Regions Financial Corp.'s acquisition of AmSouth Bancorp could open a door for Alabama banks to scoop up talent and gain market share, bankers and analysts say.
The $10 billion deal, announced May 25, would combine two Birmingham companies into the nation's 10th-largest bank. The merged Regions would have nearly $140 billion of assets and 2,000 branches in 16 states.
The fallout in job loss and executives unhappy with their new roles would create "the opportunity for companies that are on their toes to go out and get talent," said Jeff Davis, an analyst at First Horizon National Corp.'s FTN Midwest Research Securities Corp.
What's more, roughly 150 branches would be on the block as the merged company trimmed down to win regulatory approval.
"This is a relatively inexpensive way to get into a market," said Gary Kennedy, the director of mergers and acquisitions at Sheshunoff Investment Banking in Austin. "For the players that are large enough to buy these pods of deposits, I think it's a very intriguing opportunity."
Regions-AmSouth would not be the first multibillion-dollar merger to shake up the Alabama banking industry. In October 2004 the $499 billion-asset Wachovia Corp. of Charlotte bought the $53 billion-asset SouthTrust Corp. of Birmingham for $14.3 billion. But because both Regions and AmSouth are based in Alabama, the combination would probably change the state's banking landscape more than the SouthTrust sale did.
"There's no doubt that this latest merger is going to have a greater impact on the Alabama and Birmingham banking community in terms of impact on personnel job loss, not to mention deposit divestitures," Mr. Kennedy said.
Regions has said the combination would result in a 10% reduction in the pair's work force, or 3,700 jobs.
Using data provided by SNL Financial LC of Charlottesville, Va., Sheshunoff analysts identified Mobile, Montgomery, Huntsville, and Tuscaloosa as the Alabama markets likeliest to experience divestitures as a result of the merger.
"That is where the deposits overlapped the most," Mr. Kennedy said.
Under Alabama law, only banks that already have operations in the state would be able to bid on the branches.
"This is much more of a regional play," Mr. Kennedy said.
Analysts listed a slate of Alabama banks that stand to benefit from the Regions-AmSouth merger.
"The No. 1 company that comes to my mind is Alabama National," Mr. Davis said. "They've got a fair bit of overlap with both companies in Alabama and Florida."
In a May 26 conference call, John H. Holcomb 3d, the chairman and chief executive officer of Alabama National Bancorp., in Birmingham, said he was "certain this will be a beneficial thing for our company."
Mr. Holcomb said the $6 billion-asset Alabama National has "good friends that we've known for a long time at AmSouth," and that the merger "might give us a chance at them joining forces with us."
He said it was too early to tell how any branch divestitures could help his company, but "we'll be competitive; we'll be in that game."
Others in Alabama that could benefit from the merger include the $32.8 billion-asset Compass Bancshares Inc. in Birmingham and the $22 billion-asset Colonial BancGroup Inc. in Montgomery, analysts said.
Out-of-state banks are considering hiring Regions and AmSouth people.
Richard Anthony, the president and CEO of the $30.1 billion-asset Synovus Financial Corp. in Columbus, Ga., said his company has contacted employees of the two companies to ask them about their plans.
"We are interested in talent in all of these key markets," Mr. Anthony said. "The need for talent has never been more important to the banking industry, especially in the bigger markets."
Fifth Third Bancorp on Sunday ran an advertisement in the Birmingham News to let bankers know it is hiring. A spokeswoman for the $105 billion-asset Cincinnati company said the ad was meant to lure executives - particularly those from Regions and AmSouth - who would be willing to relocate. It should not be taken as a signal that Fifth Third plans to enter the Birmingham market, she said.
A spokesman for SunTrust Banks Inc. said the $179 billion-asset Atlanta company would welcome any chance to talk with an executive from Regions or AmSouth.
Other out-of-state banks that could gain from the merger include the $2.5 billion-asset Renasant Corp. in Tupelo, Miss., the $11.9 billion-asset BancorpSouth Inc. in Tupelo, Miss., and the $10.3 billion-asset Whitney Holding Corp. in New Orleans, analysts said.
Regions will not let its executives walk out the door without a fight, though.
In a statement released June 9, a spokeswoman said Regions is holding town hall meetings with employees of both companies to articulate the benefits of the merger and the company's vision for the future.
"We believe this type of open, direct communication plays a critical role in retaining our talent," Regions said in the statement.
It also said in the statement that it was too early to comment on the specifics of its branch divestiture plans. The deal with AmSouth is expected to close in the fourth quarter.
