First Mid plans to expand St. Louis operations with Linco acquisition

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First Mid Bancshares in Matoon, Ill., has agreed to buy Linco Bancshares in Columbia, Mo.

The $4.5 billion-asset First Mid said in a press release Monday that it will pay $144.9 million in cash and stock for the $1.2 billion-asset parent of Providence Bank. The deal, which is expected to close in the first quarter, valued Linco at 97% of its tangible book value.

One Linco director will join First Mid’s board.

The deal is expected to be 20% accretive to First Mid’s earnings per share in the first full year after closing, excluding merger-related expenses. It should take about two years for First Mid to earn back any dilution to its tangible book value.

First Mid plans to cut a third of Linco’s annual operating expenses. First Mid also expects to incur $15.5 million in merger-related expenses.

Providence, founded in 1884 and family owned, has branches in six Missouri markets, including St. Louis, along with locations in Fairview Heights, Ill., and Grapevine, Texas. It also has a loan production office in Indianapolis and $4.1 billion in assets under management.

“Providence has a long history of providing excellent service to the communities it serves,” Joe Dively, First Mid’s chairman and CEO, said in the release.

“We are looking forward to … providing even more financial solutions for customers and communities,” Dively added. “This merger expands our presence in the mid-Missouri and St. Louis metro markets.”

Piper Sandler and Schiff Hardin advised First Mid. Keefe, Bruyette & Woods and Stinson advised Linco.

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