CHFC 2017 Annual Report

affecting the Corporation and Chemical Bank. On January 23, 2018, we declared a cash dividend on our common stock of $0.28 per share. The dividend will be paid on March 16, 2018 to shareholders of record as of March 2, 2018. Refer to Note 20 to our Consolidated Financial Statements for a further discussion of factors affecting cash dividends. 65 Capital Capital supports current operations and provides the foundation for future growth and expansion. Total shareholders' equity was $2.67 billion at December 31, 2017, an increase of $87.2 million, or 3.4%, from total shareholders' equity of $2.58 billion at December 31, 2016. Total shareholders' equity as a percentage of total assets was 13.8% at December 31, 2017, compared to 14.9% at December 31, 2016. Tangible equity, which is defined as total shareholders' equity less goodwill and other acquired intangible assets, totaled $1.51 billion and $1.43 billion at December 31, 2017 and 2016, respectively. Our tangible equity to tangible assets ratio was 8.3% and 8.8% at December 31, 2017 and 2016, respectively. Tangible equity and the tangible equity to tangible assets ratio are non-GAAP financial measures. Please refer to the section entitled "Non-GAAP Financial Measures" for a reconciliation to the closest GAAP financial measure. Regulatory Capital Under the regulatory "risk-based" capital guidelines in effect for both banks and bank holding companies, minimum capital levels are based upon perceived risk in the Corporation's and Chemical Bank's various asset categories. These guidelines assign risk weights to on- and off-balance sheet items in arriving at total risk-weighted assets. Regulatory capital is divided by the computed total of risk-weighted assets to arrive at the risk-based capital ratios. Risk-weighted assets for the Corporation and Chemical Bank totaled $14.74 billion and $14.70 billion, respectively, at December 31, 2017, compared to $13.42 billion and $13.36 billion, respectively, at December 31, 2016. The increase in risk-weighted assets during 2017 was largely attributable to originated loan growth. In July 2013, the Federal Reserve Board and FDIC approved final rules implementing the Basel Committee on Banking Supervision's ("BCBS") capital guidelines for U.S. banks (commonly referred to as "Basel III"). Beginning January 1, 2015, the Basel III capital rules include a new minimum common equity Tier 1 capital to risk-weighted assets ("CET Tier 1") ratio of 4.5%, in addition to raising the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0% and requiring a minimum leverage ratio of 4.0%. The Basel III capital rules also establish a new capital conservation buffer of 2.5% of risk-weighted assets, which is phased-in over a four-year period beginning January 1, 2016. The Corporation and Chemical Bank both continue to maintain strong capital positions, which exceeded the minimum capital adequacy levels prescribed by the Board of Governors of the Federal Reserve System (Federal Reserve) at December 31, 2017, as shown in the following schedule: December 31, 2017 Leverage Ratio Risk-Based Capital Ratios CET Tier 1 Tier 1 Total Actual Capital Ratios: Chemical Financial Corporation 8.3% 10.2% 10.2% 11.0% Chemical Bank 8.4 10.3 10.3 11.0 Minimum required for capital adequacy purposes plus conservation buffer 4.0 5.8 7.3 9.3 Minimum required for "well-capitalized" capital adequacy purposes 5.0 6.5 8.0 10.0 As of December 31, 2017, the Corporation and Chemical Bank's capital ratios exceeded the minimum levels required to be categorized as well-capitalized, as defined by applicable regulatory requirements. See Note 20 to our Consolidated Financial Statements for more information regarding the Corporation's and Chemical Bank's regulatory capital ratios. Common Stock Repurchase Programs From time to time, the board of directors approves common stock repurchase programs allowing the repurchase of shares of our common stock in the open market. The repurchased shares are available for later reissuance in connection with potential future stock dividends, employee benefit plans and other general corporate purposes. Under these programs, the timing and actual number of shares subject to repurchase are at the discretion of management and are contingent on a number of factors, including the projected parent company cash flow requirements and our share price. In January 2008, the board of directors authorized the repurchase of up to 500,000 shares of our common stock under a stock repurchase program. In November 2011, the board of directors reaffirmed the stock buy-back authorization with the qualification that the shares may only be repurchased if the share price is below the tangible book value per share of our common