First Illinois stockholders may elect to receive either 0.5727 shares of First Financial common stock or $44.35 in cash for each First Illinois share, subject to proration so that 70% of First Illinois shares are exchanged for stock and 30% for cash. Based on First Financial's August 26, 2026 closing price of $79.07, the implied per-share purchase price is $45.00 and the aggregate transaction value is approximately $111.3 million. The merger consideration is subject to downward adjustment, dollar for dollar, if First Illinois' adjusted consolidated shareholders' equity at closing falls below $82,437,826, subject to specified exclusions for transaction expenses, benefit-plan costs and AOCI changes on available-for-sale securities. Outstanding First Illinois stock options will be cashed out based on the $44.35 cash consideration net of exercise price, and unvested restricted stock awards will vest in full and receive the merger consideration. The investor presentation values the deal at 135% of First Illinois' tangible book value, 13.0x last-twelve-months earnings, 7.4x 2028 estimated earnings inclusive of fully phased-in cost savings, and a 5.3% premium to First Illinois' core deposits; it also discloses a "pay-to-trade" ratio (the deal's TBV multiple divided by THFF's standalone TBV multiple) of 80%. Pro forma ownership is expected to be approximately 92% First Financial and 8% former First Illinois shareholders.
First Financial disclosed expected cost savings equal to 34% of First Illinois' noninterest expense base, with 75% phased in during 2027 and 100% realized thereafter. The company estimates pre-tax merger and transaction expenses of $10.8 million, fully reflected in the pro forma tangible book value estimate at closing. Purchase accounting marks disclosed include a loan credit mark of 1.39% of gross loans ($6.1 million), an interest-rate mark on loans of 2.32% of gross loans ($10.1 million) amortized over 3.0 years on a straight-line basis, a $2.4 million mark on Hickory Point's held-to-maturity securities amortized over 2.1 years, and a core deposit intangible of 3.00% amortized over 10 years using the sum-of-the-years-digits method, in addition to other fair value marks on fixed assets, AOCI, time deposits and FHLB borrowings. First Financial projects EPS accretion of approximately 6% in 2027 and approximately 7% in 2028 (fully phased in), tangible book value dilution of 3.2% at closing with an earnback period of 2.3 years, and pro forma capital ratios at closing of 9.1% tangible common equity to tangible assets, 12.9% CET1, 13.8% total risk-based capital and 10.4% Tier 1 leverage. The investor presentation also cites an estimated internal rate of return of over 20%.
On a combined basis using June 30, 2026 financial data, the pro forma company is expected to have approximately $6.9 billion in total assets, $4.9 billion in total loans (gross), $5.5 billion in total deposits, and $625 million of tangible common equity at closing, operating 95 branches across Georgia, Illinois, Indiana, Kentucky and Tennessee (87 from First Financial and 8 from Hickory Point). Hickory Point Bank, founded in 1979 and previously owned by Archer-Daniels-Midland Company from 1986 to 2011 before being purchased by local business leaders and bank executives who formed First Illinois, operates 8 branches in the Decatur, Champaign-Urbana and Springfield, Illinois markets. As of June 30, 2026, Hickory Point reported approximately $717 million in total assets, $438 million in gross loans, $624-627 million in deposits, $82.4 million in tangible common equity, $8.5 million in LTM net income, 1.18% LTM ROAA, a 70% loan-to-deposit ratio, and 1.27% cost of deposits; at the bank level it reported an 11.0% leverage ratio and 17.3% total risk-based capital ratio.
First Financial President and CEO Norman D. Lowery said the company is "pleased to expand our footprint in Illinois through the addition of Hickory Point Bank, an exceptional community banking franchise with strong customer relationships across central Illinois," adding that "Hickory Point Bank brings an attractive core deposit franchise and strong balance sheet liquidity that will enhance our funding profile and support continued growth." Anthony G. Nestler, President of First Illinois and President and CEO of Hickory Point Bank, said the companies are "pleased to be joining an organization that shares Hickory Point Bank's commitment to relationship-focused community banking" and that the deal "will provide our customers and employees with access to additional resources and capabilities while delivering meaningful value to our stockholders." The investor presentation frames the deal around three themes: it is "financially attractive" (approximately 7% fully phased-in EPS accretion, 2.3-year TBV earnback, and over 20% IRR), it represents an "enhanced franchise" (complementing First Financial's existing Illinois footprint with entry into Decatur and Springfield, adding experienced local management and lending teams, and improving an already low-cost deposit base), and it is "low risk" (citing shared values and credit cultures, a comprehensive due diligence process, and First Financial's track record of successfully integrating past acquisitions, including HopFed Bancorp in 2019, Hancock Bancorp in 2021, Simply Bank in 2024 and CedarStone Financial in March 2026).
On the acquirer side, Raymond James & Associates, Inc. served as financial advisor to First Financial and rendered a fairness opinion to its board of directors; Amundsen Davis, LLC served as First Financial's legal counsel. On the target side, Piper Sandler & Co. served as financial advisor to First Illinois and rendered a fairness opinion to its board, while Barack Ferrazzano Kirschbaum & Nagelberg LLP served as First Illinois' legal counsel. The merger agreement separately identifies Levenfeld Pearlstein, LLC as special tax counsel to First Financial, expected to deliver a closing opinion that the merger qualifies as a tax-free reorganization under Section 368(a) of the Internal Revenue Code.
The transaction has been unanimously approved by both companies' boards of directors, and First Illinois directors have signed voting agreements committing to vote their shares in favor of the merger. The deal is expected to close in the fourth quarter of 2026, subject to First Illinois stockholder approval, the effectiveness of a Form S-4 registration statement (which First Financial has not yet filed with the SEC as of this writing), Nasdaq listing approval for the shares to be issued, and receipt of required bank regulatory approvals without the imposition of a condition deemed "unduly burdensome" by First Financial. The merger agreement sets an "Outside Date" of March 31, 2027 (automatically extended to May 31, 2027 if the SEC has not declared the Form S-4 effective by then, and otherwise extendable by up to 60 additional days in 30-day increments if regulatory approvals remain pending). The agreement provides for a termination fee of $4,400,000 payable by First Illinois to First Financial if the agreement is terminated under specified circumstances, including a change in the First Illinois board's recommendation or termination by First Illinois to accept a superior proposal. No closing 8-K, vote-result 8-K, or definitive merger proxy/S-4 has been filed as of this update; the specific terms of the proxy statement/prospectus, any other bidders considered by First Illinois, and final closing conditions satisfaction have not yet been disclosed in public filings.