Heartland Bancorp Inc. in Bloomington, Ill., announced Monday that it is buying the $346 million-asset First Federal Bancshares Inc. in Colchester, Ill., for about $28.6 million of cash.
Heartland, with $913 million of assets, has 23 branches in central Illinois. The deal, which is expected to close next quarter, would push its assets above $1 billion and give it eight additional branches, including three in Missouri.
First Federal is the parent company of First Federal Bank, an 80-year-old thrift. Through the first six months of 2006, the company earned $207,000, down 64% from the same period a year earlier. Its return on average equity at June 30 was 1.96%, down from 4.97% in the first half of 2005.
Heartland would pay First Federal stockholders $23 per share, or 25 cents above First Federal's closing price on Friday. First Federal's stock was trading at $22.64 late Monday, down 0.48%. Heartland is privately held.
