HBT Financial, headquartered in Bloomington, Illinois, announced on Monday that it will acquire Tri-County Financial Group, the holding company of First State Bank, for approximately $204.6 million. The transaction is expected to close in the first quarter of 2027, as confirmed by both parties in a joint statement.

The acquisition will add 19 new branches for HBT in central and northern Illinois and push the company's total assets above $8 billion. HBT stated that this will be its 12th acquisition since 2007. Previously, HBT completed its acquisition of CNB Bank Shares in March of this year, a deal that expanded its footprint in the St. Louis metropolitan area. In contrast, acquiring Mendota-based Tri-County will help HBT expand into the outer markets of the Chicago metropolitan area.

HBT Executive Chairman Fred Drake called Tri-County an "excellent addition to Heartland Bank." He said, "I have been following their bank for years, and since we serve many of the same markets, I know their communities are very similar to ours. We both have long histories and are solid community banks."

Upon completion of the transaction, HBT expects to nominate Tri-County Chairman Thomas Prescott to the boards of Heartland Bank and the holding company. Prescott said the deal is "rooted in the principles we have followed for decades: providing excellent service to our customers, supporting our communities, and creating long-term value for our shareholders." He added, "We are pleased to partner with an institution that shares our beliefs, and we believe the future holds great promise for everyone associated with the bank."

Under the agreement, Tri-County shareholders may elect to receive 2.4589 shares of HBT common stock, or $71.01 in cash, or a combination of both, for each share they own. The deal is valued at $204.6 million, based on HBT's closing price of $36.35 per share last Friday. Upon completion, Tri-County shareholders will hold approximately 9% of the combined company.

Tri-County President and CEO Kirk Ross said in a statement on Monday, "We look forward to the opportunities this partnership brings. After the merger, we will be stronger, more innovative, and better equipped to meet the evolving needs of our customers, while continuing to uphold the customer relationships and personalized service that define us."

The combined bank is expected to have approximately $8.3 billion in assets, $7.1 billion in deposits, and $6 billion in total loans. Tri-County will contribute approximately $1.6 billion in assets, $1.3 billion in deposits, and $1.3 billion in loans. HBT currently has 83 branches, and Tri-County's 19 branches will bring the combined company's total to more than 100 branches. However, according to the investor presentation, five First State Bank branches are located less than two miles from existing Heartland Bank and Trust offices. HBT Chief Financial Officer Peter Chapman told American Banker that the bank will "consolidate branches that are in close proximity where it makes sense."