MidWestOne to broaden Heartland operations with ATBancorp deal

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MidWestOne Financial Group in Iowa City has agreed to buy ATBancorp in Dubuque, Iowa.

The $3.3 billion-asset MidWestOne said in a press release Wednesday that it will pay $170.3 million in cash and stock for the $1.4 billion-asset ATBancorp. The deal, which is expected to close in the first quarter, priced ATBancorp at 155% of its tangible book value.

The move represents MidWestOne’s entry into the Iowa cities of Des Moines and Dubuque.

“ATBancorp has a rich heritage in one of Iowa’s finest cities,” Charles Funk, MidWestOne’s president and CEO, said in the release. “For over a century their company has evolved, extending their brand to the Dyersville area west of Dubuque, to southwest Wisconsin and westward to Des Moines.”

ATBancorp has 12 branches in Iowa and five in southwest Wisconsin. It has $1.1 billion in deposits and $1.1 billion in loans.

MidWestOne said it expects the transaction to be more than 15% accretive to its earnings per share in 2019 and 2020, excluding one-time transaction expenses. It should take less than three years to earn back any dilution to MidWestOne’s tangible book value.

MidWestOne said it plans to cut about $14.7 million of ATBancorp’s annual noninterest expenses. It expects to incur roughly $20 million in merger-related expenses.

Piper Jaffray and Shapiro Bieging Barber Otteson advised MidWestOne. Sandler O’Neill and Barack Ferrazzano Kirschbaum & Nagelberg advised ATBancorp.

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