First Bank System Inc. has reached an agreement to buy BankAmerica Corp.'s corporate trust business.

The Minneapolis-based superregional said the deal would make it No. 1 domestically in that processing specialty.

The move would also double First Bank's corporate trust revenues, to $145 million. Its client total would rise to 8,700, with 26,500 accounts.

"Conventional wisdom is that the Bank of New York is the biggest" in corporate trust, First Bank chief financial officer Richard A. Zona said last week. "But in reality, I think we are."

With the acquisition, which requires regulatory approval, $34 billion- asset First Bank would continue an aggressive expansion in a market from which smaller players, lacking the economies of scale needed to be profitable, have been bowing out.

Since it bought the corporate trust business of Bankers Trust Co. of California from Bankers Trust New York Corp. in 1992, First Bank System has made three large trust deals, including the BankAmerica acquisition.

It bought the corporate trust business of two U.S. Bancorp subsidiaries in 1993 and acquired J.P. Morgan & Co.'s unit last year.

The Morgan deal helped First Bank bulk up in the large-corporate trust business, where it had earlier had little presence, Mr. Zona said.

The agreement with BankAmerica, which had previously acquired trust activities with Security Pacific Corp. and Continental Illinois Corp., gives First Bank its big municipal bond business.

"By buying BankAmerica, we have really in one fell swoop acquired Security Pacific and Continental Illinois," Mr. Zona said Tuesday. "The fit is very good."

The price of the transaction, which is expected to close by yearend, was not disclosed. But analysts said it appeared First Bank had made another wise bid.

"It makes a great deal of sense, given their expertise in the area," said analyst Sandra J. Flannigan of Merrill Lynch & Co. in New York. "There should definitely be some cost synergies, the way they've been disciplined with acquisitions."

For San Francisco-based BankAmerica, shedding the corporate trust business made sense, analysts said. Because the activities had come in mainly through acquisitions, they never attained the status of a core business line, and they likely were not as profitable as they would be for First Bank.

"It probably was never a focus for BankAmerica," said analyst Ben B. Crabtree of Dain Bosworth Inc. in Minneapolis. "On the other hand, it is just the kind of business John F. Grundhofer has been focusing on," he said, referring to First Bank's chairman.

Mr. Crabtree said First Bank's larger trust scale should allow it to achieve significant profit margins and returns on equity. Its market leadership will help, too, as it works to become even more dominant.

"It's the kind of business where the top three in the market make very good returns," said Mr. Crabtree. "I can't see why they don't have a fundamental advantage over their competitors, if only because they are No. 1."

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