CHFC 2017 Annual Report

Condensed Statements of Cash Flows Years Ended December 31, (Dollars in thousands) 2017 2016 2015 Cash Flows From Operating Activities Net income $ 149,523 $ 108,032 $ 86,830 Adjustments to reconcile net income to net cash provided by operating activities: Share-based compensation expense 17,346 13,452 3,478 Depreciation of premises and equipment 408 355 318 Equity in undistributed net loss (income) of subsidiaries 2,694 (18,458) (35,799) Net decrease in other assets 1,410 9,752 2,873 Net increase (decrease) in other liabilities 25,178 (11,830) (19,033) Net cash provided by operating activities 196,559 101,303 38,667 Cash Flows From Investing Activities Cash paid, net of cash assumed, in business combinations — (107,622) (45,267) Purchases of premises and equipment, net (288) (774) (320) Net cash used in investing activities (288) (108,396) (45,587) Cash Flows From Financing Activities Cash dividends paid (78,498) (49,389) (36,918) Proceeds from issuance of common stock, net of issuance costs — — — Repayment of subordinated debt obligations — (18,558) — Repayments of other borrowings (105,000) (62,500) — Proceeds from issuance of other borrowings — 125,000 25,000 Proceeds from directors' stock purchase plan and exercise of stock options 3,991 1,572 2,473 Cash paid for payroll taxes upon conversion of restricted stock units (27,854) (1,065) (571) Net cash used in financing activities (207,361) (4,940) (10,016) Net decrease in cash and cash equivalents (11,090) (12,033) (16,936) Cash and cash equivalents at beginning of year 16,851 28,884 45,820 Cash and cash equivalents at end of year $ 5,761 $ 16,851 $ 28,884 Business combinations: Fair value of assets acquired (noncash) $ — $ 46,898 $ 10,304 Liabilities assumed — 58,309 42,019 Common stock and stock options issued — 1,504,811 159,904 Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2017 157