Michigan community banks strike deal to merge

ChoiceOne Financial Services in Sparta, Michigan, said Thursday it agreed to acquire in-state rival Fentura Financial in Fenton for $180.4 million in stock. The price tag put Fentura at 134.6% of its tangible book value.

The $2.6 billion-asset ChoiceOne said in a press release it expected to close the transaction in the first quarter of 2025. The combination would create the third-largest publicly traded bank based in Michigan with approximately $4.3 billion of assets and bolster ChoiceOne's metropolitan Detroit footprint. Overall, it would have 56 offices in western, central and southeastern Michigan.

"This transaction will allow ChoiceOne to strengthen its presence in the suburbs of Detroit while adding the markets of Flint and Saginaw. We remain committed to our local Michigan communities, and this transaction will enhance that commitment," ChoiceOne CEO Kelly Potes said in the release.

ChoiceOne said it expected the acquisition to be more than 30% accretive to its 2025 earnings per share. Within three years, the company expects to earn back 18.2% dilution to its tangible book value.

The buyer would trim about 28% of Fentura's annual noninterest expenses. It expects  $18.7 million of merger-related charges.

M&A

ACNB in Gettysburg to acquire Pennsylvania peer Traditions Bancorp

The $73.5 million all-stock deal, slated to close early in 2025, would create a bank with more than $3 billion of assets.

By Jim Dobbs

July 24

ChoiceOne also said Wednesday it would raise about $30 million in a stock offering. It said that, in addition to supporting the Fentura deal, it would use the proceeds for general corporate purposes, including supplementing regulatory capital ratios.

The Michigan merger marked the second all-stock acquisition announced this week. On Wednesday, ACNB Corp. in Gettysburg, Pennsylvania, said it inked a deal to acquire Traditions Bancorp in York, Pennsylvania, for $73.5 million.

The $2.5 billion-asset ACNB said in a press release that its bid for the $859 million-asset Traditions was expected to be finalized in the first quarter of 2025. After closing, Traditions' shareholders would also receive a quarterly cash dividend equal to about 23 cents a share.

The deal priced Traditions at 109% of its tangible book value. 

The acquisitions announced this week add to a growing list in 2024. There have been more than 55 bank deals announced so far this year, putting the sector on track to top 2023's 99 deal announcements, according to S&P Global Market Intelligence data.