Chemical Financial Corp., Midland, Mich., announced this week that it would buy Shelby (Mich.) Financial Corp. for about $25.6 million of stock.

The deal would give $1.7 billion-asset Chemical its first presence in three counties in west-central Michigan. Shelby is the parent of $102 million-asset Shelby State Bank.

Chemical operates 10 community banks with 86 branches in 24 counties across northern and central Michigan.

"We believe in keeping separate boards with local directors who know the community," said Aloysius J. Oliver, Chemical president.

Mr. Oliver said he expects the deal to be completed in the first quarter.

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