Boatmen's Trust Co. would get a nice lift from a pending Kansas acquisition by its parent, St. Louis-based Boatmen's Bancshares.
The trust company, which manages $83 billion in 28,000 accounts across nine states, would pick up $5.5 billion in trust assets through the purchase of Fourth Financial Corp., Wichita.
The $1.2 billion merger agreement was announced in late August and is expected to close in the first quarter of 1996.
The deal for Fourth Financial "was engineered at the holding company level, but the fact that it came with solid trust activities really didn't hurt," said Martin E. Galt, chairman of Boatmen's Trust Co.
Fourth Financial, he added, is "clearly the dominant trust player in Kansas." Boatmen's Trust has only one small office there, just over the state line, and has had no ambition to compete.
Banks have been eager to amass trust assets because they see great promise in the fees from this business. The current wave of mergers is helping many banks build their strength in this area.
Fourth Financial's trust business generated $21 million of income in 1994. Boatmen's drew $156 million from its trust business, placing it 26th in the nation last year.
Fourth Financial has $3 billion of discretionary trust assets, over which the bank exercises investment control. Almost 70% of that amount is in personal trust. The bank has 87 offices in Kansas, 56 in Oklahoma, and three in Missouri.
"If you look at Boatmen's territories, Kansas was the missing piece in the middle - it's the hole in the doughnut," said Mr. Galt.
The two trust businesses should mesh well, because they are structured similarly, with offerings in personal trust, corporate trust, and employee benefits, Mr. Galt said.
Officials at Fourth Financial said the pending merger would augment existing business and further growth.
"I think it will bolster our efforts because Boatmen's is recognized as one of the strongest trust companies in the country and certainly in this region," said Michael R. Ritchey, president of trust and investments at Fourth Financial.
Mr. Ritchey said other Kansas-based banks are strong competitors in the trust business, but added he is more concerned about the nonbank rivals.
But at least one competitor - Wichita-based Intrust Bank - thinks it would pick up customers who don't want to deal with a big, out-of-state bank.
"There are many people who will continue to look to a hometown provider," said Steven C. Woods, senior trust officer at Intrust. The merger, he added, "definitely heightens the competition, but not totally to our detriment at all."
