Benzinga | Nov 2, 2021 10:23AM EDT

MidWestOne Financial Group, Inc. To Acquire Iowa First Bancshares Corp. In A Trasanctioned Valued At ~$47.6M

MidWestOne Financial Group, Inc. ("MidWestOne") (NASDAQ:MOFG) and Iowa First Bancshares Corp. ("IOFB") (OTC:IOFB) today jointly announced the execution of a definitive merger agreement providing for the acquisition of IOFB by MidWestOne in a transaction valued at approximately $47.6 million. The combined company will have approximately $6.2 billion in total assets with over 60 banking offices throughout Iowa, Minnesota, Wisconsin, Florida and Colorado.

Charles Funk, Chief Executive Officer of MidWestOne, said "This is a natural extension of the MidWestOne geographic footprint as we increase our market presence in Muscatine and Jefferson Counties. Both First National Banks--Muscatine and Fairfield--have been long-time pillars in their respective communities. Each has a strong deposit franchise and a long history of service in their markets. We look forward to welcoming our new customers and employees to MidWestOne."

D. Scott Ingstad, Chairman, President and Chief Executive Officer of IOFB, said "This is a significant milestone for our company. It marks the culmination of our search for a like-minded partner to strengthen and secure our presence in Muscatine and Fairfield, provide additional support and resources to our organization for continued growth, and offer our valued employees a path to long-term success. We've found that ideal partner in MidWestOne."

IOFB operates five banking offices in Iowa through its two banks, First National Bank of Muscatine and First National Bank in Fairfield. First National Bank of Muscatine was founded in 1870, and as of September 30, 2021, had approximately $361.6 million in total assets with $315.9 million in deposits, and $203.9 million in total loans, net. First National Bank in Fairfield was founded in 1865, and as of September 30, 2021, had approximately $157.6 million in total assets with $137.4 million in deposits, and $100.0 million in total loans, net.

As of September 30, 2021, MidWestOne had total assets of approximately $5.9 billion, operating thirty-four banking offices in Iowa, twelve banking offices in Minnesota, seven banking offices in Wisconsin, two banking offices in Florida, and one banking office in Colorado.

Under terms of the definitive merger agreement, the aggregate consideration to be paid by MidWestOne for IOFB will consist of cash consideration of $47.6 million, subject to adjustment. MidWestOne expects the transaction to be approximately 14.4% accretive to its earnings per share in 2022 (excluding one-time transaction expenses) and 10.8% accretive in 2023. The transaction is expected to be approximately 0.70% dilutive to tangible book value per share at closing, which dilution is expected to be earned back in less than one year. The definitive merger agreement has been unanimously approved by the boards of directors of both companies. The acquisition is expected to close during the first quarter of 2022 and is subject to approval by IOFB's shareholders and regulatory agencies, as well as other customary closing conditions.

Piper Sandler & Co. acted as financial advisor and Otteson Shapiro LLP served as legal counsel to MidWestOne. Hovde Group, LLC acted as financial advisor and Barack Ferrazzano Kirschbaum & Nagelberg LLP served as legal counsel to IOFB.