Union Planters Corp. president Jackson W. Moore said the Memphis bank's deal for some of First Chicago NBD's Indianapolis holdings is a "logical extension" of its expansion strategy.
"We are and continue to be a community bank organization," said Mr. Moore, who is also chief operating officer, "but one of the things we wanted to do was expand our franchise into larger, higher-growth markets." "This is a very logical extension of the type of markets, communities, and geography that we have grown through," he said.
Union Planters is finding itself all over the map these days, with eight pending deals that would add a total $5 billion of assets.
The $30 billion-asset company entered Miami last year by buying Capital Bancorp and gained a sizable presence in the Midwest with its July 1 purchase of $7.1 billion-asset Magna Group of St. Louis.
Union Planters made its first move into Indiana last month by buying Ambanc Corp., a Vincennes company with $391 million of deposits in the state.
Tuesday, Union Planters said it would pay First Chicago $294 million in cash for $1.8 billion of deposits and $830 million in loans. It is also paying $31 million for branches and equipment. This deal is expected to close in February.
Union Planters has also agreed to lease about 90,000 square feet in Indianapolis for the headquarters of its statewide network. In addition, the company plans to hire about 150 people for a new operations center.
First Chicago had to make the sale to satisfy antitrust concerns related to its pending merger with Banc One Corp.
Christopher T. Kelley, an analyst at Morgan Keegan & Co., said the deal was a natural step for Union Planters.
"Now they've got some critical mass" in Indiana, he said. "It isn't the hottest growth market out there, but it is pretty in line with what they do."
With excess capital and restrictions on stock buybacks, Union Planters is eager to find attractive cash deals.
And company officials said they hope to add quickly to the Indiana network through more acquisitions, by "making hay while the sun shines," as Mr. Moore put it.
Mr. Moore said at least two Evansville banking companies could provide market muscle while filling in some gaps.
CNB Bancshares, with $6.7 billion of assets, and $6 billion-asset Old National Bancorp, would fill the bill. CNB and Old National rank third and fourth, respectively, in Indiana market share.
Union Planters would have 3.3% of the statewide market after its deal with First Chicago closes.
Banc One and National City Corp. of Cleveland hold the No. 1 and No. 2 spots, respectively.