National City Corp. announced Monday it had agreed to acquire Integra Financial Corp. of Pittsburgh for $2.1 billion in stock.
The acquisition, for $62.75 a share - 1.96 times book value - would give Cleveland-based National City an entrance into neighboring Pennsylvania. The resulting bank would operate in four states, with deposits of $35 billion and assets of $50 billion.
Executives said they expect to consummate the purchase in the second quarter of 1996.
"This acquisition is consistent with our previously stated growth plans, and it is a logical and attractive opportunity for National City," said David A. Daberko, National City president and chief executive officer. He also noted its "significant opportunities for increased revenues."
The proposed deal lends further credence to analysts' expectations that the national bank merger wave is washing over the Midwest after being confined mainly to other regions.
Just last Friday, Boatmen's Bancshares of St. Louis, continuing its aggressive expansion in the Midwest and Southwest, agreed to acquire Fourth Financial Corp. of Wichita, Kan., in a $1.2 billion stock transaction that would allow Boatmen's to claim the leading deposit share in five states.
With $33.4 billion of assets, Boatmen's is the biggest bank in Missouri, while Fourth Financial, a holding company with $7.5 billion of assets, is the largest in Kansas and third in Oklahoma. The combined bank would have 650 offices in nine states.
Meanwhile, expanding in Florida, Huntington Bancshares of Columbus, Ohio, announced Monday an agreement to acquire Peoples Bank of Lakeland, for an undisclosed price. The latter, with $534 million of assets, would be merged into the $19 billion-asset Huntington's subsidiary, Huntington National Bank of Florida, roughly doubling the company's assets in the state.
The acquisition of Integra brings $35 billion-asset National City 264 offices in 33 western Pennsylvania counties.
National City comes into the merger with 650 offices in Ohio, Kentucky, and Indiana. The bank said it would have a major presence in nine of the 100 biggest metropolitan areas, a claim it said only a handful of other banking companies can make.
"They have put a lot of money into technology (which they can) leverage across a broader customer base," said C.J. Lawrence analyst Michael Plodwick.
Integra, with $15 billion of assets, "has built a great franchise in western Pennsylvania," said William F. Roemer, the company's chairman and chief executive officer, who plans to step aside from day-to-day management after the merger. "This transaction promises to enhance that position at a much faster pace than what we would have been able to effect on our own."
National City said it will save $85 million a year by merging. The two banks expect to take a one-time charge of $100 million to cover the costs of the merger.