Banking & Finance and Retail

Bank makes $26M acquisition

November 5, 2014
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Bank makes $26M acquisition
Midland-based Chemical Bank operates branches across Michigan, including downtown Benton Harbor. Photo via fb.com

A statewide bank with a strong presence in the region is acquiring a community bank in an all-stock transaction valued at roughly $26 million.

The deal

The board of directors of Chemical Financial Corporation in Midland, a holding company for Chemical Bank, and Monarch Community Bancorp in Coldwater, with its banking subsidiary, Monarch Community Bank, said this week that they’ve signed a definitive merger agreement.

Chemical Financial’s acquisition of Monarch, which is based on Chemical's closing stock price as of Oct. 31, will allocate 0.0982 shares of Chemical common stock to Monarch’s shareholders for each share they own.

The closing transaction is anticipated to take place in the first quarter of 2015, which is dependent on closing conditions and regulatory and Monarch shareholder approvals.

Due to the intention to consolidate Monarch Community Bank into Chemical Bank and operate under the Chemical name, Chemical anticipates a cost savings of about 40 percent of Monarch’s operating expenses.

On a proforma basis, Chemical has $7.4 billion in assets and more than 182 banking offices across the southwestern, central and northern regions of Michigan.

Monarch has $177 million in assets, $136 million in loans and $144 million in deposits as of Sept. 30.

Monarch also has full-service banking locations in Hillsdale, Marshall and Union City, as well as lending offices in Adrian, Battle Creek, Brighton, East Lansing, Grand Haven, Jackson and Angola, Ind.

The acquisition by Chemical Financial follows on the heels of its recent acquisition of Northwestern Bancorp.

Michigan’s southern border

David Ramaker, chairman, CEO and president of Chemical Financial, said Monarch’s values, culture and dedication to service mirror those at Chemical, and the community bank is a good strategic fit.

“This partnership with Monarch and its talented group of community-oriented bankers led by Richard DeVries . . . gives us an increased and important presence along the Michigan-Indiana border, enhancing our south region footprint,” Ramaker said. “It’s a great fit with a great group of people and communities. We look forward to Rick joining our team.”

Richard DeVries, president and CEO of Monarch, said Chemical’s robust line of client-centered services and products and focus on serving Michigan communities were attractive to Monarch and its shareholders in pursuing the deal.

“We are delighted to be joining the Chemical Bank family,” DeVries said. “We view Chemical as the premier banking franchise in Michigan and believe this partnership will greatly benefit our customers, employees and the communities we serve.”

Advisors

Monarch was advised by the investment banking firm Donnelly Penman & Partners and Howard and Howard Attorneys.

Chemical Financial was advised by Keefe Bruyette & Woods, an investment banking firm, and the law firm Warner Norcross & Judd.  

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