Merrill Lynch & Co. and Keefe, Bruyette & Woods Inc. were the top bank merger advisers in 1997.

Merrill, whose financial institutions group is headed by Herbert A. Lurie, topped all Wall Street's investment bulge-bracket firms by advising on $45.5 billion worth of deals. That marked a drastic jump from a year earlier, when the firm ranked sixth and advised on only $6.4 billion, according to Sheshunoff Information Services.

When boards of directors sat down to vote on a merger, investment bankers from Keefe Bruyette had a seat at the table more often than anyone else. The firm, which has specialized in covering the financial services business since it began in 1962, advised on 30 deals last year. Its investment banking group is headed by John G. Duffy.

"It was year of feverish activity and we were firing on all cylinders," said James J. McDermott, president of Keefe Bruyette.

While such bulge-bracket firms as Morgan Stanley and Goldman, Sachs & Co. usually duke it out for top advisory honors, 1997 saw the rise to prominence of J.P. Morgan & Co.'s bank advisory team, headed by Edwin J. Kelly. The group, which along with Merrill Lynch co-advised Barnett Banks Inc. in its $15.5 billion sale to NationsBank Corp., ranked fourth among all advisers in 1997 after failing to appear on the tables in 1996.

While some executives at commercial banks privately acknowledge they are uneasy about the investment banking arm of another commercial bank offering advice about their company's strategy, most of these bankers say J.P. Morgan's banking business-which relies heavily on trading revenues and underwriting companies in emerging markets-is so different from their own that conflicts of interest are minimized.

NationsBank Corp. is another commercial bank that is trying to develop a big bank merger advisory business. When the banking giant acquired Montgomery Securities in October for $1.2 billion, some bankers questioned whether a call to J. Richard Fredericks, Montgomery's top commercial banking adviser, would be equivalent to tipping off NationsBank.

But such concerns don't seem to have affected Montgomery's bank advisory business. NationsBanc Montgomery advised on eight bank mergers in 1997, the same as the independent Montgomery did in 1996..

The top legal advisers for 1997's bank mergers also reads much like a roundup of the usual suspects.

Wachtell, Lipton, Rosen & Katz-NationsBank's outside counsel-whose banking group is headed by Edward Herlihy, led the way in dollar volume. Sullivan & Cromwell, a firm with close ties to Goldman, Sachs & Co., and whose top banking lawyer is H. Rodgin Cohen, led the way in number of deals advised on with 25.

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