The two firms today announced executing an agreement for the purchase, which would include North Bancorp’s subsidiary, First National Bank of Gaylord. It operates one branch Houghton and two others in Gaylord.
First National is a $173 million property. The agreement contemplates a July 31 completion on the transaction that would merge North Bancorp into Independent and will operate as part of it.
Independent Bank is a wholly owned subsidiary of Independent Bank Corp.
Charles C. Van Loan, president and CEO of Independent Bank Corp., termed the acquisition “a great addition.”
“In particular, Otsego County and Gaylord blend in well with our existing footprint in the northern Lower Peninsula,” Van Loan said.
“We have had excellent historical success with acquisitions of institutions in a turn-around situation. We believe the acquisition of North Bancorp will provide some unique opportunities for increasing our shareholder value.”
According to the agreement, North Bancorp shareholders will receive $16 per share payable in Independent Bank common stock.
Based on 532,896 outstanding shares of North Bancorp stock and allowing for contingent price adjustments, the aggregate value of the transaction is about $8.5 million.
The primary contingency would be an adjustment in the event North Bancorp’s total shareholders’ equity is below $3.8 million at the end of the month prior to the transaction’s closure.
If that happened to be the case, the transaction value would be reduced dollar for dollar by the amount that the value is below $3.8 million and the per share transaction value would adjust accordingly.