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Level One boosts Ann Arbor presence via AAB
Posted on Wednesday, 14 August 2019 10:31
Level One Bancorp is accelerating expansion in the Ann Arbor metropolitan statistical area (MSA), which is among Michigan’s most desirable markets, through the acquisition of privately-owned Ann Arbor Bancorp (AAB) for USD 67.80 million.
The USD 38.50 per share cash offer equates to a multiple of 16.2x earning for the last 12 months and is 170.0 per cent tangible book value.
It will boost Level One’s franchise value through added exposure to Ann Arbor MSA, increase scale and breadth to further service commercial and retail customers in the region and add 25.0 per cent to earnings in 2020.
AAB is the holding company for Ann Arbor State Bank, a ten-year-old lender with three branches across the Washtenaw and Jackson counties.
The group had assets of USD 320.09 million, gross loans of USD 229.60 million and total deposits of USD 262.67 million, as of 30th June 2019.
AAB had a return on average assets of 1.3 per cent for the last 12 months ending 30th June 2019, and a net margin of 3.7 per cent.
The holding group had tangible common equity to tangible assets of 12.2 per cent and a bank level total risk-based capital ratio of 15.6 per cent.
Subsidiary Ann Arbor State Bank is one of two remaining true community banks headquartered in one of the US’s most prestigious markets, which is the second-best city to live in in the country and the sixth most innovative in the States.
Upon completion of the merger, Level One will have over USD 1.80 billion in assets, USD 1.40 billion in loans and USD 1.5 billion in deposits, based upon financials at 30th June 2019.
Zephyr, the M&A database published by Bureau van Dijk, shows 40 acquisitions have targeted a Michigan-based bank since records began.
The largest, at USD 4.90 billion, featured Fifth Third taking over Old Kent Financial in 2001, which is followed by Chemical Financial buying Talmer Bancorp in 2016.
Level One’s deal is the 13th biggest by value, according to Zephyr.
© Zephus Ltd