Great Western Bancorp in Sioux Falls, S.D., has agreed to buy HF Financial in Sioux Falls.

The $9.8 billion-asset Great Western said in a press release Monday that it will pay about $140 million, or $19.70 a share, in cash and stock for the $1.2 billion-asset parent of Home Federal Bank. The deal is expected to close in the second quarter.

The deal will propel Great Western, which was spun off from National Australia Bank last year via an initial public offering, past $10 billion in assets, where it will face stress testing and caps on interchange fees. Executives have expressed an interest in acquisitions in recent months.

"This acquisition offers us the opportunity to expand our footprint and customer base by complementing our existing branch network presence in Eastern South Dakota and adding locations in attractive markets" in Fargo, N.D., and Minnesota, Ken Karels, Great Western's president and chief executive, said in the release.

Great Western said it expects the transaction to have mid-single-digit earnings per share accretion in the first full year after closing. It should take less than three years to earn back any dilution to tangible book value.

RBC Capital Markets and Nyemaster Goode advised Great Western. Piper Jaffray and Briggs & Morgan advised HF Financial.

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