Bank analysts are keeping a close eye on Evansville, Ind.-based National City Bancshares after the company's top executive resigned last week in the wake of a failed buyout.
Michael F. Elliott, the $2.2 billion-asset company's chairman and chief executive officer, said he was quitting so he could spend more time with his two children and pursue other business interests.
Mr. Elliott's resignation came about two weeks after CNB Bancshares, also of Evansville, announced that it was no longer in talks to acquire National City. The two sides said regulators would have required them to divest too many deposits in Evansville to make the deal worthwhile.
Analysts said those two events, plus National City's delay in releasing its yearend earnings and rumors that it is behind in its testing for year- 2000 computer problems, have sidetracked a company that is still trying to swallow 11 acquisitions from 1998.
"It's time for them to settle back a little bit and get everything cemented," said Jeffrey Davis, a bank analyst at National City Investments, which is not affiliated with National City Bancshares.
Brock Vandervliet, a bank analyst at Keefe, Bruyette & Woods in New York, said he was particularly surprised that National City was seeking a buyer while trying to integrate the banks it acquired.
"It's kind of like selling a house that's half built," Mr. Vandervliet said.
He suspected that Mr. Elliott may be taking the fall for the merger flop with $7.1 billion-asset CNB, Mr. Vandervliet said.
"If you look across industries, when there is a failed transaction, someone resigns," he said.
National City executives maintain that Mr. Elliott's decision to quit was personal and that he was not forced out by the board of directors. Mr. Elliott could not be reached for comment.
"This had nothing to do with the board, CNB, or any other business decision," said Robert D. Vance, National City's interim chairman and CEO.
Mr. Vance said the company is seeking a leader who can to move forward with the consolidation and restructuring plan that Mr. Elliott laid out last year. National City is cutting its bank charters to 14 from 23 and consolidating its data processing centers. It also plans to take a break from community bank acquisitions.
"There is not anything negative," said Mr. Vance, who said he does not want the chairman's job permanently. "We're moving full-speed ahead."
Mr. Vance and Robert A. Keil, National City's president, also denied rumors that the company has stumbled in its preparations for the year-2000 date change. They said National City is scheduled to complete its testing for the computer glitch by March 31.
Analysts said they are reassured by the company's conservative tone. Still, Jeffrey Davis of National City Investments said he is concerned that the company will not be an attractive buyout candidate. Antitrust concerns have ruled out the likelihood of in-market deals with CNB or Evansville- based Old National Bancorp, he said.
Mr. Vandervliet and Mr. Davis also said they will be watching for surprises Friday when National City releases its yearend earnings. Company executives blamed the delay on the January merger talks.
