CHFC 2017 Annual Report

occurrence of any such event in the future could have a material adverse effect on our business, financial condition and results of operations. Risks Related to Our Common Stock Investments in our common stock involve risk. The market price of our common stock may fluctuate significantly in response to a number of factors, including, among other things: • Variations in quarterly or annual results of operations • Changes in dividends paid per share • Deterioration in asset quality, including declining real estate values • Changes in interest rates • Changes in tax laws • Significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by, or involving, the Corporation or its competitors • Failure to integrate acquisitions or realize anticipated benefits from acquisitions • Regulatory actions, including changes to regulatory capital levels, the components of regulatory capital and how regulatory capital is calculated • New regulations that limit or significantly change the Corporation's ability to continue to offer existing banking products • Volatility of stock market prices and volumes • Issuance of additional shares of common stock or other debt or equity securities of the Corporation • Changes in market valuations of similar companies • Uncertainties, disruptions and fluctuations in the credit and financial markets, either nationally or globally • Changes in securities analysts' estimates of financial performance or recommendations • New litigation or contingencies or changes in existing litigation or contingencies • New technology used, or services offered, by competitors • Breaches in information security systems of the Corporation and/or its customers and competitors • Changes in accounting policies or procedures required by standard setting or other regulatory agencies • New developments in the financial services industry • News reports relating to trends, concerns and other issues in the financial services industry • Perceptions in the marketplace regarding the financial services industry, the Corporation and/or its competitors • Rumors or erroneous information • Geopolitical conditions such as acts or threats of terrorism or military conflicts We may issue debt and equity securities that are senior to our common stock as to distributions and in liquidation, which could negatively affect the value of our common stock. In the future, we may increase our capital resources by entering into debt or debt-like financing or issuing debt or equity securities, which could include issuances of senior notes, subordinated notes, preferred stock or common stock. In the event of our liquidation, our lenders and holders of our debt securities and preferred stock would receive a distribution of our available assets before distributions to the holders of our common stock. Our decision to incur debt and issue securities in future offerings may depend on market conditions and other factors beyond our control. We cannot predict or estimate the amount, timing or nature of our future offerings and debt financings, if any. Future offerings could reduce the value of shares of our common stock and dilute a shareholder's interest in the Corporation. The Corporation relies on dividends from Chemical Bank for most of its revenue. The Corporation is a separate and distinct legal entity from Chemical Bank. It receives substantially all of its revenue from dividends from Chemical Bank. These dividends are the principal source of funds to pay cash dividends on the Corporation's common stock. Various federal and/or state laws and regulations limit the amount of dividends that Chemical Bank may pay to the Corporation. In the event Chemical Bank is unable to pay dividends to the Corporation, the Corporation may not be able to pay cash dividends on its common stock. The earnings of Chemical Bank have been the principal source of funds to pay cash dividends to shareholders. Over the long-term, cash dividends to shareholders are dependent upon earnings, as well as capital requirements, regulatory restraints and other factors affecting Chemical Bank. See the section captioned "Supervision and Regulation" in Item 1. Business and Note 20 - Regulatory Capital and Reserve Requirements in the notes to our Consolidated 27