CHFC 2018 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, 2018, 2017 and 2016. (Dollars in thousands) Commercial loan portfolio Consumer loan portfolio Total Originated Loan Portfolio Changes in allowance for loan losses for the year ended December 31, 2018: Beginning balance $ 66,133 $ 25,754 $ 91,887 Provision for loan losses 22,656 7,674 30,330 Charge-offs (9,563) (8,901) (18,464) Recoveries 3,533 2,278 5,811 Ending balance $ 82,759 $ 26,805 $ 109,564 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 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 The following schedule presents, by loan portfolio segment, the changes in the allowance for the acquired loan portfolio for the year ended December 31, 2018. There was no allowance established for the acquired loan portfolio for the years ended December 31, 2017 and 2016. (Dollars in thousands) Commercial loan portfolio Consumer loan portfolio Total Acquired Loan Portfolio Changes in allowance for loan losses for the year ended December 31, 2018: Beginning balance $ — $ — $ — Provision for loan losses 420 — 420 Charge-offs — — — Recoveries — — — Ending balance $ 420 $ — $ 420 Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2018 130