Rawlins National Bank has more than 50% of the deposit and loan market in its part of south Wyoming, so there is little room for it to expand locally within the banking sector.

President Richard Chenoweth's solution? Get into another sector: Rawlins last week reached an agreement to purchase Allen Insurance, right across the street from the $115 million-asset bank's headquarters.

"By buying the insurance agency, we can complement our banking business," Mr. Chenoweth said. "The financial modernization laws are creating new opportunities, even for smaller banks like us."

Kenneth Guenther, executive vice president of the Independent Community Bankers of America, concurred. Gramm-Leach-Bliley makes insurance acquisitions "a logical evolution" for small banks.

"There will be more demand for insurance services, and it's an area where community banks have to get involved," Mr. Guenther said.

Indeed, for a bank of Rawlins National's size, insurance is one of the very few options available.

The town of Rawlins is not exactly Los Angeles. The nearest town with population of more than 1,000 is a 100-mile drive away.

"There are lots of reasons to want to live in Wyoming," Mr. Chenoweth said. "But for a businessman trying to grow his business," working there is "not a good thing."

Allen Insurance has two offices and 11 employees, nine of them salespeople.

Terms of the deal and a scheduled closing date were not given. Mr. Chenoweth said it was too soon to detail how Allen Insurance will be integrated into Rawlins National Bank.

"We'll have to figure out how to cross-market," he said. "We have to see how privacy issues fall out, because that could be a constraining issue."

One option would be to refer customers at Rawlins' two branches in Hanna and Saratoga to Allen Insurance, Mr. Chenoweth said. The town of Rawlins is a 40-mile drive from either location, but "that's not an issue," he said. "People drive 40 miles without thinking about it."

Allen offers personal and commercial property and casualty insurance, as well as life and health products. Its largest book of business is commercial insurance.

"They sell quite a bit to the downtown business and to farming ranches," said Mr. Chenoweth, who did not provide Allen's revenues.

Allen's lines for farming ranches include workers' compensation, facility coverage, and liability policies.

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