The scramble among regional southern banks for market share was displayed in bold relief Monday as Regions Financial Corp. said it had agreed to pay $2.7 billion to buy First Commercial Corp., the biggest bank in Arkansas.

The deal for Little Rock-based First Commercial was a stark departure from Regions' previous pattern of acquisitions, which was to buy southern community banks in deals that cost less than $800 million, and often less than $100 million.

But after losing the bidding for Jackson, Miss.-based Deposit Guaranty Corp. in December, Regions outbid at least three southern rivals by offering to swap 1.7 of its shares for each First Commercial share.

As banks frantically try to achieve the size necessary to stay in business, such factors as price and attractiveness of the seller's market are becoming secondary to simply announcing an acquisition, analysts say.

"People feel the window is going to close soon," said John Mason, analyst at Interstate/Johnson Lane Corp. in Atlanta.

Entry into Arkansas, not generally considered one of the nation's hottest banking markets, did not come cheaply for Regions, headquartered in Birmingham, Ala. The bank paid four times book value and 23.5 times First Commercial's estimated 1998 earnings.

But the deal, scheduled to close in the third quarter, at least means that Regions can remain independent while it integrates First Commercial and its 28 different community banking units. The deal would also expand Regions' asset size to $32.8 billion, which would probably give it the heft to pursue other big mergers.

Such size does not guarantee independence, however. When Barnett Banks Inc. agreed to sell to NationsBank Corp., it had about $10 billion more of assets than Regions will have after completing its merger with First Commercial.

Analysts said Regions' merger agreement puts pressure on other southern regional banks to make similar purchases or face having to sell.

Compass Bancshares, which has $13.5 billion of assets and has been acquiring small banks in Texas, is seen as particularly vulnerable.

"Compass is going to have to make bigger acquisitions soon," said Eric Rothman, bank analyst at Stephens Inc. of Little Rock. "It's the reality now."

Though Regions has never operated in Arkansas, executives at both banks said the merger is a marriage of similar companies. Both give their community banking units a high degree of autonomy, analysts say, which means the companies are fragmented but at least alike.

"I am confident that First Commercial bankers will feel at home with Regions because our styles are so similar," said Regions chief executive and president Carl E. Jones Jr.

It is unclear how many First Commercial employees will lose their jobs as a result of the merger. In a regulatory filing, Regions said it expects to cut First Commercial's operating costs by 25% and incur a pretax charge of $85 million. Of those costs, $24 million will be "employee related."

Investment bankers say First Commercial decided to sell because, like many of its competitors, it faced heavy costs in technology that would be necessary if it were to keep up with the bigger players. Unwilling to shoulder these costs, last month the board enlisted investment bank Keefe, Bruyette & Woods Inc. and put itself up for auction.

Although superregionals Banc One Corp. and Norwest Corp. were said to be in contention early in the process, the final bidders at the end were all southern banks that face the same grow-or-die dilemma as Regions. They included Union Planters Corp. of Memphis, Mercantile Bancorp. of St. Louis, and Hibernia Corp. of New Orleans.

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