Level One Bancorp, Inc.
Annual Report 2017

Plain-text annual report

YEARS 2017 Annual Report Board of Directors 1 Steven H. Rivera DO, MBA, FACEP Managing Partner, Independent Emergency Physicians, PC President Medical Staff, Ascension Providence and Providence Park Hospitals 2 Mark J. Herman President & COO ANYI Management Company 3 Barbara E. Allushuski President & CEO Blue Heron Talent, LLC 4 Victor L. Ansara President & CEO Ansara Restaurant Group, Inc. 5 Stefan Wanczyk President & CEO Utica Enterprises, Inc. 6 Patrick J. Fehring President & CEO Level One Bank 7 Shukri W. David MD, MBA, FACC, Physician Chair, Heart & Vascular Center of Excellence St. John Providence Health System 8 Michael A. Brillati CEO Salus Group 9 Thomas A. Fabbri President & CEO Aaro Companies 10 James Bellinson Managing Director Riverstone Communities 4 1 3 5 7 8 10 2 6 9 To Our Shareholders I am pleased to report 2017 was another successful year of quality growth for Level One Bank. We achieved strong financial results with solid loan and deposit growth, received several local and national awards, opened a new banking center and celebrated our 10-year anniversary. Our Net Income was $9.8 million in 2017, a modest decline from 2016 due primarily to the 2017 tax reform. Although this negatively impacted earnings in 2017, we will see benefits from reduced tax rates starting in 2018 and beyond. Total Assets grew 15% to $1.3 billion in 2017. We continued strong growth in our commercial and consumer portfolios, surpassing $1.0 billion in loans in the fourth quarter. We were recognized by S&P Global in 2017 as one of the best-performing community banks in the nation, ranking 35th among other banks our size. We were also proud to be recognized for workplace excellence by American Banker Magazine as one of the ‘Best Banks to Work For’ in the country. Patrick J. Fehring, President & CEO Our Grand Rapids office had a very successful 2017 with outstanding loan and deposit results in its first year. In July, we opened a beautiful new banking center in Bloomfield Hills, our twelfth banking center overall and second in the Bloomfield Hills community. I am pleased to report this banking center is also off to a great start. It’s hard to imagine we started Level One Bank just 10 years ago. As I reflect on our first decade in business, I am ever thankful for the shareholders, team members, clients and communities who believed in us from the very beginning. We would not be the Bank we are today without your tremendous support. Throughout this report, you will see many of the accomplishments and milestones we have reached together over the last 10 years. Among all our achievements, something I am most proud of is the culture we have created here. Our core values are authentic and truly unique to the DNA of Level One Bank. Passion, humility, hard work, and relationships, to name a few, make up the same DNA that carried us through the early days of starting the Bank. It is this same set of values that continues to drive us into the exciting future ahead. We remain committed to quality growth and profitability as we look ahead to 2018 and beyond. Thank you for your continued support and unwavering commitment to Level One Bank. Sincerely, Patrick J. Fehring President & CEO Executive Team From left to right: Lani Barrett, EVP, Chief Human Resources Officer; Gregory A. Wernette, EVP, Chief Lending Officer; David C. Walker, EVP, Chief Financial Officer and Treasurer; Patrick J. Fehring, Chairman, President and Chief Executive Officer; Eva Scurlock, EVP, Risk Management Officer; Timothy R. Mackay, EVP, Consumer Banking Officer Our 10-year anniversary celebration included more than 200 team members in 2017. Annual Report 2017 | 1 2017 – Year in Review ONE TWO First Quarter • Launched a commercial banking division in Grand Rapids to complement our retail, mortgage and small business divisions • Celebrated a grand opening event for our new Grand Rapids office Second Quarter • Ranked among the nation’s ‘Top 100 Best-Performing Community Banks’ our size by S&P Global Market Intelligence THREE Third Quarter • Opened