Satisfied that the cost of community bank acquisitions has declined, Amcore Financial Inc. is invading Wisconsin with the goal of becoming a regional player.

Amcore, based in Rockford, Ill., announced Oct. 3 its plan to acquire Country Bank Shares Corp., a $285 million-asset community bank in Mount Horeb, just west of Madison.

Robert J. Meuleman, chief executive of $2.8 billion-asset Amcore, said the acquisition would fit into the bank's plan to be a player in small to midsize markets in southern Wisconsin and northern Illinois.

"We're really a regional operation, and this will accelerate recognition of that," he said. "We're not just a Rockford institution."

Mr. Meuleman said he wants to establish Amcore's presence in the area defined by Rockford, Chicago, Milwaukee, and Madison. To that end, the bank is still in the market for reasonably priced targets in Wisconsin.

Acquisitions are "not our top priority, but we're still interested," he said.

Mr. Meuleman said Amcore has wanted to move north for years, but costs were prohibitive. For example, two years ago Amcore bid for Madison branches that Marshall & Ilsley Corp. was divesting. But the cost was too high.

"The deposit premiums were in excess of 20%," he said. "I didn't see a payout with that premium."

Outright acquisitions also were too pricey. "We were seeing multiples of two times book and 16 to 18 times earnings," he said. "I thought that excessive."

Mr. Meuleman said he has since seen a drop in prices, which he attributes to banks realizing they were putting themselves out of reach.

Terms of the Country deal were not fully disclosed. But Country stockholders would receive 4.3 shares of Amcore stock for each share of the Wisconsin company.

In a release, Country president Neal H. Brunner said an acquisition by a public company is a good deal for the bank's shareholders. "We will be converting from a stock that is not listed and has limited trading for a Nasdaq-listed stock," he said.

The deal is contingent upon Country completing its acquisition of Belleville State Bank, a six-month-old transaction awaiting regulatory approval. That transaction had been hampered by a minority shareholder dispute, which has since been resolved, Mr. Brunner said in an interview.

Although Mr. Meuleman expressed confidence Amcore would crack the Wisconsin market, one of his possible competitors is less than impressed.

State Bank of Cross Plains has a branch in Mount Horeb, which has a population of about 5,000. Its chief executive, Harold L. Swanson, said he expects to pick up plenty of runoff customers from the first out-of-state bank to enter Wisconsin since 1994.

"I honestly see it as a positive for us," he said.

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