Banking

Take 2 on a Michigan financial institution deal tanked by pandemic

Two Michigan banks have revived an M&A deal that regarded prefer it had been doomed by the pandemic recession.

Ann Arbor Bancorp on Monday mentioned it has agreed — once more — to purchase the $647 million-asset FNBH Bancorp in Howell.

In February 2020, Ann Arbor had agreed to pay $101.4 million for FNBH, the holding firm for the 130-year-old First Nationwide Financial institution of Howell. The businesses agreed to terminate the deal that June as a result of the coronavirus pandemic had tanked the financial system and the assumptions underlying their preliminary pact.

Within the newest settlement, Ann Arbor would pay $116.5 million in money for FNBH, which has grown considerably prior to now yr thanks largely to its participation within the Paycheck Safety Program. FNBH made greater than $103 million of PPP loans in 2020 and 2021. FNBH’s fairness capital, which totaled $53.9 million on March 31, 2020, had grown to $62.4 million on the finish of the second quarter, based on the Federal Deposit Insurance coverage Corp.

“Each banks are stronger right now than they have been initially of the pandemic,” FNBH President and CEO Ron Lengthy mentioned Monday.

Buying FNBH would give Ann Arbor Bancorp, guardian to the $2.56 billion-asset Financial institution of Ann Arbor, its first presence in Livingston County. Howell, the county seat, is 50 miles northwest of Detroit. FNBH holds about 13% of the $3.5 billion of deposits within the Livingston market, based on the FDIC.

President and CEO Tim Marshall mentioned gaining a foothold in Livingston County, one among Michigan’s fastest-growing areas, has lengthy been a strategic aim for Ann Arbor.

“Our board has talked about Livingston County for years,” Marshall mentioned Monday. “We checked out doable [de novo] areas and by no means might actually discover the appropriate place or the appropriate folks.”

In accordance with Marshall, the businesses stored in contact after the primary deal was terminated, holding a quarterly convention name involving board members and administration “to see how all the things was going with one another’s banks.”

“I’d say our final name, which was in early Could, prompted all of us … to start out up 2.0,” Marshall mentioned.

Monday’s deal is predicted to shut by year-end. The merged firm would have greater than $3 billion of property and 17 branches in 4 Michigan counties: Wayne, Oakland, Washtenaw and Livingston.

Lengthy has agreed to function the merged firm’s district president for Livingston County. Stan Dickson, FNBH’s largest shareholder, would be a part of Ann Arbor Bancorp’s board. Lengthy’s determination to remain on would give Ann Arbor an important increase as soon as the deal closes, Marshall mentioned.

“The significance of him getting up off the bed and going to the espresso store within the morning, having the ability to take the temperature of the group … pays long-term dividends to us,” Marshall mentioned. “We wish a market chief with toes on the bottom, going to group occasions, speaking to clients and ensuring we’re doing all the appropriate issues.”

After FNBH misplaced greater than $40 million between 2007 and 2011, Dickson helped stabilize the corporate with a $7.1 million funding in December 2013. FNBH reported a $3 million revenue for the primary six months of 2021 and $6.8 million in 2020.

“Each organizations share frequent values and the fervour to offer attentive customer support, and the mix will solely improve these ideas,” Dickson mentioned within the press launch saying the deal.

Ann Arbor’s most up-to-date acquisition was its $33 million deal for Birmingham Bloomfield Bancshares in Birmingham, Michigan, in January 2017.

Gabriel

A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

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