MOFG - MidWestOne Financial Group Inc. Announces Strategic Acquisition in Denver | Benzinga
IOWA CITY, Iowa, Sept. 27, 2023 (GLOBE NEWSWIRE) -- MidWestOne Financial Group, Inc. (NASDAQ:MOFG) ("MidWestOne", "we", "our", or the "Company") today announced that it has executed a definitive merger agreement to strategically reinvest the proceeds from the previously announced sale of our Florida operations through the acquisition of Denver Bankshares, Inc. ("Denver Bankshares"), the parent company for the Bank of Denver ("Bank of Denver"). This transaction is an all cash deal that has been approved by the respective board of directors, and is expected to close in the first quarter of 2024.
Transaction Highlights
- We are strategically reinvesting the sale proceeds from our previously announced Florida divestiture into the Denver MSA, which we identified as one of our core markets, to accelerate our growth and continue building scale
- We will pay $32.6 million in cash consideration to acquire Denver Bankshares
- The Bank of Denver has $271.5 million¹ in assets, $198.0 million¹ in loans and $242.0 million¹ in deposits
- The combined Florida and Denver transactions are expected to be 13.4% accretive to earnings per share in 2024² and 10.2% accretive to earnings per share in 2025
- Tangible book value per share dilution is expected to be 3.7% at closing of both transactions, with a 2.58 year earn-back period for this dilution³
- Proforma for the transaction, the Company will have $606.6 million¹ in loans and $373.2 million¹ in deposits in Denver, providing improved scale and supporting continued expansion opportunities
- The Bank of Denver is the 6th largest community bank in the Denver market?, with an attractive deposit franchise consisting of 32.8%? non-interest-bearing deposits and a cost of deposits of 0.98%?
- MidWestOne's Denver leadership will remain in place, and Denver Bankshares' Chief Executive Officer, Lori Radcliffe, will become part of the Company's market leadership team
Charles ("Chip") Reeves, Chief Executive Officer of the Company, commented, "By reinvesting the proceeds from the sale of our Florida operations into the acquisition of Denver Bankshares, we are continuing to build the necessary critical mass in our Denver market, a large and core metropolitan market. This acquisition accelerates our growth in the region by three to four years. This additional scale in Denver will enable us to continue to recruit bankers and build upon our already strong momentum in this commercially and demographically attractive market."
A presentation with additional information can be accessed by visiting the Company's investor relations website at www.midwestonefinancial.com or on the Form 8-K filed with the U.S. Securities and Exchange Commission, which can be accessed at www.SEC.gov.
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¹ As of June 30, 2023
² 2024 EPS accretion excludes the impact of transaction costs and assumes both transactions close March 31, 2024 for modeling purposes
³ TBVPS dilution earn-back period is based on the crossover method, includes the impact of transaction costs and day 2 CECL reserve, and ...