CHFC 2017 Annual Report

Allowance for Loan Losses The following schedule presents, by loan portfolio segment, the changes in the allowance for the originated loan portfolio for the years ended December 31, 2017, 2016 and 2015. in thousands) Commercial loan portfolio Consumer loan portfolio Unallocated Total Originated Loan Portfolio Changes in allowance for loan losses for the year ended December 31, 2017: Beginning balance $ 51,201 $ 27,067 $ — $ 78,268 Provision for loan losses 19,007 4,293 — 23,300 Charge-offs (8,570) (8,297) — (16,867) Recoveries 4,495 2,691 — 7,186 Ending balance $ 66,133 $ 25,754 $ — $ 91,887 Changes in allowance for loan losses for the year ended December 31, 2016: Beginning balance $ 47,234 $ 26,094 $ — $ 73,328 Provision (benefit) for loan losses 9,788 5,087 — 14,875 Charge-offs (8,906) (6,396) — (15,302) Recoveries 3,085 2,282 — 5,367 Ending balance $ 51,201 $ 27,067 $ — $ 78,268 Changes in allowance for loan losses for the year ended December 31, 2015: Beginning balance $ 44,156 $ 28,803 $ 2,724 $ 75,683 Provision (benefit) for loan losses 7,275 1,949 (2,724) 6,500 Charge-offs (6,385) (7,116) — (13,501) Recoveries 2,188 2,458 — 4,646 Ending balance $ 47,234 $ 26,094 $ — $ 73,328 The following schedule presents by loan portfolio segment, details regarding the balance in the allowance and the recorded investment in loans at December 31, 2017 and 2016 by impairment evaluation method. (Dollars in thousands) Commercial Loan Portfolio Consumer Loan Portfolio Total Allowance for loan losses balance at December 31, 2017 attributable to: Loans individually evaluated for impairment $ 5,537 $ 2,465 $ 8,002 Loans collectively evaluated for impairment 60,596 23,289 83,885 Loans accounted for under ASC 310-30 — — — Total $ 66,133 $ 25,754 $ 91,887 Recorded investment (loan balance) at December 31, 2017: Loans individually evaluated for impairment $ 83,797 $ 28,080 $ 111,877 Loans collectively evaluated for impairment 5,573,389 4,062,163 9,635,552 Loans accounted for under ASC 310-30 2,803,341 1,604,497 4,407,838 Total $ 8,460,527 $ 5,694,740 $ 14,155,267 Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2017 125