Chemical Bank to merge with TCF Financial Corp., change name

Chemical Bank announced Monday that it intends to buy Minnesota-based TCF Financial Corp. and rename itself TCF Bank and keep plans to open a new headquarters building in Detroit.

The deal, which is being called "a merger of equals" and is still subject to approval by regulators and the banks' shareholders, would create the nation's 27th largest bank with 526 branches across nine states.

The combined company would be situated in downtown Detroit, inside a new 20-story building at Woodward and Elizabeth that Chemical Bank is constructing and expects to open in two years for about 500 employees.

The deal — if approved — is anticipated to close in the late third or the fourth quarter. The combined company would still maintain a significant presence in TCF's current headquarters of Wayzata, Minnesota, as well as in Midland and Chicago, the companies said.

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“The combination of TCF and Chemical creates the largest midcap bank in the Midwest," Gary Torgow, chairman of Chemical Financial Corp., said Monday morning, later adding, "Having it headquartered in Detroit is a tremendous coup for the city and state of Michigan."

The combined bank would take the TCF Bank name, which is better known outside Michigan, and avoid confusion with the former Chemical Bank out of New York that existed from 1824 to 1996.

The new entity would have about $45 billion in assets, $34 billion in deposits and 10,000 employees.

Chemical Bank officially relocated its headquarters to Detroit from Midland in July 2018. Chemical currently has about 100 employees in downtown Detroit at 330 W. Fort St. with executive offices on Big Beaver Road in Troy.

All of those workers are to begin working in downtown Detroit once the new building is done.

Chemical Bank, which has about 3,500 employees, is already the largest Michigan-headquartered bank with $21.5 billion in assets and 212 bank branches, primarily in Michigan, northeast Ohio and northern Indiana. Chemical Bank was founded in Midland in 1917 and acquired the former Talmer Bank in 2016.

TCF Bank has $23.7 billion in assets, about 6,500 employees and 314 bank branches in Illinois, Minnesota, Michigan, Colorado, Wisconsin, Arizona and South Dakota. Of those branches, 49 are in Michigan, predominantly southeast Michigan.

By merging, the banks say they anticipate cutting about $180 million in yearly costs from current levels by 2020. The bulk of those savings are to come from "IT efficiencies" and "centralized overhead" with only a minimal reduction of bank branches, the companies said.

Bank executives told Wall Street analysts that they anticipate using fewer contractors and consultants once the merger is done, but did not say whether any layoffs are planned.

16 on board

There would be 16 directors on the combined company’s board, with eight from TCF and eight from Chemical.Under the deal, TCF shareholders would own, on a fully diluted basis, 54 percent of the combined company and Chemical shareholders would have 46 percent.

Several Chemical Bank executives would have top roles at the new company, including Torgow, who would be executive chairman of the board of directors; Dave Provost, who would be chairman of the new board, and Tom Shafer, who would become chief operating officer.

Craig Dahl, who is TCF's chairman, president and CEO, would be president and chief executive of the combined company.

Torgow, Provost and Shafer all arrived at Chemical from the old Talmer Bank team.

Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter @JCReindl.