Peoples Bank of Indianola in Iowa has agreed to buy Pleasantville State Bank in Iowa.
The $175 million-asset Peoples did not disclose the price it agreed to pay for the $41 million-asset Pleasantville State. The deal is expected to close in the second half of this year.
Regulation and compliance costs factored into Pleasantville State's decision to sell, Mark Prill, the bank's chief executive, said in an interview.
"It's expensive," added Prill, who plans to retire when the deal closes. "We can't keep up with it."
Kevin Halterman, the chief executive of Peoples, said that the purchase will also allow the bank to expand its market for loans in the region. "Like any community bank, we all need to grow to spread the costs out," he said.
The deal will also expand mobile banking options for Pleasantville customers. "Their internet banking is pretty limited," Halterman said.
Prill plans to retire following the acquisition, after working for 24 years at the bank, which was established in 1932, during the Great Depression. He said that he's pleased to have found a buyer that's compatible with his bank's values. "You're going to lose some of that small-town feel, if you just have a big bank come in," he said.
Prill said that one of his customers recently told him that the acquisition was the third one she knew of a community bank "selling out" to a larger buyer.
"I'm not pushing the government at all," he added, "but it seems that they would prefer medium sized banks instead of small ones."