CoBiz Financial Merges with BOK Financial in $1 Billion Transaction

The commercially focused banking operation will expand its footprint by three times

Denver-based CoBiz Financial Inc. and BOK Financial Corporation announced the signing of a definitive merger agreement, Tuesday, June 19, in a deal valued at approximately $1 billion. The two entities have comparable and complementary profiles, as both banks are focused on commercial customers and maintaining a strong credit culture.

BOK Financial is a $33 billion regional financial services company headquartered in Tulsa, OK. This transaction marks a significant expansion of BOK Financial's capabilities and positions it as a premier regional bank, expanding its footprint to Oklahoma, Texas, Arkansas, Missouri, Kansas and New Mexico.

"CoBiz is a perfect fit as a merger partner for BOK Financial," says Steven G. Bradshaw, president and CEO of BOK. "Steve Bangert and his team have built a well-respected, commercially focused bank that has consistently grown shareholder value, with a strong credit culture and differentiated approach to business banking. The two banks have enjoyed a close relationship for almost two decades and both franchises will benefit as a result of this partnership. We believe the combined organization will be the premier commercial bank in Colorado and Arizona.

Based on the closing price of BOK Financial's common shares on June 15, common shareholders of CoBiz will receive $977 million of total consideration, consisting of 0.17 shares of BOK Financial common stock and $5.70 in cash for each share of CoBiz common stock. The merger consideration is valued at $24.02 per share, based on the closing price of BOK.

"The merger drives an internal rate of return in excess of 20 percent, is materially accretive to earnings per share, enhances our return on equity and return on assets, and provides further geographic diversity for both banks' loan and deposit portfolio," Bradshaw says. "In addition, the issuance of more than 7 million shares as consideration for CoBiz shareholders should provide additional trading liquidity in BOK Financial common stock."

With approximately $3.8 billion in assets and strong history of revenue and earnings growth since 1994, CoBiz is a commercially focused bank, with a footprint that extends from Colorado to Arizona. CoBiz offers specialty lending lines of business including health care and public financial, and fee-generating businesses including wealth management and commercial insurance.

Bangert will join the BOK Financial Board of Directors after the close of the transaction.

"This merger will allow us to better serve our markets and provide customers with a more robust product offering, higher lending limits and a banking franchise that spans the lower midwest and southwest," says Bangert. BOK Financial enjoys an outstanding reputation as a supporter of the communities it serves and we're so pleased to join forces with a company that shares a similar approach to how we serve our customers, our employees and our communities.

BOK Financial expects the acquisition to be 6 percent accretive to earnings in 2019, and 9 percent accretive to earnings in 2020. The transaction is anticipated to deliver an internal rate of return of more than 20 percent.

Goldman Sachs served as financial advisor while Frederic Dorwart, Lawyers PLLC served as legal advisor to BOK Financial. BofA Merrill Lynch provided financial services and Simpson Thacher & Bartlett serves as legal advisor to CoBiz.

Categories: Community News