Shares of Denver-based United Western Bancorp rose 42 percent on Wednesday, the largest percentage gain of any stock trading on the Nasdaq.
Investors snapped up United Western shares after the bank announced that Equity Trust Co. of Elyria, Ohio, will buy its Sterling Trust subsidiary for $61.2 million.
After taxes, United Western should reap $35.9 million, close to the value investors had placed on the entire company as of Tuesday.
“It shows you how oversold most banks are,” United Western chief executive Scot Wetzel said.
Equity Trust, a customer of United Western since 2000, had approached the bank before about acquiring Sterling, which has $4.5 billion in assets under custody in 72,000 accounts, Wetzel said.
Equity Trust works directly with consumers, while Sterling provided trust services for broker-dealer firms, primarily for self-directed IRAs and other retirement accounts.
United Western will get 25 percent of the sale price up front in cash, with the remainder payable in a promissory note.
Equity Trust has agreed to keep deposits from its custodial accounts and those of Sterling at United Western for the next three years.
“Everybody understood that this wasn’t long-term a core subsidiary for the business,” Wetzel said.
What they didn’t know was how much Sterling was worth.
United Western shares rose $2.08 to close at $7.01.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
