SPARTA — ChoiceOne Financial Services Inc.’s merger with Lapeer-based County Bank Corp. easily earned shareholder approvals this morning and now heads to a close next spring.
In special meetings held in Sparta and Lapeer, shareholders for both community banks voted overwhelmingly in favor of the merger, which will create a bank that has 28 offices in Michigan and combined assets of more than $1.3 billion.
“We’re very excited about it and very appreciative of the confidence that’s been put into the board and management on this merger, so we’re ready to roll,” ChoiceOne CEO Kelly Potes told MiBiz about today’s shareholder votes. “What we’re creating is a true, statewide community bank franchise.”
The two holding companies should come together in October, Potes said. The integration of the two banks will occur late in the second quarter of 2020, he said.
Under the terms of the stock transaction valued at $89 million, each share of County Bank common stock will convert into the right to receive 2.0632 shares of ChoiceOne common stock. ChoiceOne directors also will issue a special dividend of 60 cents per share to its shareholders.
Shareholders at ChoiceOne Financial (OTC: COFS), the parent company of ChoiceOne Bank, will own approximately 50.1 of the merged bank. Shareholders at County Bank, the parent company of Lakestone Bank & Trust, will own 49.9 percent.
A 14-member board of directors will consist of seven representatives from each bank. After the merger closes, the bank plans to apply for listing on the Nasdaq exchange.
ChoiceOne Bank has 14 offices in Kent, Newaygo, Muskegon and Ottawa counties with $670.1 million in total assets as of Dec. 31. During the fourth quarter of 2018, the bank opened new offices in downtown Grand Rapids and Rockford.
The bank in August reported net income of $1.4 million, or 41 cents per diluted share, for the second quarter. That compares to $1.8 million, or 50 cents per diluted share, in the same period a year earlier. The quarter included $350,000 in merger-related costs from the deal with County Bank Corp. Minus the merger costs, ChoiceOne Financial recorded flat quarterly net income of $1.8 million, or 50 cents per diluted share.
County Bank has 14 Lakestone Bank & Trust offices in Lapeer, Macomb and St. Clair counties with $659.8 million in total assets and $562 million in deposits at the end of the second quarter. The bank recorded second quarter net income of $3.7 million, according to a quarterly financial report filed the FDIC.
ChoiceOne Chairman Paul Johnson will become chairman of the merged bank and Potes will serve as its CEO. County Bank’s Bruce Cady will serve as vice chairman, while Michael Burke will become bank president.
ChoiceOne was advised on the deal by financial adviser ProBank Austin of Louisville, Ky. and the Grand Rapids-based law firm Warner Norcross + Judd LLP.