DEARBORN, Mich.—The $6.4-billion DFCU Financial Credit Union is again reaching into Florida to purchase a bank, this time the Sunshine State operations of MidWestOne Bank.
MidWestOne Financial Group, the bank’s Iowa City, Iowa-based holding company, reported it will sell its two Florida offices DFCU Financial. The Florida offices have $700 million in assets and are located in Fort Myers and Naples.
The bank reported the all-cash deal has been approved by both organizations’ boards.
The move by DFCU Financial Credit Union is not its first in the Sunshine State. DFCU Financial acquired the $689-First Citrus Bancorporation in Tampa in 2022, paying a 9% premium to acquire the bank. Crain’s Detroit estimated the deal was valued at more than $90 million.
In the case of MidwestOne Bank, it will receive a deposit premium of 7.5%, or approximately $11.9 million, pre-tax, based on its deposits as of June 30. Along with the two offices, the sale will include the transfer of $158.8 million of deposits, $162.2 million in gross loans, the bank said.
The deal is expected to close in the first quarter or second quarter of 2024.
‘Never Easy’
“Decisions like these are never easy or taken lightly,” said MidWestOne CEO Charles Reeves. “We have enjoyed serving customers in the regions of Fort Myers and Naples, Fla., and are very grateful to have had the opportunity to do so. However, as part of our long-term strategic planning process, we reviewed our geographic footprint with a focus on improving scale, and, ultimately, profitability. While our Florida operations have been performing well, we never reached the scale to allow this market to become a growth driver for MidWestOne without significant investment.”
In addition to its home state and Florida, the bank also operates in Minnesota, Wisconsin and Colorado.
DFCU Financial reported $49 million in net income through June of 2023 and has $844 million in capital (13.2%).
It’s Hot in Florida
Michael Bell, the pioneer of credit union purchases of banks, reminded that Florida has been a hotbed for credit union bank buys and is a natural spot for branch transactions.
“Branch deal frequency relates to a shortage of sellers not buyers. That said, I am seeing more activity in the marketplace at the moment. Sellers are realizing the gains in efficiency, expense reduction and gain on sale are worth the effort,” said Bell, a partner and co-chair of the Financial Institutions Practice Group at Honigman, LLP, which is representing DFCU Financial.
Bell has been involved in nearly 50 whole-bank agreements, plus additional bank branch purchases.
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