A wave of mergers in Michigan, led by Bank of America's sale of nearly two dozen branches, spurred Lake Michigan Financial in Holland to eventually sell itself to Chemical Financial.
Lake Michigan agreed in January to sell to Chemical in Midland, Mich., for $184 million. The seller's board and management team began assessing its future after B of A agreed in early 2013 to sell a number of branches to an unnamed out-of-state buyer, Chemical disclosed in a regulatory filing Friday.
Several other mergers in Lake Michigan got the attention of First Michigan's management, including Mercantile Bank's purchase of Firstbank, Chemical's acquisition of Northwestern Bancorp and Old National Bancorp's purchases of Founders Financial and United Bancorp, the filing said.
Richard Lievense, Lake Michigan's chairman, and Garth Deur, the $1.2 billion-asset company's president and chief executive, "held several meetings and conference calls with various potential merger partners during 2013 and 2014," with management discussing deals to be the buyer or seller.
The $6.6 billion-asset Chemical had a good handle on Lake Michigan's financial condition. As part of a $10 subordinated-debt purchase in 2008, Chemical had performed due diligence on Lake Michigan and received quarterly and annual financial information. Chemical had also participated in loans originated by Lake Michigan, the filing disclosed.
Chemical and an unnamed bank entered into confidentiality agreements last September to receive confidential information on Lake Michigan. The unnamed institution backed off in late October. Lake Michigan's board successfully haggled for a larger payout from Chemical during negotiations late last year.
Lake Michigan's board met with David Ramaker, Chemical's chairman, president and chief executive, on Jan. 5, and the deal was announced the next day.