Independent Bank signed a definitive merger agreement to acquire TCSB Bancorp, the parent company of Traverse City State Bank. Both boards of directors unanimously approved the agreement.

Under the merger terms, TCSB shareholders will receive 1.1166 shares of IBCP common stock for each outstanding share of TCSB common stock or 2.71 million shares of IBCP common stock in the aggregate. The 169,800 outstanding options to acquire TCSB common stock will be converted into IBCP options at the completion of the merger. The transaction is valued at approximately $63.24 million based on IBCP’s 15-day volume weighted average price of $22.4438 as of December 1, 2017.

Provided the agreement meets the customary closing conditions and approval of both the TCSB shareholders and regulators, both banks anticipate a close in the first half of 2018. Afterward, IBCP, Independent Bank’s holding company, intends to consolidate all five Traverse City branches into Independent Bank and operate under the latter’s name.

Connie Deneweth, the current CEO of TCSB, will remain on board as head of the Northern Michigan market, while one member of the TCSB board of directors will join IBCP’s board.

“The transaction with TCSB will strengthen our current franchise and support our growth in the attractive Traverse City market with full-service banking through five locations,” said Brad Kessel, the president and CEO of IBCP. “We are excited to welcome the TCSB team and together create an even stronger bank for the Michigan communities that we serve.”

ProBank Austin acted as IBCP’s financial advisor, with Varnum acting as legal counsel. D.A. Davidson acted as TCSB’s financial advisor, while Warner Norcross & Judd acted as legal counsel.

Independent Bank is a Michigan-based bank holding company with total assets of approximately $2.8 billion.