Dubuque, IA-based Heartland Financial USA, Inc. (“Heartland”)
(NASDAQ:HTLF) and Lubbock, TX-based First Bank Lubbock Bancshares,
Inc. (“FBLB”) jointly announced today that they have entered into a
definitive merger agreement pursuant to which FBLB and its
wholly-owned subsidiary, FirstBank & Trust, will be acquired by
Heartland. This is the second merger announcement for
Heartland within the last 30 days as it prepares to pass $10
billion in assets.
Based on Heartland’s closing common stock price of
$50.15 per share on December 11, 2017, the stock and cash
transaction is valued at approximately $185.6 million (including
the cash consideration to be paid to holders of FBLB’s stock
appreciation rights). The actual transaction value will
change due to fluctuations in the price of Heartland common stock
and is subject to certain adjustments.
FirstBank & Trust is a commercial and retail
bank, headquartered in Lubbock, TX, with approximately $930 million
in total assets, $652 million in net loans outstanding and $824
million in deposits as of September 30, 2017. The bank serves
Lubbock and its surrounding communities from eight full-service
banking centers throughout West Texas. Additionally, the bank
offers mortgage lending services from eight offices throughout
Texas through its wholly-owned subsidiary, PrimeWest Mortgage
Corporation.
As a result of the merger of FBLB with and into
Heartland, FirstBank & Trust will become a wholly-owned
subsidiary of Heartland, and continue to operate under its present
brand and management team as Heartland’s 11th state-chartered bank.
After the closing of the FBLB transaction and the previously
announced acquisition of Signature Bancshares, Inc. in Minnetonka,
MN, Heartland will have assets of approximately $11.5 billion and
operate 126 full-service banking locations across 12 states.
“We are highly impressed with the people and
performance of FirstBank & Trust and the solid community
banking franchise they have built in Lubbock,” said Lynn B. Fuller,
Chairman and CEO of Heartland. “When we first became acquainted
over two years ago, it was immediately apparent that a partnership
with FirstBank & Trust would be an excellent way for us to
establish a sizable presence in Texas and a platform for further
expansion. With our well established and growing New Mexico
franchise, acquiring FirstBank & Trust is a natural transition
into West Texas. We strongly believe in the prospects of the Texas
market and I am confident that FirstBank & Trust will be an
outstanding addition to the Heartland organization.”
Barry Orr, Chairman and CEO, who founded FirstBank
& Trust in 1996 said, “This merger with Heartland is a
‘win-win’ for FirstBank & Trust as it enhances everything we
do. We are pleased to partner with such a strong and well-respected
company that will preserve our history and culture while adding
deep resources and a commitment to exceptional customer service. As
our board of directors considered our strategic options in today’s
complex banking environment, and the importance of identifying a
potential quality merger partner, Heartland stood out as an
outstanding choice for our customers, employees and shareholders.”
Under the terms of the merger agreement, which has
been unanimously approved by the Boards of Directors of Heartland
and FBLB, FBLB common shareholders will receive 3.0934 shares of
Heartland common stock for each share of FBLB common stock
(approximately 3,351,000 Heartland shares in the aggregate, subject
to certain potential adjustments) and total cash of $17.5 million,
which includes the cash payable to holders of FBLB’s stock
appreciation rights in the amount of approximately $11.5 million,
and certain other potential adjustments as set forth in the
definitive merger agreement. The transaction is subject to approval
by bank regulators, FBLB shareholders and customary closing
conditions. The transaction is expected to close in the
second quarter of 2018 with a systems conversion planned for the
third quarter of 2018.
Heartland and FBLB anticipate that the transaction
will qualify as a tax-free exchange with respect to the stock
consideration received by FBLB’s shareholders. Heartland
expects the transaction to be accretive to its earnings per share
within the first year of combined operations. Further
information regarding the financial impact of the transaction can
be found in the investor presentation filed as an exhibit to
Heartland’s Current Report on Form 8-K dated December 12, 2017 or
in the investor relations section of Heartland’s website.
Orr added, “The combination of FirstBank &
Trust with the Heartland family of community banks significantly
increases our lending capabilities and gives us access to products
and services offered by larger banks while preserving our legacy as
a locally-managed community bank. We believe our team’s experience
and expertise, and the strength of our PrimeWest Mortgage
subsidiary will complement Heartland. We are thrilled to
combine with an organization that shares our dedication to customer
service and the well-being of its communities. It’s easy to
communicate the value of an organization that has been twice
recognized by Forbes as one the “Best Banks in America.”
Fuller concluded, “We are proud to be adding
FirstBank & Trust, a blue-chip West Texas franchise, to the
Heartland family and establishing an expanded presence in Texas.
Further, we are very excited to continue to serve the Lubbock
market with its healthy and growing economy. Barry Orr is a
well-known and respected banker whose organization has developed a
successful track record of growth and solid earnings. We are
excited he and his team will be leading our flagship bank in Texas
and forming the nucleus of what will soon become the next
billion-dollar charter in the Heartland organization.”
