Farmington Hills, Mich.-based Level One Bancorp Inc. is buying Ann Arbor Bancorp Inc. in an all-cash deal valued at about $67.8 million.
Ann Arbor Bancorp shareholders will receive $38.50 per share in the deal. When the deal closes, the combined company will have more than $1.8 billion in assets, $1.4 billion in loans and $1.5 billion in deposits based on June 30 financials.
Ann Arbor Bancorp CEO Peter Schork will join Level One. Additionally, one Ann Arbor Bancorp board member will join the boards of Level One and Level One Bank.
The deal is expected to close in the fourth quarter of 2019 or the first quarter of 2020.
Level One Bancorp had total assets of $1.51 billion and Ann Arbor Bancorp had total assets of $320.6 million, both as of June 30, according to S&P Global Market Intelligence data.
S&P Global Market Intelligence calculates the deal is 169.50% of common equity and 169.50% of tangible common equity and 15.4x earnings, on an aggregate basis. The deal value is 21.18% of assets, 25.81% of deposits, and it has a tangible book premium-to-core deposits ratio of 14.46%.
S&P Global Market Intelligence valuations for bank and thrift targets in the Midwest region between Aug. 13, 2018, and Aug. 13, 2019, averaged 155.19% of book and 156.61% of tangible book and had a median of 19.94x last-12-months earnings, on an aggregate basis.
Level One Bancorp will enter Washtenaw County, Mich., with two branches to be ranked No. 13 with a 2.59% share of approximately $8.87 billion in total market deposits. It will also enter Jackson County, Mich., with one branch to be ranked No. 11 with a 1.21% share of approximately $1.79 billion in total market deposits.
Performance Trust Capital Partners LLC served as Level One's financial adviser, and Barack Ferrazzano Kirschbaum & Nagelberg LLP served as the company's legal counsel. For Ann Arbor Bancorp, Sandler O'Neill & Partners LP served as financial adviser and Varnum LLP served as legal counsel.