a new banking center in Bloomfield Hills • Named one of the ‘Best Banks to Work For’ in the nation by American Banker Magazine for the second consecutive year • Honored for the fifth straight year as one of Metro Detroit’s ‘Best & Brightest Companies to Work For’ • Recognized in Inc. Magazine’s list of ‘5,000 Fastest Growing Private Companies in America’ for the third time FOUR Fourth Quarter • Celebrated Level One Bank’s 10-year anniversary with team members, clients and the community • Exceeded the milestone of $1.0 billion in total loans Sustained Quality Growth In 2017, we further established our brand and presence in Southeast Michigan and West Michigan alike. After opening our first Grand Rapids office at the end of 2016, we held a ribbon- cutting ceremony and celebrated our entry into West Michigan with local clients and community leaders in January 2017. During the first quarter, we also launched our commercial banking division in Grand Rapids, which includes a comprehensive team of commercial lenders and treasury management professionals. The Grand Rapids location serves as our full-service banking hub in West Michigan, offering personal banking, mortgage banking and business banking services. We continued to expand our footprint in Oakland County with the opening of a new banking center in Bloomfield Hills during the third quarter of 2017. The full-service banking center is located at the corner of a highly-traveled intersection and conveniently located next to prevalent shopping centers and restaurants. The office features an open floor plan with conversation rooms, new technology, and a large conference room that offers meeting space for local community groups and organizations. Our full-service banking center in Grand Rapids. Our newest banking center in Bloomfield Hills. Annual Report 2017 | 2 We were honored to receive a number of prestigious awards in 2017, including those that recognized our Bank’s culture and human resources practices. For the second year in a row, American Banker Magazine selected Level One Bank as one of the ‘Best Banks to Work For’ in the country and for the fifth year in a row, we were named one of Metro Detroit’s ‘101 Best & Brightest Companies to Work For’. We are committed to maintaining a superior workplace environment that attracts and retains top industry talent. The Grand Opening of our newest banking center in Bloomfield Hills in 2017. Annual Report 2017 | 3 Reflecting on Our First 10 Years 2007 - 2017 OFFICES COMMUNITY IMPACT Level One Bank’s headquarters in Farmington Hills. Our first 10 years in business has been exciting to say the least. Characterized by rapid growth and extraordinary results, it’s not surprising that today Level One Bank is one of the ‘Fastest Growing Private Companies in America’ according to Inc. Magazine and one of the ‘Best-Performing Community Banks’ in the nation as recognized by S&P Global. Since the beginning, our strategies for growth have been aggressive, with robust organic growth supplemented by acquisitions. As banks were closing due to the strain of the economic climate, we sought timely opportunities to acquire local banks - Michigan Heritage Bank in 2009 and Paramount Bank in 2010. We grew quickly in size and strength with the addition of new banking centers, new clients and new team members. In 2011, with a solid foundation established in commercial banking and treasury management, we began to enhance our core business model with the addition of our Residential Mortgage and Small Business Lending divisions. In 2012, we consolidated our banking operations into a new headquarters building to prepare for future growth. We grew organically from 2012 – 2014 as we opened de novo banking centers, expanded our product offerings, invested in technology, infrastructure and talent, and established a strong brand identity and reputation in our marketplace. In 2015, we opened our first Mortgage Loan Production Office in Ann Arbor and acquired Lotus Bank. Soon after, in 2016, we acquired Bank of Michigan propelling us over $1.0 billion in assets and more than 200 team members. We continued our growth trajectory in 2016 with the opening of a new banking center in downtown Detroit and our expansion into West Michigan. In 2017, we opened our 12th banking center and celebrated a significant milestone - our 10-year anniversary. It is truly remarkable how far we’ve come in 10 years, and we’re not done yet. Profitable growth and expansion remain an important part of our strategy moving forward, and we look forward to sharing more milestones with you in the years to come. The Grand Opening of our first banking center in 2007. 