Heartland Bank and Trust plans to acquire First State Bank, the latest in a series of acquisitions by Heartland Bank as it grows its regional footprint.
Heartland is headquartered in Bloomington and currently has 86 branches. The majority are in Illinois, with a few bordering Illinois in eastern Iowa and Missouri. First State is headquartered in Mendota — about 80 miles north of Bloomington on Interstate 39. First State is smaller than Heartland, with 19 branches throughout Central and Northern Illinois including two in Bloomington and one in Heyworth.
Heartland CEO J. Lance Carter said Heartland currently has approximately 1,050 employees, while First State has fewer than 200. Once the banks are combined, Carter said he anticipates reduction in the overall workforce, due to duplicate roles at each of the current banks.
"We'll have less employees combined than we each have individually, but we hope that a lot of that happens through natural attrition between now and then," Carter said. "But there will be some reduction in headcount where we have duplicate jobs."
Carter does not plan to close many branches post-acquisition, unless they are "redundant." He said that in four or five communities, there is a First State Bank "kind of right across the street" from an existing Heartland branch. This is where the community is likely to see branch consolidation. But Carter said the larger footprint of Heartland Bank will provide customers more branches within their community overall.
"Although may we may close one branch, [Heartland Bank] customers and First State Bank customers both will have access to more branches than they did before," Carter said.
Expanding menu of services
Kirk Ross, current CEO of First State, said the acquisition is "going to expand the number of locations dramatically for First State Bank customers." Ross will be transitioning to a regional senior lender role once the acquisition is complete.
Carter said overall, he is motivated to retain the workforce talent that comes with the acquisition of First State. He plans to work closely with their management team to "bring us together to make the best organization." He said that acquiring new talent within the banking industry is one reason Heartland pursues mergers and acquisitions to begin with.
"It's hard to attract and hire talent. So when you can do an acquisition and bring in talented staff, that's always an advantage," Carter said.
Ross said First State employees joining the Heartland organization will be moving to a larger company, which naturally brings more opportunity for career growth.
Customers of both banks stand to gain access to additional products once the merger is complete.
"We have a full-service wealth department, which First State Bank didn't," Carter said. "First State Bank has an insurance agency that they operate, which we don't. So there are opportunities to expand those types of services to both customer bases."
Carter said Heartland's wealth management department provides financial planning advice and investment asset management, which will be available to First State customers once the acquisition is complete. Current Heartland customers will gain access to property/casualty and farm insurance products.
Ross also expects benefits like higher lending limits for large commercial and agricultural customers and more up-to-date products. "The bigger you are, usually the better you can provide the latest and greatest in products," Ross said.
Carter said the most important part of the acquisition is the cultural fit between Heartland and First State.
"When we looked at First State Bank, they're in very similar and overlapping markets to us. Their lending portfolio mix is very similar to us, with a focus on agriculture, small business, home loans, commercial real estate loans that they make to their customers and their communities."
A growth mindset
Merging two distinct companies can be complicated, Carter said, but Heartland has plenty of experience in the process. This is Heartland bank's thirteenth acquisition since 2007. They acquired NXT in 2021, Town and Country Financial Corporation in 2023, and CNB in March 2026.
Carter said Heartland's business strategy takes a "two pronged approach" of organic growth and growth through acquisition. He said markets in Central Illinois "aren't really growing very fast from a population standpoint," which means organic growth is slow and in the "single digits."
For the past 25 years he said they've been supplementing that trickle of growth with a "logical M&A [merger and acquisition] transaction every couple of years."
In fact, Carter said banks looking to sell often approach Heartland as a potential buyer — not the other way around. In addition to being financially strong, Carter said "we have a history of treating the banks we acquire well, and that gets out in what's really a very small community of banks, you know, throughout Illinois and really throughout the Midwest."
But even when a company has a lot of practice, an acquisition can still make people feel nervous, Carter said.
"I think the most difficult part is sort of getting from the announcement day to getting through the conversion, because customers and employees are naturally concerned and nervous, and you're trying to reassure them," Carter said. "At the same time, you don't know everything until you get through it, and so it's a challenging time."
Carter said he asks for patience from both customers and employees over the next several months.
"We've done this before, and it's worked out well for the customer bases that we've acquired."
First State customers will eventually have a new system and online banking platform, but Carter said that isn't likely to happen until mid-2027. In the meantime, First State customers should plan to do everything exactly the same, and Carter said Heartland will communicate any future changes with plenty of notice.
Between now and when the acquisition closes, Carter said the focus will be on clearing regulatory hurdles and holding a shareholder vote for Tri-County Financial Group, the holding company for First State Bank. Ross said shareholders should feel confident in the change.
"[Heartland] had a good track record as far as being profitable. They're well managed, their loan performance has been excellent," Ross said. "Going forward, I would expect them to continue to pay a strong dividend like they have in the past. So it should be a good investment for our shareholders who retain Heartland stock."
