National Commerce Bancorp. is planning to acquire Brooks, Montague & Associates, becoming the third major southeastern bank to buy an asset management firm in the past three months.
Brooks, Montague & Associates, an investment adviser based in Chattanooga, Tenn., will be part of Memphis-based NCBC's Asset Management Group but will retain its name and employees and continue to operate independently.
Term of the deal were not disclosed.
NCBC's announcement came just weeks after hometown rival First Tennessee National Corp. said it would purchase Highland Capital Management Co.
"I don't think they're playing catch-up," said Peter Tuz, an analyst with Morgan Keegan Inc. in Memphis. "This is just a process that every bank in the country is going through," he said.
Certainly, the trend seems to be hot in the South right now.
In October, First Union Corp. of Charlotte, N.C., announced it was acquiring Lieber & Co., manager of the Evergreen mutual fund family.
Like other banks, NCBC is "looking to boost their investment management business," Mr. Tuz said.
"Historically, asset management activities have provided banks a stable source of fee income," said Thomas M. Garrott, chairman, president, and chief executive of NCBC.
Over the next five years, a company spokesman said, NCBC hopes to boost to 15% from 10% the portion of its profits coming from investment advisory, trust, and broker-dealer businesses.
Commerce Capital Management, the bank's investment advisory arm, now has $800 million under management.
The bank already has a "fairly substantial" investment management business, Mr. Tuz said. Acquiring Brooks Montague would "augment Commerce Capital's business," the analyst added.
National Bank of Commerce, which has about $2.6 billion of-total bank assets, currently manages its own four-member mutual fund family - the Riverside Capital Funds - which have $270 million of assets.
The bank also provides individual and corporate asset management through Commerce investment Corp., a broker-dealer, and its trust division.
"We will continue to look to expand our asset management activities both geographically and strategically," Mr. Garrott said.
The holding company now does business in Tennessee, Mississippi, and Virginia.
There are other southern states the company is looking to expand into, Mr. Howell said, including North Carolina and Alabama.
Brooks Montague's forte is managing growth equity. That should coincide well with NCBC's plans to add a growth-oriented proprietary mutual fund in the future, Mr. Garrott said.