Southern Michigan Bancorp Has A $30M Deal for In-State Thrift

Southern Michigan Bancorp of Coldwater announced that it plans to buy an in-state thrift, Sturgis Bank & Trust Co., in a deal valued at $29.6 million.Shareholders of the thrift, the $252.6 million-asset parent of Sturgis Federal Savings Bank, are to receive 0.398 share of Southern Michigan for each share of Sturgis they own.

The deal was announced Tuesday and is expect to close by midyear. The stock of Southern Michigan, which has $275.8 million of assets, closed at $24 Tuesday, down $3.25. Sturgis was unchanged at $6.75.

Sturgis Federal Savings and the acquiring company's Southern Michigan Bank and Trust subsidiary would operate separately within the same company, and Southern Michigan Bancorp is to be renamed.

Leonard L. Eishen, Sturgis' president and chief executive officer, would keep these titles in the post-merger company. James T. Grohalski, Southern Michigan's president and CEO, is to become vice chairman, chief financial officer, and chief operating officer.

- Craig Woker

Sound Federal in N.Y. to Purchase A Suburban Neighbor for $41.7M

Sound Federal Bancorp, Mamaroneck, N.Y., said Thursday that it plans to buy Peekskill (N.Y.) Financial Corp. for $41.7 million of cash.The $22-per-share deal is 1.5 times Peekskill's book value and 26 times its trailing earnings. Peekskill Financial, the parent of First Federal Savings Bank, has $212 million of assets. It operates three branches in northern Westchester County.

Shares of Peekskill jumped 69%, to $20.375, in midday trading Thursday. Sound Federal's stock rose 5.56%, to $9.50.

Sound Federal, the $288 million-asset parent of Sound Federal Savings and Loan Association, operates five branches in Westchester County and Fairfield County, Conn. The deal is expected to close in the third quarter.

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