MidWestOne Financial Group in Iowa City has agreed to sell its Florida operations to DFCU Financial in Dearborn, Mich.
The $6.5 billion-asset MidWestOne said in a press release that the $6.4 billion-asset credit union will pay a 7.5% premium, or $11.9 million, for the transfer of $158.8 million of deposits. The sale also includes two branches and $162.2 million of loans.
The deal is expected to close in the second quarter of 2024.
DFCU acquired the $700 million-asset First Citrus Bank in Tampa, Fla., last year.
“As part of our long-term strategic planning process, we reviewed our geographic footprint with a focus on improving scale, and, ultimately, profitability,” Chip Reeves, MidWestOne’s CEO, said in the release.
“While our Florida operations have been performing well, we never reached the scale to allow this market to become a growth driver … without significant investment,” Reeves added. “We anticipate utilizing the proceeds to continue scaling our targeted growth markets of the Twin Cities, Denver and metro Iowa.”
The announcement comes five months after MidWestOne repositioned its balance sheet, selling securities at a loss, and disclosed a three-year plan to improve profitability.
Hovde Group and Barack Ferrazzano Kirschbaum & Nagelberg advised MidWestOne. Donnelly Penman & Partners and Honigman advised DFCU.