Magna Group Inc. has been on a growth spurt for more than a dozen years, but chairman and chief executive G. Thomas Andes said it is now shifting focus to profitability, in hope of averting a takeover.

Magna, a $5.2 billion-asset bank based in St. Louis, has been focused on controlling expenses and developing new lines of business. It's currently exploring subprime auto finance, consumer finance, and insurance, Mr. Andes said in a recent interview. The bank also hopes to expand its brokerage and trust businesses.

That doesn't mean Magna won't be involved in acquisitions. Mr. Andes said he is interested in doing all kinds of deals, from a merger of equals to a small-bank acquisition.

But the number of acquisitions has slowed, analysts said, because Magna is being outbid by competitors, and Mr. Andes has taken a different direction from his predecessors.

Mr. Andes said he's interested in entering the consumer finance business through an acquisition. Magna has looked at and evaluated several finance companies but has so far made no offers.

Magna has also considered entering other businesses, either through acquisition or start-up. It deliberated acquiring a subprime auto finance company before it decided to develop its own, which is expected to be in place by the second or third quarter.

Magna is already in indirect auto lending. Its auto loan portfolio is $380 million, or about 11.5% of total loans.

Mr. Andes said Magna has to be prudent in its new business ventures.

It can't afford to stumble or it will certainly become a takeover candidate. The 53-year-old chairman said Magna decided against acquiring a residential real estate brokerage business a year ago because it was a high-volume, low-margin business that could be too risky.

Since 1981, Magna has grown from a $250 million-asset, one-bank holding company with four locations to a company with more than 100 offices in Missouri and Illinois. The largest growth surge was in 1991, when Magna acquired Landmark Bancshares of St. Louis, doubling the bank in size and giving it a large presence in southern Illinois.

"In the past we've been growing rapidly, but our performance has not been where it should be," Mr. Andes said. "Our acquisitions have slowed down, compared with what we've done in the past. We've said we're not going to dilute shareholder value."

Magna's last acquisition, of a $160 million-asset bank in East Alton, Ill., closed in February. The $25 million deal was the first acquisition Magna had made since September 1994.

"Profitability is much more important than asset size," said Joseph Stieven, an analyst with Stifel Nicolaus.

Mr. Stieven said Magna had made progress over the past 18 months. The company earned $14 million in the first quarter, a 23% increase over the year-ago quarter.

"Look at the first quarter," Mr. Stieven said. "I think some of the framework Tom Andes has put in place is starting to pay dividends."

But Kay C. Lister, an analyst with Keefe Bruyette & Woods, said Magna's stock used to trade at a slight premium because it was considered a takeover target. Ms. Lister said that although Magna no longer trades as well as some of its peer banks, it is taking the correct steps to stay independent.

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