First Financial Corp Announces Merger with First Illinois Corporation

What Happened

• First Financial Corporation (FFC) and First Illinois Corporation entered a definitive Agreement and Plan of Merger on August 26, 2026. Under the deal, First Illinois will merge into FFC, and Hickory Point Bank (a First Illinois subsidiary) will be merged into First Financial Bank, N.A., at the effective time. The boards of both companies unanimously approved the Merger, which is expected to close in Q4 2026 subject to customary closing conditions, including First Illinois shareholder approval and regulatory approvals.

Key Details

• Merger consideration: each First Illinois share converts into either 0.5727 FFC shares or $44.35 cash; the deal is structured so 70% of shares will be exchanged for stock and 30% for cash (cash in lieu of fractional shares).
• Aggregate transaction value: approximately $111.3 million based on FFC’s closing price of $79.07 on August 26, 2026; First Illinois shareholders are expected to own ~8% of the combined company post-close.
• Adjustment and protections: the consideration may be reduced dollar‑for‑dollar if First Illinois’ adjusted consolidated shareholders’ equity at close is below $82,437,826 (with specified exclusions); a $4.4 million termination fee applies to First Illinois under certain circumstances.
• Treatment of awards: outstanding First Illinois options and stock appreciation rights will be canceled for cash payments; unvested restricted stock awards will vest and be converted into merger consideration.

Why It Matters

• The transaction expands FFC’s footprint by adding First Illinois and integrating Hickory Point Bank into its national bank subsidiary. For investors, the deal implies modest dilution (First Illinois holders ≈ 8% ownership) and a defined cash/street‑stock mix for consideration. The final value and investor outcome depend on required shareholder and regulatory approvals and a post‑closing equity check that can reduce the consideration if First Illinois’ capital is below the agreed threshold.