Some things never seem to change - at least not in Alabama.
Back in 1990, analysts were guessing which of the state's top five banking companies would be acquired first. They're still guessing.
The lineup of the state's largest banks is the same as in 1990: Regions Financial Corp. (then First Alabama), SouthTrust Corp., Amsouth Bancorp., Compass Bancshares (then Central Bancshares of the South), and Colonial Bancgroup.
The reason things haven't changed, analysts and bankers say, is that Alabama retains its image as an economic laggard. But in fact that image is increasingly out of focus. For instance:
*A new Mercedes-Benz plant is set to begin production in the state in 1997.
*High-technology growth in northern Alabama revolves around the federal government's Redstone Arsenal and George C. Marshall Space Flight Center at Huntsville.
*In southern Alabama, Mobile has undergone impressive development as a modernized seaport.
*Meanwhile, once-gritty Birmingham, the state's largest city, has blossomed as a regional banking center, second in the Southeast only to Charlotte.
Still, Alabama's economy overall lacks the high-profile diversity and dynamism seen in such neighboring states as Georgia, Florida, and North Carolina - home to the region's dominant banks.
So in 1996, just as in 1990, it's difficult for a bank headquartered in one of those other states to justify paying a premium for expansion in Alabama.
"I don't see the Alabama banks as major targets for their Alabama franchises," said southern banking industry analyst John B. Moore Jr. of Morgan Keegan Inc., Memphis.
"It's really been the Alabama banks that have been the aggressors - looking into adjoining markets, like Georgia and Florida, that have a more interesting growth outlook," said another analyst, Thomas F. Theurkauf Jr. of Keefe, Bruyette & Woods Inc., New York.
Indeed, the big five Alabama banks have been pursuing their own acquisitions in neighboring states since the late 1980s.
Compass Bancshares now has 34% of its assets in Texas, Amsouth 38% in Florida, with Regions Financial and SouthTrust spread out over a number of states.
In one of the largest such deals recently, Regions Financial agreed last October to buy First National Bancorp. of Gainesville, Ga., quadrupling its assets in the neighboring Peach State.
Even Colonial Bancgroup, the smallest of the Alabama top five, recently established a small foothold in Atlanta by acquiring a thrift institution in suburban Dunwoody.
Not surprisingly, the valuation assigned to any of the top five increasingly hinges as much on the out-of-state portion of their franchises as on their Alabama coverage.
Texas may have been the lure that attracted Charlotte-based First Union Corp. to make a tentative offer for Compass in the fall of 1994. First Union had previously indicated an interest in Texas in 1992 when it conducted due diligence on Houston's failing First City Bancorp.
First Union told the directors of Birmingham-based Compass in October 1994 that it would be willing to pay $1.14 million for Compass, a 35% premium on its then-market value. The Compass board rejected the proposal, which alienated several directors and led to a nasty proxy fight early last year.
Even though the First Union offer went nowhere, it indicated that an out-of-state giant would be willing, under the right circumstances, to pay a premium for a major Alabama banmk.
Meanwhile, Alabama's community banks have been attractive to out-of- state buyers for a number of years. One of the major changes in deposit market share in the state occurred with the growth of Synovus Financial Corp. to sixth place.
Synovus, based in Columbus, Ga., used a series of small acquisitions to capture 2.8% of the state's deposits, according to SNL Securities. Synovus' $1.1 billion of deposits compare with $2.2 billion for homegrown Colonial.
"We are betting on the state and the markets we're in," said Synovus chairman James H. Blanchard. "Alabama is an incredible banking state. Banks there have performed at a higher level than most any other state in the Union."
Mr. Blanchard added that he would be willing to consider future acquisitions in Alabama, particularly if the state reforms its notorious lawsuit-friendly judicial system, which has produced huge judgments against financial-service companies in recent years.
Other out-of-state acquirers lured to Alabama are Union Planters Corp., Memphis, which has built a 10th-ranked market share, with $353 million of deposits in suburban Birmingham, Huntsville, Tuscaloosa and Montgomery, and Atlanta-based SunTrust Banks Inc., which claimed 11th place with $297 million of deposits in the northern part of the state.
But Synovus, Union Planters, and SunTrust have all been content to pursue niche banking in selected markets. To acquire major market share in Alabama still requires purchasing one of the big five.
Regions Bancshares, Compass Bancshares, Amsouth Bancorp., and SouthTrust Corp. are all based in Birmingham while Colonial Bancgroup is headquartered in Montgomery, the state capital.
In the wake of the failed proxy challenge at Compass, the eyes of Wall Street analysts have shifted to Amsouth as a possible target on the theory that banks often tend to sell themselves when they experience difficulties.
Amsouth is now grappling with both earnings weakness - a legacy of its aggressive expansion into Florida - and management succession.
"The conventional wisdom is that Amsouth is a more likely candidate than some of the other names," Mr. Theurkauf said.