Level One Bancorp Inc. of Farmington Hills and Ann Arbor Bancorp Inc., the privately-owned parent company of Ann Arbor State Bank, today announced a definitive merger agreement wherein AAB shareholders will receive $38.50 per share in an all-cash transaction. The aggregate deal value is approximately $67.8 million.
Upon completion of the merger, the combined company will have more than $1.8 billion in assets, $1.4 billion in loans, and $1.5 billion in deposits based upon financials for the period ending of June 30.
AAB operates three banking locations in Michigan – two in Washtenaw County and one in Jackson County. As of June 30, AAB, which was established in January 2009, reported assets of $321 million, total loans of $230 million, total deposits of $262 million, and tangible common equity of approximately $40 million, or approximately 12.2 percent of assets.
In addition, for the 12 months ending June, AAB reported a return on average assets of 1.33 percent. On June 30, AAB had 0.23 percent non-performing assets to total assets, excluding restructured loans.
“We are pleased to welcome the customers and team members of Ann Arbor State Bank to the Level One family,” says Patrick J. Fehring, president and CEO of Level One Bank. “This merger aligns with our strategic growth goals and affords us an opportunity to accelerate our expansion in the very attractive Ann Arbor market. Further, this transaction allows us to productively deploy the capital we raised during our 2018 initial public offering.”
Peter Schork, CEO of AAB, will join Level One following completion of the merger. “We are excited about partnering with a high-performing company that shares our values and entrepreneurial community banking culture,” he says. “We find the business fit of the two organizations to be especially compelling, and we think our customers will benefit from the broader array of products and services and larger lending limit. We are thrilled about being able to do even more in our markets with considerably greater scale.”
The merger agreement has been unanimously approved by the boards of directors of each company. The transaction is expected to close in the last quarter of 2019 or the first quarter of 2020. It is subject to closing conditions, including customary regulatory approvals and AAB shareholder approval. One current board member of AAB will be appointed to join the Level One and Level One Bank boards of directors.