Firstar Corp.'s deal for Mercantile Bancorp of St. Louis would bring it a regionally entrenched asset management business.

The influx of assets under management would come on the heels of the merger of the asset management businesses of Star Banc Corp. and the old Firstar. Cincinnati-based Star Banc bought the old Firstar in November, took its name, and moved its own headquarters to Milwaukee.

As of April 30, the new Firstar managed more than $11.2 billion in 25 funds, and Mercantile managed $3.5 billion in 18 funds through its Mississippi Valley Advisers subsidiary.

Firstar Funds had $5.5 billion of money market funds, $3.6 billion of equity funds, $1.7 billion of fixed-income portfolios, and $416.5 million of balanced funds under management on April 30, according to Lipper Inc. of Summit, N.J. They are distributed by B.C. Ziegler and Co. in West Bend, Wis.

The Mercantile Funds had nearly $1.3 billion of equity portfolios, $1.1 billion of fixed-income, $1 billion of money market, and $127.2 million of balanced funds. They are distributed by Bisys Group Inc. of Little Falls, N.J.

"It usually makes a lot of sense to consolidate the efforts," said David Huber, the president of Bisys Fund Services.

Aside from the Mercantile Funds, Mercantile manages $26 billion of assets, a spokeswoman said. Firstar Investment Research and Management Co. manages $25.5 billion of assets, according to the banking company's Web site.

It is uncertain how business lines with different strategies will be integrated if the deal closes as scheduled in the fourth quarter. The Mercantile spokeswoman said no decisions have been made, and a Firstar spokesman said, "That is still being taken into consideration and still being researched internally."

Meanwhile, "the critical thing on both sides is staying in touch with clients," said James R. Janetz, managing director of FMS Consulting of Blue Bell, Pa. "You've got a pretty sizable base of assets at risk."

Mercantile "is the last big bank being taken out of St. Louis, so you run into the same scenario as Boatmen's," he said. There was a runoff of investment management staff and clients from the former Boatmen's Trust business after its 1997 takeover by NationsBank Corp.

Mercantile and Firstar have taken different approaches in the brokerage business. Firstar contracts with Conseco Inc.'s Bankmark for 150 investment representatives.

Mercantile has been expanding in-house its full-service and discount brokerages. It has 140 full-time brokers and 30 part-time brokers.

The strategies are "180 degrees" apart, said David A. Hall, chairman of Financial Services Associates Inc., a consulting firm in Niles, Mich.

The two companies have different strengths in investment management and administration. Firstar emphasizes mutual funds, and Mercantile has a large number of separate accounts for institutional customers, such as pension and profit-sharing plans. Firstar is strong in custody. And both are strong in personal trust, Mr. Hall said.

"The level of anxiety has got to be huge because there are very different strategies in place," Mr. Hall said. "There's probably no one strategy that has proven to be more successful than any other."

Mercantile's 1998 investment banking and brokerage income was up 7.7%, to $41.1 million, according to its annual report. Trust income grew 8.7%, to $113 million. Firstar's brokerage revenues last year were up 19%, to $22.3 million, according to its annual report, and trust income rose 12%, to $262.3 million.

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