Independent in Mich. expands northward with latest bank deal

Independent Bank in Grand Rapids, Mich., has agreed to buy TCSB Bancorp in Traverse City, Mich.

The $2.8 billion-asset Independent said in a press release Monday that it will pay $63.2 million in stock for the $350 million-asset parent of Traverse City State Bank. The deal is expected to close in the first half of next year.

Connie Deneweth, TCSB's chief executive, will stay with Independent as leader of its northern Michigan market. A member of the TCSB board will become a director at Independent.

The transaction “will strengthen our current franchise and support our growth in the attractive Traverse City market with full-service banking through five locations,” Brad Kessel, Independent’s president and CEO, said in the release. “We are excited to welcome the TCSB team and together create an even stronger bank for the Michigan communities that we serve.”

Independent said it expects to cut about 31% of TCSB’s annual expenses. The company should incur about $3.4 million in merger-related expenses.

The transaction is expected to be about 3.8% accretive to Independent’s first-year earnings per share and 6.7% accretive the following year. It should take a little over three years to earn back any expected dilution to Independent’s tangible book value.

ProBank Austin and Varnum advised Independent. D.A. Davidson and Warner Norcross & Judd advised TCSB.

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