Ambanc Corp., a $760 million-asset banking company in Vincennes, Ind., has retained an investment bank to attract potential buyers.

Ambanc's chief executive officer is near retirement. Sources said the company has hired Cleveland-based McDonald & Company Securities Inc. to explore a possible sale.

Ambanc declined to comment, but sources said a sale of the company and its 25 bank offices could draw interest from at least a half-dozen companies in the region, including CNB Bancshares and Old National Bancorp, both based in nearby Evansville, Ind.

Word that Ambanc might be in play has boosted its stock to new heights. On Monday it hit $29 per share, up from $27.50 on Friday-the previous record. Volume jumped from zero on March 19 to 56,900 shares on March 25. On Monday, 14,000 shares changed hands.

Prices paid for Midwest community banks over the last four months indicated Ambanc could fetch between $29 and $36 per share, said Daniel E. Cardenas, a bank analyst at Howe Barnes Investments Inc., Chicago. That is a purchase price of $200 million to $250 million.

Robert G. Watson, Ambanc's chairman, president, and CEO, declined to discuss his plans, but observers said he wants to sell before he retires.

"He wants to ride off into the sunset," said Jerry Bailey, president and CEO of First Crawford State Bank, a competitor in Robinson, Ill.

Under a golden-parachute clause written into Mr. Watson's contract Dec. 31, if Ambanc were acquired and he were terminated he would receive three years' salary and bonus, according to a recent company proxy statement. If the sale had taken place last year, that would have come to $1 million in all, the proxy said.

Though several banks would be interested in buying Ambanc, CNB Bancshares and Old National would be the two most logical acquirers, sources said.

Top executives at CNB and Old National would not comment directly. But James A. Risinger, CEO at $5.6 billion-asset Old National, said it is interested in making acquisitions in Ambanc's market area.

"Our strategy is to fill out our marketplace," he said.

Old National's last deal, to buy $110 million-asset Edgar County Bank of Paris, Ill., fell through last month.

CNB, a $4.5 billion-asset company, is also building through acquisitions in the region; the purchase of Pinnacle Financial in St. Joseph, Mich., is to close this month. CNB "has a number of fill-in opportunities," said Brocker C. Vandervliet, an analyst at Keefe, Bruyette & Woods, New York. "Ambanc would be a good fit."

Mr. Vandervliet said Ambanc would also be attractive to $1.3 billion- asset National City Bancshares, also of Evansville. Other observers said Ambanc may be too big for National City, which is now buying two banking companies in rural Kentucky markets: $94 million-asset Trigg Bancorp in Cadiz and $128 million-asset Community First Financial in Maysville.

Other banking companies that may be interested in Ambanc include: Mercantile Bancorp., St. Louis; National City Corp., Cleveland; Norwest Corp., Minneapolis; and Union Planters Corp., Memphis.

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