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West Shore Bank to purchase West Michigan Bank & Trust

In Michigan, ($390.3million), a unit of West ShoreBank Corp., and WestMichigan Bank & Trust ($40.9 million) signed a definitiveconsolidation agreement, according to an April 14 news release.

Thedealconsideration will consist of a total aggregate amount of $8.3 million in cash,with West Shore making $3.8 million in aggregate cash payment and West Michiganmaking a pre-consolidated special cash dividend of $4.5 million to itsshareholders.

On an aggregate basis, SNL calculates the deal value to be134.9% of book and tangible book. The price is 12.09% of deposits and 10.46% ofassets, and the tangible book premium to core deposits ratio is 3.60%.

For comparison, SNL valuations for bank and thrift targetsin the Midwest region between April 14, 2015, and April 14, 2016, averaged 125.60%of book, 130.53% of tangible book and had a median of 18.61x last-12-monthsearnings, on an aggregate basis.

Pursuant to the deal, West Michigan Bank & Trust willbe consolidated with and into West Shore Bank, with West Shore as the survivinginstitution. The combined banks will operate under the West Shore Bank brandfollowing the transaction.

West Shorewould expand its presence to Benzie County, Mich., and have a total asset sizeof $440 million after the deal, the release added.

Data compiled by SNL shows that West Shore Bank Corp. willenter Benzie County, with one branch to be ranked third with a 13.16% share ofapproximately $231.03 million in total market deposits, and will expand inManistee County, Mich., by one branch to be ranked third with a 15.92% share ofapproximately $284.47 million in total market deposits.

West ShorePresident and CEO Raymond Biggs II will stay in his role, and Douglas Cook,president and CEO of West Michigan, will become senior vice president, marketleader and trust officer for the combined bank, upon completion of thetransaction.

Thetransaction, approved by the board of both banks, is expected to close in thesecond half of 2016 and is subject to the approval of regulators and WestMichigan shareholders.

Sandler O'Neill & Partners, represented by Mark Biche,acted as exclusive financial adviser to West Shore Bank, and Warner Norcross& Judd LLP was its legal adviser. Donnelly Penman was financial adviser andprovided a fairness opinion to West Michigan, and Varnum LLP was its legaladviser.

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