Good day, and welcome to the First Merchants Corporation conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note that this event is being recorded. Before we begin, management would like me to remind you that today's call contains forward-looking statements with respect to the future performance and financial conditions of First Merchants Corporation that involves risks and uncertainties. Further information is contained within the press release, which we encourage you to review. Additionally, management may refer to non-GAAP measures, which are intended to supplement, but not substitute for, the most directly comparable GAAP measures. The press release available on the website contains financial and other quantitative information to be discussed today, as well as reconciliation of GAAP to non-GAAP measures. I would now like to turn the conference over to Mark Hardwick, Chief Executive Officer. Please go ahead. Thank you. Good morning, everyone. It's an exciting day here at First Merchants, and we're excited about today's call to announce our merger with Level One Bancorp. I'm joined here today with three of my colleagues, Mike Stewart, our President, John Martin, our Chief Credit Officer, and Michele Kawiecki, our Chief Financial Officer, who will be assisting me at the end of our kind of structured remarks to help with any Q&A that you may have. We released our announcement this morning at 8:30 A.M. Eastern Standard Time, and that announcement includes both a press release and a PowerPoint slide presentation. I'll be covering the slides in today's call. I'll start on page 3. You know, we're enthusiastic about this announcement as it continues to position First Merchants as a leading Midwest community banking franchise, with expanded Detroit, Michigan, market coverage. On a pro forma basis as of 9:30 A.M., First Merchants totals $17.6 billion in total assets, $10.8 billion in total loans, and $14.4 billion in total deposits. If you turn to slide four, you know, we have this broken down in a few different sections. We think that this opportunity for us is strategically compelling. It further establishes First Merchants as a leading Midwest banking franchise. The exciting part is that we're adding a proven growth-oriented bank in a substantial metro market. It enhances our scale in Michigan and creates the Southeast Michigan's premier community bank. The data is interesting to me that on a pro forma basis, we will have the number one deposit share among community banks with less than $50 billion in assets in the combined Detroit, Monroe, and Ann Arbor regions, with $3.4 billion of total deposits. This acquisition complements our existing Southeast Michigan footprint, primarily the Monroe acquisition that we did a couple of years ago, and expands our presence into Detroit and the attractive Ann Arbor and Grand Rapids markets as well. Level One Bank's commercially oriented and growing consumer mortgage platform with a low-cost deposit base and truly a compatible culture makes this acquisition, this partnership the right one for First Merchants, and we're incredibly excited about it. We think it's financially attractive. It produces double-digit earnings accretion in the first full year of cost savings, which would be 2023. We think the tangible book value dilution in the earn back are appealing as well, with an earn back of 2.9 years. Regulatory capital remains above the well-capitalized thresholds, and we feel like this will really help us continue to produce an outstanding return on tangible common equity. As you can imagine, we completed all the expected due diligence effort and really had both teams on the First Merchants side and the Level One Bank side working hard the past, you know, 45 days or so to make this happen. If you turn to page 5, we have the transaction summary. I really jump down to consideration. You know, you can see the exchange ratio there at 0.7167 shares of First Merchants common stock and cash of $10.17 per share. We were really focused on creating a transaction that had a 75% stock, 25% cash mix, as a way to optimize our capital base. As of yesterday's closing price for First Merchants, the aggregate deal value is $323.5 million. The pro forma value, or the, I guess, the exchange value for Level One shareholders would be $41.35 per share. It's 188% of tangible book and 12x consensus earnings for 2022. You can see it's just under 8x earnings if you include fully phasing cost savings. As part of the signing of the definitive agreement, we committed to one existing Level One board member that would join the First Merchants Corporation board and just continue to help us have representation in all of our markets. Our board structure, we look for a board, and actually, they have to live in our footprint. As big a market as this will be for First Merchants, it makes sense for us to have additional representation in the Detroit MSA. Approvals and closing. Level One shareholder approval will be needed, and we have all the customary regulatory approvals between our state regulatory agencies, the FDIC and the Fed. We expect to close in the first half of 2022, and our system