25 Banks and Thrifts Listed In a Midwestern Unit Trust

DETROIT - A unit investment trust consisting of stocks of banks and thrifts in the Great Lakes region is being offered to investors.

A total of 25 institutions from Michigan, Indiana, and Ohio are represented in the $10 million portfolio of First of Michigan Financial Institutions Trust.

"The region's financial institutions are in their best shape in a decade and are attracting investment interest from around the world," said Tony Howard, an analyst at First of Michigan Corp., the managing underwriter.

Mr. Howard said the fund is being marketed to the firm's retail investors and to some small institutional players.

It differs from other unit trusts in the banking sector, he said, because it includes some small and midsize banks and thrifts - such as Republic Bancorp of Owosso, Mich., and Independent Bank Corp. of Ionia, Mich. - in addition to stock in big regionals.

Mr. Howard pointed out that the region has avoided the boom and bust cycles that weakened financial institutions elsewhere.

Loan demand is on the rise, as is fee income, he said.

And he noted that banks and thrifts are attractive due to the potential for acquisitions as the industry consolidates.

"The changes in the banking industry offer significant investment opportunity and the Financial Institutions Trust gives investors a way to participate in that sector with a diverse and professionally selected portfolio," said Jack Tierney, unit investment trust manager at Van Kampen American Capital, which is sponsoring the trust. Van Kampen is a unit of the investment firm Clayton, Dubilier & Rice.

About 65% of the portfolio is comprised of Michigan institutions, 20% of institutions in Ohio, and 15% of institutions from Indiana.

Stocks in the trust include those of First of America Bank Corp., Kalamazoo, Mich., First Michigan Bank Corp., Holland, Mich., Chemical Financial Corp., Midland, Mich., and Standard Federal Bank, Troy, Mich.

The stocks were picked on the basis of asset quality, earnings momentum, and management expertise.

The trust has an expected life of four years, with dividends distributed twice a year.

First of Michigan will market units in the trust, at $10 apiece, from its 32 offices in Michigan and an office in New York.

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