HBT Financial in Bloomington, Ill., has agreed to buy Tri-County Financial Group in Mendota, Ill.
The $6.7 billion-asset HBT said in a press release that it will pay $204.6 million in cash and stock for the $1.6 billion-asset Tri-County. The deal, which priced Tri-County at 131% of its tangible book value, is expected to close in the first quarter.
Tri-County has 19 branches, $1.3 billion of loans, and $1.3 billion of deposits. Tri-County plans to sell or shut down unit First State Mortgage Services before closing.
“I look forward to working with Kirk Ross and his team at First State Bank to continue to deliver high-quality service to their customers,” J. Lance Carter, HBT’s president and CEO, said in the release. “Our banks share strong roots in the communities that we have served for generations in central and north central Illinois. HBT’s disciplined approach to M&A has allowed us to maintain strong financial performance while expanding our asset base and the communities that we serve.”
Thomas Prescott, Tri-County’s chairman, will join HBT’s board. Kirk Ross, Tri-County’s president and CEO, will join HBT as a senior management officer.
The deal is expected to be 1.1% accretive to HBT’s earnings per share in the first full year, inclusive of cost savings. It should take less than a year for HBT to earn back an estimated 2.4% dilution to its tangible book value.
HBT plans to cut about 34% of Tri-County’s annual operating expenses. It expects to incur $19 million in merger-related expenses.
Vedder Price and Piper Sandler advised HBT. Barack Ferrazzano Kirschbaum & Nagelberg and Performance Trust Capital Partners advised Tri-County.