In an effort to meet profitability goals for 1997, First of America Bank Corp. will restructure itself and further reduce its work force by what it said would be a "relatively small" percentage.

The Kalamazoo, Mich., company cut 1,000 jobs, about 7% its work force, in 1994 and 1995. Officials declined to say how many jobs would be cut this time.

They said a severance charge would probably be taken in the fourth quarter but would be more than offset by a $20 million gain from the sale of 20 branches.

First of America plans to reorganize into four lines of business: trust and financial services, consumer finance and mortgage, retail, and commercial business.

The strategy is a departure for $22 billion-asset First of America, which has traditionally been organized around its four banks in Michigan, Florida, Illinois, and Indiana.

Chairman and chief executive Richard F. Chormann said the move was necessary to meet analysts' expectations that the company earn $4.50 per share in 1997.

First of America has been identifying ways to cut expenses throughout this year. The company expects to close on the sale of 20 less profitable small-town branches by yearend.

But improved revenue generation was the motivation for the announcement last week, Mr. Chormann said. "We need to do these kind of things to continue to grow the company," he said.

Joseph Stieven, an analyst with Stifel, Nicolaus & Co. in St. Louis, said execution will be crucial. "Conceptually, it makes sense," he said. "On the other hand, a lot of companies are not reorganizing, and they're doing very well."

First of America is among the banks most often mentioned as takeover candidates, but its officials have said they're not managing it for sale. Mr. Stieven said he has recommended the stock in the past and it has performed, but it's being boosted by merger speculation.

"First of America stock is doing well," Mr. Stieven said. "The question is, Why is it doing well? Is it because First of America is performing, or because the market thinks it's going to be taken over?

"I think it's a little of both."

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