Teachers Credit Union (TCU) has signed an agreement to acquire New Buffalo Savings Bank from New Bancorp.

The acquisition is part of TCU’s strategy to boost presence in the state of Michigan.

The deal will also increase its total assets to around $3.2bn and total number of branches to 57.

Under the terms of the acquisition, New Bancorp shareholders will receive $28.42 per share in cash.

If TCU is allowed to assume a liquidation account currently maintained by New Buffalo, the share price is expected to increase to $31.23 per share. Overall, the transaction is valued at $21.3m.

Established in 1921, New Buffalo Savings Bank has three banking locations at New Buffalo, Sawyer and Three Oaks.

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After the transaction is completed, New Buffalo will merge into TCU and New Bancorp will cease to exist.

The overall integration is expected to be completed in 45 days after the completion of the transaction.

TCU president and CEO Paul Marsh said: “This acquisition will allow us to expand our footprint and better serve our members in southwestern Michigan and it will result in better banking access for New Buffalo Savings Bank’s customers as well.

I look forward to a positive transition as the cultures of both organizations are strong, and we share a commitment to the community and the members and customers we serve.”

Subject to customary closing conditions, the New Buffalo Savings Bank acquisition will complete in the second half of this year.