Wisconsin Bank & Trust, Madison, said Thursday its parent company, Heartland Financial, has signed an agreement to buy First Shares, parent company of First National Bank, Platteville, for $11 million in stock and cash.
If approved by regulators and First Shares stockholders, the transaction is expected to go through by the end of the year.
The privately owned First National, founded in 1891, will be merged into Wisconsin Bank & Trust. "We are expanding our footprint in southwestern Wisconsin and joining forces with a bank that shares a strong culture of respect for the customer and commitment to the community," Tom Wilkinson, Wisconsin Bank & Trust chairman and chief executive, said in a news release.
First National's locations in Platteville, Lancaster and Hazel Green will mesh well with Wisconsin Bank & Trust's seven branches, Wilkinson said.
The arrangement is a "great fit and great opportunity" for shareholders, customers and employees, Dale Kretschmar, First National president and CEO, said in an interview. Kretschmar said he will not stay on with the merged bank.
First National had about 40 employees and assets of $130 million as of June 30, with 2011 net income of $373,000. Wisconsin Bank & Trust, whose roots date back to 1912, has 90 employees and assets of about $500 million, with 2011 net income of $8.1 million. Formerly Wisconsin Community Bank, it is part of publicly traded Heartland Financial, of Dubuque, Iowa.
Less than 1 percent of First National's loans are delinquent, as are 2.2 percent of Wisconsin Bank & Trust's loans, according to March 31 data submitted to the Federal Deposit Insurance Corp.
Both Wilkinson and Kretschmar said smaller banks have a hard time complying with regulatory requirements and offering technology advances that customers want.
"The larger we are, the better we compete with all the big boys out there that have all the guns locked and loaded," Wilkinson said in an interview. He said Wisconsin Bank & Trust and the eight other bank companies within Heartland are all looking to make more acquisitions to grow their market share.