Northwestern/Chemical bank merger approved

Oct. 07--TRAVERSE CITY -- The Federal Reserve approved a merger between Traverse City-based Northwestern Bank and Midland-based Chemical Bank. The proposed merger was announced in March and had been awaiting the Fed's approval.

The consolidation will result in all Northwestern Bank entities being rebranded under the Chemical moniker. Northwestern Bank branches will get new signage, and some branches will be consolidated, said John Hatfield, Chemical Bank first vice president and director of marketing.

Chemical Financial Corporation will acquire Northwestern Bancorp Inc. Those two entities' subsidiaries, Chemical Bank and Northwestern Bank will merge.

"Our plan is to complete conversion on Nov. 7," Hatfield said.

The corporation mailed notification to existing Northwestern customers on Monday that explained the merger and coming changes, Hatfield said. It will soon reach out to Northwestern's commercial customers. All Northwestern accounts will become Chemical accounts.

Since the March announcement of the planned merger, "Nothing significant has changed," Hatfield said.

In March, Chemical Financial Corporation President David Ramaker said the bank will pay $120 million cash for Northwestern, which employs 374 people and owns 25 branches in 11 northwestern Michigan communities.

Also in March, Ramaker said some jobs in the operational side of the business will disappear.

"Anytime you do a merger like this, part of the way that you pay that is, unfortunately, consolidations of jobs," he said in March. "Anyone who is servicing customers day in and day out, we need all those people."

The proposed merger was announced two months after Northwestern emerged from a consent agreement with federal regulators because of failures in some of Northwestern's commercial loans in 2012. In September 2013 the Federal Deposit Insurance Corporation alleged Northwestern Bank's former president, Harry "Scrub" Calcutt, and two other bank executives tried to hide in more than $38 million in loan defaults by the bank's largest borrower from the bank's board of directors and government regulators. Calcutt denied wrongdoing. The government's case against him is pending.

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