In a scenario that will be repeated as interstate banking approaches, Fourth Financial Corp. is rumored to be in talks with three potential acquirers that would make the Kansas-based company one of the first to benefit from national interstate banking next year.

The $7.55 billion asset company is said to have drawn interest not only from Boatmen's Bancshares in neighboring Missouri, but also from two Minneapolis-based companies, First Banks System and Norwest Corp., which are prohibited from acquiring a Kansas bank under existing laws.

Analysts and investors said an acquisition by any of the three is possible and could be announced before yearend, still months ahead of Sept. 29, 1995, the effective date of interstate provisions passed this fall by Congress.

"This could be a model of how things are going to shape up in the coming months, with deals being announced before they can be legally done," said a money manager who invests in all four companies. "We hear there is a lot of talk going on between (potential) merger partners."

A spokesman for Fourth declined to comment on the rumors. The company's stock traded up again Friday, closing at $31.25, near a 1994 high of $33.

"The stock has acted unusually strong recently with a downdraft for most bank stocks underway," said Steven Schroll, analyst at Piper, Jaffray & Co. in Minneapolis.

It is no surprise that Fourth Financial is viewed as a choice target. The company dominates the market in Kansas and is close to having the largest statewide franchise in Oklahoma. Those two states fit the southwestern acquisition strategy of both Boatmen's and Norwest.

"You don't have to be a rocket scientist to know they're going to be of interest to someone," said Joseph Stieven, senior banking analyst at Stifel, Nicolaus & Co. in St. Louis.

Others say a fat efficiency ratio, the product of a three-year acquisition binge which has tripled the company's assets, means it could fetch a premium well above two times its $18.51 book value. They say such a deal could be valued at as much as $1.4 billion.

Ben Crabtree, analyst at Dain Bosworth Inc. in Minneapolis, estimates that Fourth Financial had an efficiency ratio of 65.7% in the third quarter.

He said an acquirer, especially First Bank, could generate an average of seven cents a share in new earnings for each point of costs it eliminates.

Sensitive to the problem, Fourth has recently slowed its buying spree and has begun to focus on cost-cutting and revenue generation. Analysts say that could ultimately make the franchise more attractive to buyers.

"At Fourth Financial, they've got their asset quality together and the franchise is coming along, but their expenses are high," Mr. Crabtree said. "If you want to talk about one factor that plays well for First Banks, it is the ability to cut costs."

The regional had an efficiency ratio of 57% in the third quarter.

So far, though, no clear favorite has emerged. Some believe that First Banks may have an inside track because Fourth Chairman Darrell Knudson spent his entire career at First Banks, rising from teller to vice chairman, before moving to Fourth in Wichita in 1990.

Others suggest that Norwest is willing to be more aggressive in paying for the franchise because its western expansion has put the superregional in every state neighboring Fourth's territory except Missouri.

At the same time, many doubt that Boatmen's could match the premiums of the Minneapolis banks without diluting Boatmen's value for its shareholders. Of the three, only St. Louis-based Boatmen's could legally acquire Fourth Financial now.

Kansas law allows for mergers only with banks in contiguous states. That will change under the federal interstate provisions which removes such barriers.

"Those kinds of barriers are irrelevant now," said Piper's Mr. Schroll. "It takes five or six months to complete an acquisition anyway. You could announce a deal today and not have to wait too much longer to close it."

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