Michigan community bank stocks spiked last month in the wake of National City Corp.'s $7 billion deal for First of America Bank Corp.

Stock prices at Independent Bank Corp., Republic Bancorp, and Bank West Financial Corp. have climbed faster than the Midwest average since Cleveland-based National City made its announcement Dec. 1. The acquisition of Kalamazoo, Mich.-based First of America is expected to close in the first quarter.

Analysts said investors are speculating on Michigan's next takeover target.

"The FOA deal has had an impact," said David E. Mudd, a bank analyst at Howe Barnes Investments in Chicago. "A lot of the Michigan names have appreciated rather nicely."

Independent's price rose 24.1% and Republic Bancorp's, 18.1%-both outpacing American Banker's Midwest bank stock index, which appreciated 7.5% through Dec. 30. Also beating the Midwest index were Bank West Financial, with 9.9% price growth; Franklin Bank, 8.3%; and Shoreline Financial Corp., 8.7%.

Michael M. Moran, a bank analyst at Roney & Co. in Detroit, said Michigan banks as a group are well-run and therefore attractive to out-of- state banking companies looking for entry into the Michigan market.

Even before the First of America deal, Michigan had been a hotbed of merger activity in 1997. Five deals had been announced, three of which have closed.

Among the larger pending acquisitions is a $584 million deal by CNB Bancshares, Evansville, Ind., for Pinnacle Financial Services Inc., St. Joseph, Mich. And Ohio's Huntington Bancshares completed its $908 million purchase of First Michigan Bank Corp., Holland, Mich, in September.

The analysts would not predict which Michigan banks would be acquired next. But Mr. Moran said the takeover trend may convince more Michigan community bank executives that it is time to sell to the highest bidder.

"They don't have the banker mentality anymore," he said, "where they stay independent for the sake of staying independent."

Bankers said they have been pleased at their stocks' price appreciation but try to separate themselves from acquisition speculation.

"I'm certain the First of America announcement had an effect on our stock price," said Charles C. Van Loan, chief executive officer of Ionia- based Independent. "I try not to get hung up on it. What we really try to take credit for are good performances."

Read P. Dunn, chief executive officer at Franklin Bank, agreed.

"I tend to ignore short-term spikes," he said. "Spikes from rumors don't help the shareholder in the long run."

The bankers and analysts said they expect the state's community bank stock prices to level off early this year and to trade in better synchrony with the industry's Midwest average as acquisition speculation tapers off.

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