First Merchants Corporation (Nasdaq: FRME) (“First Merchants”) and
Level One Bancorp, Inc., (Nasdaq: LEVL) today announced they have
executed a definitive merger agreement by which Level One Bancorp,
Inc. will merge with and into First Merchants Corporation in a
stock and cash transaction currently valued at approximately $323.5
million. Upon completion of the merger, Level One Bank will merge
with and into First Merchants Bank.
Headquartered in Farmington Hills, Michigan,
LEVL operates 16 banking center locations in the southeastern
Michigan area. Since its founding in 2007, LEVL has grown to be one
of the largest community banks in Michigan with consistent
double-digit loan and deposit growth rates. LEVL has total assets
of $2.5 billion, total loans of $1.7 billion, and total deposits of
$2.1 billion earning a 1.50% return on average assets and 16.3%
return on tangible common equity for the quarter ended September
30, 2021.
The merger agreement provides that the common
shareholders of LEVL will have the right to receive a 0.7167 share
of First Merchants common stock, in a tax-free exchange, and $10.17
in cash for each share of LEVL common stock owned, currently an
approximate 75% stock / 25% cash mix. Based on the closing price of
First Merchants common stock on November 3, 2021 of $43.50 per
share, the implied merger consideration for each share of LEVL
common stock is $41.35 per share. In addition, each share of Level
One’s 7.50% Non-Cumulative Perpetual Preferred Stock, Series B,
outstanding immediately prior to the effective time of the merger
will be converted into the right to receive one share of a newly
created series of preferred stock of First Merchants having voting
powers, preferences and special rights that are substantially
identical to the Level One Series B preferred stock. First
Merchants expects this combination to be mutually beneficial to
First Merchants and LEVL shareholders and customers. First
Merchants anticipates earnings per share accretion of approximately
10.4% in 2023 (the first full year of combined operations) and a
tangible book value earnback of 2.9 years.
The transaction is expected to be completed in
the first half of 2022, subject to the affirmative vote of a
majority of LEVL common shareholders, regulatory approvals, and
other customary conditions. The combined company, conducting its
banking business as First Merchants Bank, expects to complete its
system integration during the third quarter of 2022.
First Merchants and LEVL will have combined
assets of approximately $17.6 billion and First Merchants will
remain the second largest financial holding company headquartered
in Indiana. The combined company will have 122 banking offices
across Indiana, Michigan, Ohio and Illinois.
Mark Hardwick, Chief Executive Officer of First
Merchants, said: “Like First Merchants, Level One Bank has a strong
customer-focused history and a deep-rooted commitment to community
banking. We are excited they have chosen to become the newest
member of the First Merchants family.”
According to Mike Stewart, President of First
Merchants, “The LEVL franchise contiguously extends First Merchants
further into southeastern Michigan. Our operating approach is
focused on enhancing the financial wellness and prosperity of the
communities we serve. Consistent with our brand reputation, our
service model reflects a genuine relationship-oriented way of
meeting the financial needs of businesses and consumers within the
communities we serve.”
In First Merchants Bank’s newly acquired market,
the executive team will include Level One Bank President, Timothy
Mackay, Chief Lending Officer and Corporate Secretary, Gregory
Wernette, and Risk Management Officer, Eva Scurlock.
Chairman and Chief Executive Officer, Patrick Fehring, Chief Human
Resources Officer, Lani Barrett, and Chief Financial Officer, David
Walker will retire after completion of the merger.
Patrick Fehring, Chairman and Chief Executive
Officer of Level One, stated, “We believe our partnership with
First Merchants will provide tremendous benefits to our customers,
shareholders and communities as we look forward to continuing the
legacy of exceptional customer service, local responsiveness and
strong community engagement that has defined Level One Bank since
it was founded in 2007.”
Tim Mackay, President of Level One, added “This
partnership brings together two organizations with very similar
cultures and a go-to-market strategy that allows us to build upon
our strong commercial banking performance while also leveraging the
momentum and growth we have developed in consumer banking and
residential mortgage lending in recent years.”
Stephens Inc. served as the financial advisor to
First Merchants and legal advisor was Dentons Bingham Greenebaum
LLP.
Piper Sandler & Co. served as financial
advisor to LEVL in this transaction and Barack Ferrazzano served as
legal advisor.
Conference Call
First Merchants Corporation will conduct a
conference call and web cast to discuss the pending acquisition of
LEVL at 10:00 a.m. (ET) on Thursday, November 4, 2021.
To participate, dial (Toll Free) 877-507-0578
and reference First Merchants Corporation’s November 4th Conference
Call. International callers please call +1 412-317-1073.
In order to view the webcast and presentation
slides, please go to
https://services.choruscall.com/links/frme211104.html during the
time of the call.
Additional Information
Communications in this press release do not
constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any proxy vote or approval.
