SOUTHFIELD, Mich. - A suburban Detroit bank has called off plans to sell out to a Michigan commercial mortgage lender and said the lender's depressed stock price was to, blaming the latter company's depressed stock price.
Franklin Bank, with $545 million of assets, said Friday that it pulled the plug on its planned merger with Bingham Financial Services Corp. in Birmingham to protect its shareholders.
The deal, which had been scheduled to close in the third quarter, was valued at $43 million when it was announced in March. Since then, however, Bingham's stock has lost more than one-third of its value, dropping the deal price to about $27.5 million -- or nearly $3 million less than Franklin's current market value.
Bingham had planned to issue almost 5.4 million of its shares to acquire Franklin. Its stock, which was trading at $8.06 per share the day before the merger announcement, had dropped to $5.13 per share by midday Friday.
As a result of terminating the deal, Franklin said it would take a one-time pre-tax charge of $950,000 in the second quarter. Franklin earned $1.1 million in the second quarter of last year.
