Midland States Bancorp in Effingham, Ill., has agreed to buy Centrue Financial in Ottawa, Ill.

The $3.2 billion-asset Midland said in a press release Thursday that it will pay $175.1 million, or $26.75 a share for the $978 million-asset Centrue. The cash-and-stock deal is expected to close in mid-2017.

Midland said it expects the deal to be accretive to its earnings per share by up to 9% in 2018.

Centrue has 20 branches, $677 million in loans and $740 million in deposits.

"Having competed against Centrue in our northern Illinois markets for many years, we are very familiar with their franchise and believe they will be an excellent cultural fit," Leon Holschbach, Midland's president and CEO, said in the release.

Midland said it expects to cut Centrue's annual noninterest expense by 40%. The company also said it expects to incur $18.2 million in merger-related charges. It should take about two years to earn back the deal's expected dilution to Midland's tangible book value.

Stephens Inc. and Barack Ferrazzano Kirschbaum & Nagelberg advised Midland. Sandler O'Neill and Howard & Howard advised Centrue.

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