1 headquarters 12 banking centers ACQUISITIONS 1 mortgage production office acquired banks 4 $1 Million 150 dollars donated non-profits supported TEAM MEMBERS 235 currently employed AWARDS RECEIVED 2x American Banker’s Best Banks to Work For 5x 101 Best Places to Work in Metro Detroit 3x Inc. 5000 Fastest Growing Private Companies in America 3x Standard & Poor’s Best Performing Community Bank 1x Michigan Top 50 Companies to Watch 4x SBA Export Lender of the Year 2x SBA Community Lender of the Year FUN FACTS THEN & NOW U.S. Prime Rate 7.25% 13,265 Dow Jones Industrial Average 24,719 4.50% December 2007 December 2017 Annual Report 2017 | 4 Annual Report 2017 | 5 Making an Impact: Investing in Local Communities Through leadership, financial support and volunteerism, Level One team members are actively engaged and making an impact in the communities we serve. Since our founding, we have contributed over one million dollars and countless hours to local organizations and individuals in need. While our community outreach efforts span far and wide, we primarily focus on financial literacy, affordable housing and community development initiatives. In 2017, we continued our partnership with Habitat for Humanity of Oakland County, Macomb County and Detroit. We developed a customized loan program for low-to-moderate income borrowers purchasing homes from Habitat for Humanity that offers reduced costs and below-market fixed interest rates. With this specialized loan, Level One Bank was able to help numerous Habitat for Humanity families become homeowners in 2017. We are pleased to provide a number of grant opportunities to qualifying low-to- moderate income individuals to help make home ownership more affordable. Our grant programs include money for down-payment assistance, existing home repairs, and accessibility modifications for seniors and those with disabilities. “In 2017, we facilitated over $400,000 in grant money throughout Southeast Michigan and Grand Rapids, helping nearly 50 families.” Our team members are passionate about lending their financial expertise to the community. As such, we regularly volunteer with local adult and youth organizations to teach various financial literacy and homebuyer education classes. Classes range from banking basics and credit building to preparation for first-time homebuyers and buying a car. We continued our partnership in 2017 with Operation HOPE, Wayne State University and TechTown Detroit to offer free credit counseling and money management classes to nearly 600 individuals in the Detroit area. The Harris family moved into their first home with the help of Habitat for Humanity and Level One Bank. The Glovell family, along with friends and supporters, celebrates their new Habitat for Humanity home with the help of a grant from Level One Bank used for down-payment assistance. Level One team members get their hands dirty as they volunteer with Habitat for Humanity. “We regularly volunteer with local adult and youth organizations to teach various financial literacy and homebuyer education classes.” Level One team members lead a credit-building workshop at Southwest Solutions. Level One team members regularly volunteer with Read to a Child Detroit. Annual Report 2017 | 6 Level One’s mortgage team teaches students about the mortgage loan process and how to prepare for buying a home. Annual Report 2017 | 7 Client Spotlight One reimburses customers for fees charged at non-Level One ATMs. “It’s nice when you don’t have to make a special trip to your own bank’s ATMs. It’s the little things.” Atkins is