Merger creating $1.3B bank


Sparta-based ChoiceOne Bank operates 14 branches in West Michigan. Courtesy ChoiceOne Bank

Two Michigan bank holding companies are merging to create a $1.3-billion financial institution.

Sparta-based ChoiceOne Financial Services (OTC: COFS), parent of ChoiceOne Bank, has signed a definitive merger agreement with Lapeer-based County Bank Corp. (OTC: CBNC), or County, the parent of Lakestone Bank & Trust, to combine into one entity under the name ChoiceOne Financial Services, according to ChoiceOne today.

The “merger of equals” is expected to close in the second half of 2019, subject to satisfaction of customary closing conditions, including the receipt of regulatory approvals and approval by the shareholders of each company.

The parties’ subsidiaries ChoiceOne Bank and Lakestone Bank & Trust are expected to consolidate in the second quarter of 2020.

The merger will combine ChoiceOne’s $670 million in assets and County’s $617 million in assets to create a bank holding company with about $1.3 billion in assets and 28 offices in West and southeastern Michigan.

The new holding company will be headquartered in Sparta, with the combined company’s senior leadership and operations based in Sparta and Lapeer.

The combined company will be led by Paul Johnson, board chair, Bruce Cady, vice chair, Kelly Potes, CEO, and Michael Burke, president.

The board of directors of the combined holding company will be comprised of 14 directors, consisting of seven directors designated by ChoiceOne and seven directors designated by County.

“I am extremely proud to lead these two companies into our next phase of growth,” Johnson said. “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.”

Potes said the merger is “exciting for our customers, communities, employees and shareholders” and will help the bank achieve its long-term vision.

“Because of our separate but similar markets, this combination will result in an exceptional company and present efficiencies and new growth opportunities in our expanded network across Michigan,” Potes said.

Transaction details

Under the terms of the deal, each share of County common stock outstanding immediately prior to completion of the merger will be converted into the right to receive 2.0632 shares of ChoiceOne common stock.

ChoiceOne will declare and pay a special dividend of $0.60 per share to its shareholders.

The transaction is valued at about $50.96 per share of County common stock, or about $89 million in the aggregate, based on the closing price of ChoiceOne’s common stock of $24.70 on March 22, 2019.

Upon completion of the transaction, ChoiceOne shareholders will own about 50.1 percent and County shareholders will own about 49.9 percent of the combined company, excluding outstanding ChoiceOne stock options and restricted stock units.

The transaction is projected to generate about 14 percent earnings per share accretion in the first full year, based on fully phased-in cost savings of about 10 percent of the combined expenses of the two companies.

The parties project the tangible book value dilution will be earned back in about three years.


Louisville, Kentucky-based ProBank Austin is serving as financial advisor to ChoiceOne.

Grand Rapids-based Warner Norcross + Judd is serving as legal counsel to ChoiceOne.

West Conshohocken, Pennsylvania-based Boenning & Scattergood is serving as financial advisor to County.

Richmond, Virginia-based Hunton Andrews Kurth is serving as legal counsel to County.


Founded in 1898, ChoiceOne Bank operates 14 branches in Kent, Ottawa, Muskegon and Newaygo counties.

The bank offers insurance and investment products through its subsidiary, ChoiceOne Insurance Agencies.

County Bank Corp.

County Bank Corp. is the parent of Lakestone Bank & Trust, which was founded in 1902.

The bank operates 14 branches in Lapeer, Macomb and St. Clair Counties.

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