Regulatory Capital

9 Months Ended

Sep. 30, 2011

Regulatory Capital [Abstract]

Regulatory Capital

Note 7: Regulatory Capital

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 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.

At September 30, 2011, December 31, 2010 and September 30, 2010, 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 Corporation’s and Chemical Bank’s 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
	(In thousands)
September 30, 2011
Total Capital to Risk-Weighted Assets:
Corporation	$	493,976		13.1	%	$	302,360		8.0	%		N/A		N/A
Chemical Bank		486,207		12.9			302,149		8.0		$	377,686		10.0	%
Tier 1 Capital to Risk-Weighted Assets:
Corporation		446,217		11.8			151,180		4.0			N/A		N/A
Chemical Bank		438,480		11.6			151,074		4.0			226,612		6.0
Leverage Ratio:
Corporation		446,217		8.6			206,656		4.0			N/A		N/A
Chemical Bank		438,480		8.5			206,613		4.0			258,266		5.0
December 31, 2010
Total Capital to Risk-Weighted Assets:
Corporation	$	473,471		12.9	%	$	293,856		8.0	%		N/A		N/A
Chemical Bank		465,709		12.7			293,573		8.0		$	366,966		10.0	%
Tier 1 Capital to Risk-Weighted Assets:
Corporation		427,014		11.6			146,928		4.0			N/A		N/A
Chemical Bank		419,296		11.4			146,786		4.0			220,179		6.0
Leverage Ratio:
Corporation		427,014		8.4			204,426		4.0			N/A		N/A
Chemical Bank		419,296		8.2			204,291		4.0			255,363		5.0
September 30, 2010
Total Capital to Risk-Weighted Assets:
Corporation	$	500,253		13.7	%	$	292,057		8.0	%		N/A		N/A
Chemical Bank		488,346		13.4			291,454		8.0		$	364,318		10.0	%
Tier 1 Capital to Risk-Weighted Assets:
Corporation		454,074		12.4			146,028		4.0			N/A		N/A
Chemical Bank		442,260		12.1			145,727		4.0			218,591		6.0
Leverage Ratio:
Corporation		454,074		8.8			205,361		4.0			N/A		N/A
Chemical Bank		442,260		8.6			205,080		4.0			256,350		5.0