Advisors:In connection with the
transaction, Panoramic Capital Advisors, Inc. served as financial
advisor to Heartland and Dorsey & Whitney LLP served as
Heartland’s legal counsel. Stephens Inc. served as financial
advisor to FBLB and Fenimore, Kay, Harrison, & Ford, LLP served
as FBLB’s legal counsel.
Conference Call:Heartland will
host a live conference call for analysts and investors on
Wednesday, December 13, 2017 at 11:00 a.m. Eastern Time. To
participate, dial 877-407-0782 at least five minutes before start
time. Live audio of the call will also be Webcast and corresponding
investor presentation slides will be available on the Company’s
Investor Relations webpage, which may be accessed
at www.htlf.com. A webcast replay will be available until
December 13, 2018, by logging on to www.htlf.com.
About Heartland Financial USA,
Inc.Heartland Financial USA, Inc. is a diversified
financial services holding company with assets of approximately
$9.8 billion. The company provides banking, mortgage, private
client, investment, treasury management, card services, insurance
and consumer finance services to individuals and businesses.
Heartland currently has 117 banking locations serving 88
communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona,
Montana, Colorado, Minnesota, Kansas, Missouri, Texas and
California. Additional information about Heartland Financial USA,
Inc. is available at www.htlf.com.
About FirstBank &
TrustFirstBank & Trust, a subsidiary of First Bank
Lubbock Bancshares, Inc., is an independent community bank serving
Lubbock and its surrounding communities. Through its subsidiary,
PrimeWest Mortgage Corporation, the bank also engages in mortgage
lending in Lubbock and the South Plains. FirstBank & Trust’s
strengths are in commercial and industrial lending, as well as
residential construction and development lending. Serving
over 15,000 retail relationships, FirstBank & Trust provides
banking services such as digital banking, a wide ATM network,
instant-issue debit cards, and low-cost credit cards.
Additionally, the bank offers an array of financial and wealth
management services, such as money management, and retirement and
education planning, as well as investment products including
stocks, bonds, mutual funds, annuities, and insurance products.
The company was founded in 1996 and is based in Lubbock,
Texas. Additional information about FirstBank & Trust is
available at www.firstbanklubbock.com. FirstBank & Trust is a
member of the FDIC and an Equal Housing Lender.
Additional Information about the Merger and
Where to Find It This communication is being made in
respect of a proposed merger transaction involving Heartland and
FBLB. In connection with the transaction, Heartland will file a
registration statement on Form S-4 with the Securities and Exchange
Commission (“SEC”) that will include a proxy statement/prospectus
to be provided to FBLB shareholders in connection with the special
shareholder meeting FBLB will call to approve the merger.
Shareholders are urged to read the proxy
statement/prospectus when it becomes available because it will
contain important information about the proposed
transaction.
The final proxy statement/prospectus will be mailed to FBLB
shareholders of record on the record date for the special meeting
of the shareholders to be held to approve the proposed transaction.
In addition, the registration statement on Form S-4, which will
include the proxy statement/prospectus and other relevant
documents, will be available free of charge at the SEC’s Internet
Web site, www.sec.gov, Heartland’s website, www.htlf.com, or by
contacting Bryan R. McKeag, Executive Vice President and Chief
Financial Officer of Heartland.
Forward-Looking StatementsThis
release, and future oral and written statements of Heartland and
its management, may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
about Heartland’s financial condition, results of operations,
plans, objectives, future performance and business. Although these
forward-looking statements are based upon the beliefs, expectations
and assumptions of Heartland’s management, there are a number of
factors, many of which are beyond the ability of management to
control or predict, that could cause actual results to differ
materially from those in its forward-looking statements. These
factors, which are detailed in the risk factors included in
Heartland’s Annual Report on Form 10-K filed with the Securities
and Exchange Commission, include, among others: (i) the strength of
the local and national economy; (ii) the economic impact of past
and any future terrorist threats and attacks and any acts of war,
(iii) changes in state and federal laws, regulations and
governmental policies concerning the Company’s general business;
(iv) changes in interest rates and prepayment rates of the
Company’s assets; (v) increased competition in the financial
services sector and the inability to attract new customers; (vi)
changes in technology and the ability to develop and maintain
secure and reliable electronic systems; (vii) the loss of key
executives or employees; (viii) changes in consumer spending;
(ix) unexpected results of acquisitions; (x) unexpected outcomes of
existing or new litigation involving the Company; and (xi) changes
in accounting policies and practices. All statements in this
release, including forward-looking statements, speak only as of the
date they are made, and Heartland undertakes no obligation to
update any statement in light of new information or future
events.
CONTACT:Laura J. Hughes
Executive Vice
President
Chief Marketing OfficerHeartland Financial USA, Inc. (563)
589-2148lhughes@htlf.com
Barry OrrChairman and CEOFirst Bank Lubbock
Bancshares, Inc.(806)
788-0800
borr@firstbanklubbock.com
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