First Mid Bancshares in Mattoon, Ill., has agreed to buy Two Rivers Financial in Burlington, Iowa.
The $7.8 billion-asset First Mid said in a press release that it will pay $94.1 million in stock for the $1.1 billion-asset Two Rivers. The deal, which is expected to close in the first quarter, priced Two Rivers at 104% of its tangible book value.
Two Rivers has 14 branches, $901 million in loans, and $988 million in deposits.
The deal is expected to be about 12.3% accretive to First Mid’s 2027 earnings per share. It should take about two years for First Mid to earn back an estimated 4.3% dilution to its tangible book value.
First Mid expects to cut about 27% of Two Rivers’ annual noninterest expense. The company expects to incur $14.5 million of merger-related charges.
“This partnership is an exciting step forward for our organization as we expand into a neighboring state, demonstrating our commitment to continued growth and geographic diversification,” Joseph Dively, First Mid’s chairman and CEO, said in the release.
Shane Zimmerman, president and CEO of Two Rivers Bank & Trust, will join First Mid as a divisional president.
D.A. Davidson, Barack Ferrazzano Kirschbaum & Nagelberg, and Dickinson, Bradshaw, Fowler & Hagen advised Two Rivers. Keefe, Bruyette & Woods and ArentFox Schiff advised First Mid.