Frandsen Financial Corp. said it is buying Peoples Bank Midwest of Hayward, Wis., in a transaction expected to close by the end of the year, pending regulatory approval.
Peoples Bank has assets of more than $360 million and equity capital of about $75 million. The bank also operates offices in Eau Claire, Wis., and Vadnais Heights.
The deal would push Arden Hills-based Frandsen Financial, parent of Frandsen Bank & Trust, over $2 billion in assets, making it Minnesota's second-largest privately held banking company behind St. Paul-based Bremer Financial.
Terms were not disclosed.
Richard Hoban, who recently stepped down as chief executive of Frandsen to focus on acquisitions, said the two companies are culturally similar.
"I think there's a great opportunity for well-run community banks," Hoban said Monday. "The big banks do well with their marketing and technology. But we compete with them at every level. And our strategy is to have a local market leader in every community in which we operate."
Chairman Michael O'Meara of Peoples Bank, who bought the bank in 1991, said: "Peoples Bank customers won't notice many differences, if any, once the ownership changes hands. We were very intentional about who we sold the bank to."
Frandsen Bank & Trust, which had earnings of $25.5 million last year, according to the Federal Deposit Insurance Corp., operates 35 full-service community bank offices in Minnesota, North Dakota and Wisconsin. It has assets of $1.7 billion.
"Peoples Bank Midwest's commercial customers will benefit from larger lending capabilities, strong treasury management products and SBA lending expertise," Frandsen Financial CEO Chuck Mausbach said.
Entrepreneur Dennis Frandsen launched Frandsen Financial in 1982. Frandsen, 85, said last spring that he and his wife, Jeannette, have chosen to eventually transfer their majority ownership in Frandsen Corp., which also owns several Minnesota manufacturers and employs 1,300 people, to a family foundation so that their share of stock distributions and earnings will benefit communities in which Frandsen does business.
The Frandsens already have given away millions in community college scholarships to graduates of several high schools and to an emergency-services nonprofit in Chisago and Isanti counties.