a licensed attorney with over eight years of experience. She serves as a Managing Attorney at The Probate Pro in Royal Oak where she focuses primarily on estate planning and probate related issues. Amber Atkins is a long-time and loyal client of Level One Bank. After moving her personal accounts from the frustrations of a big bank, Atkins has an appreciation for the personalized service she receives from Level One. “It makes such a big difference. You don’t feel like just another account,” she explained. Atkins notes conveniences like Online Banking, Bill Pay and Mobile Banking as reasons she loves Level One. “I do most of my banking online now. I can deposit checks with the mobile app and pay my bills online. The online services are very user-friendly,” she explained. Atkins particularly enjoys the fee-free ATM network in which Level Dr. Robert Standring was a medical resident when he began the search for his first home. As a young professional earning a resident’s wage and bearing the burden of medical school debt, obtaining financing for a home was no easy task. He shopped around other banks and mortgage companies before choosing Level One Bank. “Their rates were competitive and they offered a more personal approach. I have someone I can call any time, day or night, and they know me and my practice. It’s so refreshing,” explained Dr. Standring. Level One Bank was able to offer a zero down-payment option through their Physician Loan program to accommodate Dr. Standring’s unique situation. “They took a gamble on me when I was just getting started in my career.” Today, Dr. Standring is a Board Certified Otolaryngologist at Ear, Nose and Throat Consultants in Southfield, Michigan where he treats disorders of the ear, nose and throat and related problems of the head and neck. He added, “I can’t speak highly enough of my loan officer, Brad Donnelly, and the whole mortgage process. Everything Level One Bank did was so smooth. I always had paperwork on time and when I needed it.” When Nigam Tripathi moved his commercial accounts to Level One Bank, he immediately noticed a difference in treatment. “People are very friendly compared to the other banks I’ve worked with,” he explained. Tripathi appreciates how down-to-earth the Level One team is at all levels of the organization, from the administration to upper management, and from the Grand Rapids office to the headquarters in Farmington Hills. “It’s unique. It’s something you don’t see walking into a commercial bank. That’s key to me,” he added. Since 2010, Tripathi has started five successful businesses in Michigan, including three manufacturing companies, a real estate company and a capital holding company: WL Molding, WPI, PlasTechs, Jhamin and TCH. Tripathi’s strong relationship with his commercial banker in Grand Rapids, Doug Kohlbeck, led to the refinancing of various lines of credit and equipment financing through Level One. When asked about his decision to switch to Level One, Tripathi said, “I am very, very happy.” Amber Atkins The Probate Pro Dr. Robert Standring, MD Ear, Nose and Throat Consultants P.C. Nigam Tripathi WL Molding, WPI, PlasTechs, Jhamin, and TCH Annual Report 2017 | 8 Ira Harris Habitat for Humanity Homeowner Ira Harris and her family purchased and moved into their first home with the help of Habitat for Humanity Detroit and Level One Bank. Harris was looking for a place of her own when she heard about the Habitat for Humanity program. As a mortgage partner for Habitat for Humanity, Level One Bank originated Harris’s mortgage loan and worked with her throughout the entire mortgage process to get her to the closing table on time. When asked about her experience working with Level One, Harris said, “It was great. They had my back every step of the way. They were loyal to me and my family.” Harris was especially thankful for the responsiveness and dependability of her loan officer, Kendra Merriman. “Even if she wasn’t in the office or if it was after hours, she always responded back to me right away. Whatever questions I had were answered and everything stayed on track and got approved.” Michael