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Sunday, 10 July 2016 13:35

Two Michigan bank deals move ahead

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Two large bank mergers affecting the Michigan market are progressing, with one securing shareholder approval and another awaiting a vote in the coming weeks.

Shareholders at Talmer Bancorp Inc. are scheduled to vote July 14 on the proposed $1.1 billion merger with Midland-based Chemical Financial Corp., whose shareholders will weigh in on the deal five days later on July 19.

If approved by shareholders, and subsequently by state and federal regulators, the merger would give Chemical Financial (Nasdaq: CHFC) more than $16 billion in assets and 266 offices, mostly in Michigan and northeast Ohio. 

After growing in recent years through a series of acquisitions, most recently via a deal for Holland-based Lake Michigan Financial Corp., the Talmer acquisition would move Chemical Financial into the Southeast Michigan market.

Talmer Bancorp (Nasdaq: TLMR), the holding company for Talmer Bank and Trust, has 51 branches and lending offices in Michigan, plus locations in Ohio, Illinois, Indiana and Nevada with about $6.6 billion in assets. In West Michigan, Talmer Bank & Trust operates branches in Grand Rapids, Portage, Holland, Muskegon and Grand Haven. The offices stem from when it purchased the former Michigan Commerce Bank’s assets in early 2014 from the bankrupt Capital Bancorp in Lansing.

As shareholder votes loom for that deal, Huntington Bancshares Inc.’s $3.4 billion acquisition of FirstMerit Corp. awaits regulatory action. Shareholders from both banks in mid-June gave their blessing to the merger, which would create an institution with offices in eight states across the Midwest and assets of more than $100 billion.

The Huntington-FirstMerit deal drew objections from advocacy groups over the planned closure of 107 branches in five states, including 34 in Michigan. The bank targets the closures for early 2017 after the acquisition is completed. Parties challenging the merger, including New York-based watchdog group Inner City Press/Fair Finance Watch, worry about the effect the closures would have on local communities.

Huntington (Nasdaq: HBAN), one of the market leaders in West Michigan, says the branch closures would eliminate office redundancies in selected markets. In most instances, offices targeted for closure are nearby another branch location.

In West Michigan, the Grand Haven FirstMerit office will consolidate into a nearby Huntington branch about a mile away on Beacon Boulevard. The Portage FirstMerit office on Centre Avenue is less than two miles from a Huntington Bank branch. Meanwhile, the Muskegon FirstMerit office on West Norton Avenue is a few blocks away from a Huntington Bank branch on Henry Street.

Once the deal closes, Sandra Pierce, FirstMerit’s chair and CEO in Michigan, will become senior executive vice president of the private client group and regional banking director and chair of Huntington’s Michigan operation. In Grand Rapids, John Irwin continues as regional president for West Michigan, reporting to Pierce.

Inner City Press/Fair Finance Watch also has challenged the Chemical-Talmer deal. The advocacy group claims Chemical Financial has a “weak record of (lending) to people of color and lower income people, and of consumer compliance.” The group asked the Federal Reserve Board to extend the public comment period, which it has yet to do.

In an email to MiBiz in May, Chemical Bank noted that it received an “outstanding” rating in its last federal Community Reinvestment Act exam in October 2015 that “included evaluations of lending in low- and moderate-income tracts, investment in the community, and service to the community.”

“As a community bank, Chemical is committed to meeting the banking needs of everyone in the communities it serves,” a Chemical spokesperson wrote.

Inner City Press/Fair Finance Watch issued a similar challenge in 2014 when Grand Rapids-based Mercantile Bank Corp. announced its acquisition of the former Firstbank Corp.

In approving the deal, the Federal Reserve Board cited a 2012 exam by the FDIC that  “considered Mercantile Bank to have an excellent record of lending inside its assessment areas and noted that Mercantile Bank was a leader in community development lending.” 

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