Brian Coyle
Finance 412
November 16, 2015
Professor Sommers
Monarch – Chemical Bank Merger
Bank Mergers are a complicated and sometimes divisive topic. Since 2008 the United States has been in a financial flux and banks have joined together more than other, leaving many to wonder what purpose mergers and acquisitions hold. According to financialdictionary.com the definition of a bank merger is “a situation in which two banks pool their assets and liabilities to become one bank. Because this can have a significant impact on the financial industry, the Federal Reserve subjects’ mergers involving bank holding companies to more intensive regulation”. The Bank Merger this paper will cover involves two banks: Chemical Fininacial Corporation and formerly known Monarch Bank. Throughout this analysis, this paper will discuss the impact that this bank merger had. This discussion will include a timeline of events that led to the merger including an evaluation of the circumstances, the impact the merger had on the community, and in depth look at the numbers that made this merger successful.
The reasoning behind bank mergers often vary and press releases can sometimes be misleading as to the root cause of the transaction. However, if one is to do some investigative work and research the history of both banks the reasoning behind the mergers can often become quite clear. To understand this particular bank merger it is important to take a look back to find out how the merger ended up occurring. The first bank we will look at is the acquired bank, Monarch. Monarch Bank had been having financial troubles going back to 2012 and even before. In 2012 Monarch Bank began making moves to try and reduce its costs and stay afloat despite hardships.
According to an article on AmericanBanker.com written by Robert Barba, in 2012 the bank transferred trading of its shares on the NASDAQ OTCQB from the NASDAQ National Market. Monarch said that the reasoning behind this decision...