MidWestOne Bank is acquiring Denver Bankshares, Inc., in a $32.6 million, all-cash deal.
Through the deal, which is expected to close early next year, the Iowa City, Iowa-based bank will reinvest proceeds from its recently-announced divestiture of two Florida branches. The $6.5 billion MidWestOne is selling those branches to Dearborn, Mich.-based DFCU Financial in a deal announced earlier this week.
MidWestOne has said that it plans to scale its targeted growth to markets in Iowa, Denver and the Twin Cities. By acquiring the $271.5 million Bank of Denver, MidWestOne’s regional footprint is expected to grow to $606.6 million in loans and $373.2 million in deposits.
“We are continuing to build the necessary critical mass in our Denver market, a large and core metropolitan market,” said CEO Chip Reeves. “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.”
Denver Bankshares CEO Lori Radcliffe is expected to become part of MidWestOne’s market leadership team. MidWestOne’s Denver leadership will remain in place.
The Florida and Denver transactions are expected to be 13.4 percent accretive to earnings per share next year before falling to 10.2 percent in 2025. Tangible book value per share dilution is expected to be 3.7 percent at closing of both deals, with a earn-back period for the dilution of a little more than 2 1/2 years.
Minneapolis-based Piper Sandler & Co. served as financial adviser for MidWestOne while Chicago-based Barack Ferrazzano Kirschbaum & Nagelberg LLP provided legal counsel. Washington, D.C.-based Olsen Palmer LLC provided financial advice and Redondo Beach, Calif.-based Spierer, Woodward, Corbalis & Goldberg provided legal counsel to Denver Bankshares.