2020 - Choice One

ChoiceOne Financial Services, Inc. announces acquisition of Community Shores Bank Corporation

THE TRANSACTION

On January 6, 2020 ChoiceOne Financial Services, Inc. (OTC: COFS) ("ChoiceOne"), the parent company of ChoiceOne Bank and Lakestone Bank & Trust, and Community Shores Bank Corporation (OTC: CSHB) ("Community Shores"), the parent company of Community Shores Bank, jointly announced today the signing of a definitive merger agreement pursuant to which ChoiceOne will acquire Community Shores. The combination, a stock and cash transaction, will create an approximate $1.5 billion asset bank holding company with 33 offices in West and Southeastern Michigan. The transaction is expected to close in the second quarter of 2020, subject to the satisfaction of customary closing conditions, including receipt of approval from Community Shores shareholders and receipt of regulatory approvals. The transaction was unanimously approved by the boards of directors of both companies.

Under the terms of the merger agreement, each share of Community Shores common stock outstanding immediately prior to the merger will be converted into the right to receive, at the election of each Community Shores shareholder, an amount of cash equal to $5.00 or 0.17162 shares of ChoiceOne common stock, in each case subject to ChoiceOne stock consisting of not more than 75% and not less than 50% of the aggregate merger consideration and other adjustments as set forth in the merger agreement. ChoiceOne is an approximately $1.3 billion asset bank holding company with 29 offices serving West and Southeastern Michigan. Community Shores is an approximately $204 million asset bank holding company with 4 offices serving Muskegon and Ottawa Counties.

Based on a closing price of $31.54 per share of ChoiceOne common stock on January 3, 2020, the implied per share value to Community Shores shareholders approximates $5.31 per share if 75% stock is elected (an aggregate transaction value of $21.9 million) and $5.21 per share if 50% stock is elected (an aggregate transaction value of $21.5 million). The transaction is projected to generate approximately 7% to 10% earnings per share accretion when fully phased in and tangible book value dilution is expected to be earned back in approximately 2.5 to 3 years.

Our Client

CHOICEONE FINANCIAL SERVICES, INC.

ChoiceOne Financial Services, Inc. is a financial holding company headquartered in Sparta, Michigan and the parent corporation of ChoiceOne Bank and Lakestone Bank & Trust. Lakestone Bank & Trust operates 15 offices in parts of Lapeer, Macomb and St. Clair counties. ChoiceOne Bank operates 14 offices in parts of Kent, Ottawa, Muskegon, and Newaygo counties. ChoiceOne Bank offers insurance and investment products through its subsidiary, ChoiceOne Insurance Agencies, Inc. ChoiceOne Financial Services, Inc. common stock is quoted on the OTC under the symbol "COFS."

Transaction Partner

COMMUNITY SHORES BANK CORPORATION

Community Shores Bank Corporation is the bank holding company of Community Shores Bank, the only independent community bank with headquarters in Muskegon, Michigan. The bank serves businesses and consumers in the western Michigan counties of Muskegon and Ottawa from four branch offices.

CONTACT

Managing Director
Financial Institutions
Managing Director
Financial Institutions
Vice President
Financial Institutions