Acquisitions

3 Months Ended

Mar. 31, 2012

Acquisitions [Abstract]

ACQUISITIONS

Note 2: Acquisition

On April 30, 2010, the Corporation acquired OAK for total consideration of $83.7 million. OAK, a bank holding company, owned Byron Bank, which provided traditional banking services and products through 14 banking offices serving communities in Ottawa, Allegan and Kent counties in west Michigan. Byron Bank was consolidated with and into Chemical Bank on July 23, 2010. At the acquisition date, 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.

Upon acquisition, the OAK loan portfolio had contractually required principal and interest payments receivable of $683 million and $97 million, respectively, expected principal and interest cash flows of $636 million and $88 million, respectively, and a fair value of $627 million. The difference between the contractually required payments receivable and the expected cash flows represents the nonaccretable difference, which totaled $56 million at the acquisition date, with $47 million attributable to expected credit losses. The difference between the expected cash flows and fair value represents the accretable yield, which totaled $97 million at the acquisition date. The outstanding contractual principal balance and the carrying amount of the acquired loan portfolio were $508 million and $473 million, respectively, at March 31, 2012, compared to $530 million and $493 million, respectively, at December 31, 2011 and $583 million and $539 million, respectively, at March 31, 2011.

Activity for the accretable yield, which includes contractually due interest, of acquired loans follows:

	Three Months Ended March 31,
	2012			2011
	(In thousands)
Balance at beginning of period	$	43,359		$	72,863
Additions		—			—
Reductions		—			—
Accretion recognized in interest income		(6,575	)		(8,738	)
Reclassification from (to) nonaccretable difference		—			—
Balance at end of period	$	36,784		$	64,125