First Financial Corporation Announces Merger with First Illinois; $111M Deal

What Happened

• On August 26, 2026, First Financial Corporation (FFC) entered into an Agreement and Plan of Merger to merge First Illinois Corporation into FFC, with the transaction expected to close in Q4 2026, subject to customary regulatory and shareholder approvals.
• Immediately at closing, Hickory Point Bank & Trust (an indirect, wholly owned subsidiary of First Illinois) will be merged into First Financial Bank, N.A.
• Consideration: each outstanding share of First Illinois common stock will convert into either 0.5727 shares of FFC common stock or $44.35 in cash. The deal is structured so ~70% of First Illinois shares will receive stock and ~30% cash (fractional shares paid in cash).
• Based on FFC’s closing price of $79.07 on August 26, 2026, the transaction value is approximately $111.3 million; First Illinois shareholders are expected to own about 8% of the combined company after closing.

Key Details

• Conversion options: 0.5727 FFC shares or $44.35 cash per First Illinois share; company intends 70% stock / 30% cash mix.
• Potential adjustment: Merger consideration may be reduced dollar-for-dollar if First Illinois’ adjusted consolidated shareholders’ equity at close is below $82,437,826 (with specified exclusions).
• Shareholder approvals and regulatory clearances required; each First Illinois director has signed a voting agreement to vote in favor.
• Deal mechanics for awards: options and SARs will be cashed out; unvested restricted stock awards will vest and participate in the merger.
• Termination fee: First Illinois may owe a $4.4 million termination fee under certain circumstances.

Why It Matters

• This is an acquisition-sized deal that modestly expands FFC’s footprint (Decatur, IL market) and adds the assets and deposits of Hickory Point Bank. First Illinois shareholders would hold roughly 8% of the combined company, indicating a relatively small but strategic transaction.
• Important near-term items for investors: regulatory and shareholder approvals, the possible equity-based downward adjustment to consideration, and the integration of the bank subsidiary into FFC’s national bank.
• FFC and First Illinois have filed supporting materials (press release, investor presentation, employee/shareholder communications) and will include more detail in a Form S-4/proxy and other SEC filings as the transaction progresses.