Alerus Financial Corporation (NasdaqCM:ALRS) executed a non-binding letter of intent to acquire MPB BHC, INC. (OTCPK:MPHX) on October 6, 2021. Alerus Financial Corporation entered into a definitive agreement to acquire MPB BHC, INC. for $81 million on December 8, 2021. Subject to the terms of the agreement and plan of merger, MPHX shareholders will receive 0.74 Alerus common shares for each outstanding MPHX share. Alerus currently intends to merge Metro Phoenix Bank into Alerus Financial, N.A. at that time of closing. After the merger is completed, Alerus stockholders will own approximately 87.0% of the outstanding shares of common stock of the combined company, and current MPB stockholders will own approximately 13.0% of the outstanding shares of common stock of the combined company. The merger agreement provides a termination fee of $3.5 million will be payable by MPB to Alerus upon termination of the Merger Agreement under certain circumstances. Upon completion of the transaction, Steve Haggard will join Alerus as President of its Arizona Market.

The transaction is subject to MPB stockholder approval, Regulatory approvals, the Registration Statement shall have become effective under the Securities Act, Acquirer shall have filed with the Nasdaq Stock Market, LLC a notification form for the listing of all shares of Acquirer Common Stock to be delivered in the Merger, and the Nasdaq Stock Market, LLC shall not have objected to the listing of such shares of Acquiror Common Stock. The agreement and plan of merger has been approved by the boards of directors of Alerus and MPHX. On December 8, 2021, the directors and certain officers of MPB agreed to vote all of their shares of MPB common stock in favor of the merger agreement at the special meeting. Following closing, Alerus will have the fifth largest deposit market share in Phoenix metropolitan statistical area (MSA) among community banks. MPB stockholders' meeting is expected to be held on April 29, 2022. The transaction is expected to complete in the first quarter of 2022. As of March 11, 2022, the transaction is expected to be completed in the second quarter of 2022. The transaction is anticipated to be immediately accretive to Alerus' earnings per share, excluding one-time transaction related expenses, and approximately 8.5% accretive in the first full year.

Tom Hayes of D.A. Davidson & Co. served as financial advisor and Allison N. Powers, Joseph Ceithaml, Nicholas M. Brenckman and Andrew K. Strimaitis of Barack Ferrazzano Kirschbaum & Nagelberg LLP served as legal counsel to Alerus on the transaction. Raymond James & Associates, Inc. served as financial advisor and Ernest J. Panasci of Spierer, Woodward, Corbalis, & Goldberg served as legal counsel to MPHX. American Stock Transfer & Trust Company, LLC acted as transfer agent to Alerus. Robert Toma of Raymond James & Associates, Inc. acted as fairness opinion provider to the board of MPB. MPB has agreed to pay Raymond James a total fee of approximately $1.1 million for advisory services in connection with the merger, $25,000 of which was paid in connection with its engagement as MPB's financial advisor and $150,000 of which was paid in connection with the delivery of its opinion. The remaining portion of the total fee is contingent on the closing of the merger. Richard B. Robinson, Fred J. Diss, Patricia L. Clowdus, Barbara M. Moore, Elizabeth A. Robertson and Justin L. Mills of Robinson, Diss and Clowdus, P.C. acted as legal advisors to MPB.

Alerus Financial Corporation (NasdaqCM:ALRS) completed the acquisition of MPB BHC, INC. (OTCPK:MPHX) on July 1, 2022.