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MidWestOne Financial Group Inc (NASDAQ:MOFG) penned a deal to acquire Denver Bankshares, Inc., the parent company for the Bank of Denver, for $32.6 million.
The all-cash transaction has been approved by the respective board of directors and is expected to close in Q1 2024.
The company plans to fund the buyout through the proceeds of the previously announced sale of its Florida operations.
Yesterday, MOFG disclosed a purchase and assumption deal to sell its Florida operations to DFCU Financial for a deposit premium of 7.5%, or around $11.9 million (pre-tax) based on deposits as of June 30, 2023. The sale includes the transfer of deposits of $158.8 million, gross loans of $162.2 million, and its two branches.
MOFG expects the combined Florida and Denver transactions to be 13.4% accretive to EPS in 2024 and 10.2% in 2025.
Post closure, proforma for the deal, the company will have loans of $606.6 million and deposits of $373.2 million in Denver, which will improve scale and offer expansion opportunities.
"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." commented Charles ("Chip") Reeves, Chief Executive Officer of MOFG.
As of June 30, 2023, the company had $144.6 million in cash and cash equivalents.
Price Action: MOFG shares are trading higher by 4.24% at $20.15 on the last check Wednesday.
