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FirstBank (FBMI) in Alma, Mich., has redeemed its remaining shares issued in exchange for funds through the Troubled Asset Relief Program.
June 17 -
Mercantile Bank (MBWM) in Grand Rapids, Mich., posted another profitable quarter despite renewed efforts to purge bad assets.
January 15 -
Firstbank in Alma, Mich., plans to redeem its remaining Troubled Asset Relief Program shares for $17 million.
May 8
Mercantile Bank (MBWM) announced a deal Thursday that would make it the third-largest bank based in Michigan.
The $1.4 billion-asset Mercantile agreed to pay approximately $151.5 million for Firstbank (FBMI), the companies announced Thursday. Firstbank shareholders would receive an equal number of Mercantile shares.
Mercantile's stock closed at $18.77 per share Wednesday, and Firstbank's closed at $16.66. Mercantile is paying a premium of approximately 13% based on those stock values.
Mercantile also intends to issue a dividend of $2 per share before the deal closes; it would cost about $17.4 million.
The combined bank would have deposits of $2.3 billion, making it No. 3 in market share among banks with headquarters in Michigan. Mercantile's shareholders would own 52% of the combined company and Firstbank's shareholders 48%.
Firstbank Chief Executive Thomas Sullivan and Chief Financial Officer Sam Stone would join the executive team of the combined company, with Mercantile CEO Michael Price serving as president and CEO. The board would be composed of an equal number of former Mercantile and Firstbank directors, and Sullivan would serve as chairman for the first year following the closing. Price would become chairman thereafter.
Mercantile is based in Grand Rapids and has eight branches, all in Michigan. Firstbank is based in Alma and has two banking units: the $1.3 billion-asset Firstbank, with 41 branches in Michigan, and the $243 million-asset Keystone Community Bank, with seven branches in the state. The combined company would use the Mercantile name.
"I am extremely pleased to announce the combination of these two great Michigan community banks," Price said in a news release. "This is an exciting opportunity for our customers, our shareholders and our employees to create the premier Michigan community banking franchise."
Keefe, Bruyette & Woods advised Mercantile; Sandler O'Neill advised Firstbank. The companies expect to close the deal by yearend.
Firstbank