integration is scheduled for the third quarter of 2022. If you then turn to page six. You know, many of you know Level One by reputation and are familiar with their growth since Pat Fehring founded the bank in 2007. You know, they have a formidable team of seasoned bankers with regional bank experience. You know, we're excited about this footprint. There are a number of items on this page that just show the reasons why. You know, Level One serves the Detroit MSA, especially when you think about combining it with our current market, our current franchise in that marketplace. We're excited about serving a population that's over 4.3 million, and we're excited about doing it with a bank that's been able to grow organically 12% since 2017. The team's very entrepreneurial, then they have a culture that's just driven by their passion to make a difference for their customers, much like the First Merchants team. If you look, then on page seven, we have some additional bullet points. The chart on the bottom left is really what helps us get excited about this opportunity. You know, we'll be the ninth-largest bank in the footprint, but we will be, you know, really the only community bank, an organization that's less than $50 billion in total assets, that really can make a difference in this Detroit MSA and Southeast Michigan marketplace. Hopefully, you can hear in my voice, my enthusiasm for it. It's home to 28,000 small to large-sized businesses, which is exactly where our focus is, and Michigan ranks fourth for middle market companies owned by women and minorities, which is just outstanding when you think about our corporate social responsibility initiatives. The Detroit MSA has a population, like I said, of over 4 million, of which 1.3 million live in Oakland County. Interestingly, Oakland County is the wealthiest county in the United States that isn't either on the East or West Coast. The Ann Arbor market and Grand Rapids market, we're excited about having you know, a presence in those markets and the ability to continue to grow. Especially in the Ann Arbor market, where we already have three locations and $276 million of total deposits. If you then slide to, or turn to slide eight, you'll see the pro forma loans and deposits of this franchise. It's appealing, it's profitable. It's a solid foundation to grow upstream in Michigan, and it's really funded by a strong core deposit base. If you look at this is kind of in the fine print, but I'm excited about the overall yield. Level One will improve the yield on our total loan portfolio from 4%- 4.1%, and the deposit base stays steady at 19 basis points. We're pleased by that as well. If you turn to slide 9, you can see the financial impact and the key transaction assumptions, and I'll cover a few of those. EPS accretion of double digit in 2023 after the cost savings are fully phased in is something that we're really excited about. The 2.9-year earn back, as I mentioned previously, you can just see the specifics here, is, we think, you know, a very reasonable pricing methodology that we've deployed in the past and has been successful for the growth of our tangible book value per share over time, and we wouldn't expect this to be any different. We'll have a TCE of 8.4 after the close and regulatory capital ratio of 13.4. The cost savings, pretty modest cost savings. We have 30% built into this model. Part of that is, you know, we've had significantly higher cost savings in prior transactions. This is a little bit of a different merger for us. Many of our mergers in the past have been more of a deposit play. In this case, we're picking up a more seasoned, competent, you know, and, I guess, experienced commercial team that we think can help enhance our growth prospects into the future. We made sure that the cost savings were a little bit more reasonable so we can continue to invest in the marketplace. The loan mark, you can see those notes here. $6 million on a pre-tax basis. We have a fixed asset mark of $1.5 million, and the deposit interest rate markup of just $300,000. A core deposit intangible of 0.7%. One-time pre-tax costs of $23.5 million. We didn't put in the model any revenue enhancements, that's been our tradition. Yet I feel like this acquisition probably has more revenue enhancement opportunities than any that we've done in the past. Both from just leveraging the commercial franchise and the fact we have a larger balance sheet to really leveraging even our private wealth business into the Level One customer base. If you remember when we purchased Monroe, they had a really strong private wealth business that added to the now $6 billion assets under advisement platform that we have at First Merchants, and we're excited about being able to leverage that across the Monroe customer base, as I mentioned. If you turn to slide 10, you'll see our acquisition history. Part of this is I think it's a core competency of First Merchants. We do a nice job of cultivating relationships. I think paying reasonable prices that we can produce value into the future. I go all the way back to, you know, I was here at the beginning of this chart when we were $1 billion in