Hostile takeovers between banks - a rarity in the past - could become more frequent when the purchase method becomes the only way to account for a merger.

Pooling-of-interests accounting, which fueled most of the merger boom in the banking sector, has prevented many aggressive acquirers from launching hostile transactions, said Henry C. Dickson of Salomon Smith Barney.

A bank can prevent itself from being "pooled" by buying back more than 10% of its shares, because pooling rules say that 90% of a deal's price tag must involve untainted shares. Reissuing shares that have been bought back taints them.

Another obstacle that pooling of interests created is the cross-option lockup agreement. A lockup agreement - standard in many large bank deals - grants each company the right to own as much as 20% of the other's stock if one company walks away from the deal.

A pooling of interests is not allowed if a single investor holds more than 10% of one company's stock.

The Financial Accounting Standards Board is planning to repeal pooling-of-interests accounting at the end of the year. In a pooling, the stocks and assets of both companies are combined. The standards board says purchase accounting, in which the acquirer must write off the purchase price over time, gives investors a more accurate picture of the financial situation of the resulting company.

Hostile takeovers in the banking industry have been infrequent and often unsuccessful, Mr. Dickson said. In fact, Bank of New York's hostile takeover of Irving Trust Co. on Jan. 2, 1989, is the most recent successful hostile bank deal.

But with the rule change, he said, the number of hostile mergers is likely to take off, especially if bank stocks continue to perform poorly. "Investors want a good return," he said, "and if current performance levels continue, shareholder patience may wane."

Mr. Dickson declined to name potential targets, but some investment bankers mentioned Regions Financial Corp. of Birmingham, Ala., and Summit Bancorp of Princeton, N.J.

Regions warned about an earnings shortfall in the third quarter and has one of the lowest price/earnings ratios. Summit - a perennial takeover target - has a mediocre loan growth rate and a very low price/earnings ratio - 11.8times its last 12 month's earnings.

Conversely, banks with high price/earnings ratios, such as Fifth Third Bancorp of Cincinnati and Firstar Corp. of Milwaukee, can be expected to get aggressive.

Christopher Quackenbush, an investment banker at Sandler O'Neill & Partners LP, said using the pooling method can hurt hostile deals, if market sentiment goes against a deal and causes the acquirer's stock to fall.

"The beauty of the purchase deal is that a hostile acquirer can continue to buy back stock'' to lift its price, he said.

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