MidWestOne Financial Group in Iowa City has agreed to buy Denver Bankshares a day after agreeing to sell its Florida operations.
The $6.5 billion-asset company said in a press release that it will pay $32.6 million in cash for the parent of the $271.5 million-asset Bank of Denver. The deal, which is expected to close in the first quarter, priced Denver Bankshares at 173% of its tangible book value.
Bank of Denver has $198 million of loans and $242 million of deposits.
MidWestOne said the acquisition, combined with the sale of its Florida operations should be 13.4% accretive to its 2024 earnings per share and 10.2% accretive the next year.
It should take less than three years for MidWestOne to earn back an estimated 3.7% dilution to its tangible book value.
MidWestOne plans to cut about 40% of Denver Bankshares’ annual operating expenses. It expects to incur $5.5 million of merger-related expenses.
Lori Radcliffe, Denver Bankshares’ CEO, will join MidWestOne’s Denver leadership team.
“By reinvesting the proceeds from the sale of our Florida operations into the acquisition …we are continuing to build the necessary critical mass in our Denver market,” Chip Reeves, MidWestOne’s CEO, said in the release.
“This acquisition accelerates our growth in the region by three to four years,” he added. “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.”
Piper Sandler and Barack Ferrazzano Kirschbaum & Nagelberg advised MidWestOne. Olsen Palmer and Spierer, Woodward, Corbalis & Goldberg advised Denver Bankshares.