First Merchants Corporation (NasdaqGS:FRME) entered into an agreement to acquire Level One Bancorp, Inc. (NasdaqGS:LEVL) for approximately $320 million on November 4, 2021. Shareholders of Level One will be entitled to receive, for each outstanding share of Level One common stock, (a) a 0.7167 share of First Merchants common stock, in a tax-free exchange, and (b) a cash payment of $10.17. The Exchange Ratio is subject to adjustments for stock splits, stock dividends, recapitalization, or similar transactions, or as otherwise described in the Merger Agreement. Fractional shares of First Merchants common stock will not be issued in respect of fractional interests arising from the Exchange Ratio but will be paid in cash pursuant to the Merger Agreement. Level One shall pay First Merchants termination fee of $11.13 million as termination fee. First Merchants shall pay to Level One $10 million as termination fee. 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.

Consummation of the Merger is subject to various conditions, including, among others, (i) requisite approvals of the holders of Level One common stock; (ii) effectiveness of a Form S-4 registration statement relating to the shares of First Merchants common stock and its newly created preferred stock (or preferred depositary shares in respect thereof), in each case, to be issued in the Merger, (iii) authorization for listing on the Nasdaq Global Select Market of the shares of First Merchants common stock to be issued in the Merger, as well as the shares of the newly created First Merchants preferred stock (or depositary shares in respect thereof), and (iv) receipt of regulatory approvals. The Boards of Directors of both First Merchants and Level One have approved the Merger Agreement. As on January 13, 2022, registration statement was decarded effective. As of February 23, 2022, Federal Reserve Board and Federal Deposit Insurance Corporation approved the transaction. The Indiana DFI expects to meet next month to consider the application for approval of the transaction. As of March 1, 2022, the transaction was approved by the shareholders of Level One Bancorp. On March 14, 2022, the Indiana Department of Financial Institutions notified First Merchants that it had approved the transaction. As a result, all regulatory approvals required prior to consummation of the Merger have been obtained. On March 21, 2022, First Merchants and Level One agreed to waive all remaining closing conditions in the Merger Agreement. The parties anticipate completing the Merger in the first half of 2022. As of February 23, 2022, the transaction is expected to close in early second quarter of 2022. As on March 1, 2022, the transaction is expected to close on April 1, 2022. 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 earn back of 2.9 years.

Stephens Inc. served as the financial advisor to First Merchants and legal advisor was Jeremy E. Hill and Bradley C. Arnett of Dentons Bingham Greenebaum LLP. Piper Sandler & Co. served as financial advisor and fairness opinion provider to LEVL in this transaction and Bill Fay of Barack Ferrazzano Kirschbaum & Nagelberg LLP served as legal advisor to Level One. Continental Stock Transfer & Trust Company serve as depositary for the depositary shares and as transfer agent and registrar for the First Merchants preferred stock and the depositary shares. Piper Sandler & Co. will receive $3.54 million for advisory services and $0.25 million to render an opinion.