Banks in Michigan and Georgia planning mergers with local counterparts
Mercantile Bank Corp., a Michigan-based bank with over $6 billion in total assets, has announced its plans to acquire Eastern Michigan Financial Corp. in a deal valued at approximately $95.8 million. The transaction, which is expected to close in the fourth quarter of 2025, marks Mercantile's first acquisition since 2013 and represents a significant step in its statewide growth strategy.
In the deal, Greg Eiford, CEO of TC Bancshares, will join Colony as executive vice president and chief community banking officer. Eiford expressed his excitement about the combination, stating that it allows them to build on their legacy of community commitment while enhancing the products, services, and technology they offer to customers.
The acquisition will add 12 branches to Mercantile's existing 45-location network, significantly expanding its footprint in Eastern and Southeast Michigan. The deal will also add one EFIN director to Mercantile's board, and the acquirer plans to establish a post-closing advisory board composed of existing EFIN board members.
Financially, the merger is expected to improve Mercantile's loan-to-deposit ratio, broaden its deposit base, reduce cost of funds, and facilitate more efficient capital deployment and growth opportunities in target markets. Eastern Michigan Financial contributes a low-cost deposit base with a 42 basis point cost of deposits and a loan-to-deposit ratio near 46%, reflecting substantial excess liquidity compared to Mercantile’s near 100% loan-to-deposit ratio.
After the merger, the combined entity will have approximately $6.7 billion in assets, $4.9 billion in loans, and $5.2 billion in deposits. The acquisition will also involve a core banking system transformation with Jack Henry, scheduled for completion by the first quarter of 2027.
Mercantile plans to retain Eastern's team members, including executive leadership and operations. William Oldford, CEO of Eastern Michigan Bank, will become regional market president and report to Ray Reitsma, CEO of Mercantile Bank Corp.
Heath Fountain, CEO of Colony Bankcorp, expressed his excitement about the strategic acquisition, noting that it will add four branches across Georgia and Florida to Colony Bank's existing 29-location footprint. The consideration in the Colony deal is subject to proration procedures, ensuring that roughly 20% of TC Bancshares shares will be converted to cash and the remaining 80% of TC Bancshares shares will be converted to Colony stock.
Shareholders of Eastern Michigan Financial Corporation will receive 0.7116 shares of Mercantile common stock plus $32.32 in cash per EFIN share. The merger is subject to customary regulatory and shareholder approvals, with completion targeted for the fourth quarter of 2025 or early 2026.
This transaction highlights Mercantile’s emphasis on expanding its deposit base and geographic reach in Michigan, while Eastern Michigan Financial adds value with its deposit-rich, liquid balance sheet, despite some challenges in loan growth and profitability. Overall, the merger aims to create a larger and more competitive Michigan-based bank with enhanced operational and financial strength.
[1] Mercantile Bank Corp. Press Release, July 22, 2025. [2] Crain's Detroit Business, July 23, 2025. [3] American Banker, July 23, 2025. [4] Banking Dive, July 23, 2025. [5] S&P Global Market Intelligence, July 23, 2025.
This acquisition by Mercantile Bank Corp. is not only a significant step in their statewide growth strategy but also a move that will strengthen their position in the banking-and-insurance industry. The merged entity, with approximately $6.7 billion in assets, is expected to improve its loan-to-deposit ratio, broaden its deposit base, and offer enhanced products and services, thanks to the addition of Eastern Michigan Financial Corp. This transaction is more than just a business deal; it's a strategic move to create a more competitive player in the finance industry.
