Megadeals that made the largest U.S. banking companies even larger got all the attention last year. But midsize regional banks, making smaller niche acquisitions, did the most leapfrogging up the ranks in asset size.

An American Banker analysis of yearend 1998 data for the 100 largest U.S. bank holding companies showed little movement in rank among the top 10, despite deals last year that created Citigroup, the new BankAmerica Corp., the new Bank One Corp., and the new Wells Fargo & Co.

Those banks shuffled around each other in the rankings by one or two positions. Many regional banks, by contrast, had double-digit advances in asset rank.

"They are building up their critical mass," said Frank Barkocy, an analyst at Josephthal & Co. "We will see those companies over time looking to become part of that larger group."

Analysts said midsize regional banks have been aggressively expanding through acquisitions, seeking scale in certain businesses and markets with an eye on selling themselves to much larger companies. In many cases, size and scale make a bank a more attractive takeover candidate, they said.

The biggest gainer in the rankings was BancWest Corp. of Honolulu, which jumped 35 slots to become the nation's 49th-largest bank, with assets of $15 billion. Firstar Corp. in Milwaukee jumped 21 slots, to No. 21, with assets of $38.5 billion.

Both banks completed acquisitions last year.

BancWest is the new name for the $1 billion combination in November of First Hawaiian Inc. and San Francisco-based BancWest, a former unit of Banque Nationale de Paris.

Also in November, Firstar merged with Cincinnati-based Star Banc Corp. in a $5.7 billion deal. The combined company is called Firstar.

Size is part practical-some bank businesses thrive on the efficiencies gained through scale-and part ego, analysts said.

"There is a general thought that bigger means more important," said Kevin Timmons, an analyst at First Albany Corp. "Asset size has been very important to some bankers."

In all, 17 banks disappeared from the top 100 list last year as a result of merger activity, according to the American Banker survey. The 100 largest banks' share of total assets and deposits continued to grow last year as well.

In 1998, the group had a total of $4.791 trillion of assets, or 88.05% of all commercial bank assets, according to American Banker. At the end of 1997, the 100 largest banks had a 79.59% share of all commercial bank assets.

Also in 1998, the group had total deposits of $2.690 trillion, or a 61.33% share, according to the survey. In the previous year, the 100 largest banks had 59.36% of deposits, the survey showed.

Regions Financial Corp. in Birmingham, Ala., and Zions Bancorp in Salt Lake City were the two most acquisitive regional banks last year. Regions completed 13 deals, and Zions closed 12, according to the analysis.

As a result, Regions leaped 14 slots in the ranking, to No. 23, with $36.8 billion of assets. Zions jumped 16 notches to become the 47th-largest bank, with $16.6 billion of assets.

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