Minneapolis-based Park Financial Group Inc. agreed to acquire Grand Rapids, Minn.-based Mesaba Bancshares Inc.

Park Financial initially made an investment in Mesaba in 2018, and has now agreed to purchase 100% of Mesaba's shareholder shares.

Under the deal, Mesaba units American Bank of the North and Lake Bank will join Park State Bank as units of Park Financial. The three brands will continue to operate independently, and the parent company will have assets approaching $1 billion upon completion.

Financial terms of the deal were not disclosed.

S&P Global Market Intelligence valuations for bank and thrift targets in the Midwest region between Jun. 30, 2019, and Jun. 30, 2020, averaged 145.02% of book and 150.36% of tangible book and had a median of 16.73x last-12-months earnings, on an aggregate basis.

Park Financial will expand in Saint Louis County, Minn., by seven branches to be ranked fourth with a 11.06% share of approximately $3.47 billion in total market deposits; will enter Itasca County, Minn., with six branches to be ranked second with a 22.33% share of approximately $736.6 million in total market deposits; will enter Lake County, Minn., with three branches to be ranked first with a 73.28% share of approximately $157.93 million in total market deposits.

The deal is expected to close in the third quarter.

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