Level One Bancorp in Farmington Hills, Mich., has found its next growth opportunity with a deal to buy a struggling 128-year-old bank.
The $470 million-asset company said Thursday that it would buy the $270 million-asset Oxford Bank in Michigan for an undisclosed amount. The deal will close in the first quarter of 2013.
"We look forward to building upon Oxford Bank's 128-year history and culture of community engagement while also adding residential and mortgage services, business loans and a wide range of treasury management services," Patrick Fehring, Level One's president and chief executive, said in a press release. "This acquisition is also in keeping with our plan for strategic growth."
Oxford's bank was undercapitalized at June 30, with a total risk-based capital ratio 7.22%. It became significantly undercapitalized in the second quarter of 2010, when its total risk-based capital ratio fell to 4.93%.
Oxford Bank has not been well capitalized since the third quarter of 2008, according to data from the Federal Deposit Insurance Corp. The bank has been profitable since the last quarter of 2010 and has been slowly rebuilding capital while reducing problem assets. At June 30, nonperforming assets made up 5.46% of total assets.
If completed, the deal would be Level One's third acquisition since it was formed five years ago, but its first open-bank deal. In April 2009, it bought the failed Michigan Heritage Bank in Farmington Hills. In December 2010, it bought the failed Paramount Bank, also based in Farmington Hills.