First Federal of N. Michigan Bancorp to merge with Mackinac Financial Corporation
MANISTIQUE — The Directors of Mackinac Financial Corporation, the holding company for mBank, and the Directors of First Federal of Northern Michigan Bancorp, Inc, the holding company for First Federal of Northern Michigan announced the execution of a definitive agreement for Mackinac to acquire FFNM through an all-stock merger of FFNM with and into a subsidiary of Mackinac. FFNM shareholders will receive .576 shares of Mackinac common stock for each share of FFNM common stock. The aggregate value of the stock consideration, based on an assumed price of Mackinac shares of $15.75, is $33.8 million. MFNC expects to issue approximately 2.15 million shares to FFNM shareholders in connection with the transaction. Under the terms of the agreement, shareholders of FFNM will also receive a special cash dividend immediately prior to close of $8.0 million subject to maintenance of a minimum equity requirement. Total consideration to FFNM shareholders in connection with the transaction would equate to $41.8 million, or $11.22 per share, based upon the assumed value of Mackinac common shares.
The transaction will increase mBank’s market position as the largest bank headquartered in the Upper Peninsula with post-transaction assets estimated at approximately $1.3 billion.