Standard Bank & Trust in Hickory Hills, Ill., has hired an investment bank to explore a possible sale, according to Crain's Chicago Business.

The $2.4 billion-asset bank hired JPMorgan Chase to help manage a sale, unnamed sources told Crain's. The $17 billion-asset PrivateBancorp in Chicago and the $10 billion-asset First Midwest Bancorp in Itasca, Ill., are the known interested buyers.

Standard, a subsidiary of Standard Bancshares, and First Midwest did not return calls seeking comment. JPMorgan and PrivateBancorp both declined to comment.

Standard's potential exploration of strategic options comes amid other deals in the Midwest. Those include the merger between MB Financial and American Chartered Bancorp, Huntington Bancshares' plan to buy FirstMerit and Anchor BanCorp's sale to Old National Bancorp.

Standard's private-equity investors are fueling the interest in a sale, Crain's said. The family-owned bank raised $138 million in 2013 from a group including Stone Point Capital in Greenwich, Conn. The bank used a portion of the funds to redeem Troubled Asset Relief Program shares and saved the rest as it explored merger opportunities.

But Standard never made good on the possibility of buying another bank, which isn't surprising given the timing of Standard's investment, said Michael Iannaccone, managing director at FinPro Capital Advisors.

"Many people anticipated there being a higher level of M&A on the smaller side of the market," said Iannaccone, who is not involved in the Standard matter. "But a lot of people didn't know where the economy was going or where rates were going, so there was a lot of ambiguity in the market."

Higher regulatory and technology costs for smaller banks have also kept them out of M&A, Iannaccone said. Now, in Standard's case, the private-equity investors are probably looking to cash in on their investment, even without the benefits of a merger, given the premium they'll likely receive.

"Private equity wants to get out before the industry has shrinking margins and valuations go back down," Iannaccone said. "They got in at a discount, and they'd be able to sell at premium to book."

Standard could also potentially look at an initial public offering, or finding another investor, as alternatives to a sale, he said.

Iannaccone speculated that the bank could approach other strategies to help its private equity investors make an exit, such as or an investment from another firm.

Standard itself could also be a buyer, Iannaccone said.

"You potentially could see a merger of equals," Iannaccone said. "Doing a deal like that could then signal to people that there's true consolidation and there's a viable player in the market to start consolidating the little guys."

Standard operates 35 branches in Illinois and Indiana.

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