Alerus Financial in Grand Forks, N.D., has agreed to buy MPB BHC in Phoenix.
The $3.2 billion-asset Alerus said in a press release Thursday that it will pay $85.3 million in stock for the parent of the $411 million-asset Metro Phoenix Bank. The deal is expected to close in the first quarter.
Metro Phoenix, founded in 2007, has one branch, $283 million of loans and $366 million of deposits. Alerus has been operating in the Phoenix market since 2009.
“Alerus has a long history of successful strategic acquisitions that strengthen our ability to provide diversified financial services to clients across the country,” Randy Newman, the company’s president and CEO. “The addition of Metro Phoenix Bank will complement our business model and enhance our ability in Phoenix to offer commercial lending and banking services.”
Katie Lorenson, Alerus’ chief financial officer, led the negotiations. Lorenson is set to succeed Newman as president and CEO on Jan. 1.
Steve Haggard, Metro Phoenix’s president and CEO, will join Alerus as president of its Arizona market.
Alerus said it expects the deal to be 5% accretive to its 2022 earnings per share, excluding merger-related expenses, and about 8.5% accretive the next year. It should take less than three years for Alerus to earn back any dilution to its tangible book value.
Alerus plans to cut about 29% of Metro Phoenix’s annual noninterest expenses, or about $2.5 million. It expects to incur $5.2 million in merger-related expenses.
D.A. Davidson and Barack Ferrazzano Kirschbaum & Nagelberg advised Alerus. Raymond James and Spierer, Woodward, Corbalis, & Goldberg advised Metro Phoenix.