Furthering a push into Illinois, Banc One Corp. on Wednesday agreed to buy Rockford-based First Community Bancorp. for about $120 million in stock.

First Community, with $797 million in assets, operates in northern Illinois. Its lead bank is First National Bank and Trust Co., Rockford.

The First Community acquisition, combined with other pending deals, would give Banc One an Illinois franchise with $4.3 billion in assets, making it the state's eighth largest.

And the acquisitive company doesn't plan to stop there: "We want to become a bigger player in Illinois," said Banc One spokesman John A. Russell.

1.85 Times Book Value

The exchange has a minimum value of $29.25 per First Community share, representing a premium of at least 1.76 times book value. That is in line with what Banc One is paying for Key Centurion Corp., Charleston, S.C., and lower than the 2.3 times book the Ohio company is paying for Valley National Corp., Phoenix.

Banc One's common stock was trading Wednesday afternoon at $43.875, down 37.5 cents. First Community stock shot up $8.75, to $27.25, an increase of 47% from Tuesday's close. Depending on what happens to Banc One trading values, the deal could be worth as much as $32 per share.

First Community is a solid banking company that nevertheless has been posting average results by Midwest standards. The company's $4.1 million of earnings during the first half of 1992 equaled annualized returns of 1.07% on average assets and 12.58% on average equity.

The unit has excellent credit quality: Nonperforming assets equaled as slim 1.17% of gross loans at midyear, and loss reserves equaled 125% of nonperforming assets.

The First Community deal is but the latest in a string of takeovers by Banc One and other out-of-state Midwest banking companies. Detroit-based NBD Bancorp, for example, has built an Illinois franchise controlling almost $5 billion of assets.

Also staking out territory in Illinois are First of America Bank Corp., Kalamazoo, Mich.; Comerica Inc., Detroit; Old Kent Financial Corp., Grand Rapids, Mich.; and Firstar Corp., Milwaukee. Other regional banks, including Norwest Corp., Minneapolis, may also be looking to enter Illinois, analysts said.

But the window of opportunity is beginning to close.

While there are plenty of opportunities to buy small banks having less than $500 million in assets, there are not very many large banks left on the market. And bidding competition seems destined to heat up.

"There are just as many buyers as there are banks to be bought," said John E. Snow, an analyst at Chicago Corp.

A number of medium-size bank holding companies in the Chicago area remain independent. Among them are First Midwest Bancorp., with $2.3 billion of assets, the $1.6 billion-asset First Colonial Bankshares, and the $1.5 billion-asset Boulevard Bancorp. These institutions comprise only a small portion of the Chicago market, which is dominated by First Chicago Corp.

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