GRAND RAPIDS — Mercantile Bank Corp. and Firstbank Corp. jointly announced today the signing of a definitive merger agreement to create one of the largest banking institutions headquartered in Michigan.
Based on financial results, the combined company would have total assets of $2.8 billion, deposits of $2.3 billion, and loans of $2.0 billion. The merger is expected to create the third largest bank headquartered in Michigan by market capitalization and by deposit market share. In addition, the combined company will have a more robust offering of products and services, an enhanced retail delivery system with 53 branches statewide, a more diversified loan portfolio, and greater origination capabilities.
“I am extremely pleased to announce the combination of these two great Michigan community banks,” said Michael Price, chief executive officer of Mercantile. “This is an exciting opportunity for our customers, our shareholders, and our employees to create the premier Michigan community banking franchise.”
“We are very excited to become partners with Mercantile, as our similar cultures and complementary geographies and service strengths make this transaction a natural fit. We see great opportunity in combining to create a bank with enormous potential for future success” said Thomas Sullivan, chief executive officer of Firstbank.
In the merger, Firstbank shareholders will receive a fixed ratio of 1.00 share of Mercantile common stock for each share of Firstbank common stock. This implies a transaction value per share of $18.77 or approximately $151.5 million in the aggregate. Upon closing, Mercantile shareholders will own approximately 52 percent of the stock in the combined company while Firstbank shareholders will own approximately 48 percent.
The combined company’s leadership team will be comprised of executives from both organizations. Michael Price will serve as the president and chief executive officer, with Robert Kaminski and Charles Christmas from Mercantile, along with Thomas Sullivan and Samuel Stone from Firstbank completing the executive team. Additionally, the board of directors will be comprised equally of Mercantile and Firstbank directors. Thomas Sullivan will serve as chairman of the board for a period of one year and Michael Price will become chairman of the board thereafter. The combined company will use the Mercantile name and the corporate headquarters will be in Grand Rapids.
The merger agreement has been unanimously approved by the board of directors of each company. The companies expect to consummate the transaction by the end of the year.