Magazine article American Banker

First Indiana Eyeing Branches Banc One Might Have to Divest

Magazine article American Banker

First Indiana Eyeing Branches Banc One Might Have to Divest

Article excerpt

Based in a city dominated by regional banks, First Indiana Corp. in Indianapolis has found in-market acquisitions hard to come by. But the proposed merger announced Monday of Banc One Corp. and First Chicago NBD Corp. may change that.

Columbus, Ohio-based Banc One and First Chicago NBD hold the Hoosier State's top two market positions, and a marriage could force the pair to divest some branches to cut costs and avoid antitrust allegations. That is good news for community banks, such as $1.7 billion-asset First Indiana, that have been looking for growth opportunities.

But First Indiana would face competition for those branches. Midsize regional banks such as Columbus, Ohio-based Huntington Bancshares and Cincinnati-based Fifth Third Bancorp could also be expected to bid for any divested branches, analysts said.

Nonetheless, "I'm elated for my bank," said Robert H. McKinney, First Indiana's chief executive officer. He added that he is already in line to bid for any available offices.

Indianapolis is one of the few markets where Banc One and First Chicago have significant duplication. Yet bankers and analysts say community banks in other Midwest cities could capitalize on the megamerger as well, if it happens.

In Chicago, where the merger would eliminate the First Chicago name, community banks could market themselves as homegrown, bank analysts said.

Banc One's planned takeover would mark the first time a megabank has been able to gain significant market share in the Windy City. Stephen Skiba, a bank analyst at ABN Amro Chicago Corp. …

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