Dubuque, IA-based Heartland Financial agreed to acquire First Bank Lubbock Bancshares (FBLB) and its wholly-owned commercial and retail bank subsidiary, FirstBank & Trust. Both boards of directors unanimously approved the merger.

As a result of the merger, FirstBank & Trust will become a wholly-owned subsidiary of Heartland but will continue to operate under its present brand and management team. After the closing of the FBLB transaction and the previously announced acquisition of Signature Bancshares, 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. “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.”

Under the terms of the transaction, FBLB common shareholders will receive 3.0934 shares of Heartland common stock for each share of FBLB common stock 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 agreement. The transaction is subject to approval by regulators and FBLB shareholders, along with the usual and customary closing conditions. FBLB and Heartland expect to close in Q2/18, with a systems conversion planned for the third quarter.

Both organizations 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.

For this transaction, Panoramic Capital Advisors served as financial advisor to Heartland, while Dorsey & Whitney acted as legal counsel. Stephens served as financial advisor to FBLB, with Fenimore, Kay, Harrison, & Ford acting as legal counsel.