Exchange State Bank Corp. Announces Merger with Thumb Bancorp, Inc.

On August 29, 2022, Exchange State Bank Corp. (“Exchange”), the bank holding company for Exchange State Bank, announced the signing of an agreement and plan of reorganization with Thumb Bancorp, Inc. ("Thumb"), the bank holding company for Thumb Bank & Trust. The agreement provides upon closing of the transaction, each share of Exchange common stock will be exchanged for 0.5259 shares of Thumb common stock and approximately $20.67 per share in cash. The final per share cash consideration is subject to adjustment based on the unrealized losses in Exchange’s investment portfolio at closing and potential expenses associated with terminating Exchange’s employee defined benefit plan. Based on Exchange’s June 30, 2022 financial statements, the adjusted cash consideration per share would be approximately $19.04. The total value of the transaction to Exchange is estimated at $29.9 million or $66.36 per share using a market value of $90.00 per share for Thumb’s common stock and June 30 financial statements of Exchange to estimate the cash consideration. On a pro forma basis, Exchange shareholders will own approximately 40% of the combined organization.

Exchange was established in 1901 and operates branch offices in Applegate, Carsonville, Deckerville, Brown City, Sandusky and Port Sanilac, Michigan. Exchange is privately-owned with 506 shareholders of record. Exchange had assets of $213.5 million as of June 30, 2022.