Heartland Financial USA, Inc. To Acquire Heritage Bank, N.A. In Phoenix, Arizona

Heartland Financial USA, Inc. (NASDAQ: HTLF) announced today that it has entered into a definitive agreement to acquire Heritage Bank, National Association, a Phoenix-based commercial bank. Heritage is a subsidiary of Ameri-National Corporation of Overland Park, Kansas. According to terms of the agreement, Heartland will acquire Heritage in an all-cash transaction valued at approximately $16 million. The purchase price represents a premium of approximately 1.24 times total equity and a premium on total deposits of 3.54 percent.

The transaction is subject to approval by bank regulatory authorities and expected to close on or before December 14, 2012. After that date, Heartland will operate Heritage Bank as a separate charter until late in the first quarter of 2013 when it expects to combine the Heritage charter with Heartland’s Arizona Bank & Trust subsidiary and complete the systems conversion. Heartland expects the transaction to be accretive to earnings in 2013.

“We are excited about the prospect of expanding further in the East Valley area of Phoenix,” said Lynn B. Fuller, president and CEO of Heartland. “The two branch offices of Heritage Bank are an excellent fit for our Arizona Bank & Trust locations in Tempe and on Camelback Road in Phoenix. These locations match our desire to ‘fill-in’ attractive areas in or close to our existing service areas.

“We are acquiring a talented team of local commercial banking professionals and staff with an excellent knowledge of the community and the clients they serve,” added Fuller.

"Among the many alternatives for merger partners, we found Heartland to be the most attractive,” said Jim Tinsman, Chairman of Ameri-National. “The company has an excellent reputation, is well-known as a forward-thinking business with a successful track record in acquisitions and an established presence in Phoenix.

“We believe our customers will be in very good hands going forward. Heartland’s Arizona Bank & Trust subsidiary is a perfect fit, with a strong orientation toward business and commercial clients along with a wide selection of financial products. This transaction is also good for Ameri-National as it allows us to focus more resources on our primary banking market in Kansas City,” added Tinsman.

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