First Commerce Corp.'s adoption of antitakeover provisions was probably not spurred by any immediate hostile action but rather by a desire to protect the New Orleans-based bank during a period of earnings weakness, analysts said.
First Commerce, Louisiana's largest bank, announced this week that its board had adopted a 10-year shareholder rights plan, or "poison pill," allowing current holders to buy shares of the company at half market value whenever an acquirer buys 10% or more of the company.
"The plan will not prevent a takeover but should encourage anyone seeking to acquire First Commerce to negotiate with the board prior to attempting a takeover," First Commerce said in a published statement.
In the same statement, president and chief executive Ian Arnof said First Commerce is "not currently in any discussions with other parties regarding the sale of the company, nor do we currently anticipate entering into such discussions."
Rather, Mr. Arnof said, First Commerce adopted the rights plan "based on the ongoing consolidation taking place in our industry and the recent emergence of transactions which could be considered hostile."
Mr. Arnof was apparently alluding to the recent hostile takeover of California's First Interstate Bancorp by Wells Fargo & Co.
"For a long time, banks didn't have to think about hostile situations, but that really has changed," said First Commerce spokeswoman Holly Hobson.
Ms. Hobson denied knowledge that any potentially hostile group is buying First Commerce shares. And Dean Witter analyst Anthony A. Lombardi said he has seen no evidence of such activity in the market.
But Mr. Lombardi added that First Commerce faces a lot of pressure to improve earnings. Last year was marred by a plethora of special quarterly charges related to securities losses, acquisitions, reengineering expenses, and credit problems.
"They've got to produce good numbers this year," Mr. Lombardi said, warning that continued underperformance could leave the company open to a hostile bid.
Lehman Brothers analyst Michael L. Mayo said First Commerce, with $8.5 billion of assets, is already attractive to potential acquirers, based on its recent sluggish stock performance and strong deposit share in the still relatively unconsolidated Louisiana market.