First of America Bank Corp. has announced a share repurchase program that analysts believe is designed to fend off a possible takeover.
The company, based in Kalamazoo, Mich., announced Friday it will repurchase two million shares, or 3.3%, of its outstanding common stock. Last year it completed a 3.6 million share repurchasing program.
Stock buybacks have become commonplace in banking, as companies return excess capital to investors.
Tony Howard, a bank analyst in Detroit, said First of America's management "is very nervous about someone coming in.
"So to stay independent they're going to try to boost the value of their shares," said Mr. Howard, who is with First of Michigan, Detroit. First of America's stock slipped with the market Friday. In early afternoon trading it was down 37.5 cents, to $58.875.
Banks have consolidated less in the Midwest than other regions, and less in Michigan than most other midwestern states. Banks like Old Kent Financial Corp. and Comerica Inc. are frequent names in takeover rumors.
First of America, which has $22 billion of assets and offices in Michigan, the Chicago area, Indiana, and Florida, announced plans in November to trim an unspecified number of employees.
Not everyone considers First of America a likely takeover target. Michael Plodwick, bank analyst at Salomon Brothers, called management "pretty independent-minded," with a good "going-concern mentality."