Triumph of Timing Seen in Miami Bank's Sale to NationsBank

Three months ago, William H. Allen Jr., the chairman of Intercontinental Bank in Miami, said he'd be "extraordinarily shocked" if the bank were sold within the next five years.

But most observers were not that surprised at the news Monday that Intercontinental, one of the most attractive banks in Florida and the second-largest publicly owned bank in the state, had agreed to sell to NationsBank Corp.

Some said this was a done deal almost from the $1.1 billion-asset company's inception nine years ago. It's principal founder and shareholder, after all, sits on the board of directors of NationsBank and had engineered a sale of his previous bank to NationsBank 10 years ago.

Most of the senior management team from that first bank, called Pan American Banks Inc. in Miami, came over to Intercontinental shortly after Pan American's sale in 1985 to NCNB Corp., which later became NationsBank.

History, then, has repeated itself. The only question for most observers was when would Intercontinental sell to NationsBank. The fact that it was this week is telling, analysts say.

"The important point here is that you have a couple of smart guys who picked this time to sell the bank," said Richard X. Bove, a bank analyst with Raymond James & Associates in St. Petersburg, Fla. "It shows that they feel the fundamentals of the banking industry are topping out right now and that 1996 will be a tough year."

Competitive pricing in commercial lending in the South Florida market and declining core deposits in many institutions there will result in added margin pressure down the road, analysts said. Under this thinking, combined with the perception that the economy may be slowing, Intercontinental's management and insiders were correct to cash in now, analysts said.

And, pending regulatory and shareholder approval, they will cash in: With about 48% of the stock, Intercontinental's internal owners stand to collect $100 million from the $30-a-share offer. Michael Weintraub, the founder of Intercontinental who sits on NationsBank's board, would make about $32 million from the deal.

The next question is what becomes of Intercontinental's senior management, called the "dream team," by some analysts. Mr. Allen, William L. Morrison, the president and chief executive, and Thomas B. Brady, the chief operating officer, have earned enormous respect in South Florida banking circles from their nearly 20 years together at Pan American and Intercontinental.

The fourth member of the team, Thomas E. Beier, the bank's chief financial officer, came to Intercontinental from Atico Financial Corp., the controlling shareholder of Pan American.

"It's hard to imagine entrepreneurs like these guys staying inside a place like NationsBank," Mr. Bove said. "If they go on and do something else, you ought to invest in it because they are professionals."

Mr. Morrison said no decisions have been made about senior management positions at Intercontinental.

A sale to NationsBank would probably create a score of Intercontinental customers looking for a new bank, analysts said. Intercontinental has built its customer base - primarily consisting of small and medium-size businesses - through relationship banking.

Other fairly large, locally owned banks such as BankAtlantic Bancorp, Capital Bank, and City National Bank, will have their arms open, observers said.

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