ChoiceOne Financial Services has brokered a deal to acquire Community Shores Bank in cash and stock deal valued at approximately $21.9m in the US.
Headquartered in Muskegon, Michigan, Community Shores Bank Corporation is an approximately $204m asset bank holding company of Community Shores Bank. The bank serves businesses and consumers in the western Michigan counties of Muskegon and Ottawa from four branch offices.
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The merged entity will have nearly $1.5bn in assets and 33 offices in the west and southeastern Michigan.
ChoiceOne, the implied per share value to Community Shores shareholders is $5.31 per share if 75% stock is elected and $5.21 per share if 50% stock is elected.
The deal is expected to generate nearly 7% to 10% earnings per share accretion with full phased in and tangible book value dilution is expected to be earned back in 2.5 to three years.
Under the terms of the deal, Community Shores Bank Corporation shareholders will get $5 in cash or 0.17162 shares of ChoiceOne common stock for each Community Shores share held, which is subject to stock consisting of 50%-75% of the aggregate merger agreement.
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By GlobalDataChoiceOne CEO Kelly Potes said: “Joining forces with Community Shores is a natural geographical and cultural fit for ChoiceOne.
“It allows ChoiceOne to extend our footprint into Muskegon and Ottawa counties and enhance the commitment that both Community Shores Bank and ChoiceOne Bank have to our Michigan customers and communities.”
The deal is expected to be completed in the second quarter of this year.
The transaction is subject to the satisfaction of customary closing conditions, including receipt of approval from Community Shores’ shareholders.
The deal has been unanimously approved by the boards of directors of both companies.
Community Shores Bank CEO and president Heather Brolick said: “With similar cultures, values and commitments to our local communities, this merger will allow both organisations to better serve our customers in Muskegon and Ottawa counties.
“Both ChoiceOne Bank and Community Shores Bank have deep roots in West Michigan. This merger will allow us to enhance our impact on the local community, as well as combine our service cultures and ChoiceOne’s technology enhancements to better serve our customers.”
For the transaction, ProBank Austin is acting as financial advisor while Dickinson Wright is serving as legal counsel to Community Shores Bank.
On the other hand, Donnelly Penman and Partners is serving as financial advisor to ChoiceOne Financial Services, while Warner Norcross + Judd is serving as legal counsel to the company.