assets. We had a board member at the time that asked all the time, "Does scale truly exist in banking?" I can tell you, over the years, we've proven that scale does exist in banking, and it's part of what has made us a high-performing company. The secondary thing that has come with our acquisition history is improved demographics. As we have been able to grow the company through acquisition, we've improved the demographic profile of our franchise, and I think that's absolutely the case with this acquisition, our largest in the company's history, with Level One. The other thing I guess I should mention is just culturally, I think we're batting a thousand culturally. These acquisitions have been great for all stakeholders, and it's been fun to build these relationships and have so many fans in every market that we serve. You know, if I go to the last page, 11, I'd love to provide a brief summary here. You know, we love that our Southeast Michigan presence will be of a scale that attracts talent and positions us to win. We feel this transaction is compelling, both financially and strategically, and more importantly, achievable. We're enthusiastic about welcoming the Level One team into the First Merchants high-performance family. At this point, I'm happy to take questions. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily. Our first question will come from Scott Siefers with Piper Sandler. Please go ahead. Morning. Thank you for taking the question. Mark, just wanted to ask you, when you talk about investing in the market, as it related to your discussion on the cost savings assumptions, what specifically was the thrust of that? Or what did you mean? Is that to do more hiring or is it to diversify the legacy Level One business to look more like yours? Just maybe a little color there would be great, please. Yeah, really just talking about talent, and maybe Mike Stewart wants to jump in here. We're excited about our ability to attract traditional talent and continue to expand their current loan portfolio really upmarket. Yeah, I'll hit on a little bit more. You know, with our existing Monroe franchise, we are looking into the greater Detroit area for our growth. We just recently put a new office on the north side of Detroit and Birmingham, where we were attracting really high caliber bankers coming from the middle market area to help us round out our efforts to take advantage of the density of the middle market companies there, and to take advantage of our investment real estate capabilities. So we've got a team up there. When you think about their proven growth-oriented bank with our proven growth-oriented bank, and then putting that, those two organizations together around that whole southeast area, the opportunities for us to allow them to continue the pace of play in which they've done with some enhanced capabilities, like our asset-based lending capabilities, our investment real estate opportunities, our public finance approach. We have a debt capital markets syndication capabilities. That skilled and veteran team that they have underneath Greg Wernette, in particular, has the caliber and capabilities to continue that pace of play, the growth. We offer, you know, the liquidity and the product to enhance that. That similar culture, we've got to spend a lot of time there, and I think that that's gonna be a really good synergy, right out of the get-go. All right. Perfect. That's not even speaking about Ann Arbor and Grand Rapids, which to me Yeah. I get even as excited about the opportunities and the density in those markets as well. Yeah. Perfect. Thank you. Then, just maybe Mark, a thought on what having Level One does to the balance sheet growth rate of the combined company. I mean, you guys have always been a pretty solid organic grower. I think Level One has grown a little more rapidly. Would you anticipate maintaining that kind of level of growth for the legacy Level One business, or does it normalize toward yours and what would be the main factors in that thinking? It was really one of the key factors that we spent a lot of time on prior to making really our final pricing decision. You know, we are confident that our core bank is going to grow in the high- to mid-single-digit range. We're expecting next year that it's 8% or 9%. I would say our confidence in the Southeast Michigan market is that we should be able to grow at 10%, 11%, and 12% year-over-year. We think it accelerates the overall growth aspect of First Merchants. Right. Perfect. Thank you very much. Our next question will come from Daniel Tamayo with Raymond James. Please go ahead. Good morning, guys. Maybe I have to talk a little bit about the fee income side of the deal. First, excuse me, you touched on it on the wealth management side, but you know, maybe you could go into a little more detail on the opportunities you see to grow that business. I don't think Level One did any of that, especially given the affluence of the region there. And then, you know, just the second part being, you know, what you're seeing in terms of opportunities in mortgage banking, and if there's gonna be any overlap expected from their business relative