Oxford Bank in Michigan has terminated its planned sale to Level One Bancorp due to regulatory delays and an improvement in Oxford's financial condition.

Oxford's board voted to terminate the agreement on May 14, the $266 million-asset company disclosed. Under the merger agreement, either side had the right to cancel the deal if it had not closed by May 13. The $519 million-asset Level One in Farmington Hills, Mich., agreed to pay $3.5 million for Oxford last September.

Oxford said that the uncertainty resulting from regulatory delays and restrictions in the merger agreement let directors to terminate the sale. The agreement "tied our hands to do the normal things we needed to do," James Bess, Oxford's chief executive, told the Clarkston News.

Oxford also said that its improved financial performance prompted the termination. Oxford has not been well-capitalized since 2008 and had a Tier 1 capital ratio of 5.43% at March 31, but it earned $500,000 in the first quarter and $2.8 million last year.

Oxford would have been the third acquisition and first open-bank deal for Level One. The six-year-old bank has bought two failed banks.

Neither Level One nor Oxford Bank immediately responded to requests from American Banker for comment.

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