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 market⁴, with an attractive
deposit franchise consisting of 32.8%⁵ non-interest-bearing
deposits and a cost of deposits of 0.98%⁶
- 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.
_________________________¹ As of June 30, 2023²
2024 EPS accretion excludes the impact of transaction costs and
assumes both transactions close March 31, 2024 for modeling
purposes³ TBVPS dilution earn-back period is based on the crossover
method, includes the impact of transaction costs and day 2 CECL
reserve, and assumes both transactions close March 31, 2024 for
modeling purposes⁴ Based on total deposits in the Denver MSA as of
June 30, 2023. Community bank is defined as institutions with total
assets less than $3.0 billion. Source: S&P Capital IQ Pro⁵
Non-interest-bearing deposit as a percentage of total deposits as
of June 30, 2023⁶ Cost of total deposits for the six months ended
June 30, 2023
Conference Call DetailsThe
Company will host a conference call for investors on Wednesday,
September 27, 2023, at 12:30PM CT. Investors and analysts
interested in participating in the call may pre-register utilizing
the following link:
https://www.netroadshow.com/events/login?show=f8c1ed99&confId=55934.
After pre-registering for this event, you will receive your access
details via email. You are also able to dial 1-833-470-1428, using
an access code of 535493 at least fifteen minutes before the call
start time. A live audio webcast of the conference call and
conference materials will be available on the Company’s website at
www.midwestonefinancial.com.
A replay of the call will be available within
two hours of the conclusion of the call and can be accessed by
dialing 1-866-813-9403 and using the replay access code of 695602.
The replay will be available until Wednesday, October 25, 2023.
AdvisorsPiper Sandler & Co.
served as financial advisor and Barack Ferrazzano Kirschbaum &
Nagelberg LLP provided legal counsel to MidWestOne. Olsen Palmer
LLC served as financial advisor and Spierer, Woodward, Corbalis
& Goldberg provided legal counsel to Denver Bankshares.
About
MidWestOne Financial Group,
Inc.MidWestOne Financial Group, Inc. is a financial
holding company headquartered in Iowa City, Iowa. MidWestOne is the
parent company of MidWestOne Bank, which operates banking offices
in Iowa, Minnesota, Wisconsin, Florida, and Colorado. MidWestOne
provides electronic delivery of financial services through its
website, MidWestOne.bank. MidWestOne Financial Group, Inc. trades
on the Nasdaq Global Select Market under the symbol “MOFG”.
Cautionary Note Regarding Forward
Looking StatementsCertain statements contained in this
presentation that are not statements of historical fact constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 that are subject to risks
and uncertainties and are made pursuant to the safe harbor
provisions of Section 27A of the Securities Act and Section 21E of
the Exchange Act. These forward-looking statements may include
information about MidWestOne’s and Denver Bankshares’ possible or
assumed future economic performance or future results of
operations, including MidWestOne’s and Denver Bankshares’ future
revenues, income, expenses, provision for loan losses, provision
for taxes, effective tax rate, earnings per share and cash flows,
and MidWestOne’s and Denver Bankshares’ future capital expenditures
and dividends, future financial condition and changes therein,
including changes in MidWestOne’s and Denver Bankshares’ loan
portfolio and allowance for loan losses, future capital structure
or changes therein, as well as the plans and objectives of
management for MidWestOne’s and Denver Bankshares’ future
operations, future or proposed acquisitions, the future or expected
effect of acquisitions on MidWestOne’s and Denver Bankshares’
operations, results of operations, financial condition, and future
economic performance, statements about the benefits of the merger,
and the statements of the assumptions underlying any such
statement. Such statements are typically, but not exclusively,
identified by the use in the statements of words or phrases such as
“aim”, “anticipate”, “estimate”, “expect”, “goal”, “guidance”,
“intend”, “is anticipated”, “is expected”, “is intended”,
“objective”, “plan”, “projected”, “projection”, “will affect”,
“will be”, “will continue”, “will decrease”, “will grow”, “will
impact”, “will increase”, “will incur”, “will reduce”, “will
remain”, “will result”, “would be”, variations of such words or
phrases (including where the word “could”, “may”, or “would” is
used rather than the word “will” in a phrase) and similar words and
phrases indicating that the statement addresses some future result,
occurrence, plan or objective. The forward-looking statements that
MidWestOne makes are based on our current expectations and
assumptions regarding MidWestOne’s and Denver Bankshares’
businesses, the economy, and other future conditions. Because
forward-looking statements relate to future results and
occurrences, they are subject to inherent uncertainties, risks, and
changes in circumstances that are difficult to predict. Many
possible events or factors could affect MidWestOne’s future
financial results and performance and could cause those results or
performance to differ materially from those expressed in the
forward-looking statements. Such risks and uncertainties include,
among others: the occurrence of any event, change or other
circumstances that could give rise to the right of one or both of
the parties to terminate the merger agreement or asset purchase
agreement, with respect to the branch sale, the outcome of any
legal proceedings that may be instituted against MidWestOne or
Denver Bankshares’, delays in completing the merger or branch sale,
the failure to obtain necessary regulatory approvals (and the risk
that such approvals may result in the imposition of conditions that
could adversely affect the combined company or the expected
benefits of the merger or branch sale) and shareholder approval or
to satisfy any of the other conditions to the merger or branch sale
on a timely basis or at all, the possibility that the anticipated
benefits of the merger or branch sale are not realized when
expected or at all, including as a result of the impact of, or
problems arising from, the integration of the two companies or as a
result of the strength of the economy and competitive factors in
the areas where MidWestOne and Denver Bankshares do business, the
possibility that the merger and branch sale may be more expensive
to complete than anticipated, including as a result of unexpected
factors or events, diversion of management’s attention from ongoing
business operations and opportunities, potential adverse reactions
or changes to business or employee relationships, including those
resulting from the announcement or completion of the merger and
MidWestOne’s ability to complete the acquisition and integration of
Denver Bankshares successfully. Each of MidWestOne and Denver
Bankshares disclaims any obligation to update such factors or to
publicly announce the results of any revisions to any of the
forward-looking statements included herein to reflect future events
or developments. Further information on MidWestOne, and factors
which could affect the forward-looking statements contained herein
can be found in MidWestOne’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2022, its Quarterly Reports on Form
10-Q for the three-month periods ended March 31, 2023, and June 30,
2023, and its other filings with the SEC.
Category: Financial
This news release may be downloaded
from: https://www.midwestonefinancial.com/corporate-profile/default.aspx
Source: MidWestOne Financial Group, Inc.
Industry: Banks
Contact:Barry S. RayChief
Financial OfficerMidWestOne Financial Group, Inc.319-356-5800
MidWestOne Financial (NASDAQ:MOFG)
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