MILWAUKEE -- Firstar Corp., an $8.5 billion bank holding company, saidMonday it would merge with Banks of Iowa, Inc., a $2.5 billion banking holding company based in Des Moines.
The merger is the first interstate agreement to be announced in Iowa since passage of an interstate banking law earlier this year.
The agreement allows Firstar to exchange 2.7 of its shares for each outstanding share of the common stock of Banks of Iowa. Based on the closing price of Firstar stock of the new York Stock Exchange on Aug. 3, the shareholders of Banks of Iowa would received Firstar stock with a value of about $75.60 per share, or a total of $219 million.
When the transaction is completed, the 12-bank Iowa franchise, which is Iowa's second-largest banking organization, will become Firstar Corp. of Iowa, a subsidiary of Firstar Corp. The combined organization will have 52 banks with 174 offices in Wisconsin, Iowa, Minnesota, Illinois and Arizona, and a trust subsidiary in Florida.
'The merger of these two banking organizations is a natural, both in terms of the geographical fit and the corporate cultures,' said Firstar Chairman John H. Hendee Jr. 'It benefits Firstar by moving us into the growing urban areas of Iowa which enjoy healthy, diversified economies. It benefits Banks of Iowa by adding major new resources for its customers and operations.'
'It became apparent early in our discussions that Firstar was an ideal match for Banks of Iowa,' said Holmes Foster, Banks of Iowa chairman.
Foster said James R. Lang would become president and chief executive officer of Firstar Corp. of Iowa.