First Merchants in Muncie, Ind., has agreed to buy Level One Bancorp in Farmington Hills, Mich.
The $15.1 billion-asset First Merchants said in a press release Thursday that it will pay $323.5 million in cash and stock for the $2.5 billion-asset Level One. The deal, which is expected to close in the first half of 2022, priced Level One at 188% of its tangible book value.
Level One has 16 branches, $1.7 billion of loans and $2.1 billion of deposits.
First Merchants said it expects the deal to be 10.4% accretive to its 2023 earnings per share. It should take less than three years to earn back an estimated 4.3% dilution to First Merchants’ tangible book value.
First Merchants plans to cut 30% of Level One’s annual noninterest expenses. It expects to incur $23.5 million of merger-related expenses.
Level One will appoint one director to join First Merchants’ board.
Piper Sandler and Barack Ferrazzano advised Level One.