MidWestOne (MOFG) to Sell Its Florida Operations to DFCU
MidWestOne Financial Group MOFG announced that it has entered into a definitive agreement to sell its Florida operations to DFCU Financial. The completion of the cash deal, approved by both companies’ boards of directors, is expected in the second quarter of 2024.
As a result of the sale, MOFG will transfer two branches, $158.8 million in deposits and $162.2 million in gross loans to DFCU Financial. MidWestOne will receive a deposit premium of 7.5%, amounting to nearly $11.9 million pre-tax. The premium is calculated on the basis of its deposits as of Jun 30, 2023.
Management anticipates utilizing the proceeds to further expand their targeted growth markets in the Twin Cities, namely, Denver and Metro Iowa.
MidWestOne identified the Florida market as a non-core market in its 2023 long-term strategic planning process, necessitating the sale of its Florida operations. Despite the operations in Florida performing well, the company acknowledged that it would need to make significant investments to reach the scale necessary to become a growth driver.
Headquartered in Michigan, DFCU Financial is a credit union with assets valued at $6.4 billion. It has a successful history of acquisitions, including its purchase of a commercial bank in Florida with assets of around $700 million in 2022.
MidWestOne has decided to divest its Florida operations to focus its operations on markets with the highest potential for expansion and profitability. The sale of Florida operations is in line with its long-term goals and will enable the company to strengthen its position and explore new opportunities.
Over the past three months, shares of MOFG have declined 8.4% compared with the industry’s fall of 0.2%.
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Currently, MidWestOne carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Divestitures by Other Finance Firms
Citigroup Inc. C announced the sale of its Bridge built by Citi platform to Foro Holdings, Inc., a Charlotte-based commercial lending services provider. C has joined Foro’s investors, including TTV Capital, US Bank and Correlation Ventures to provide Foro with additional capital investment to aid the continued growth of the business.
Bridge is a lending platform that connects small and medium-sized businesses with small regional banks. The platform facilitates small businesses to submit loan proposals to 75 banks and has handled more than $1 billion in loan requests.
In an SEC filing, CURO Group Holdings Corp. CURO revealed that on Aug 31, its wholly-owned subsidiary, CURO Intermediate Holdings, completed the sale of all the issued and outstanding equity interests of its Canadian point-of-sale business, FLX Holding Corp., to Questrade Financial Group Inc.
At closing, nearly C$39 million of net proceeds (inclusive of adjustments for escrow and holdbacks) were received after the deal and transaction costs. Per the terms of the deal, CURO expects to receive C$25-C$30 million in late 2023 and up to C$4 million in subsequent periods, subject to adjustments.
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