to yours. Thanks. If I can, I'll start with the private wealth, which is a complete upside once we get fully integrated and bring our private wealth suite of products, investment management, private banking, retirement plan services, to name a few, into their marketplace. You know, again, spending time with their management team and knowing where they were going next, that is an area that they had interest in building out their connectivity with their businesses. The fluency level there, I think is a perfect overlay for us to expand quickly our team, our approach, or add new team into that approach. Having a group of people already in Monroe with that capability, I think it becomes a quicker pace for us to penetrate that. There is complete receptivity on their team's ability to want to leverage that into their business. Then we can talk more about the mortgage business, but, you know, their mortgage business is equal in size to our mortgage business. Both leaders. We haven't talked much about Tim Mackay, Greg Wernette, and Eva Scurlock, but both the leaders that they have and we have in that mortgage business will play an integral role to build on the best practices, the best platform, and the processes to really fully unlock the potential of what now become a really important business unit for our collective organizations. There's really no overlap. We might find some real benefits in some of their platforms, which we might enhance ours. We think that some of our connectivity into our consumer network might enhance some of their throughput. I think there's real upside with both those teams working together. Great. Separately, probably a question for Michele, but on the impact to the core margin, it sounds like you know, loan yields and deposit rates are pretty similar. Are you gonna be able to you know, just how are you thinking about any kind of restriction of the balance sheet with what you're bringing over from Level One, and what would be the impact on the core margin for First Merchants going forward? Thank you. Yeah. I think the upside on the margin will come from the loan yield. As Mark pointed out, I think it's on slide 8, you can see the combined yield. You know, with our loan yields being at 4% and then the pro forma being 4.10%, we do expect to pick up so a few basis points of core margin. Our next question will come from Damon DelMonte with KBW. Please go ahead. Hey, good morning, everyone. I hope everybody's doing well today. First question, just wondering, Mark, could you provide a little color on the background behind the merger? Was this like a negotiated transaction with Level One, or is this a competitively bid process? It was a competitively bid process, but I think it was a fairly limited audience or group that they went out to. Yeah, I would say it was a traditional kind of bid process with just maybe a smaller number of participants. Okay. That's helpful. Thank you. You know, with respect to, I think Mike Stewart made a passing comment about Grand Rapids, and I know that Level One has a branch out there. Can you guys give a little insight into your thought process of what you guys could do in Grand Rapids? Is this an area that you think you'll try to physically increase your presence and have more of a footprint there? Or do you feel that, you know, the resources there today are enough, or do you feel like you don't even need to be in there, you can just kind of from where you're currently located, get some access to that market? Yeah. I think that we're gonna absolutely wanna support what they've already begun to do in Grand Rapids. It is a singular, full service banking, but it has several commercial bankers that have joined their team with a nice background that are starting to really make an impact. They have plans, and I would want to continue those plans to grow that marketplace. Again, if you think about the competitive landscape there, which is, very competitive. But the, again, the density of the businesses and the density of the consumer network would prove really valuable. I think we'll be supporting their efforts to lead with the commercial efforts and watch the results there, and compete against the, I think, some of the market disruptions that's been happening globally in the greater Michigan marketplace. I think we let them continue to work their growth metrics and support it and maybe in a more fast-paced approach. Okay. That's helpful. Thanks. Just lastly, Michele, do you happen to have the total goodwill amount that you expect to come under the balance sheet? Yes. It's $137 million. Perfect. That's all that I had. Thanks a lot. Appreciate it. Thanks, Damon. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Mark Hardwick for any closing remarks. Yes. Thank you everyone for your time. We appreciate the questions. Like I said, we're, you know, it's an exciting time at First Merchants. We are. Our entire team is on our way to Michigan now to meet our new partners and welcome them into the family. I know they're excited and receptive. Thank you for the time and energy, and we're gonna make this happen for all of our stakeholders' benefits. Have a good day.