Heartland Bank and Trust plans to purchase First State Bank in the latest expansion of its regional presence, the Bloomington-based institution announced this week. The deal continues a growth pattern that's seen Heartland complete 13 acquisitions since 2007, combining organic expansion with strategic purchases to build out its footprint across Central Illinois and neighboring states. Heartland CEO J. Lance Carter acknowledged the merger will result in workforce reductions due to overlapping positions, though he hopes much of that happens through natural attrition rather than layoffs.
Heartland currently operates 86 branches, most of them in Illinois with a handful across the border in eastern Iowa and Missouri, and employs roughly 1,050 people. First State, headquartered in Mendota about 80 miles north of Bloomington on Interstate 39, has 19 branches throughout Central and Northern Illinois and fewer than 200 employees. Once combined, the banks will have fewer total workers than they do separately because of duplicate roles. Carter said he doesn't plan to close many locations after the purchase unless they're redundant—in four or five communities, a First State branch sits "kind of right across the street" from an existing Heartland location, where consolidation is likely.
According to Carter, one reason Heartland pursues mergers and acquisitions is to bring in skilled employees, saying "it's hard to attract and hire talent." Kirk Ross, First State's current CEO who will transition to a regional senior lender role, said the deal "is going to expand the number of locations dramatically for First State Bank customers." The acquisition will give customers of both institutions access to services the other didn't offer—Heartland operates a full-service wealth management department that First State lacked, while First State runs an insurance agency that Heartland doesn't have. Ross noted that shareholders should feel confident because Heartland has "a good track record as far as being profitable" with excellent loan performance.
Carter explained that Heartland's business strategy uses a "two-pronged approach" of organic growth supplemented by a "logical M&A transaction every couple of years." Central Illinois markets "aren't really growing very fast from a population standpoint," which keeps organic growth slow and in the single digits, making acquisitions necessary to expand at a faster pace. The cultural alignment between the two banks matters most, Carter said—First State operates in similar and overlapping markets with a lending portfolio focused on agriculture, small business, home loans, and commercial real estate, just like Heartland. Banks looking to sell often approach Heartland first rather than the other way around, Carter noted, because the company has built a reputation for treating acquired institutions well in what's "really a very small community of banks" across Illinois and the Midwest.
The deal still needs to clear regulatory approval and requires a shareholder vote from Tri-County Financial Group, First State Bank's holding company. First State customers won't see changes to their banking system or online platform until mid-2027, and Carter asked for patience during the transition period. For now, First State customers should continue banking exactly as they have, with Heartland promising plenty of advance notice before any changes take effect.