MidWestOne acquiring Minnesota bank

MidWestOne Financial Group of Iowa City has agreed to acquire a Minnesota bank, creating a combined bank holding company with roughly $3 billion in assets.

MidWestOne Financial, corporate parent of MidWestOne Bank, has signed a definitive merger agreement with Central Bancshares, corporate parent of Central Bank in Golden Valley, Minn. Central Bancshares will be merged into MidWestOne Financial, with MidWestOne Bank and Central Bank operated as separate banking subsidiaries.

MidWestOne Bank, with assets of approximately $1.8 billion on Sept. 30, operates 25 branches in Iowa. Central Bank, with assets of about $1.2 billion on Sept. 30, operates 20 branches in the Minneapolis/St. Paul metropolitan area and western Wisconsin, and two branches in southwest Florida.

Under the terms of the merger agreement, MidWestOne Financial will pay $64 million in cash and 2,723,083 shares of MidWestOne common stock for Central Bancshares. The transaction, which is subject to approval by MidWestOne's shareholders and regulatory agencies, is expected to close during the second quarter of 2015.

Following the merger, Charles Funk will continue as president and chief executive officer of MidWestOne. John Morrison, Central's chairman and sole shareholder, will become chairman of the combined company's board of directors.

Kevin Monson, MidWestOne's chairman, will become vice chairman of the combined company's board.

MidWestOne expects the transaction to be immediately accretive to its 2015 earnings per share (excluding transaction expenses), and to be at least 20 percent accretive to its earnings per share in 2016.

l Comments: (319) 398-8366; george.ford@thegazette.com