A Wisconsin bank that wants to dominate small-town markets in the Upper Midwest plans to buy its first out-of-state bank.

F&M Bancorp., Kaukauna, said it plans to acquire $25 million-asset Sentry Bancorp., Dundas, Minn., for an undisclosed sum. The acquisition, which is expected to close in the fourth quarter, is part of a growth plan that's been in the works for five years.

Gail E. Janssen, F&M's 66-year-old chairman and chief executive, said his $1.3 billion-asset company would continue to venture outside the Badger State. He's also exploring acquisitions in Iowa and Illinois.

Mr. Janssen said he waited to make his move across state lines until the company reached $1 billion of assets. He said he wanted to make sure it had the size to support far-flung operations.

But other than being in a neighboring state, Sentry, which operates the one-office Cannon Valley Bank in a town of 1,000 people, is a typical acquisition for F&M in many respects.

It's a community bank in a tiny, rural town devoid of competition. F&M, which is based in rural northeastern Wisconsin, is the only bank in about one-third of the 55 communities it's entered.

Actually, Dundas, which is about 35 miles south of Minneapolis-St. Paul, is relatively close to four banks F&M expects to operate near the Minnesota border once it completes the acquisition of $35 million-asset Clear Lake Bancorp., Clear Lake, Wis. The deal is expected to close in the third quarter.

F&M also plans to close this month on $75 million-asset Citizens National Bancorp., Darlington, Wis. Mr. Janssen said F&M would look for more acquisitions in Minnesota, using Sentry as its beachhead.

Moreover, F&M will continue to look for more Wisconsin acquisitions. A number of banks are left to buy in small communities that are "highway corridors, county seats, and business centers," he said.

Clearly, Mr. Janssen, who holds degrees in engineering and agriculture, has a contrarian view of banking: No jobs are lost after F&M acquisitions, and each bank is given considerable autonomy. Yet F&M boasts a good efficiency record. Its ratio of expenses to revenues is 54%, he said.

F&M's stock is thinly traded, and much of it is held by former investors in the private banks the company has bought.

Robert Ollech, an analyst at Principal Financial Securities, said F&M is likely to be an acquisition target itself some day. But since its stock currently trades at a high multiple, shareholders seem content to let Mr. Janssen run the business, and he has no plan to retire.

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