After Busy 1995, Southeast Deals Slow Down in '96

As the Southeast recovered from the major merger activity of 1995, consolidation moves remained small in 1996.

Still, some important deals got done and, as in several other regions, thrift institutions were the prime takeover quarry.

Union Planters Corp., Memphis, led the regional roster of deals with its $523 million purchase of Memphis thrift Leader Financial Corp. First Union Corp., Charlotte, N.C. was second place with its acquisition of Home Financial Corp., Hollywood, Fla. That deal was valued at $336 million.

Mostly, as behemoths like NationsBank Corp. digested prior acquisitions or expanded elsewhere, smaller southeastern institutions consolidated among themselves.

"A lot of the bigger buyers were otherwise engaged with what they previously acquired, making 1996 a relatively flat year," said Ronald Mandle of Sanford C. Bernstein & Co., New York.

First Virginia Banks Inc., Falls Church, acquired Premier Bankshares, Bluefield, Va., for $160 million, while Regions Financial Corp., Montgomery, Ala. bought Allied Bankshares, Thomson, Ga., for $136 million.

"1996 was a good year, but it was a different kind of year than 1995," said analyst Darren Short of Robinson Humphrey & Co.

Observers expect acquisitions to pick up in 1997, especially in Alabama and Virginia, where there are a number of independent banks.

The recent announcement of Allied Irish's acquisition of Dauphin Deposit Corp., Harrisburg, Pa., has refocused investment scrutiny on Virginia, where similar sized banks are located. First Virginia and Crestar Financial Corp., Richmond, are seen as likely candidates.

"Nineteen ninety-five was the year of some very large combinations, and that is going to happen again in 1997," said Don Delson, managing director of financial services group at Alex. Brown & Sons, Baltimore. "Over capacity and major banks' desire to cover most of the growth and population centers of the country will drive acquisitiveness in 1997."

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