First American's purchase of Deposit Guaranty appears to have been star-crossed from the beginning. The company won an intensive bidding battle for Deposit Guaranty in December 1997. The price, $2.7 billion in stock, was widely perceived as much too high by analysts and investors.

The price amounted to 25 times earnings and 4.2 times book value, bringing the total to more than NationsBank Corp. paid for the much more attractive Barnett Banks.

The price of First American's stock plunged by almost 20% after the announcement but later since recovered most of that ground.

At the time, Mr. Bottorff defended the merger, saying it would help First American join the ranks of what he called the Sweet 16 most profitable banks.

But analysts said the deal actually diluted First American's profitability and they saw little potential for cross-selling. One commented that he could not see people in Hattiesburg, Miss., dying for First American's deposit products.

They also pointed out that cost cuts were not available because the two companies had no overlapping offices except in Memphis. Tenn.

In a bid to retain customers, First American agreed to let Deposit Guaranty keep its name. And to maintain continuity, it also made a deal with E.B. Robinson, Deposit Guaranty's chief executive, that pays him a salary of $600,000 a year as chief operating officer. He also got restricted stock, options, and an incentive bonus of up to 16% of his base salary in stock.

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