SPARTA — ChoiceOne Financial Services Inc. plans to merge with Lapeer-based County Bank Corp. in a deal that would create a bank with a combined $1.28 billion in assets.
Executives at ChoiceOne Financial (OCT: COFS), the Sparta-based parent company of ChoiceOne Bank, and County Bank (OTC: CBNC), the parent corporation for Lakestone Bank & Trust, today announced a definitive agreement for what they describe as “a strategic merger of equals” with an aggregate value of $89 million.
Pending shareholder and regulatory approvals, the County Bank merger “with and into” ChoiceOne could close in the second half of 2019, resulting in a combined bank with 28 offices in western and southeastern Michigan.
“These two organizations are very similar in their steady growth over the last 100 years, and yet they both bring unique qualities to the table,” ChoiceOne Chairman Paul Johnson said in a statement. “Our combined organization will allow us to expand our collective expertise into the communities we serve with enhanced capacity to invest further into technology, products and services as well as our local support.”
Johnson will become chairman of the merged bank and ChoiceOne President CEO Kelly Potes will become CEO. County Bank Chairman and CEO Bruce Cady will serve as vice chairman and Lakestone Bank & Trust President Mike Burke will serve as the president of the bank.
“We are two strong, growing institutions with a powerful commitment to serve our customers and give back to our communities. Leveraging these strengths in this merger, as well as our complementary products and leading market positions, will clearly position us as one of the finest community banks in Michigan,” Cady said.
Under the terms of the stock transaction, each share of County Bank common stock would convert into the right to receive 2.0632 shares of ChoiceOne common stock. ChoiceOne would declare and pay a special dividend of 60 cents per share to its shareholders.
ChoiceOne Bank has 14 offices in Kent, Newaygo, Muskegon and Ottawa counties with $670.1 million in total assets as of Dec. 31. The bank during the fourth quarter opened new offices in downtown Grand Rapids and Rockford.
The bank in January reported 2018 net income totaled $7.3 million, or $2.02 per diluted share. ChoiceOne recorded net income of $6.1 million, or $1.70 per diluted share, in 2017.
County Bank has 14 Lakestone Bank & Trust offices in Lapeer, Macomb and St. Clair counties with $616.1 million in assets and 2018 net income of $6.9 million, according to a quarterly financial report filed the FDIC.
ChoiceOne is being advised on the deal by financial adviser ProBank Austin of Louisville, Ky. and the Grand Rapids-based law firm Warner Norcross + Judd LLP.