Independent Bank (IBCP) in Ionia, Mich., plans to raise up to $86 million through a common stock offering.

The $2.1 billion company said Monday that it will use the proceeds to exit the Troubled Asset Relief Program. Independent agreed in late July to pay the Treasury $81 million for the $72 million of preferred shares, plus accrued dividends, and warrants it issued through the Tarp in December 2008.

Independent said it will use any remaining funds from the offering for general corporate purposes. The offering began Monday and is underwritten by Keefe, Bruyette & Woods, which will have the option of buying an additional 15% of the shares sold.

Last year, Independent sold 21 branches to Chemical Financial (CHFC) in Midland, Mich., for $12.4 million.

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