GRAND RAPIDS — Independent Bank Corp. would extend its presence in northwestern Lower Peninsula with the proposed acquisition of TCSB Bancorp Inc. in Traverse City.
Under a stock transaction valued at $63.2 million, shareholders at TCSB Bancorp, the parent company of Traverse City State Bank, would receive 1.1166 shares of Grand Rapids-based Independent Bank stock for each of their shares.
“The transaction with TCSB will strengthen our current franchise and support our growth in the attractive Traverse City market with full-service banking through five locations,” Independent Bank President and CEO Brad Kessel said in a statement.
The acquisition is expected to close in the first half of 2018, pending approval by regulators and shareholders at the privately-owned TCSB Bancorp.
Traverse City State Bank had assets as of Sept. 30 of $346.9 million and $292.2 million in deposits, according to a quarterly financial report filed with the FDIC. The bank recorded net income of $2.6 million in 2016, and $2.1 million through the first three quarters of 2017.
In the annual FDIC Summary of Deposits, Traverse City State Bank as of June 30 ranked fifth out of 10 banks in its home market of Grand Traverse County with a 10.47 percent share of a $2.37 billion deposit market.
“This combination significantly enhances our capabilities, including larger lending limits, an expanded loan and deposit product mix, and more automated services,” TCSB Bancorp CEO Connie Deneweth said. “We believe this partnership is in the best interests of our customers and shareholders.”
Deneweth will continue to lead the northern Michigan market for Independent Bank once the deal closes.
Independent Bank (Nasdaq: IBCP) has 65 branches across the Lower Peninsula with total assets of $2.75 billion as of Sept. 30. Early this year, the bank first ventured into the Traverse City market with the opening of home mortgage and retail lending offices.
The corporation in October reported net income of $6.8 million, or 32 cents per share, for the third quarter, which compares to $5.9 million, or 28 cents per share, in the same period a year earlier. Net income for the first nine months of 2016 totaled $18.7 million, or 88 cents per share, versus $16.9 million, or 79 cents per share, through the third quarter of last year.
ProBank Austin served as Independent Bank’s financial adviser in the transaction, and Varnum LLP acted as legal counsel. D.A. Davidson & Co. was TCSB’s financial adviser and Warner Norcross & Judd LLP acted as legal counsel.