T. Kulka, P.E. PM Environmental When PM Environmental was seeking a new banking relationship, the company’s Founder and CEO, Michael Kulka, turned to his team of trusted CPAs and advisors to guide him through the process. They recommended working with a community bank. “It wasn’t about who had the cheapest rate. It was about who was best for my company,” Kulka explained. Kulka was impressed by Level One Bank’s ability to turn around a decision quickly, providing an answer in a couple of days while other banks needed a couple of weeks. Even more important to Kulka was Level One Bank’s relationship-centered approach. “The ability to sit one-on-one with a senior executive to review financials was a huge plus,” he noted. “Level One Bank knew me intimately, like other banks couldn’t. We had a personal relationship. They were the best choice because they know me the best.” PM Environmental is an environmental risk expert with over 25 years of experience in consulting and managing a wide variety of environmental, engineering, industrial hygiene, energy and development projects through 18 regional offices across the country. Anita’s Kitchen is a family-owned Lebanese restaurant that originally started in 1980 in Farmington Hills. After opening a location in downtown Ferndale nearly 10 years ago, Anita’s Kitchen became a local favorite in the community. The restaurant is conveniently located next door to Level One Bank’s Ferndale office. “It’s great to be able to walk two doors down and get all of our banking taken care of,” explained Joe Wegrzyn, Co-owner of Anita’s Kitchen. “We use Level One Bank whenever we can, whether it’s for the business or for personal banking.” With the help of Level One Bank’s small business lending team, Joe and his wife Jennifer are now expanding their operations to include AKtakeaway - a fast-casual restaurant in downtown Detroit, and WonderBlue LLC - a commissary kitchen that will serve as the main supply hub for their restaurants. AKtakeaway and WonderBlue LLC are both slated to open in 2018. “From day one, it was a big sigh of relief to know that Level One Bank was going to bring this thing to life,” said Joe Wegryzn. “Whether financing our business ventures or our family home, there has always been a sense of trust and comfort with Level One.” Annual Report 2017 | 9 Joe and Jennifer Wegrzyn Anita’s Kitchen CONSOLIDATED BALANCE SHEETS December 31, 2017 and 2016 (Dollars in thousands, except share data) ASSETS Cash and cash equivalents Securities available-for-sale Federal Home Loan Bank stock Mortgage loans held for sale, at fair value Loans: Originated loans Acquired loans Total loans Less: Allowance for loan losses Net loans Premises and equipment Goodwill Other intangible assets, net Bank-owned life insurance Income tax benefit Other assets Total assets LIABILITIES Deposits: Noninterest-bearing demand deposits Interest-bearing demand deposits Money market and savings deposits Time deposits Total deposits Borrowings Subordinated notes Other liabilities Total liabilities Shareholders’ equity Common stock: Authorized - 20,000,000 shares at 12/31/2017 and 12/31/2016 Issued and outstanding - 6,435,461 shares at 12/31/2017 and 6,350,532 shares at 12/31/2016 Retained earnings Accumulated other comprehensive loss, net of tax Total shareholders’ equity Total liabilities and shareholders’ equity 2017 $ 63,661 150,969 8,303 4,548 920,895 114,028 1,034,923 (11,713) 1,023,210 13,435 9,387 667 11,542 3,102 12,467 $1,301,291 $ 324,923 62,644 289,363 443,452 1,120,382 47,833 14,844 10,272 1,193,331 59,511 49,232 (783) 107,960 $ 1,301,291 2016 $ 19,116 100,533 5,828 9,860 803,572 149,821 953,393 (11,089) 942,304 15,719 9,387 901 11,214 5,137 7,532 $1,127,531 $ 280,779 60,472 284,249 299,424 924,924 82,645 14,786 8,605 1,030,960 58,306 39,391 (1,126) 96,571 $1,127,531 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY Years ended December 31, 2017, 2016 and 2015 (Dollars in thousands) Preferred Stock Common Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity BALANCE AT JANUARY 1, 2015 $11,287 $ 57,501 $15,929 $ (296) $ 84,421 Net income