Illinois bank acquiring Wisconsin bank

Central Illinois-based First Mid Bancshares, Inc., is acquiring Beloit, Wis.-based Blackhawk Bancorp, Inc., in a $90 million, all-stock deal. 

The $6.7 billion, Mattoon-based First Mid Bancshares is the parent company of First Mid Bank & Trust, N.A., and has branches in Illinois, Missouri and Texas. Headquartered near the Wisconsin-Illinois border, the $1.2 billion Blackhawk has $782 million in loans and $1.19 billion in deposits. It operates 10 branches in Wisconsin and Illinois. 

First Mid Bancshares said it expects Blackhawk’s strong financial position to increase its funding sources. As of the end of last year, Blackhawk had a 65 percent loan-to-deposit ratio and a fourth quarter cost of deposits of 0.51 percent. Only 8.5 percent of Blackhawk balances were uninsured deposits. 

First MidChair and CEO Joe Dively said the banks have already worked together on multiple projects over the last several years. “Blackhawk has a long history of providing excellent service with a community-minded focus that aligns very well with First Mid’s philosophy,” he said. “We have been talking to [Blackhawk President and CEO Todd James] and his team for a number of years about a possible combination of our organizations. And, while there is volatility in the equity markets for banks today, the discussions which led to today’s announcement started a long time ago.” 

 Under the terms of the deal, Blackhawk Bancorp shareholders will receive 1.15 shares of First Mid Bancshares common stock for each share of Blackhawk common stock. The transaction is expected to be approximately 22 percent accretive to earnings per share next year, excluding non-recurring transaction expenses. First Mid expects tangible book value per share dilution to be earned in less than two years.  

The merger is expected to close in the second half of this year.

The buy continues First Mid’s recent growth. In the summer of 2021, the bank acquired St. Louis, Mo.-based Delta Bancshares, as well as a loan and deposit portfolio in the city. In March of that year, the bank acquired two Illinois insurance agencies through its subsidiary First Mid Insurance Group. In 2018, First Mid acquired Decatur, Ill.-based SCB Bancorp, Inc., in a $70 million cash-and-stock transaction.    

Piper Sandler & Co., Minneapolis, served as exclusive financial adviser to Blackhawk and rendered a fairness opinion. Janney Montgomery Scott LLC, Philadelphia, served as exclusive financial adviser to First Mid. ArentFox Schiff LLP, Washington, D.C., served as legal advisor to First Mid.