One by one, large independent banks are being picked off by hungry predators.

In the last year alone, the biggest independents in Arizona and Washington were bought out, as well as the second-largest in Florida.

With the bigger players eager to enter new markets, build market share, or keep rivals at bay, investors and analysts are asking the obvious question: Who's next?

The Top Five Names

Singling out merger targets, of course, is more art than science. But there is widespread agreement among market observers that the following five banks can expect phone calls from suitors in the next year or so: Bank South Corp., Atlanta; Colorado National Bankshares, Denver; Meridian Bancorp, Reading, Pa.; Crestar Financial Corp., Richmond, Va.; and Fourth Financial Corp., Wichita, Kan.

Selling Points

The five have several things in common.

All have attractive franchises focused on the biggest markets in their states.

Each is the last sizable means of entry into its market, or among the last.

All are also in what is viewed as the ideal size range - from $3 billion to $12 billion in assets -- for a number of possible buyers.

And reflecting that, all have some level of acquisition premium already built into their stock prices.

Potential acquires are being driven by the fear of missing out on opportunities in a consolidating industry. "I think there is a sense of urgency in the industry because the number of attractive franchises is shrinking very rapidly," says R. Jay Tejera, a bank analyst in Seattle for Dain, Bosworth Inc.

All of the cited targets declined to comment directly on the possibility of being sold, but many noted they have strategies to expand their own franchises through acquisitions and have firm plans to remain as independent banks.

Still, a number of independent banks in similar market positions have been acquired this year, often at hefty prices.

Valley National Corp. in Phoenix, the last major independent in Arizona, is being acquired by Banc One Corp. Puget Sound Bancorp in Tacoma, the only large independent left in Washington, is being bought by KeyCorp, and First Florida Banks Inc. in Tampa is being bought by Barnett Banks Inc.

"The biggest determinant of who gets bought out is who is last remaining target in the market," says Kristina E. Andersson, a bank analyst at Smith Barney, Harris Upham & Co.

The Leading Independent

That is the situation for Colorado National, after Affiliated Bankshares of Colorado agreed nearly a year ago to sell to Banc One. Only much smaller community banks remain in the state and are not focused on the state's prime market, Denver.

"Its a situation where Banc One, Norwest Corp., and First Bank System are all in the state and probably want to get bigger and some others probably want in," says Mr. Tejera.

The price tag is something all three could swallow easily. Affiliated's market value is $363 million, 1.5 times its book value.

Fourth Financial Corp. is also the single large independent in its state. While Kansas overall is not a major market, Fourth Financial operates in the sizable Kansas City metropolitan area (population: 1.5 million). Its market value is $489 million, or 1.6 times book value.

Possible acquires include Boatmen's Bancshares Inc. in St. Louis, Commerce Bancshares Inc. in Kansas City, and Norwest Corp. in Minneapolis.

Focusing on Atlanta

Bank South Corp. is not quite the last major independent left in Georgia, but it is the last one in Atlanta, the state's desirable and growing metropolitan market. "They would have to be on just about any short list," says John J. Mason, the bank analyst at Interstate/Johnson Lane, Atlanta.

Bank South's stock price has taken off several times this year merely on rumors of a possible deal. The outstanding stock is currently worth $483 million, or 1.7 times book value.

Rivals that might be interested include First Union Corp. in Charlotte, N.C., and South Trust Corp. in Birmingham, Ala.

Meridian Bancorp is the largest of several banks in Pennsylvania that are possible takeover candidates. It offers access to the Eastern end of the state for Middle Atlantic superregionals, while Integra Financial Corp., Pittsburgh, is viewed as a potential target at the Western end for Midwestern acquirers.

Change in Roles Expected

"Meridian is initially an acquirer, but probably ultimately it will be a seller," says Gerard M. Cassidy of Tucker Anthony Inc.

Among possible buyers: Mellon Bank Corp. in Pittsburgh and First Fidelity Bancorp., Lawrenceville, N.J., Both have bases in Philadelphia that they would like to expand.

The price tag here would be hefty. The company's market value is $1.3 billion, with its stock trading at 1.5 times book.

A Meridian spokesman says: "Our plans are the same: to remain independent."

Likewise, Crestar is not the only independent bank left in Virginia, but it is the largest. Analysts see the state as a prime expansion area for superregional banks from either North or South because of the desirable suburbs around Washington, D.C.

In September, First Union agreed to buy Dominion Bankshares Corp. in Roanoke. Last year, NationsBank Corp. of Charlotte acquired C&S/Sovran Corp. in Norfolk.

Desire for Independence

On the list of possible suitors are Wachovia Corp. in Winston-Salem, N.C., and Sun Trust Banks Inc. in Atlanta, two southeastern superregionals that have not yet entered Virginia, as well as the two Pittsburgh giants, Mellon and PNC.

Crestar's market value is $969 million. Its stock trades at 1.2 times book.

A Crestar spokesman said "we never address speculation," but noted that the bank's desire for independence is well-known on Wall Street.

Mr. Cassidy believes banking industry consolidation will be driven by a secular change in loan demand. Commercial real estate lending, the driving force in the 1980s, is unlikely to return soon.

That leaves consumer lending, an area where competition is rising at the same time that many consumers are paying down debt.

Asset-quality improvement and margin expansion have driven bank earnings and stock prices for the past two years, but ultimately an expansion of earning assets will be required, he says. And with lending slow, acquisition of other banks will be the alternative for achieving this growth.

Appetites Whetted

Ms. Andersson notes that one factor favoring further dealmaking is that "more deals have recently been closed than announced," leaving major acquirers such as KeyCorp, NBD Bancorp in Detroit, and National City Corp. in Cleveland free to resume buying.

In addition, some big acquirers with healthy stock prices, notably PNC and Wachovia, have not made major acquisitions recently.

As for stock prices themselves, she says, "the prices of the acquirers have pulled back a little, but the group has basically held its own in the market, and the buyers still have the currency for dealmaking."

The possibility of interstate branching legislation from Congress is also a motivating factor, suggests Mr. Tejera.

"In any deal the economics have to make sense and especially in those with higher prices being paid as a result of scarcity. Interstate banking could make that equation in quite a few cases."

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