Bank expands footprint with $4M acquisition
A bank in the region has acquired a one-branch bank in a $4-million deal to expand its presence near the lakeshore.
Sturgis Bancorp, the parent company of Sturgis Bank & Trust Company in Sturgis, near the state’s southern border, said last week that it has agreed to purchase West Michigan Savings Bank, which operates a single branch in Bangor, just southeast of South Haven.
Sturgis Bank & Trust operates 11 branches in southwest Michigan. West Michigan Savings Bank’s Bangor location will operate as a Sturgis Bank & Trust branch under the deal.
"The acquisition of West Michigan Savings Bank is a natural, synergistic extension of our presence in Van Buren County," said Eric Eishen, president and CEO, Sturgis Bancorp. "We believe expanding our footprint into Bangor, with the addition of West Michigan's solid core deposit base, will complement our existing business in South Haven nicely.”
West Michigan Savings Bank will be consolidated into Strugis Bank & Trust Company in an all-cash transaction totaling $4 million, with a per-share transaction price payable to shareholders of $400.
The transaction is expected to be completed late in the first quarter of 2015, subject to bank regulators and West Michigan Saving Bank shareholders.
The consolidated company will have about $353 million in assets, $255 million in loans and $271 million in deposits.
“We also believe the transaction will be beneficial to our existing shareholders, as we expect it to generate double-digit annual earnings accretion from the outset, with a tangible book value dilution earn-back period of approximately three years,“ Eishen said.
Sturgis Bancorp is being advised by the banking firm Boenning & Scattergood and the law firms Warner Norcross & Judd and Dresser Dresser Haas & Caywood.
West Michigan Savings Bank is being advised by the banking firm Donnelly Penman and Partners and the law firm Bodman.
The transaction is Strugis’ first whole-bank acquisition following 25 years of branch purchases.
“We are excited to build upon the legacy that West Michigan Savings Bank has created during its 130-year history and expand upon the product offerings and level of service that its customers have come to expect,” Eishen said.
West Michigan Savings Bank was organized in 1882.
"We welcome the opportunity to join with Sturgis Bank & Trust Company," said Douglas Merriman, president and CEO, West Michigan Savings Bank. "We have faithfully served the Bangor community for well over a century, but felt that partnering with another institution with greater scale and resources would be in the best interests of our shareholders and customers going forward."