income	11,897	12,554	13,605	13,215	13,504
Per Common Share Data
Net income:
Basic	$0.47	$0.50	$0.54	$0.53	$0.54
Diluted	0.47	0.50	0.54	0.53	0.53
Cash dividends	0.275	0.265	0.265	0.265	0.265
Book value	20.10	19.98	19.82	19.68	19.32

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