Chemical Acquires Caledonia Bank

September 26, 2003
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MIDLAND — Chemical Financial Corp. announced late yesterday that it plans to acquire Caledonia Financial Corp., holding company for the State Bank of Caledonia, in a $55.3 million deal it expects to complete in the fourth quarter of this year.

Caledonia Financial shareholders will get $39 for each share of Caledonia common stock.

David B. Ramaker, president and CEO of Chemical Financial, will be chairman and CEO and Lawrence B. Fitch, president and CEO of Caledonia Financial, will be president of the merged bank.

Caledonia Financial had total assets of $210 million, total deposits of $181 million and total shareholders’ equity of $21.3 million as of June 30. It has four banking offices in Kent, Kalamazoo and Barry counties.

Midland-based Chemical Financial is a bank holding company with three subsidiary banks operating 129 offices and two loan production offices across 32 counties in Michigan’s lower peninsula.

Chemical’s total assets were $3.6 billion as of June 3, and it ranks as the fourth largest bank holding company headquartered in Michigan.

The company plans to fold Caledonia Financial’s offices in Caledonia, Middleville and Dutton into Chemical Bank West and fold Caledonia’s Kalamazoo office into Chemical Bank Shoreline.

Ramaker said the acquisition helps solidify Chemical’s entry into the southern portion of the Grand Rapids marketplace and also provides the company with a much bigger presence in the Kalamazoo market.

The acquisition is about the same size as was Chemical’s acquisition of Bank West a couple of years ago, he said.

“We are always in acquisition mode, but for the last couple of years there have not been a lot opportunities out there.”

The two banks are a good fit, he believes.

“State Bank of Caledonia is a community bank and has a lot of the same types of philosophies with regards to how they provide personalized service to their customers. That’s exactly what we try to do with our customer base,” he said.

“We need to get larger in the Grand Rapids marketplace in order to offer more services to customers there, and this helps us to do that.”

As Fitch sees it, the merger offers current Caledonia customers a wider variety of banking products and financial services, such as cash management and trust and investment management services.

“This will enhance our ability to satisfy all of the financial services needs of our customers,” he said.

The merger hinges on approval by Caledonia shareholders, as well as banking regulators’ approval.

Ramaker said the bank is already in the process of seeking regulatory approval. He anticipates the shareholder meeting will take place sometime in November and that the regulatory approval process will still be going on at that time.   

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