Chemical, TCF banks get regulatory approval for merger
The last major hurdle to TCF Financial Corp. merging into Chemical Financial Corp. has been cleared.
The banks said Tuesday they have received the needed regulatory approval to combine forces. The merger would create one of the 50 largest banks in the United States and be headquartered in Detroit. The companies said in a filing with the Securities and Exchange Commission that they expect to close the merger Aug. 1.
The combined bank will take on the TCF Financial Corp. name but will reside in the new $105 million 20-story, mixed-use building planned at Woodward and West Elizabeth near Comerica Park.
Chemical is based in Detroit; TCF is based in Wayzata, Minnesota. The merged bank will retain large presences in Minneapolis as well as Chicago, Milwaukee and greater Michigan.
The Board of Governors of the Federal Reserve System's approval of the merger follows recent approvals from the Office of the Comptroller of the Currency and from shareholders of both companies.
The new TCF is expected to have $45 billion in assets and a $7 billion market capitalization and be a top 10 bank in the Midwest based on deposit market share with $34 billion in total deposits. Its 500 branches will cover nine states.
The merger doubles the number of branches in southeast Michigan for the banks’ customers and will move more jobs to Detroit, Chemical Executive Chairman Gary Torgow previously said. The new headquarters building is expected to house 500 employees.
The companies project to save approximately $180 million by 2020 with minimal reductions in branches. The new bank will have more than 9,000 employees with more in Michigan than ever before. When Chemical Bank said it was moving its headquarters last year from Midland to Detroit, it also said it plans to add neighborhood branches in the city.
Chemical Bank in February also acquired the naming rights to the Cobo Center in Detroit in a $33 million deal over 22 years. Company leaders at that time said if the merger is approved, the convention center's name would be the TCF Center. Chemical spokesman Ron Fournier said the name is being finalized and there will be a separate naming ceremony after the merger closes.
The banks decided to use the TCF name, a brand familiar to Detroit but has more reach outside Chemical’s core markets. It also may reduce confusion in the financial community with New York City’s Chemical Bank that acquired and was renamed as Chase Bank in the 1990s.
The deal is an all-stock "merger of equals," according to the companies. It grows TCF’s presence in the Midwest and expands Chemical’s footprint west. TCF shareholders will receive 0.5081 shares of Chemical common stock for each share of TCF common stock they own. Upon completion of the deal, TCF and Chemical shareholders will own 54 percent and 46 percent of the combined company, respectively.
Chemical Bank leaders will retain three of the top four positions under the deal. Torgow will continue to chair the bank holding company. Chemical Financial Corp. CEO Dave Provost will chair the new bank board, and Chemical Bank CEO Thomas Shafer will be president and chief operating officer of the new bank.
TCF Chairman and CEO Craig Dahl will lead the new holding company and bank, and will work from Detroit and Minnesota. The two banks will split board seats evenly.
Since Comerica Bank moved its headquarters to Dallas in 2007, it left Ally Financial Inc. as the only major bank still based in Detroit. Comerica, which traces its roots in the city to 1849, had $58 billion in assets (about $72 billion today) at the time.