I’ve been bullish on Chemical Financial (CHFC)
for a little while now, as I liked the prospects for this community
banking-oriented financial company to gain deposit share in Michigan and
surrounding states as larger banks looked elsewhere for growth.
Although I thought M&A was certainly going to be a part of the
company’s future, I was surprised to see the merger of equals with TCF Financial (TCF) announced in tandem with fourth quarter earnings.
TCF
has never been my favorite bank, but I like this combination, and
particularly as there will be a lot of Chemical Financial executives
still in positions of authority in the combined company. I believe this
is a good blending of relative strengths, and it may well be a blueprint
of deals to come in the Northeast and Midwest as larger banks no longer
seem so interested in sizable whole bank acquisitions in those areas.
Modeling the new combined entity takes a little more guesswork than I’d
like, but I believe this combination is undervalued today and well worth
consideration.
Follow the link to continue:
Chemical Financial About To Double In Size With An Unexpected Merger Of Equals
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