George A. Schaefer Jr. is looking for bargains in a seller's market.

The chief executive officer of Cincinnati's Fifth Third Bancorp would like to double his bank's market share in Ohio and build up in Indiana and Kentucky through acquisitions in the next few years. But he said he is not going to pay up for deals, despite Fifth Third's strong stock price.

"We're like the Jif peanut butter commercials," Mr. Schaefer said. "We've got to be very picky and very choosy."

Today, Fifth Third is expected to complete its acquisition of CitFed Bancorp, Dayton, Ohio, which would bring its assets to $29 billion. Also this month Fifth Third completed deals for State Savings Co., Columbus, and Ohio Co., a Cincinnati brokerage firm.

Still, Fifth Third remains small compared to its Ohio competitor Banc One Corp. When Banc One completes its merger with First Chicago NBD Corp. it will have $230 billion of assets.

But Mr. Schaefer said his game plan will remain the same: Buy small, underpeforming companies at low premiums and improve them.

That doesn't mean Mr. Schaefer doesn't have ambitious growth plans. The company is most interested in buying into several markets in which it already has a small presence, including Cleveland, Indianapolis, and Louisville, Ky., he said.

He said he would also like to expand in Columbus, Ohio, and Lexington, Ky., and would consider entering Evansville and Fort Wayne, Ind.

Fifth Third could gain a bigger presence in Indiana by buying all or part of the $1.3 billion of deposits that Banc One has proposed divesting as part of its planned merger with First Chicago NBD. Mr. Schaefer said he is interested in these deposits; Fifth Third now controls only 1% of the Indiana market.

Fifth Third holds about $15 billion of deposits in Ohio, or 10% of the market. Though it is the banking company's largest market, Ohio still offers growth opportunities, Mr. Schaefer said. Indeed, there are about 400 banks and thrifts in Ohio, mostly with less than $1 billion of assets.

Still, Mr. Schaefer emphasized that he is not going to overpay.

"Because some major acquisition occurs and a bank gets four or five times its book value, some $50 million thrift thinks it can get that too," he said. "Hopefully, more rationalization will come back in pricing."

Fifth Third has taken a fairly conservative approach to growth, buying mostly small thrifts and divested branches of bigger banks. And that suits Mr. Schaefer just fine. He said he has no desire to double Fifth Third's size through a merger of equals, though such deals have come into vogue.

As Mr. Schaefer sees it, recent mergers of equals among regional banking companies-Society Corp. with KeyCorp, First Chicago Corp. with NBD Bancorp, and Comerica Inc. with Manufacturers National Corp.-have produced lackluster results.

"Generally, those haven't performed as well as everyone would have liked," he said. "You look at the industry and tell me which of the the last 10 mergers of equals have worked out well."

Mr. Schaefer said his company may be relatively small but its stock has outperformed that of virtually every other large bank in the nation. Ranked by asset size, Fifth Third is the 36th-largest banking company in the nation, but ranked by market capitalization, it is 23rd.

It was the top performer last year among the 50 largest banks tracked by Keefe, Bruyette & Woods Inc.

Joseph Duwan, a Keefe analyst, said Fifth Third does not need to make major acquisitions to survive. "I don't think there's as much pressure on them as on other companies," he said. "They have a proven formula."

"In this environment, you're either a buyer or seller or a niche player, and I think Fifth Third is a buyer," said Fred Cummings, an analyst at McDonald & Co. Securities, Cleveland. However, he said, there's no pressure on the company to make deals.

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