Building on relationship, Iowa banks merge, construct office

Leighton State Bank, Pella, Iowa, is acquiring Monroe State Bank, Iowa. The $25 millionMonroe will bring Leighton up to roughly $150 million in assets. The deal is expected to close before the end of the month.

"We have had a friendly relationship with Monroe State Bank and the shareholders for several years," said Leighton President Steve Fopma. "We were first approached by the MSB shareholders in early 2013 and were invited to consider the possibility of purchasing their bank. After evaluating the opportunity, we began negotiations for the possible purchase throughout 2013, finally reaching a successful agreement just before Christmas."

Efficiencies were another motivation for the deal. The merger removes duplicated costs of processing transactions, insurance, core systems, contracts with outside vendors, meeting regulations, auditing and human resources.

"Leighton has been considering appropriate opportunities for several years, and the Monroe State Bank purchase felt right," Fopma said.

All of Monroe's employees will remain with the newly merged bank with the exception of Monroe's president, Darrell Hjortshoj, who will be retiring.

This is an exciting year for Leighton. In addition to the merger, construction is underway of its brand new main facility in Pella. With the building and the merger also come new logos for the bank and its insurance and finance wings.

The new building is being constructed across the street from Leighton's existing location. Fopma said the permitting process and regulatory necessities were fairly extensive, including permission from the State Historical Preservation Office. The bank expects the project to be complete this summer.

KleinBank to purchase Prior Lake State Bank

KleinBank, Chaska, Minn., has announced plans to purchase the $206 million Prior Lake State Bank, Prior Lake, Minn. The purchase is subject to regulatory approval, and is expected to be completed by the end of the year.

"We feel fortunate to have been able to align with a bank that is family-owned like we are and that shares our commitment to community banking," said Bob Barsness, president and CEO of Prior Lake State Bank.

Barsness was appointed director, executive vice president and cashier at Prior Lake State Bank in 1976. He succeeded his father as president and CEO of the bank in 1989. Barsness, a well-known community banker, was chairman of the Independent Community Bankers of America in 1999-2000 and chairman of the Independent Community Bankers of Minnesota in 1994-1995. He was one of the founding officers of the Bank Holding Company Association in 1981.

Doug Hile, president and CEO of the $1.6 billionKleinBank, said the purchase was a valuable opportunity to expand KleinBank's network of community-focused banks. "Prior Lake fits well into our brand footprint, and means our current and future customers will have access to additional convenient locations and services, and to customer focused employees," he said.

Prior Lake State Bank has two locations in Prior Lake, one on Duluth Avenue and one on Commerce Avenue. The bank also offers products and services on a limited basis at Shepherd's Path, a senior housing facility.

Missouri bank announces a second acquisition

Southern Missouri Bancorp, Poplar Bluff, Mo., has announced a proposed acquisition of the $275 millionPeople's State Bank of the Ozarks, Nixa, Mo., which operates 10 branches in southwest Missouri. Eight of these branches are located in Springfield, Mo. Should this merger be completed, Southern will sit at $1.3 billion in assets and operate 35 branches in southern Missouri and northeast and north central Arkansas.

"We have been interested for some time in expanding our presence in and around Springfield," said Greg Steffens, Southern's president. "We first began working toward that in mid2010, with the opening of a loan production office in that market. We have experienced strong loan growth in what is now a full-service facility in Springfield, but this partnership provides a great opportunity to build on that with Peoples' substantial retail presence in the market."

Steffens said the transaction marks the most significant strategic move for Southern during his tenure with the company, which began in 1998. He said the move will add immediate value to the bank, but that the acquisition will take four years to reach its full tangible book value.

"Our investors may note that this period is longer than we've been willing to accept in other transactions," Steffens said. "However, we believe that the strategic opportunities this merger affords our organization will prove to make it a wise investment."

Previously this year, Southern completed an acquisition of the $70 millionCitizens State Bank, Bald Knob, Ark. The move added three Arkansas branches to Southern.