Other comprehensive income (loss) Exercise of stock options (2,835 shares), including tax benefit Preferred stock dividends Preferred stock redemption Stock-based compensation expense - - - - (11,287) - - - 25 - - 114 12,528 - - (112) - - - (55) - - - - 12,528 (55) 25 (112) (11,287) 114 BALANCE AT DECEMBER 31, 2015 $ - $ 57,640 $28,345 $ (351) $ 85,634 Net income Other comprehensive income (loss) Exercise of stock options (27,008 shares), including tax benefit Tax benefit from restricted stock vesting Stock-based compensation expense - - - - - - - 300 2 364 11,046 - - - - - (775) - - - 11,046 (775) 300 2 364 BALANCE AT DECEMBER 31, 2016 $ - $58,306 $39,391 $(1,126) $ 96,571 Net income Other comprehensive income (loss) Exercise of stock options (57,506 shares), including tax benefit Stock-based compensation expense, net of shares net settled - - - - - - 605 600 9,841 - - - - 343 - - 9,841 343 605 600 BALANCE AT DECEMBER 31, 2017 $ - $59,511 $49,232 $ (783) $107,960 Annual Report 2017 | 10 Annual Report 2017 | 11 CONSOLIDATED STATEMENTS OF INCOME Years ended December 31, 2017, 2016 and 2015 (In thousands, except per share data) Net Interest Margin Interest income Originated loans, including fees Acquired loans, including fees Securities: Taxable Tax exempt Federal funds sold and other Total interest income Interest Expense Deposits Borrowed funds Subordinated notes Total interest expense Net interest income Provision for loan losses Net interest income after provision for loan losses Noninterest income Service charges on deposits Net gain on sale of securities Net gain on sale of residential mortgage loans Net gain on sale of commercial loans Gain on FDIC loss share agreement termination Other charges and fees Total noninterest income Noninterest expense Salary and employee benefits Occupancy and equipment expense Professional service fees Acquisition and due diligence fees Marketing expense Printing and supplies expense Data processing expense Other expense Total noninterest expense Income before income taxes Income tax provision Net income Less: Preferred stock dividends Net income allocated to common shareholders Earnings per common share: Basic Diluted Average common shares outstanding - basic Average common shares outstanding - diluted 2017 2016 2015 $39,812 12,231 $33,771 $26,978 16,956 11,762 1,746 955 863 55,607 6,267 797 1,014 8,078 47,529 1,416 1,431 1,674 441 304 674 247 52,903 41,335 4,499 3,512 318 1,015 5,832 47,071 3,925 252 28 3,792 37,543 1,359 46,113 43,146 36,184 2,543 208 1,698 146 - 1,907 6,502 21,555 4,208 2,314 - 930 477 1,912 4,655 36,051 16,564 6,723 9,841 - 1,885 926 2,249 - - 1,347 6,407 972 280 1,701 92 3,117 1,052 7,214 17,978 14,663 3,370 1,189 2,684 806 468 2,023 3,889 32,407 17,146 6,100 11,046 - 2,792 892 722 567 349 1,350 3,553 24,888 18,510 5,982 12,528 112 The Company’s loans are its main revenue engine, and the loan yield increased more than the cost of funds increased, resulting in the Company’s net interest margin of 4.2%. Noninterest Expense/Average Assets Offsetting net interest revenue is noninterest expense (e.g., salaries, occupancy, data processing, etc.) In 2017, this increased primarily due to higher salary and employee benefits resulting from an increase of 23 FTE employees (portion of which related to opening of Grand Rapids Branch). (Thousand) Net Income Net income was strong at $9.8 million in 2017. $ 9,841 $11,046 $12,416 Return on Average Assets $ 1.54 $ 1.49 6,388 6,610 $ 1.74 $ 1.69 6,341 6,549 $ 1.97 $ 1.92 6,307 6,463 CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31, 2017, 2016 and 2015 (Dollars in thousands) (Million) Total Assets Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Amortization of core deposit intangibles Stock-based compensation expense, net of shares net settled Provision for loan losses Discount on acquired SBA/USDA retained loans Net securities premium amortization Net gain on sales of securities Originations of loans held for sale Proceeds from sales of loans originated for sale Net gain on sales of loans Net accretion on acquired purchase credit impaired loans Writedowns on