Banks Mating, But Just Who Is Chasing Whom?

It may feel like late August to you, but to bankers it's early spring. As in opening buds, rising sap, and whatever else signals the time for serious courtship.

Last week's announcment of a planned $4.2 billion acquisition by BankAmerica Corp. of its California rival Security Pacific Corp. sounded like wedding bells in June to those watching for a merger wave among the nation's biggest banking institutions.

The BankAmerica deal, following close after engagement announcements by Chemical Bank and Manufacturers Hanover in New York, and by NCNB and C&S- Sovran in the Southeast, seems to have confirmed predictions of a massive consolidation that will leave the United States with many fewer and much larger banks within a few years. Accordingly, stocks of banks seen as potential merger candidates all over the country jumped last week on Wall Street.

But who's pursuing whom? Since bankers perform their mating dances far out of the public eye, it's almost impossible to know for sure. That, however, doesn't stop investors, analysts, worried bank employees and others from guessing. There may have never been a time when so many have guessed so hard about the intentions of so few - at least when the subject is banks.

"Remaining independent is really no longer a serious long-term consideration for most of these organizations," said Daniel Piro, editor of a magazine called Bank Mergers & Acquisitions. "At the super-regional level they're going to have no choice but to consolidate."

It is at the "super-regional" level, it happens, where one finds the biggest players in the Philadelphia area, all of whom are actively included in the current merger speculation. CoreStates Financial Corp., of Philadelphia, New Jersey-based First Fidelity Bancorp., Reading's Meridian Bancorp and the Pittsburgh companies, Mellon and PNC Financial, are all being mentioned as prospects for get-togethers of the financial kind.

"The big rumor is that BankAmerica's next acquistion is First Fidelity, and that after that they'll merge with Chase," says Ron McRae of SNL Securities, a bank research and consulting firm in Charlottesville, Va.

"A First Fidelity-Corestates merger is a merger made in heaven," chimes in Maryland bank consultant Arnold Danielson.

"Meridian is sooner or later going to be acquired. Their size just about dictates that," predicts editor Piro. "I can't see them having the staying power as the consolidation proceeds."