HBT Financial, in Bloomington, Ill., is moving into Iowa via a deal for NXT Bancorporation, Inc., and its NXT Bank in Cedar Rapids in a cash and stock transaction worth $42.8 million.
Founded in 1946, the $241 million NXT Bank has $198 million in loans and $184 million in deposits and operates in eastern Iowa.
After the deal closes in the fourth quarter, NXT Bank President and CEO Nathan Koch will join Heartland Bank & Trust as Iowa market president.
“Nate Koch has done an excellent job as president of NXT Bank. We look forward to working with him and the NXT team to make this merger a success,” said Fred Drake, chair and CEO of the $3.9 billion HBT. “NXT is located in very nice communities in eastern Iowa, and we are excited about serving the area.”
Post-merger, NXT shareholders are expected to hold approximately 6.2 percent of HBT’s outstanding common stock. The estimated transaction value represents a 1.34 multiple of NXT’s tangible book value as of March 31 and an 18.0 multiple of NXT’s earnings for the twelve months ended March 31.
HBT currently has $2.3 billion in loans and $3.4 billion in deposits. It operates 62 offices in central and northern Illinois.
Kirkland & Ellis LLP served as legal counsel and Piper Sandler & Co. served as financial advisor to HBT. Vedder Price P.C. served as legal counsel and D.A. Davidson served as financial advisor to NXT.