A West Michigan bank holding company is acquiring a community bank’s parent company.
Sparta-based ChoiceOne Financial Services (OTC: COFS), parent of ChoiceOne Bank, is acquiring Muskegon-based Community Shores Bank Corporation (OTC: CSHB), parent company of Community Shores Bank, the companies said yesterday.
Expected to close in the second quarter of 2020, the transaction was unanimously approved by the boards of directors of both companies.
The stock and cash transaction will create an approximate $1.5 billion-asset bank holding company with 33 offices in west and southeastern Michigan.
ChoiceOne has about $1.3 billion in assets, with 29 offices in west and southeastern Michigan. Community Shores has about $204 million in assets, with four offices in Muskegon and Ottawa counties.
Heather Brolick, Community Shores Bank’s CEO and president, will continue with ChoiceOne as its SVP of human resources. Brent McCarthy, Community Shores Bank’s chief lending officer, will become a ChoiceOne VP, heading the Muskegon market.
“This merger will allow us to enhance our impact on the local community, as well as combine our service cultures and ChoiceOne’s technology enhancements to better serve our customers,” Brolick said.
Under the terms of the agreement, each share of Community Shores common stock outstanding immediately prior to the merger will be converted into the right to receive 0.17162 shares, equaling about $5, of ChoiceOne common stock.
The transaction is projected to generate approximately 7% to 10% earnings per share accretion when fully phased-in.
Parties expect the tangible book value dilution to be earned back in about 2.5 to 3 years.
Louisville, Kentucky-based ProBank Austin is serving as financial adviser to Community Shores.
Detroit-based Dickinson Wright is serving as legal counsel to Community Shores.
Grosse Pointe-based Donnelly Penman and Partners is serving as financial adviser to ChoiceOne.
Warner Norcross + Judd is serving as legal counsel to ChoiceOne.