Market observers are estimating that if Banc One Corp. and First Chicago NBD Corp. are forced to sell $1.9 billion of Indianapolis deposits as part of their merger, the buyer would become the third-largest bank there.

The divestiture, which many expect to be required by the Federal Reserve Board and the U.S. Justice Department, would be bound to attract the interest of large regional banking companies.

Fifth Third Bancorp, Huntington Bancshares, KeyCorp, Old Kent Financial Corp., Norwest Corp., PNC Bank Corp., Star Bancorp, and Union Planters Corp. would probably be on the list of potential buyers, sources said.

Huntington and Old Kent officials acknowledged that they would be interested, but representatives of the other companies declined to comment.

Banc One would not say how much it would divest as part of its $30 billion merger with First Chicago, but market watchers said there is substantial overlap between the two companies in Indiana.

Matthew Lee, a New York-based activist on community reinvestment issues, said the two companies may have to sell more than $1.9 billion of deposits to satisfy regulatory concerns about antitrust issues.

He noted that banks in major acquisitions have sometimes been required to sell even larger amounts, based on anecdotal information regarding competition.

The greatest overlapping between First Chicago and Banc One is in Indianapolis, where the combined company would hold 46% of deposits before any divestiture. That would far exceed Justice Department and Fed guidelines for allowable market concentration.

Assuming the deal closes as planned, National City Corp. of Cleveland would remain the second-largest bank in Indianapolis, with 22.5% of the market's deposits. Banc One would remain No. 1. (It now has 24.3%.) And the buyer of the divested deposits would be No. 3, succeeding First Chicago.

J. Christopher Graffeo, chief executive officer of National City Bank of Indiana, said his company would not be interested in buying deposits divested by the new Banc One because it already has sufficient market share in Indianapolis. Other observers said the Justice Department would look unfavorably on a sale to National City because such a deal would not increase competition in the market.

It might be to Banc One's advantage to sell its deposits to a company that is not now in Indianapolis, said Mr. Lee. The Justice Department has historically approved of bringing new players into a market, he said.

That would present a rare opportunity for a bank that wants top-tier market share position in Indianapolis.

"There are a number of regional banks not currently in the Indianapolis market that would be given an overnight major presence," said John C. Reed, an investment banker at David A. Noyes & Co., Indianapolis.

In addition to the large regional banking companies, some small regional and community banks are interested in the deposits. CNB Bancshares of Evansville, Ind., is interested, chief executive officer James J. Giancola said.

A coalition of community banks also hopes to bid on and divide up the deposit package, Mr. Reed noted.

But Mr. Reed said he does not believe Banc One will want to sell to the community bank group. "For Banc One, that means multiple buyers, multiple applications, and multiple opportunities for something to go wrong," he said.

Banc One is not going to want to complicate the regulatory process, he added.

The Justice Department would also probably not look kindly on a sale to a small-bank coalition, but Indiana politicians may apply political pressure on Banc One to sell to such a group, Mr. Lee said.

Some observers said they believe Banc One may have already struck a deal with a buyer whose identity they do not know.

Banc One may not announce the transaction until close to the expected completion of its merger with First Chicago, which is slated for the fourth quarter, these observers said.

David Wagner, chief executive of Old Kent, said his Grand Rapids, Mich., company would be interested in buying Banc One's divested deposits. "We will look at that," Mr. Wagner said. "Without knowing the branches and the markets, it's hard for me to know."

Likewise, a spokeswoman for Columbus, Ohio-based Huntington said, "It's something that's been on our radar."

Market sources also estimated that Banc One would have to divest $300 million of deposits in Lafayette, Ind., and $240 million in Gary, Ind.

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