Keweenaw Financial has signed a definitive agreement to acquire North Star Financial Holdings and its subsidiary Main Street Bank.

Under the terms of the agreement, Keweenaw Financial will pay $42m in cash to North Star as consideration.

The acquisition will combine Main Street Bank with Keweenaw Financial banking subsidiary Superior National Bank and Trust.

Once complete, the combined lender will have assets more than $800m. It will also have 11 bank branches and four loan origination offices.

The deal will help Superior National to bolster its lending capacity as well as provide Main Street customers with access to Superior National’s services.

It will be headquartered in Hancock, Michigan, while Superior National’s local board of directors will govern the entity.

Superior National Bank president and CEO Dave Vlahos said: “This acquisition brings two strong banking teams together and gives us greater capacity to invest in better products and services for our customers.

“We’re expanding our geography and service area as well as enhancing our team with a larger suite of banking products and tools to better serve customers.

“The long-term impact is smart, measured growth for Superior National, with continued high levels of customer satisfaction at the centre.”

The transaction is expected to close in the first quarter of 2020, subject to customary closing conditions and regulatory approvals.