The Great Bank Consolidation Continues: Heartland Bank Buys Town and Country

HBT Financial, Inc. (NASDAQ: HBT), the holding company for Heartland Bank and Trust Company  announced its plan to acquire Town and Country Financial for $101 million. Heartland’s Chairman and CEO stated in their joint press release, “Our disciplined approach to M&A has helped us to consistently enhance the value of our franchise.” The transaction follows decades of consolidation in the banking industry. 

During the economic boom that followed World War II, banks aggressively opened new branches to serve communities within their respective states – growing from 17,198 bank branches in 1945 to 47,519 in 1977. By 1994, Congress passed the Riegle-Neal Interstate Banking and Branching Efficiency Act allowing banks to open branches across state lines. This led to massive consolidation in the industry as national banks sought to capitalize on economies of scale. 

67% of banking institutions have disappeared since the 1980s – dropping from 18,000 banks to just 5,000 by 2021. And the surviving banks have grown significantly: while small banks accounted for 84% all U.S. banks in 1994, that figure dropped to 52% by 2021. 

The precipitous decline in banks reflects not only fewer overall institutions, but also fewer branches. As banks increasingly rely on online banking services and automate administrative labor, they can shrink their physical footprints. Branch closures accelerated following the Great Recession, with 14% of the nation’s branches closing between 2008 and 2020. During the pandemic, that rate roughly doubled, jumping to approximately 200 branches closed per month during 2020-2022. A disproportionate number of closures are in low income and rural communities. 

According to Matterhorn’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly announced transactions. Heartland was advised by law firm Vedder Price P.C., and financial adviser Piper Sandler & Co.. Town and Country Bank was advised by Barack Ferrazzano Kirschbaum & Nagelberg LLP, and financial adviser Keefe, Bruyette & Woods, Inc.