Heartland Financial USA Inc. of Dubuque, Iowa, announced Thursday that it is buying Bank of the Southwest of Tempe, Ariz., for $18 million in cash.
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Heartland said it plans to merge Bank of the Southwest with its Arizona Bank and Trust subsidiary.
The $2.8 billion-asset Heartland would gain branches in Phoenix and Tempe. Arizona Bank and Trust, in Chandler, has four branches and plans to open two in 2006.
The deal is expected to close in the second quarter. The price is about 1.6 times Bank of the Southwest's book value.
Heartland has eight banking subsidiaries with branches in nine states.
