The year's first half seemed tame compared to the fireworks of a year ago. Only six mergers announced in the banking industry topped $2 billion in transaction value and only three others topped $1 billion.

But the year's first six months were not without a few flashes of excitement. There were a couple of blockbuster deals, the biggest of which was Boston-based Fleet Financial Group's acquisition of BancBoston Corp. for about $16 billion.

BancBoston's chairman and chief executive, Charles K. "Chad" Gifford, apparently decided it was not feasible even for a bank as large as BancBoston to go it alone (see article, page 4).

A foreign-owned bank also made a big acquisition. HSBC USA, the London company's American unit, is paying $10.3 billion for Republic New York Corp. And Germany's Deutsche Bank closed its $9.3 billion takeover of Bankers Trust, announced last year.

In second place for the first half was the $10.6 billion deal Firstar Corp., Milwaukee, made for Mercantile Bancorp., St. Louis.

Analysts are quick to point out that banks can find themselves facing major challenges in absorbing their acquisitions. A case in point is Amsouth Bancorp., which is acquiring First American Corp. First American became vulnerable when it had trouble digesting Deposit Guaranty Corp., which it acquired in 1998, and became a target itself.

Some analysts believe Amsouth can in turn become vulnerable if it has problems integrating First American and its undigested Deposit Guaranty (see article, page 6).

The volume for the half, $66 billion, was down sharply from the $236.5 billion of dealmaking in the first half a year earlier.

Of course, it was during last year's first half that the industry's "big four" linkages were announced. The leader among those landscape-altering deals, Citicorp-Travelers, was larger by itself at $74.3 billion in announced value than everything done in this year's first half.

The other industry blockbusters of a year ago were NationsBank- BankAmerica at $61.6 billion, Norwest-Wells Fargo at $34.5 billion, and Banc One-First Chicago at $29.8 billion. And for good measure there was Washington Mutual Inc.'s acquisition of H.F. Ahmanson & Co. at $9.9 billion in announced value.

Simply the digestion period due after such a round of transaction would have dictated a fallow period this year in merger activity. Those institutions, as well as First Union Corp., were absent from the buyer ranks in the first half.

On top of that, there was also the lingering effect of last fall's steep downward spiral of bank stocks in the second half of the year as global financial markets reeled from economic crises in Russia and Asia.

Nor was that all. By this time last year, some investors and analysts had already become wary of high premium deals like First American's. SunTrust Bank's acquisition of Virginia's Crestar Financial Corp. at a hefty premium, which was announced July 20, 1998, also created investor anxiety.

Nevertheless, the first half represented something of a comeback in deal activity. The total volume of prices paid was above the $47 billion in last year's second half. It was also higher than the $60 billion of the first half of 1997.

Premiums have slipped a bit, however. The average deal price paid in the first half was 2.81 times the book value of the seller versus 2.96 times book a year earlier.

And many deals are still not getting off the ground, says Michael L. Mayo, a banking analyst with Credit Suisse First Boston, who believes there are more buyers than sellers in the market right now (see article, page 8).

He said a number of very large deals were still do-able on paper but posed serious questions of cultural differences and survivorship. Those issues have loomed larger as the industry has consolidated into larger and larger entities with superregional or even national reach.

Still, some expansion-minded banks have forged ahead, unveiling more than one acquisition ranked among the top 75 deals of the first half.

The champion was Winston-Salem, N.C.-based BB&T Corp., which acquired First Liberty of Macon, Ga.; Mason-Dixon Bancshares, Westminster, Md.; Matewan Bancshares, Williams, W.Va; and First Citizens Corp., Newnan, Ga. The four deals together totaled just under $1 billion.

BB&T has been seen as "an acquirer of choice by community banks," noted one observer. Besides a healthy stock price, it has a reputation of respecting cultural issues, often keeping local management and employees in place at acquired institutions.

Considerably bigger than the string of BB&T deals were three moves by Utah's Zions Bancorp, which topped $6 billion overall, led by its $5.7 billion deal for rival First Security Corp. New Jersey's Hudson United also made three deals, but their value fell short of $500 billion.

Among the banks making two deals in the top 75 were Fifth Third Bancorp, Cincinnati; U.S. Bancorp, Minneapolis; Old Kent Financial, Grand Rapids, Mich., and New York's Independence Community Bank.

In major first half line-of-business acquisitions, Citigroup in March bought $1.9 billion of credit card portfolio and servicing from Mellon Bank Corp., Pittsburgh, while Wachovia Corp., Winston-Salem, N.C., in May acquired $11 billion in the trust services sector from Offitbank Holdings, New York.

In the insurance sector, Countrywide Credit Industries, Calabasas, Calif., is paying $425 million for life and casualty activities of California's Balboa Life & Casualty Co.

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