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BOK Financial buying CoBiz for $977M

Tulsa, Okla.-based BOK Financial Corp. is acquiring Denver-based CoBiz Financial Inc. for a total consideration of $977 million, or $23.02 per share.

For each share held, CoBiz shareholders will receive 0.17 shares of BOK Financial common stock and $5.70 in cash. Approximately 75% of the consideration will be in stock, with the rest in cash.

The deal is expected to have an internal rate of return of over 20%. It is estimated to be 6% accretive to 2019 earnings and 9% accretive to 2020 earnings.

SNL calculates the deal value to be 288.1% of book, 288.7% tangible book and 25.6x earnings, on a per-share basis. It is also 25.64% of assets and 30.76% of deposits. The premium to tangible book amounts to 20.14% of deposits. The one-day premium is 3.95%, based on CoBiz's $22.15 closing price as of June 15. The one-month premium is 7.64%, based on the seller's $21.39 closing price as of May 18.

SNL valuations for bank and thrift targets in the Southwest region between June 18, 2017 and June 18, 2018 averaged 182.37% of book, 191.41% of tangible book and had a median of 20.36x last-12-months earnings on an aggregate basis. On a per-share basis, valuations averaged 223.69% of book, 246.06% of tangible book and had a median of 25.58x LTM earnings.

The deal is subject to approvals from regulators and CoBiz shareholders and is expected to close in the fourth quarter. The merger agreement contains certain termination rights for both CoBiz and BOK Financial. In the event of termination of the deal under certain circumstances, CoBiz would be required to pay a fee of $34.2 million to BOK Financial.

Upon completion, CoBiz Chairman and CEO Steven Bangert will join BOK Financial's board of directors.

BOK Financial will expand in Arizona by four branches to be ranked No. 11 with a 1.02% share of approximately $124.71 billion in total market deposits. It will also expand in Colorado by 11 branches to be ranked seventh with a 2.89% share of approximately $132.59 billion in total market deposits.

As of March 31, BOK Financial had $33.36 billion in assets, while CoBiz had $3.82 billion in assets.

Goldman Sachs is BOK Financial's financial adviser, while Frederic Dorwart Lawyers PLLC is the legal adviser. For CoBiz, BofA Merrill Lynch is the financial adviser and Simpson Thacher & Bartlett LLP is the legal adviser.

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