In one swoop, Banc One Corp. not only transformed its banking operation earlier this month by announcing plans to buy credit card specialist First USA Inc., it also signaled a new direction of bank merger and acquisitions.

The big mergers of 1996 - Wells Fargo & Co.'s purchase of First Interstate and NationsBank Corp.'s marriage to Boatmen's Bancshares - reflected the two strategies that big banks have pursued for years: expanding within their own market or buying into new ones.

But Banc One's foray into credit cards shows that banks are thinking less about prowling the country for customers and more about attracting customers with an array of credit cards, mutual funds, and other services.

"We're now at a stage where fill-in acquisitions are moving down to the midsize and small banks," said Richard J. Barrett, managing director of UBS Securities' financial institutions group. "The bigger guys are thinking about what strategic moves they can make to truly become national franchises."

Investment bankers expect a busy year for bank consolidation in 1997 after a comparatively quiet 1996. Last year, $43.9 billion of deals were announced versus $77 billion in 1995.

"It's going to be extremely active," said Michael E. Martin, managing director of Credit Suisse First Boston's financial institutions group. "You can expect to see a few big deals among big players, and you'll start to see banks try to buy such companies as brokerages, asset management firms, technology companies, and consumer finance companies."

In addition to Banc One's purchase of First USA, reports have surfaced that BankAmerica Corp. is interested in buying brokerage PaineWebber Inc. And Citicorp demonstrated its interest in a money manager and credit company by negotiating late last year with American Express Co.

Although many major banks appear flush with resources right now, it may not be possible to pay for everything on their wish lists.

Banc One showed just how dear a valuable property can be when it paid 20 times estimated 1997 earnings for First USA. Banks typically pay 15 to 16 times earnings when they buy another bank.

Further complicating matters is the fact that bank stocks traditionally trade at lower price-to-earnings ratios than the nonbanking companies they crave. That makes it hard for banks to do deals without diluting earnings per share and irking shareholders. Banc One will have to absorb a hefty 7.3% first-year dilution in buying First USA.

Some attribute the slowdown of mergers last year to the health of the banking industry.

Many, perhaps most, of the lagging competitors already have been snapped up by healthier companies, notes Lawrence W. Cohn, bank analyst at PaineWebber Inc. That effectively drives up prices for the remaining players and makes any remotely underperforming bank a clear-and-present takeover candidate.

In addition to financial performance, investment bankers say that one of the best ways to gauge a bank's likelihood for a merger is to look for top management close to retirement age.

Again, Banc One provides an example. In the last merger of 1996, it paid $527 million for Liberty Bancorp in Oklahoma, or 18.5 times earnings estimates for a bank that's expected to grow at 8% a year. But what really made the deal possible, insiders say, was that Liberty's chief executive, Charles E. Nelson, was nearing retirement and ready to sell. Mr. Nelson could not be reached for comment.

"In the end, a lot of these deals revolve around personality," said Douglas Mercer, managing director at Donaldson, Lufkin & Jenrette. "If the bank is making money and the CEO is feeling good about things, why should he sell?"

Additionally, updated guidelines from the Securities and Exchange Commission issued last March have made deals more complicated to pull off.

Banks traditionally have preferred to pay for acquisitions by using "pool accounting." In doing so, they incorporate the assets of their new bank onto their balance sheet as if they were always a single company.

But the SEC ruled last spring that pooling couldn't be used when banks were buying back shares from investors. And since investors have come to expect banks to repurchase stock to keep the value high, acquiring banks have been forced to use purchase accounting, which requires banks to amortize any price paid over the selling bank's book value and take it from their earnings per share.

This regulation forced banks to come up with innovative ways to pay for their megamergers in 1996.

Wells Fargo's $13.2 billion hostile takeover of First Interstate was a significant purchase transaction. The San Francisco banking company told analysts to focus not on reported earnings but on "cash earnings" - earnings before the goodwill was deducted.

Wall Street accepted this, and the model was followed by NationsBank in its $9.6 billion takeover of Boatmen's. It could become common in future blockbuster deals, said Ken Wilson, managing director at Lazard Freres & Co.

However banks pursue their strategies to be the dominant player in the industry, Mr. Barrett of UBS Securities says there is probably room for only five or six on the top.

The biggest banks already have a huge advantage. Their earnings are so high that investors are starting to award them with higher price-to- earnings ratios than regional banks. And higher ratios mean less dilutive deals when buying a nonbanking company.

This doesn't necessarily mean the game is up for the regionals. A top 20 bank with a strong balance sheet like Star Banc Corp. of Cincinnati could, with the right partners, quickly develop into the next Banc One, observers say.

And there are plenty of partners available, since consolidation hasn't fully hit the Midwest or parts of the Southeast, experts say.

Meanwhile, the thrift industry also is more attractive than ever to banks seeking old-fashioned geographic expansion and business in new markets.

"This isn't a sprint," said Mr. Barrett of UBS. "It's a long-distance race, and the game isn't over."

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