September 12, 2007 / 2:29 PM / 10 years ago

ISB, MidWestOne in $96.5 mln Iowa bank merger

NEW YORK, Sept 12 (Reuters) - ISB Financial Corp ISBO.PK on Wednesday said it agreed to merge with MidWestOne Financial Group Inc OSKY.O in a transaction valuing MidWestOne at $96.5 million, creating the third-largest publicly-traded banking company based in Iowa.

MidWestOne shareholders would receive 0.95 of an ISB share for each of their shares. The transaction would value MidWestOne at about $26.13 per share, a 54 percent premium over its Tuesday closing price. MidWestOne had about 3.7 million shares outstanding as of Aug. 13.

ISB, with offices in Iowa City, operates Iowa State Bank & Trust Co. and First State Bank. MidWestOne operates MidWestOne Bank. The companies characterized the transaction as a merger of equals. They said the merged company would carry the MidWestOne name and have $1.5 billion of assets, more than $1.1 billion of deposits, and 29 banking offices.

The transaction is expected to close in the first quarter of 2008, and result in $7 million of merger-related costs.

MidWestOne shares rose $3.61 to $20.60 ahead of a trading halt. The merger was announced on its Web site. (Reporting by Jonathan Stempel)

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