Another bank has joined the hunt for mortgage banking assets.

Deposit Guaranty National Bank, Jackson, Miss., is searching for mortgage banks to buy, according to a company official.

The bank has a mortgage subsidiary, Deposit Guaranty Mortgage Co., that services $2 billion but is looking to triple or quadruple that figure, said Alan H. Walters, chairman of the unit. "We want to get to $6 to $8 billion in servicing," he said in an interview this week. "It's a matter of do we do it in two or three deals or five or six deals."

Deposit Guaranty, with more than $5 billion in assets, is typical of the midsize banks that see mortgage banking as an integral part of their future. The bank is keen on buttressing its fee-based income, according to Mr. Waiters, and "We think we can operate profitably ... and gain some economies of scale."

To aid in the search, the Deposit Guaranty has retained the Houston consultancy of Charbonneau-Klein Inc., to scope potential targets and help with strategy, Looking at acquisitions and performing due diligence "can take up a lot of your time," Mr. Waiters said.

Charbonneau-Klein, which also acts as a servicing brokerage, acted on behalf of First Tennessee Bank in its acquisition of four mortgage banking firms in 1993 and 1994.

Deposit Guaranty has a small originations outfit. The company operates a retail franchise in Mississippi and Louisiana, the parent bank's trade area. Retail should account for about half of this year's target production of $350 million, Mr. Waiters said.

Wholesale is the other pan of the lending picture, and Deposit Guaranty has a network that includes its trade area and also branches out into Arkansas, Tennessee, Ohio, Wisconsin, and Indiana.

Although the southeast will be the focus of the search, Deposit Guaranty will look at companies in a wide geographic range. "Ideally we want a company in a good market with a strong retail network. Also we want a company that has a culture which will fit in with ours," Mr. Walters said.

Mr. Waiters has run the mortgage subsidiary for four years, coming to Deposit Guaranty Mortgage from its parent company.

Mortgage banking will form the second main thrust of the bank's fee income push. Deposit Guaranty already has a fairly large trust division, with more than $12.5 billion in trust assets under management and administration.

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