The acquisition marks Heartland’s 20th acquisition since 1994, and its 13th transaction in the past six years.
Based on Heartland’s closing common stock price of $47.30 per share on November 10, 2017, the stock and cash transaction is valued at approximately $53.4 million (including the consideration to be paid in exchange for the termination of Signature options), subject to certain adjustments. The actual transaction value will change due to fluctuations in the price of Heartland common stock.
Signature Bank is a commercial and private bank, headquartered in Minnetonka, MN, with approximately $390 million in total assets, $326 million in net loans outstanding and $339 million in deposits as of September 30, 2017. Simultaneously with the merger of Signature with and into Heartland, Signature Bank will merge with and into Heartland’s Minnesota-based subsidiary, Minnesota Bank & Trust.
Together Signature Bank and Minnesota Bank & Trust will have over $600 million in combined assets and operate as one of Heartland’s locally managed subsidiary banks. The combined banks will deliver exceptional service to its Twin Cities’ customers. Following the completion of the transaction the combined organization will operate under the Minnesota Bank & Trust brand name. After the closing of the acquisition of Signature, Heartland will have 118 full-service banking locations operating across 12 states.
“We have been impressed with the strong community banking culture that the Signature team has built over many years,” said Lynn B. Fuller, President and CEO of Heartland. “We strongly believe in the prospects of the Minnesota market, and the acquisition of Signature Bank is a great opportunity to expand our presence in the Twin Cities.” Fuller added, “Our roots date back to 1935, when we were established as a community bank in Iowa. We were passionate about helping customers and our community rebuild their financial resources following the Great Depression. Now, 82 years later, in 12 states across the USA, we continue to provide services to our customers personally and locally, much like we did in 1935. An exceptional customer experience was good business then and it’s good business now.”
Ken Brooks, Chairman and President, and Leif Syverson, Executive Vice President of Signature, who founded Signature Bank in 2003, jointly said, “We are delighted to be partnering with such a well-respected organization. As our board of directors considered our strategic direction in today’s complex banking environment, and the importance of identifying a potential quality merger partner, Heartland stood out as an exceptional opportunity. We are pleased to partner with a strong public company with deep resources that is committed to face-to-face customer service and locally-based community banking. We look forward to combining forces with Minnesota Bank & Trust in the strong and growing Twin Cities market.”
Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of Heartland and Signature, Signature common shareholders will receive 0.0610 shares of Heartland common stock (approximately 922,100 Heartland shares in the aggregate) and $0.335 in cash for each share of Signature common stock, subject to certain adjustments as set forth in the definitive merger agreement.
Signature option holders will receive cash or Heartland common stock, at the election of the holder, for the in-the-money portion of the Signature stock options. The transaction is subject to approval by bank regulators and the Signature shareholders. The transaction is expected to close in the first quarter of 2018 with a systems conversion planned for the second quarter of 2018.
Heartland and Signature anticipate that the transaction will qualify as a tax-free exchange with respect to the stock consideration received by the common shareholders of Signature. 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 November 13, 2017 or in the investor relations section of Heartland’s website.
Fuller stated, “I am thrilled to welcome Signature Bank into the Heartland family. I am also pleased to announce the appointment of Ken Brooks who will serve as President and CEO of our combined Minnesota banking operations. Under Ken’s leadership, Signature Bank has been recognized as a 'Best Place to Work' by the Minneapolis-St Paul Business Journal for five straight years.”
"Founded in 2008, Minnesota Bank & Trust is a full-service bank focused on providing commercial, private, nonprofit and mortgage banking services,” added Fuller, “its strategy and culture is similar to Signature Bank in that Minnesota Bank & Trust has an unwavering commitment to exceeding customer expectations."
Brooks said, “The combination of Signature Bank 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-led community bank. I know our customers and employees will benefit from us joining the Heartland team. It’s easy to communicate the value of an organization that has been twice recognized by Forbes as one its “Best Banks in America.”
Fuller concluded, “We are growing our presence and adding scale in the vibrant Twin Cities market with a top notch team dedicated to delivering an exceptional customer experience. Ken Brooks is well-known and respected in the Twin Cities banking community. We are excited he and his team will be joining with the Minnesota Bank & Trust team to expand and continue our success in the market.”
