Looking to enter fast-growing York County, Pa., Community Banks Inc., Millersburg, Pa., has agreed to acquire People's State Bank for $55.9 million.

The stock deal is valued at 2.77 times book. Each People's share would be traded for 0.889 Community share.

The deal, which awaits approval from People's shareholders, is expected to close in the first half.

Community, founded in 1867, operates 22 branches in central and northern Pennsylvania and has assets of $428 million. Buying East Berlin-based People's would boost assets to about $669 million and give Community six additional branches, the closest about 35 miles from the nearest Community branch.

"This puts us into a totally different market," said Ernest L. Lowe, president of Community. "There is no overlap." He added that People's would retain its name and its employees.

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