Two Midwest banks are joining forces: Chemical Financial Corporation CHFC and TCF Financial Corporation TCF announced Monday they are merging in a deal that will create a top-30 bank headquartered in Detroit.
The announcement sent shares of both companies surging. The new bank, which will be called TCF Bank, will have more than 500 branches in nine states and $45 billion in assets and $34 billion in deposits.
'Largest Midcap Bank In The Midwest'
Chemical Bank said previously it is building a new headquarters in downtown Detroit that will be open in two years and have about 500 employees. That building will be the headquarters for the new TCF operation.
Chemical Bank is the largest in Michigan and the acquisition of Wayzata, Minnesota-based TCF will make the bank the 27th-largest in the nation.
"The combination of TCF and Chemical creates the largest midcap bank in the Midwest, poised to deliver double-digit EPS accretion for each set of shareholders, significant cost synergies, top-tier return metrics, a more diversified balance sheet and a lower risk profile,” Chemical Chairman Gary Torgow said in a statement released by both companies.
The transaction is expected to deliver 17-percent earnings per share accretion to Chemical shareholders and 31-percent accretion to TCF shareholders, the companies said.
Stocks Rise On M&A Announcement
Both banks said the merger increases lending capabilities and opportunities for growth better than either company had alone. They also said the combined bank would have a more diversified deposit mix and more balanced loan portfolio.
Shares of Chemical Financial were up 4.47 percent at $44.37 at the time of publication Monday, while TCF’s stock was up 4.82 percent at $22.62.
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