Horizon Bancorp has announced a definitive agreement to acquire Heartland Bancshares Inc. and its wholly-owned subsidiary, Heartland Community Bank, based in Franklin, Ind.

Under the terms of the merger agreement, Horizon has agreed to issue 0.54 shares (subject to adjustment) of its common stock for each share of Heartland common stock outstanding at the effective time of the merger. Based on the closing price of Horizon’s common stock of $18 on Feb. 8, the indicated value of the transaction was approximately $9.72 per share of Heartland’s common stock. Subject to Heartland’s shareholder and regulatory approval, the companies anticipate the transaction will close in the second quarter of 2012.

“We are enthusiastic about the opportunity to expand our presence in Central Indiana, which is an attractive, growth-oriented market,” Horizon President and CEO Craig Dwight said in a statement released last week. “Heartland, which has the No. 1 deposit share in Johnson County, will provide a strong foothold in Central Indiana and further establish Horizon’s position as an Indiana-focused financial institution.”

Heartland Community Bank reported total assets of approximately $246 million, total deposits of approximately $217.9 million, and total loans of approximately $137.7 million on Dec. 31.

“Horizon anticipates the acquisition will be accretive to earnings per share after transaction costs,” Dwight added. “By consolidating back-office capabilities, Horizon anticipates a 25-percent operating cost savings compared with Heartland’s current operations.”

“Horizon has a successful track record of integrating acquired companies, such as American Trust & Savings Bank (acquired in 2010) and Alliance Financial Corporation (acquired in 2005), and believes they will be equally successful in integrating the Heartland operations into Horizon’s,” the statement said.

Based on Horizon’s closing price per share and Heartland’s total dilutive shares outstanding, the acquisition pricing was approximately $14 million on Feb. 8 based on 1,442,727 outstanding shares of Heartland common stock.

Heartland’s co-founders, Steve Bechman, President and CEO, and Jeffrey Goben, Executive Vice President, will continue to manage Heartland’s operations in Central Indiana.

Horizon Bancorp is a locally owned, independent, commercial bank holding company serving Northern Indiana and Southwest Michigan. Its common stock is traded on the NASDAQ Global Market under the symbol HBNC.

Posted 2/14/2012