Northwestern Bank is expected to be sold by the third quarter of 2014. An all-cash transaction valued at $120 million dollars was announced this morning by Midland-based Chemical Bank.
Northwestern Bank, headquartered in Traverse City, has 25 branch offices throughout an 11-county region. Bank leaders say up to four branches could be closed, in communities that already have Chemical Bank branches. As part of a regulatory review process, bank officials expect they will have to get rid of one bank office in the Gaylord area as well. All bank branches will do business as Chemical Bank once the sale is final.
Northwestern Bank shareholders will receive cash in the deal, which does not have a stock option. A spokesman for Northwestern Bank could not say how many shareholders are from northern Michigan, but the number could be significant. The bank has never been publicly traded. One independent member of the Northwestern Board of Directors will receive a seat on the Chemical Bank board.
In a call with shareholders this morning, Chemical Bank executives named a number of areas where they believe they can quickly increase lending at Northwestern Bank. Chemical expects to grow the loan portfolio at a double-digit pace. Strategies include a broadening of the bank’s commercial offerings, as well as a more “aggressive” consumer loan strategy.
Chemical Bank is publicly traded. Leaders at the bank say it is the second largest financial institution headquartered in the state and operating branch offices in Michigan. It has 156 offices in 38 counties in the Lower Peninsula, with very little presence in northwest Lower Michigan. The purchase will expand its reach to 49 counties, based on both banks’ footprints as of December 2013.