Mackinac Financial Corporation Completes the Acquisition of Lincoln Community Bank
October 01 2018 - 9:30AM
The Directors of Mackinac Financial Corporation [Nasdaq: MFNC]
(Mackinac), the holding company for mBank, today announced the
consummation of the all-cash acquisition of Lincoln Community Bank
(Lincoln), Merrill, Wisconsin. Lincoln was immediately
consolidated into mBank and both branches were opened as mBank
locations on Monday, October 1, 2018. Consistent with the
terms of the Agreement and Plan of Merger, the total cash
consideration was $8.5 million.
The acquired assets equate to roughly $60
million, loans of approximately $40 million, and core deposits of
$52 million. The transaction will increase Mackinac’s
post-transaction assets to an estimated $1.32 billion and balance
sheet loans to approximately $1.1 billion. mBank plans to
close Lincoln’s Gleason, WI office at year-end. The office will
remain open and fully operational until this closure occurs. The
addition of the single acquired office (following the anticipated
Gleason closing), will increase mBank’s total branches from 29 to
30.
“On behalf of the entire Mackinac Board of
Directors, staff, and management, we would like to extend a sincere
welcome to all Lincoln clients and employees,” said Kelly W.
George, Mackinac President and mBank President and CEO. “Our
primary objective will be to provide professional, secure and
flexible banking products and services to all customers as we look
to deepen our banking relationships with current clients and
actively work to attract new ones. mBank also looks forward to
becoming an active corporate citizen within the Merrill market and
assisting with various municipal, educational, charitable and
business development organizations to help make a positive
difference within the communities. We also are excited that current
President Clyde Nelson will remain with the company as the Merrill
Market Executive prior to his retirement.”
Commenting on the acquisition, Clyde Nelson
noted, “We are proud to become a partner with a high-quality
community banking organization such as mBank, whose community
focused culture reflects our values and many of their markets
mirror our Merrill community so well. You can expect the same level
of continued exceptional service and timely decision making
delivered by your local team of bankers every day. In
addition, the added scale of mBank will allow for the expansion and
enhancements of current product and service offerings for clients
to help make banking more convenient, and more opportunities for
our small businesses to access capital for growth.”
Mackinac anticipates, that inclusive of
acquisition related expenses, the transaction will be breakeven in
2018 and accretive to earnings per share beginning immediately in
2019. Operating efficiencies are targeted to be fully
phased-in by the end of 2018, which includes the anticipated
completion of the data system conversion scheduled for early
November. The Tangible Book Value earn back for Mackinac is
currently expected to be approximately two years or less.
“We are very pleased to expand our presence into
Northcentral Wisconsin by partnering with another long-standing,
community minded financial institution,” commented Paul D. Tobias,
Chairman and CEO of Mackinac and Chairman of mBank.
“Strategically, the proximity to our current footprint complements
our Eagle River market and allows us to add scale in that region to
enhance our franchise value and presence.”
Mackinac was advised by Piper Jaffray and the
law firm of Honigman Miller Schwartz and Cohn LLP. Lincoln was
advised by Hovde Group, LLC and the law firm of Ballard Spahr
LLP.
Forward-Looking StatementsThis
release contains forward-looking statements within the meaning of
the “Safe-Harbor” provisions of the Private Securities Litigation
Reform Act of 1995 regarding Mackinac's outlook or expectations
with respect to the acquisition of Lincoln, including expected cost
savings, expected transaction-related and integration expenses and
the impact of the transaction on Mackinac's future performance.
Words and phrases such as "growth," "anticipates," "estimates,"
"expect," "plan," "approximately," “allows,” "should," "will," and
variations of such words and phrases or similar expressions are
intended to identify such forward-looking statements. Such
statements are based upon current beliefs and expectations and
involve substantial risks and uncertainties which could cause
actual results to differ materially from those expressed or implied
by such forward-looking statements. These statements are not
guarantees of future performance and involve certain risks,
uncertainties and assumptions ("risk factors") that are difficult
to predict with regard to timing, extent, likelihood and degree of
occurrence. Therefore, actual results and outcomes may materially
differ from what may be expressed or forecasted in such
forward-looking statements. Mackinac undertakes no obligation to
update, amend or clarify forward-looking statements, whether as a
result of new information, future events or otherwise.
Risk factors relating to both the transaction and the
integration of Lincoln into Mackinac after closing include, without
limitation:
- The anticipated cost savings and strategic gains expected from
the transaction may be significantly harder or take longer to
achieve than expected or may not be achieved in their entirety as a
result of unexpected factors or events;
- The integration of Lincoln's business and operations into
Mackinac, which will include conversion of Lincoln's operating
systems and procedures, may take longer than anticipated or be more
costly than anticipated or have unanticipated adverse results
relating to Lincoln's or Mackinac's existing businesses;
- Mackinac's ability to achieve anticipated results from the
transaction is dependent on the state of the economic and financial
markets going forward. Specifically, Mackinac may incur more credit
losses from Lincoln’s loan portfolio than expected and deposit
attrition may be greater than expected.
Risk factors also include, but are not limited to, the risk
factors described under "Risk Factors" in Mackinac's Annual Report
on Form 10-K filed with the Securities and Exchange Commission on
March 15, 2018. These and other factors are representative of the
risk factors that may emerge and could cause a difference between
an ultimate actual outcome and a preceding forward-looking
statement.
Contacts:
Kelly W. GeorgePresident, Mackinac Financial Corporation &
President & CEO, mBank
Manistique, MI (906) 341 – 7140kgeorge@bankmbank.com
Jesse A. DeeringExecutive Vice President & CFO, Mackinac
Financial Corporation and mBankBirmingham, MI(248) 290 –
5906jdeering@bankmbank.com
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