First Mid-Illinois Bancshares in Matton has agreed to buy SCB Bancorp in Decatur, Ill.

The $3.3 billion-asset First Mid-Illinois said in a press release Tuesday that it will pay $70.4 million in cash and stock for the $437 million parent of Soy Capital Bank and Trust. The deal, which is expected to close in the fourth quarter, priced SCB at 185% of its tangible book value.

SCB plans to pay a $25 million special dividend to its shareholders before the deal closes.

SCB also owns J.L. Hubbard Insurance and Bonds, which had gross revenues of $10.1 million last year and an agricultural services division with about 248,000 acres of farmland under management.

The acquisition “strengthens First Mid’s commitment to community banking and further enhances our various lines of business providing an attractive loan and deposit portfolio and a significant increase in noninterest income through services that we are very familiar with,” Joe Dively, the company’s chairman and CEO, said in the release. “SCB has a long history of delivering excellent service with a community-minded focus and an unmatched diversity of revenue.”

First Mid-Illinois, which plans to raise about $30 million from a stock offering, said noninterest income will increase from 25% of revenue to roughly 31% after it buys SCB.

The deal is expected to be accretive to First Mid-Illinois' earnings in the first full year. It should take less than six months to earn back any dilution to First Mid-Illinois' tangible book value.

First Mid-Illinois said it plans to cut SCB's annual noninterest expense by 22%. First Mid-Illinois expects to incur $6 million in merger-related expenses.

SCB will gain one seat on First Mid-Illinois' board.

FIG Partners and Schiff Hardin advised First Mid-Illinois. Piper Jaffray and Thomas M. Shade advised SCB.

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