Michigan banks to merge in $95 million deal

Croswell, Mich.-based Eastern Michigan Financial Corp. and subsidiary Eastern Michigan Bank is merging with Grand Rapids, Mich.-based Mercantile Bank Corp. in a $95.8 million cash-and-stock deal..The deal is expected to close in the fourth quarter of this year. The combined institution is expected to have $6.7 billion in assets, nearly $5 billion in total loans and $5.2 billion in total deposits. Mercantile Bank will add a dozen branches in eastern, also growing its presence in southeast Michigan. As of June 30, Eastern Michigan Financial Corp. had $505 million in assets, $208 million in loans and $449 million in deposits. According to a press release, Mercantile Bank’s operating footprint will strengthen as Eastern Michigan Bank has the No. 1 ranked deposit franchise in the state and a 46 percent loan-to-deposit ratio. "The combination provides an improved loan-to-deposit ratio, a broader deposit base, and a reduced cost of funds,” said Ray Reitsma, president and CEO of Mercantile Bank Corp. “These enhancements support more efficient capital deployment and further positions the bank for sustained, profitable growth.”Eastern Michigan Bank CEO William Oldford said merging with Mercantile “gives us the resources, scale and support to grow beyond what we could achieve alone — opening the door to new opportunities for our customers, employees and the communities we serve.” Mercantile Bank will operate Eastern under Eastern’s bank charter until Mercantile’s system transformation is completed in the first quarter of 2027. After that, Mercantile plans to consolidate the bank charters of Mercantile Bank and Eastern. Little Rock, Ark.-based Stephens, Inc. is financial adviser to Mercantile, and Detroit-based Dickinson Wright PLLC is Mercantile’s legal advisor. Minneapolis-based Piper Sandler & Co. was financial adviser to Eastern Michigan Financial Corp., while Toledo, Ohio-based Shumaker, Loop & Kendrick LLP is legal advisor to the company.