Terms

Series

5.70% Series C Non-Cumulative Perpetual Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

5.7%

Rate Type

Fixed

Annual Dividend

$1.43

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

December 1, 2022

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Creditors And Debt Obligations Of The Corporation, Any Senior Preferred Stock Issued With Requisite Holder Consent; Pari Passu With: Other Parity Preferred Stock Series; Senior To: Common Stock, Any Junior Preferred Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.001

Shares Offered

7,000,000

Prospectus Summary

Chemical Financial Corporation (soon to be renamed TCF Financial Corporation) is issuing depositary shares, each representing a 1/1,000th interest in a share of its 5.70% Series C Non-Cumulative Perpetual Preferred Stock, with a liquidation preference of $25,000 per underlying share ($25 per depositary share). Dividends are paid quarterly on March 1, June 1, September 1, and December 1 at an annual rate of 5.70% ($1.425 per depositary share). The stock is non-cumulative: if the board does not declare a dividend for any period, that dividend is permanently forfeited — holders have no right to recover it in future periods. The shares are perpetual with no stated maturity, but are callable at par beginning December 1, 2022. The Series C Preferred Stock ranks senior to common stock and on parity with other preferred series, but is junior to all debt obligations and creditor claims of the Corporation. As a holding company issue, it is structurally subordinated to all liabilities of Chemical's banking subsidiaries. A regulatory capital call provision allows the issuer to redeem all outstanding shares within 90 days if a change in law, regulation, or official interpretation (occurring on or after September 7, 2017) creates more than an insubstantial risk that the preferred stock will no longer qualify as full Tier 1 capital — a meaningful risk for bank holding company preferreds subject to evolving Basel/Federal Reserve capital rules. Any redemption requires prior Federal Reserve approval. At a $25 liquidation preference, the 5.70% fixed rate produces approximately $1.425 per depositary share annually ($0.356 per quarter). Record dates fall on the 15th of the month preceding each payment month. As dividends from a domestic corporation, they are expected to qualify for the preferential 15%/20% qualified dividend income (QDI) rate for individual holders and the dividends-received deduction (DRD) for corporate holders, though the prospectus does not provide an explicit tax opinion. The dividend stopper prevents payment of common stock dividends or junior preferred dividends — and restricts repurchases of junior securities — if Series C dividends for the current period have not been declared and set aside in full, providing a modest structural protection for preferred holders.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Chemical has not paid or set aside full dividends on the Series C Preferred Stock for the current dividend period, it cannot pay dividends on or repurchase its common stock or other junior securities, and may not repurchase parity preferred stock except on a pro rata basis.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 75 (Strong)