Chemical, TCF banks close Detroit-based merger
It's official: Chemical Financial Corp. is now TCF Financial Corp. after the banks closed their merger Thursday morning.
The new TCF, headquartered in downtown Detroit, is now one of the 50 largest banks in the United States and has a Top 10 deposit market share in the Midwest. With that will come hundreds of jobs in Detroit, with more investment and more branches in the city, the company said.
"The merger closed is really the culmination of a long process that began with agreements in January, shareholder approval and regulatory approval," said Tom Wennerberg, TCF's chief marketing and communications officer. "Today, we are one company: TCF Financial Corp. Though we will be two brands in the marketplace until next year with Chemical Bank sitting alongside TCF Bank in Detroit."
That means Chemical and TCF customers won't see any changes immediately. The company expects to combine its banking technology platforms by the middle of 2020 without disruption to customers. Until then, customers still can go to their same local branches, use their debit and credit cards, and access their same mobile apps and websites. It also means Chemical customers cannot yet go to TCF branches and vice versa.
One immediate change is on the stock market: For each share they owned prior to the merger, TCF shareholders received 0.5081 common shares of the new company. For each share that Chemical shareholders held, they received one share of the new company. The new TCF's shares were up 2% to $42.90 Thursday afternoon.
The new bank doubled Chemical's size with $47 billion in assets, a nearly $7 billion market capitalization, $35 billion in total deposits and more than 500 branches across nine states. The merger grows TCF’s presence in the Midwest and expands Chemical’s footprint west. It will double the number of locations in southeast Michigan available to its customers.
TCF will reside as a long-term tenant in a new $105-million, 20-story mixed-use building planned at Woodward and West Elizabeth near Comerica Park. The building would host up to 350 employees when it opens in the first three months of 2022 and possibly grow to up to 500. A groundbreaking is expected in the next 30-45 days, Wennerberg said.
The companies previously projected the merger will save approximately $180 million by 2020 with minimal reductions in branches because of little overlap in footprint. A majority of cuts will come from back-office support functions and information technology inefficiencies, the company previously said. The new TCF employs more than 9,000 people.
The completion of the merger also paves the way for the company to announce the new name of the Cobo Center after Chemical Bank acquired its naming rights in February in a $33 million, 22-year deal. Company leaders at that time said if the merger is approved, the convention center's name would be the TCF Center. A formal public announcement is expected later this month.
TCF also plans to add additional branch locations in the city of Detroit, though no details on that expansion are available now.
"Building branches in Detroit is definitely part of our long-term approach," Wennerberg said. "We’re so committed to the communities we serve. The residents of Detroit are so important for us, and it’s our duty that the residents in our community are served where our residents are and have a presence."
The larger size of the bank will give the company scale to offer more products and services and better technology as well as the ability to make greater investments into the community and increase financial education efforts, Wennerberg said.
"Both banks have been committed to home lending and affordable housing and homeownership," he said. "It's important for a bank to stand behind that, and there's a great legacy with TCF and Chemical that we want to bring forward to our community."
The bank also will maintain significant presences in major Midwest markets such as Chicago, Midland, Milwaukee and Minneapolis.
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.
Chemical Bank leaders retained three of the top four positions under the deal. Chairman Gary Torgow is the chair of the new bank holding company. Chemical Financial Corp. CEO Dave Provost is chairing the new bank board, and Chemical Bank CEO Thomas Shafer is president and chief operating officer of the new bank.
TCF Chairman and CEO Craig Dahl is leading the new holding company and bank and will work from Detroit and Minnesota, where TCF formerly was based. The two banks have 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.