other real estate owned Gain on sale of other real estate owned Increase in cash surrender value of life insurance Net (increase)/decrease in accrued interest receivable and other assets Net increase/(decrease) in accrued interest payable and other liabilities Net cash from operating activities Cash flows from investing activities Net increase in loans Principal payments on securities available-for-sale Purchases of securities available-for-sale Purchases of Bank Owned Life Insurance Purchases of FHLB Stock Additions to premises and equipment Proceeds from: Redemption of FHLB Stock Sale of securities available-for-sale Sale of other real estate owned Net cash from/(used) in acquisition Net cash used in investing activities 2017 2016 2015 $ 9,841 $ 11,046 $ 12,528 1,369 234 1,445 233 1,026 154 600 1,416 - 871 (208) (64,184) 69,753 (1,844) 364 3,925 133 608 (926) (78,950) 74,995 (2,249) 114 1,359 33 864 (280) (58,245) 59,622 (1,793) (5,340) - (237) (328) (8,412) - (35) (181) (6,960) 105 (181) (100) (1,519) (4,658) 4,952 1,725 12,149 2,865 203 (1,454) 11,744 (75,780) 8,850 (74,225) - (2,475) (913) (89,466) 12,900 (91,041) (7,520) (1,536) (3,066) - 14,803 885 - (128,855) - 93,427 116 2,458 (83,728) Cash flows from financing activities 195,458 Net increase in deposits Repayment of Federal Home Loan Bank (FHLB) advances (348,500) 314,000 Issuances of FHLB advances (1,826) Change in short term borrowings 1,514 Increase in secured borrowing - Proceeds from issuance of subordinated notes - Preferred stock dividends Redemption of preferred stock - Proceeds from exercised stock options, including tax benefit Net cash from financing activities Net change in cash and cash equivalents Beginning cash and cash equivalents Ending cash and cash equivalents 605 161,251 44,545 19,116 $ 63,661 46,170 (16,600) 65,000 (8,265) - - - - 300 86,605 3,080 16,036 $ 19,116 Supplemental disclosure of cash flow information: Interest paid Income taxes paid Transfer from premises and equipment to other assets Transfer of loans held for sale to loans held for investment Transfer from loans to other real estate owned $ 7,427 $ 5,864 1,200 - - 258 4,625 1,793 1,587 385 (109,972) 12,610 (68,072) - - (1,050) 313 50,801 714 (965) (115,621) 145,358 (37,000) 35,000 (43,798) - 14,733 (112) (11,287) 25 102,919 (958) 16,994 $ 16,036 $ 3,603 1,050 - - 399 Organic growth drove an increase in assets of 15% during 2017. (Million) Total Loans Loan growth contributed to 47% of total asset growth during 2017. Uncovered Net Charge Offs / Average Assets Credit quality remains excellent with a .07% loss rate in 2017. Annual Report 2017 | 12 Annual Report 2017 | 13 The Company’s net income as percent of assets was 0.82% in 2017. Non-cash transactions: Increase in assets and liabilities in acquisitions: Assets acquired - Bank of Michigan (2016), Lotus Bank (2015) Liabilities assumed - Bank of Michigan (2016), Lotus Bank (2015) - 114,442 111,428 - 102,762 98,906 Corporate Office 32991 Hamilton Court Farmington Hills, MI 48334 248-737-0300 Banking Center Locations Birmingham 1732 West Maple Road Birmingham, MI 48009 248-723-4800 Bloomfield 6450 Telegraph Road Bloomfield Hills, MI 48301 248-406-8905 Bloomfield 37100 Woodward Avenue Bloomfield Hills, MI 48304 248-530-7401 Mortgage Loan Production Office 2750 South State Street Ann Arbor, MI 48104 734-794-5225 Farmington Hills 30095 Northwestern Highway Farmington Hills, MI 48334 248-865-1300 Grand Rapids 2355 Burton Street SE Grand Rapids, MI 49506 616-827-4400 Farmington Hills 31000 Northwestern Highway Farmington Hills, MI 48334 248-538-7600 Northville 20550 Haggerty Road Northville, MI 48167 248-380-6590 Farmington Hills 30201 Orchard Lake Road Farmington Hills, MI 48334 248-737-1110 Novi 44350 W. 12 Mile Road Novi, MI 48377 248-735-1000 Detroit 1420 Washington Boulevard Detroit, MI 48226 313-309-9980 Ferndale 22635 Woodward Avenue Ferndale, MI 48220 248-414-6500 Sterling Heights 43683 Schoenherr Road Sterling Heights, MI 48313 586-412-1800 Member FDIC 888-880-5663 | contact@levelonebank.com www.LevelOneBank.com

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