Founders will merge into Premier Valley, but will continue to operate under the Founders Community Bank name. A Premier Valley branch under construction in San Luis Obispo will carry the Founders branding.
Under the agreement, the outstanding common shares of Founders Bancorp will be converted into cash, shares of Heartland Financial common stock, or a combination at the election of Founders’ shareholders.
Founders, a wholly owned subsidiary of Founders Bancorp, is an 11-year-old bank with about $100 million in assets, $107 million in loans and $180 million in deposits as of Sept. 30. The bank serves clients in San Luis Obispo, Paso Robles and Morro Bay, and has a small-business lending center in Atascadero.
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Premier Valley Bank is a wholly owned subsidiary of Iowa-based Heartland Financial. Premier Valley will have nine full-service branches and one loan production office once the merger closes.
Heartland Financial reported second quarter net income of $21 million, a 40 percent increase over those earnings from the previous year. Third-quarter results were not yet reported.
Heartland also owns Yosemite Bank, and together with Premier Valley, the institutions have assets worth about $680 million, Heartland said.
“We are growing our presence in California and we see the San Luis Obispo County market area as an economically strong and vibrant region,” said J. Mike McGowan, Premier CEO.
Heartland Financial trades on Nasdaq under the symbol HTLF. The stock’s closing price Monday was $37.45, up 5 cents from its Friday close.
Founders Bancorp, which trades on the OTC board under FBCP, closed at $20.70 Monday, up $7.33 from its Friday close.