Illinois bank M&A ignites as dealmaking picks up nationwide

Illinois bank M&A increased in 2025 as deregulation and faster merger approvals under the new administration sped up dealmaking across the country.

Fifteen Illinois-based banks were targeted in M&A transactions in 2025, up from nine in 2024 and 13 in 2023, making it the second‑most active state for bank M&A last year, S&P Global Market Intelligence data showed. Total assets and deposits sold jumped in unison to $7.53 billion and $6.27 billion, respectively, from about $1 billion each in 2024 — nearly a seven-fold increase for both.

Those increases followed the nationwide trend, with the US seeing 182 bank deals in 2025, up from 125 in 2024 and 96 in 2023. Bank M&A transactions in the Midwest region also increased to 71 in 2025 from 48 in 2024 and 44 in 2023.

Conversely, assets sold in the Midwest region declined 20.9% year over year to $38.69 billion in 2025.

The largest deal measured by target total assets was Bloomington, Illinois-based HBT Financial Inc.'s purchase of Carlinville, Illinois-based CNB Bank Shares Inc. with $1.85 billion in total assets. The deal, which had a value of about $170.2 million, was announced on Oct. 20, 2025.

HBT Financial expects the deal to enhance its existing presence in the Chicago and St. Louis markets and provide access to new markets in central Illinois, according to the company's fourth-quarter 2025 earnings release.

Only two other M&A targets had over $1 billion in assets: Bancorp Financial Inc. with $1.45 billion and BankFinancial Corp. with $1.43 billion.

Cincinnati, Ohio-based First Financial Bancorp. is bolstering its Chicago presence with its acquisition of Burr Ridge, Illinois-based BankFinancial.

"As far as M&A in Chicago, we do think there's opportunity for add-on there. And if the right thing happens, maybe so, but that's not really our focus at the moment," First Financial President and CEO Archie Brown said during a fourth-quarter 2025 conference call on Jan. 29.

Old Second Bancorp Inc., which completed its acquisition of Bancorp Financial in July 2025, could also strike more deals in 2026, having accumulated excess capital for potential M&A as it awaits a deal opportunity, bank executives said during the company's fourth-quarter 2025 earnings call.

The "M&A market feels good. There's no shortage of discussions happening," CFO and COO Bradley Adams said. "The question is what's the right deal for Old Second at the right time and how much capital do we need to do that."

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Of the 15 bank M&A transactions in Illinois in 2025, nine involved in-state buyers and four involved credit union buyers.

East Lansing, Michigan-based Michigan State University FCU struck two bank deals in Illinois in 2025, while Decatur, Illinois-based Land of Lincoln CU and Joliet, Illinois-based NuMark CU struck one each. Overall, $1.07 billion in Illinois-bank assets were sold to credit unions last year.

Michigan State University FCU's two bank buys made up the bulk of that total, with Gold Coast Bank having $464.0 million in assets and American Eagle Bank having $461.3 million. Both deals are still pending.

Of the 15 deals in the state last year, six have closed as of Jan. 28 for a median of 131 days. The fastest closing deal was T & C Bancorp Inc.'s acquisition of Great River Bancshares Inc. at 63 days.

Bank M&A activity increased in 2025 and announcement momentum is expected to continue in 2026 as institutions take advantage of the conducive dealmaking environment, including faster closing timelines.

NuMark CU's acquisition of Lemont National Bank took the longest at 295 days. Credit union-bank deals often take longer to close since both bank and credit union regulators are involved in the approval process.