TCF, Chemical OK merger, creating bank with $45B in assets

DETROIT and WAYZATA, Minnesota — TCF Financial Corp., which operates bank branches in Broomfield, Lafayette and Westminster, has signed a definitive agreement to merge with Detroit-based Chemical Financial Corp. (Nasdaq: CHFC).

The transaction will be an all-stock merger of equals, creating a combined company with $45 billion in assets, $34 billion in deposits and 500 branches across nine states, including 34 in Colorado.

The merger has been approved unanimously by the boards of directors of both companies. TCF will merge into Chemical, with the combined holding company and bank operating under the TCF name and brand after closing of the transaction, the company said in a press release.

The transaction will leverage the strengths of Chemical’s community-banking and wealth-management capabilities with TCF’s large deposit franchise and expertise in wholesale lending on a national basis, the companies said.

“With a shared strategic vision and increased scale and capabilities, our two complementary banking platforms will be positioned to better serve our customers and communities,” Chemical’s chairman Gary Torgow said in a prepared statement. “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. We also share a deep commitment to supporting and giving back to the communities we serve.”

Craig Dahl, president, CEO and chairman of TCF, said the parties “are confident that this merger will enhance our ability to deliver stronger and more sustainable growth and greater value creation than either company could achieve alone. The new TCF will have attractive positions in both its product suite and market footprint as well as a more diversified loan portfolio and increased lending capabilities across asset classes, geographies and industry verticals.

“Through improved profitability and earnings predictability, we will be able to reinvest in the business to drive multiple growth engines, enhance our ability to compete in the next generation of banking and sustain consistent return on capital for shareholders,” he added. “We believe the combined company will also create new opportunities for our employees and enable us to attract and retain top talent.”

The transaction is projected to deliver 17 percent earnings per share accretion to Chemical and 31 percent EPS accretion to TCF by 2020. In addition, the transaction is expected to generate approximately $180 million in annual cost savings by 2020, with minimal reductions in branches, the companies said.

Under terms of the agreement, TCF shareholders will receive 0.5081 shares of Chemical common stock for each share of TCF common stock based on a fixed exchange ratio, equivalent to $21.58 per TCF share based on the closing price as of Jan. 25, 2019. Upon completion of the deal, TCF and Chemical shareholders will own 54 percent and 46 percent of the combined company, respectively.

The combined company will be headquartered in Detroit, with “a significant operating presence in Minneapolis as well as Midland and Chicago,” the companies said.

The combined company will be led by Dahl as president and CEO, with Torgow serving as executive chairman of the board. David Provost will become chairman of the combined bank, with Tom Shafer becoming president and chief operating officer of the combined bank.

The merger is expected to close in the late third or early fourth quarter of 2019, subject to customary closing conditions, including regulatory approvals and approval by the shareholders of each company.

Chemical Financial is the largest banking company headquartered and operating branch offices in Michigan. Through its subsidiary bank, Chemical Bank, the company operates 212 banking offices located primarily in Michigan, northeast Ohio and northern Indiana. As of Dec. 31, 2018, Chemical reported total assets of $21.5 billion.

TCF is a Wayzata, Minnesota-based national bank holding company, with total assets of $23.7 billion as of Dec. 31, 2018. The bank operates 314 branches in Colorado, Arizona, Illinois, Michigan, Minnesota, South Dakota and Wisconsin.

TCF operates four locations in the Boulder Valley/Northern Colorado region:

  • 4100 W. 144th Ave., Broomfield.
  • 320 N. U.S. Highway 287, Lafayette.
  • 7206 Federal Blvd., Westminster.
  • 11968 Vrain St., Westminster.

 

DETROIT and WAYZATA, Minnesota — TCF Financial Corp., which operates bank branches in Broomfield, Lafayette and Westminster, has signed a definitive agreement to merge with Detroit-based Chemical Financial Corp. (Nasdaq: CHFC).

The transaction will be an all-stock merger of equals, creating a combined company with $45 billion in assets, $34 billion in deposits and 500 branches across nine states, including 34 in Colorado.

The merger has been approved unanimously by the boards of directors of both companies. TCF will merge into Chemical, with the combined holding company and bank operating under the TCF name and brand after closing of the transaction, the company said in a press release.

The transaction will leverage the strengths of Chemical’s community-banking and wealth-management capabilities with TCF’s large deposit franchise and expertise in wholesale lending on a national basis, the companies said.

“With a shared strategic vision and increased scale and capabilities, our two complementary banking platforms will be positioned to better serve our customers and communities,” Chemical’s chairman Gary Torgow said in a prepared statement. “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. We also share a deep commitment to supporting and giving back to the communities we serve.”

Craig Dahl, president, CEO and chairman of TCF, said the parties “are confident that this merger will enhance our ability to deliver stronger and more sustainable growth…