Having closed more than two dozen acquisitions in four years, Community First Bankshares of Fargo, N.D., is hungry for more.
There are "a number (of deals) in the pipeline in which we're in serious discussions," said chief executive officer Donald R. Mengedoth.
Mr. Mengedoth said he would like to expand his $5.7 billion-asset company in the 11 midwestern and western states in which it operates. He is also interested in entering contiguous states, including Nevada, Idaho, and Montana in the West; and Kansas, Missouri, and Oklahoma in the Midwest.
In each of the last few years, Community First has made about a half- dozen acquisitions. Already this year it has closed seven deals, including its purchase of Guardian Bancorp of Salt Lake City this week.
In an interview, Mr. Mengedoth predicted that Community First would continue to increase its assets by about 10% to 20% a year through acquisitions. Though the bank is capable of buying a company with more than $1 billion of assets, Mr. Mengedoth said he looks for those with $150 million to $300 million of assets.
He also looks for banks in small, growing markets and likes to be the biggest bank in communities of 10,000 people.
"Our most unique niche is in a medium-size market that has some vitality," Mr. Mengedoth said.
Community First's biggest presence is in Colorado, where it has $1.8 billion of assets. It also has banks in Arizona, Iowa, Minnesota, Nebraska, New Mexico, Utah, Wisconsin, Wyoming, and the Dakotas.
Having started in the Midwest, Mr. Mengedoth likes the western states for their growth potential.
"Our observation is as baby boomers begin to mature, they look for retirement homes or second homes, many of them in the inner mountains and the Southwest," Mr. Mengedoth said.
Ben Crabtree, an analyst with Dain Rauscher Inc., Minneapolis, said Community First would have made more deals this year, but sellers are seeking steep prices.
Mr. Crabtree said Community First's strategy of being an alternative to big banks is a viable one, especially as the industry continues to consolidate.
Other analysts agreed.
"They've focused on markets that are not being focused on by others, and therefore there's less competition," said Joseph Roberto, an analyst with Keefe, Bruyette & Woods Inc.
Mr. Roberto said Community First does need to continue to grow through acquisition, and he cautioned the bank against buying branches from larger competitors. Community First has been disappointed in the branches it bought from KeyCorp and Banc One Corp. in the past year, he said.
Mr. Mengedoth said he would be more careful about buying branches, because it sometimes is difficult to determine which customers are assigned to certain branches.
