Rockford, IL-based Illinois Bank & Trust (“IBT”), a wholly-owned subsidiary of Heartland Financial USA, Inc. (“Heartland”) (NASDAQ: HTLF), and Rockford, IL-based Rockford Bank and Trust Company (“Rockford Bank & Trust” or “RB&T”), a wholly-owned subsidiary of QCR Holdings, Inc. (“QCRH”) (NASDAQ: QCRH), jointly announced today that they have entered into a purchase and assumption agreement, pursuant to which IBT will acquire substantially all of the assets and assume substantially all of the deposits and certain other liabilities of RB&T.
Rockford, IL August 13, 2019 — In connection with the closing of this transaction, RB&T’s operations will be combined with and into IBT. The combination of IBT and RB&T will create Heartland’s fifth largest bank subsidiary with assets of approximately $1.3 billion and 10 banking centers. The resulting institution will operate under the Illinois Bank & Trust brand.
With $523 million in total assets, $423 million of gross loans outstanding, and $453 million of deposits as of June 30, 2019, RB&T is a full-service community bank that serves Rockford from two full-service banking centers. Similarly, IBT serves commercial businesses, professionals and individuals from eight offices in the Rockford and northwestern Illinois markets and had approximately $853 million in total assets, $504 million of gross loans outstanding and $770 million of deposits as of June 30, 2019.
The leadership teams from both banks will play critical roles in leading the new combined bank. Once the transaction is complete, Jeffrey S. Hultman, President and CEO of IBT, will be named the CEO of the combined bank and Thomas D. Budd, President and CEO of RB&T, will assume the role of President of the combined bank.
Mr. Hultman said, “Illinois Bank & Trust and Rockford Bank & Trust share a common focus of providing excellent service to our customers and leadership for our communities. Both organizations are headquartered here in Rockford, and the new organization will remain here, bigger and stronger than ever. We will retain RB&T’s heritage as a locally-managed community bank, expand its footprint and increase its lending capacity. We expect the new combined entity will quickly add value to our customers and communities.”
Mr. Budd said “We are excited about the opportunity to expand our team, services, and commitment to the Rockford area. You will see the same personal attention and the same strong support to our local nonprofits, and the same volunteerism from our employees. We are enthusiastic to be joining with Illinois Bank & Trust and Heartland to offer additional financial strength and more new products and services to our customers.”
The transaction is subject to approval by federal and state bank regulators and to customary closing conditions. The transaction is expected to close in the fourth quarter of 2019, with a systems conversion planned for the first quarter of 2020.
Mr. Hultman concluded, “We are increasing our presence and adding scale in Rockford with a solid and experienced team dedicated to client success. We extend a warm welcome to the Rockford Bank & Trust customers and employees to our organization.”
About Illinois Bank & Trust
IBT, a wholly-owned subsidiary of Heartland, had total assets of $853 million as June 30, 2019, and is dedicated to the principles of community banking, including community involvement, an active board of directors, local presidents and local decision-making. The bank currently operates eight banking centers in the Rockford area, and in Stockton, Galena and Elizabeth, Illinois. For more information, visit www.illinoisbank.com. IBT is a member of the FDIC and is an Equal Housing Lender.
About QCR Holdings, Inc.
QCRH, headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny, Springfield and Rockford communities through its wholly owned subsidiary banks. The banks provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, and Rockford Bank & Trust Company, based in Rockford, Illinois, commenced operations in 2005. Quad City Bank & Trust Company also provides correspondent banking services. In addition, Quad City Bank & Trust Company engages in commercial leasing through its wholly owned subsidiary, m2 Lease Funds, LLC, based in Milwaukee, Wisconsin. Additionally, QCRH serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. In July 2018, QCRH completed a merger with Springfield Bancshares, Inc., the holding company of Springfield First Community Bank of Springfield, Missouri. With this addition of Springfield First Community Bank, QCRH has 27 locations in Illinois, Iowa, Wisconsin and Missouri. As of June 30, 2019, QCRH had approximately $5.2 billion in assets, $3.9 billion in loans and $4.3 billion in deposits. For additional information, please visit their website at www.qcrh.com.
About Heartland Financial USA, Inc.
Heartland is a diversified financial services company with assets of $12.2 billion as of June 30, 2019. The company provides banking, mortgage, private client, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 116 banking locations serving 84 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.
Forward-Looking Statements
This release, and future oral and written statements of Heartland, QCRH and their management, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about IBT’s acquisition of RB&T. These forward-looking statements may include statements about the benefits of the transaction, including anticipated future results, cost savings and accretion to earnings. Risks relating to the acquisition include the following: the businesses of RB&T and IBT may not be combined successfully, or such combination may take longer than expected; the cost savings from the acquisition may be less than anticipated; credit and interest rate risks of RB&T may be greater than anticipated; and various difficulties associated with achieving anticipated future financial results of IBT after the transaction may occur. In addition, this 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 and QCRH’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 and QCRH’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 in Heartland's and QCRH’s Annual Reports 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 as they impact 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 clients; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the potential impact of acquisitions and Heartland's ability to successfully integrate acquired banks; (viii) the loss of key executives or employees; (ix) changes in consumer spending; (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 and QCRH undertake no obligation to update any statement in light of new information or future events.