Firstar Corp. of Milwaukee, which spent the last two years undergoing an intensive restructuring, is on the hunt for acquisitions, according to chairman and chief executive officer Roger L. Fitzsimonds.
"While we were going through the restructuring, we said we have to slow down," Mr. Fitzsimonds told a gathering of analysts and investors in Chicago last week.
But last fall the company began looking for bank and nonbank deals. So far, it has found the market too expensive.
"We looked at a lot," Mr. Fitzsimonds said, but "the simple answer is price."
Firstar, which has $19.8 billion of assets, must compete against mammoth midwestern banking companies, including $116 billion-asset Banc One Corp., Columbus, Ohio, and the two Minneapolis giants, Norwest Corp., with $96 billion of assets, and U.S. Bancorp, with $71 billion.
Analysts said Firstar is at an awkward size because it is too small to take on such large rivals yet too big to compete as a community bank.
But Mr. Fitzsimonds said he believes Firstar can still be "viable" even as Banc One prepares to merge with First Chicago NBD Corp., creating a $230 billion-asset powerhouse.
The new Banc One may become the largest banking company in the Midwest, but in Milwaukee deposit market share it would still trail Marshall & Ilsley Corp. and Firstar.
In Wisconsin as a whole, Banc One would rank fourth, behind Marshall & Ilsley, Firstar, and Associated Banc-Corp of Green Bay.
Firstar also operates banks in Illinois, Iowa, and Minnesota. Mr. Fitzsimonds said his company would look for deals in those and bordering states.
Firstar has been outbid on bank acquisitions in the past. Most recently, it was bested by St. Louis-based Mercantile Bancorp for First Financial Bancorp. of Iowa City, sources said.
First Financial, with $550 million of assets, would make Mercantile the second-largest banking company in Iowa, behind Norwest and pushing Firstar into third place.
In November, Marshall & Ilsley beat out Firstar for $1.1 billion-asset Advantage Bancorp., Kenosha, Wis.
Some observers said Firstar may have a reason for not bidding aggressively for bank and thrift companies.
"I'd have to say management's appetite is on the nonbank side," said Gerry Cronin, an analyst at McDonald & Co. Securities in Cleveland.
Mr. Fitzsimonds said his company has spent considerable time assessing mortgage companies and firms specializing in money management, consumer finance, and commercial leasing.
Mr. Cronin said he believes Firstar would probably buy a specialty company to enhance one of its three lines of business: retail, commercial banking, or trust and investment management.
The analyst said he believes the retail banking group holds the most promise for growth because the bank has put plenty of resources there.
At the meeting of analysts and investors, Firstar officials touted technological advances that have helped boost the retail operation, including the company's data base marketing and customer satisfaction monitoring system.
Mr. Fitzsimonds also said he is committed to increasing customers' profitability.
