When Amcore Financial Inc. holds its annual meeting Tuesday, shareholders are expected to demand the Rockford, Ill., banking company put itself up for sale.

Despite a strong market position, earnings at the $4.4 billion-asset company have been sluggish and its stock price performance has been disappointing.

"If ever there's been a bank that should be sold, this is it," said David B. Moore, an analyst with Podesta & Co. of Chicago. "It's blatantly obvious that Amcore is underperforming and will continue to underperform.

"There's a large group of shareholders that are going to show up to voice their displeasure with the current course that management's taking."

Amcore investor-relations manager Katherine Taylor declined to say whether the bank would consider a sale, but she said its "independent-minded" board is always aware of its alternatives. "They're extremely well informed about our options, the industry, and the economy," she said. "Their goal is always to act in the best interests of shareholders."

She later added, "We're in dynamic markets, and we're optimistic about our future growth opportunities."

Amcore holds 27% of the Rockford area's deposits, making it No. 1 in its hometown, and operates a $5.1 billion trust-and-asset-management group.

Those same features make Amcore attractive to other, larger banks, analysts said. Leading the list of potential acquirers are Wells Fargo & Co., Old Kent Financial Corp., and Marshall & Ilsley Corp.

"Amcore is a great franchise," said Brock Vandervliet, an analyst with Salomon Smith Barney in New York. "The problem is that it's been underperforming for so long that shareholders are upset and out of patience."

Amcore in 1999 delivered a return on assets of 1.1%, against 1.5% for other banks across the country with $1 billion to $10 billion of assets, according to the Federal Deposit Insurance Corp. Its net interest margin also was lower: 3.5% versus 4.4% for other banks of its size.

More important to investors, Amcore's stock has underperformed potential acquirers, Mr. Moore said. It has delivered a 9.9% annualized return since the end of 1994, compared with Wells Fargo's 30% return and Old Kent's 24%.

"Management should do the right thing for shareholders, put their egos aside, and go for a sale," said Dan Bandi, portfolio manager for the Armada Small Cap Value Fund, a National City Corp. mutual fund that invests in Amcore. "The right thing for them to do is realize value for their shareholders, and they can't seem to pull that off themselves."

Amcore also is finding itself on the defensive elsewhere.

Several Amcore executives - led by group vice president Cherie Zanck - quit and accused Amcore of ignoring its customers. They have formed a new bank in Woodstock, Ill., the county seat of one of Amcore's fastest-growing markets.

"We wanted to move away from commodity banking," said Ms. Zanck, American Community Bank & Trust's chief executive officer. "I call it corporate arrogance when people lose touch with their own client base."


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