First Western Financial and Teton Financial Services Sign Merger Agreement



First Western Financial, the parent company of First Western Trust Bank, and Teton Financial Services, the parent company of Rocky Mountain Bank, signed a definitive merger agreement pursuant to which Teton Financial Services will merge with and into First Western Financial.

Teton Financial Services has three branches in the state of Wyoming, assets of $420.7 million, total deposits of $374.6 million and total loans of $267.9 million as of June 30, 2021. Teton Financial Services also offers trust and wealth management services and had $394.1 million in assets under management as of June 30, 2021.

“This transaction brings together two highly complementary institutions with similar values, business models and commitment to helping clients achieve their financial goals,” Scott C. Wylie, chairman, president and CEO of First Western Financial and First Western Trust Bank, said. “Expanding our presence in Wyoming is a key element of our long-term growth strategy given its attractive demographics and favorable environment for our unique approach to private banking. The talented team at Rocky Mountain Bank has consistently attracted new clients and grown loans and deposits at a double-digit compound annual growth rate over the past seven years, and their experience and expertise will further strengthen our commercial banking capabilities. With our combined resources, we believe that we can steadily increase our market share in Wyoming in the future, providing another catalyst for enhancing the value of the First Western franchise.”

“We are excited for the opportunity to join such a highly regarded franchise in the western region,” Allan R. Tessler, chairman, president and CEO of Teton Financial Services, said. “Our employees and clients will benefit from First Western’s broader offering of products and services, as well as its ability to accommodate larger financing needs. With the greater resources provided by First Western, we will have the opportunity to enhance the banking experience provided to our customers while maintaining our ‘client first’ relationship-oriented approach to banking.”

As of June 30, 2021, the combined institutions would have approximately $2.4 billion in assets and $7.2 billion in assets under management. The transaction is expected to close in late Q4/21 or early Q1/22. The combined company will operate 18 offices in four states, including Colorado, Arizona, Wyoming and California.

The transaction is expected to be 5.2% accretive to 2022 earnings per share and 0.4% dilutive to tangible book value, with a short tangible book value earnback period of 0.4 years.

Under the terms of the merger agreement, Teton Financial Services shareholders will receive 0.0466 shares of First Western Financial common stock and $0.39 in cash for each share of Teton Financial Services stock they own, subject to certain adjustments. Based on First Western Financial’s closing stock price on July 21, 2021, the aggregate merger consideration is valued at $47.8 million. The value of the merger consideration will fluctuate until closing based on the value of First Western Financial’s stock.

First Western Financial’s and Teton Financial Services’ respective boards of directors unanimously approved the merger agreement. Additionally, directors and executive officers of Teton Financial Services entered into agreements whereby they have committed to vote their shares in favor of the transaction. The closing of the acquisition is subject to satisfaction of customary closing conditions, including regulatory approvals and approval of Teton Financial Services’ shareholders.

Keefe, Bruyette & Woods advised First Western Financial and Otteson Shapiro served as its legal counsel. Piper Sandler advised Teton Financial Services and Greenberg Traurig served as its legal counsel.

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