Triumph Bancorp in Dallas has agreed to buy ColoEast Bankshares in Lamar, Colo.
The $1.7 billion-asset Triumph said in a press release Monday that it will pay $70 million in cash for the $759 million-asset parent of Colorado East Bank & Trust. The price could drop to $69 million if ColoEast fails to meet certain targets tied to nonperforming assets. The deal, which is expected to close in the third quarter, values ColoEast at 130% of its tangible book value.
Triumph will also assume $11.9 million in trust-preferred securities and $19.6 million of other obligations, including preferred stock issued under the Troubled Asset Relief Program, that will be retired around the closing date.
The closing conditions require that ColoEast’s nonperforming assets be below $9.3 million. The company, which has $15 million in nonperforming assets, representing 2% of total assets, was released from a regulatory order on Feb. 29.
Triumph, which said it expects $5 million in “projected synergies,” also expects $2.5 million in other real estate owned expenses to roll off. Triumph also said it expects to take less than 3.5 years to earn back the deal’s dilution to its own tangible book value.
ColoEast has 18 branches and a loan-production office in Colorado and western Kansas.
The acquisition "will provide immediate and long-term benefits to both of our organizations," Aaron Graft, Triumph's vice chairman and chief executive, said in the release.
Triumph was advised by Wachtell, Lipton, Rosen & Katz. Bieging, Shapiro & Barber advised ColoEast, while Performance Trust provided a fairness opinion to the company's board.