CHFC 2018 Annual Report

Condensed Statements of Cash Flows Years Ended December 31, (Dollars in thousands) 2018 2017 2016 Cash Flows From Operating Activities Net income $ 284,020 $ 149,523 $ 108,032 Adjustments to reconcile net income to net cash provided by operating activities: Share-based compensation expense 8,578 17,346 13,452 Depreciation of premises and equipment 435 408 355 Equity in undistributed net (income) loss of subsidiaries (180,902) 2,694 (18,458) Net decrease in other assets 4,302 1,410 9,752 Net increase (decrease) in other liabilities 537 25,178 (11,830) Net cash provided by operating activities 116,970 196,559 101,303 Cash Flows From Investing Activities Cash paid, net of cash assumed, in business combinations — — (107,622) Purchases of premises and equipment, net (99) (288) (774) Net cash used in investing activities (99) (288) (108,396) Cash Flows From Financing Activities Cash dividends paid (88,954) (78,498) (49,389) Proceeds from issuance of common stock, net of issuance costs — — — Repayment of subordinated debt obligations — — (18,558) Repayments of other borrowings (20,000) (105,000) (62,500) Proceeds from issuance of other borrowings — — 125,000 Proceeds from directors' stock purchase plan and exercise of stock options 3,115 3,991 1,572 Cash paid for payroll taxes upon conversion of restricted stock units (5,316) (27,854) (1,065) Net cash used in financing activities (111,155) (207,361) (4,940) Net increase (decrease) in cash and cash equivalents 5,716 (11,090) (12,033) Cash and cash equivalents at beginning of year 5,761 16,851 28,884 Cash and cash equivalents at end of year $ 11,477 $ 5,761 $ 16,851 Business combinations: Fair value of assets acquired (noncash) $ — $ — $ 46,898 Liabilities assumed — — 58,309 Common stock and stock options issued — — 1,504,811 Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2018 163