First Merchants will file a Registration Statement on Form S-4 with
the Securities and Exchange Commission (“SEC”) in connection with
the proposed merger of Level One Bancorp, Inc. (“Level One”) with
and into First Merchants that will include a proxy statement for
Level One and a prospectus for First Merchants, which, when
finalized, will be submitted to Level One common shareholders for
their consideration. INVESTORS ARE URGED TO READ THE PROXY
STATEMENT-PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES
AVAILABLE, AS WELL AS ANY OTHER RELEVANT DOCUMENTS CONCERNING THE
PROPOSED TRANSACTION, TOGETHER WITH ALL AMENDMENTS OR SUPPLEMENTS
TO THOSE DOCUMENTS, AS THEY WILL CONTAIN IMPORTANT INFORMATION.
When filed, this document and other documents relating to the
merger filed by First Merchants and Level One can be obtained free
of charge from the SEC’s website at www.sec.gov. These documents
also can be obtained free of charge by accessing First Merchants
website at www.firstmerchants.com under the tab “Investor
Relations” and then under “SEC Filings.” Alternatively, these
documents, when available, can be obtained free of charge from
First Merchants upon written request to First Merchants
Corporation, 200 East Jackson Street, Muncie, IN 47305, Attention:
Corporate Secretary, or by calling (765) 747-1500, or from Level
One, upon written request to Level One Bancorp, Inc., 32991
Hamilton Court, Farmington Hills, MI 48334, Attention: Investor
Relations, or by calling (888) 880-5663.
First Merchants and Level One and certain of
their directors and executive officers may be deemed to be
participants in the solicitation of proxies from the common
shareholders of Level One in connection with the proposed merger.
Information about the directors and executive officers of First
Merchants is set forth in the proxy statement for First Merchants’
2021 annual meeting of shareholders, as filed with the SEC on
Schedule 14A on April 1, 2021, which information has been updated
by First Merchants from time to time in subsequent filings with the
SEC. Information about the directors and executive officers of
Level One will be set forth in the Proxy Statement-Prospectus
relating to the proposed merger when it becomes available.
Additional information regarding the interests of these
participants, including Level One’s officers and directors, will
also be included in the Proxy Statement-Prospectus regarding the
proposed merger when it becomes available. Free copies of this
document may be obtained as described above.
Forward-Looking Statements
This release contains forward-looking statements
made pursuant to the safe-harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements can often, but not always, be identified by the use of
words like “believe”, “continue”, “pattern”, “estimate”, “project”,
“intend”, “anticipate”, “expect” and similar expressions or future
or conditional verbs such as “will”, “would”, “should”, “could”,
“might”, “can”, “may”, or similar expressions. These
forward-looking statements include, but are not limited to,
statements relating to the expected timing and benefits of the
proposed merger (the “Merger”) between First Merchants and Level
One, including future financial and operating results, cost
savings, enhanced revenues, and accretion/dilution to reported
earnings that may be realized from the Merger, as well as other
statements of expectations regarding the Merger, and other
statements of First Merchants’ goals, intentions and expectations;
statements regarding the First Merchants’ business plan and growth
strategies; statements regarding the asset quality of First
Merchants’ loan and investment portfolios; and estimates of First
Merchants’ risks and future costs and benefits, whether with
respect to the Merger or otherwise. These forward-looking
statements are subject to significant risks, assumptions and
uncertainties that may cause results to differ materially from
those set forth in forward-looking statements, including, among
other things: the risk that the businesses of First Merchants and
Level One will not be integrated successfully or such integration
may be more difficult, time-consuming or costly than expected;
expected revenue synergies and cost savings from the Merger may not
be fully realized or realized within the expected time frame;
revenues following the Merger may be lower than expected; customer
and employee relationships and business operations may be disrupted
by the Merger; the ability to obtain required regulatory approvals
or the approval of Level One’s common shareholders, and the ability
to complete the Merger on the expected timeframe; possible changes
in monetary and fiscal policies, and laws and regulations; the
effects of easing restrictions on participants in the financial
services industry; the cost and other effects of legal and
administrative cases; possible changes in the credit worthiness of
customers and the possible impairment of collectability of loans;
fluctuations in market rates of interest; competitive factors in
the banking industry; changes in the banking legislation or
regulatory requirements of federal and state agencies applicable to
bank holding companies and banks like First Merchants’ affiliate
bank; continued availability of earnings and excess capital
sufficient for the lawful and prudent declaration of dividends;
changes in market, economic, operational, liquidity, credit and
interest rate risks associated with the First Merchants’ business;
the severity and duration of the COVID-19 pandemic and its impact
on general economic and financial market conditions and First
Merchants’ business, results of operations, and financial
condition; and other risks and factors identified in each of First
Merchants’ filings with the SEC. Neither First Merchants nor Level
One undertakes any obligation to update any forward-looking
statement, whether written or oral, relating to the matters
discussed in this press release. In addition, the companies’ past
results of operations do not necessarily indicate their anticipated
future results.
SOURCE: First Merchants Corporation, Muncie, Indiana and Level
One Bancorp, Inc., Farmington Hills, Michigan
For more information, contact:First Merchants CorporationNicole
M. Weaver, Vice President and Director of Corporate
Administration765-521-7619http://www.firstmerchants.com
Level One Bancorp, Inc.David C. Walker, Executive Vice President
and Chief Financial
Officer248-737-6903http://www.levelonebank.com
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