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Commercial banks

BankAmerica Corp. Eyes Harris Bankcorp Inc. for Major Acquisition

Strategic Insights

— 1 min read

BankAmerica Corp. is reportedly planning to make a move on Harris Bankcorp Inc., Chicago's fourth-largest bank, in a surprise bid to expand its presence in the region. The $618-billion-assets BankAmerica has initiated merger talks with Bank of Montreal, Harris' parent company, sources close to the North Carolina-based financial services company say. The potential acquisition would mark a significant shift in Bank of Montreal's North American expansion plan, which emphasizes Harris' growth potential in the lucrative U.S. banking market.

Key Takeaways:

  • BankAmerica Corp. is eyeing Harris Bankcorp Inc. for a major acquisition, with a potential price tag of around $4.2 billion.
  • The acquisition would be a significant milestone in BankAmerica's efforts to become the first truly nationwide bank, filling a conspicuous gap in its retail presence in the Great Lakes region.
  • Harris Bankcorp Inc. is valued at $25.1 billion, with assets generating 21% of Bank of Montreal's earnings.
  • Bank of Montreal's leadership, including CEO James E. Sutherland and CFO Darryl White, would be required to approve any potential sale of Harris Bankcorp Inc.
  • BankAmerica Corp. has a significant commercial presence in Chicago, but has no retail presence in the region, with the exception of a single branch at its Loop offices.
  • The potential acquisition has been met with skepticism by some analysts, who point out that Bank of Montreal's leadership has emphasized Harris' growth potential in North America.

Statistics:

  • $618 billion: BankAmerica's assets
  • $142.2 billion: Bank of Montreal's assets
  • 21%: Harris Bankcorp Inc.'s contribution to Bank of Montreal's earnings
  • $25.1 billion: Harris Bankcorp Inc.'s assets
  • $4.2 billion: Potential price tag of Harris Bankcorp Inc.
  • 80%: Consumer banking and middle-market lending's contribution to NationsBank Corp.'s revenues

Sources:

  • Crain's (Nov. 30)
  • Crain's (March 8)
  • Interview with James Keating, senior analyst at Merrill Lynch & Co.
  • Interview with Harry Keefe, major shareholder in St. Paul Bancorp Inc.

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