could add fuel to the state's already hot merger market. Minneapolis-based Norwest Corp. said Monday it would acquire Victoria (Tex.) Bankshares in a $275.7 million deal. Bill Strunk, chairman of Strunk and Associates, Houston-based bank analysts, said the deal for Victoria Bankshares will garner plenty of attention in industry circles. "I think some of the other big boys are starting to sit up and take notice," he said. "With all Norwest's moves, its assets are close to $7 billion, and we could see even more activity within the state from other banks before long." Victoria, parent company for Victoria Bank and Trust, the 10th-largest bank in the state, had been rumored as a takeover target for several months. With 42 branches in central and southern Texas and assets of $1.9 billion, it is the biggest deal for Norwest since it entered the Texas market two years ago. "Norwest has been concentrating on being a rural community banker, which is similar to what we've tried to accomplish," said Greg Sprawka, Victoria's chief financial officer. "This is a good fit." Victoria is the latest in a growing list of bank acquisitions in the state - more than 65 deals in the past 18 months. Frank W. Anderson, Dallas-based vice president of Stephens Inc., an Arkansas investment firm, said the acquisition will benefit consumers in the Victoria area. "Norwest will definitely be much more of a competitor, but it's good competition, not cutthroat," he said. "Norwest takes a hands-on view of the community and likes to work within the community." Mr. Strunk said he expects more acquisition action in the state, which should boost community bank values. "The big banks from out of state are going to want to get more involved in the game and it makes community bank franchises in the area more valuable," he said. Takeover rumors had swirled around Victoria for some time. During the past few days the stock price had risen steadily, but after news of the acquisition was made public, its price fell $4.25, to $31.75. Norwest will exchange 1.05 shares of its stock for each share of Victoria's stock. Mr. Strunk said he felt the price was an accurate reflection of Victoria's value. "It's probably a fair deal for both sides," he said. "Victoria has never been a high performer, and I think overall it's a fair price." Mr. Strunk added that he expects Norwest to continue its acquisitions drive, and said he wouldn't be surprised if it outgrew Bank of America- Texas, currently the state's fourth-largest, by year's end.
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