Boatmen's Sets Stock Swap For First Interstate of Iowa

ST. LOUIS - The boards of Boatmen's Bancshares Inc. and First Interstate of Iowa Inc. have approved a definitive merger agreement, St. Louis-based Boatmen's announced.

Boatmen's agreed to exchange 0.17 share of its common stock for each share of First Interstate of Iowa. The latter is based in Des Moines and has $1.2 billion in assets, 10 banks, and 31 locations. The transaction's estimated value is $134 million.

First Interstate was not part of Los Angeles-based First Interstate Bancorp but had rights to the name. Boatmen's acquired First Interstate Bancorp's Oklahoma subsidiary in August.

Boatmen's and the Iowa company said they expect to complete the transaction in the first quarter of 1992. Iowa will be the fifth state of operations for Boatmen's, which has $17.2 billion in assets and more than 200 locations in Missouri, Illinois, Tennessee, and Oklahoma.

The St. Louis superregional banking company said it will leave First Interstate of Iowa management in place, led by Oliver H. Hagen, chairman, president, and chief executive officer.

Andrew B. Craig 3d, chairman, president, and chief executive of Boatmen's, called Iowa "a natural, attractive market" for his company. First Interstate "will contribute to Boatmen's earnings in the first year and will strengthen already strong capital ratios," he said.

First Interstate of Iowa's shareholders' equity of $83 million equals almost 7% of total assets. On its third-quarter earnings statement, Boatmen's showed $1.3 billion in equity, or 7.7% of assets.

Net income at Boatmen's rose 12.6% from the 1990 third quarter, to $39.1 million. Earnings per share rose 3%, to $1.03, reflecting a stock offering in April. The company enjoyed double-digit percentage increases in net interest income and noninterest income.

Net interest income rose 16.1% from a year ago, to $142.1 million, attributed to widening interest rate spreads and additional volume from the Oklahoma acquisition.

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