BUSINESS: FIRSTAR, U.S. BANCORP MERGER COULD CREATE 8TH LARGEST BANK

Those Firstar Bank logos put up in Cape Girardeau and Southeast Missouri about six months ago may be replaced by U.S. Bancorp signs early next year.

Firstar Corp., has signed an agreement to merge with U.S. Bancorp through an exchange of shares valued at about $21.2 billion.

The merger would create the 8th largest bank holding company in the United States, with assets of more than $160 billion and deposits of $107 billion, spanning 24 midwestern and western states with 2,200 branches.

According to an announcement this week, the transaction is expected to close in the first quarter of 2001.

After closing, the combined companies will operate under the U.S. Bancorp name.

In the definitive agreement, Firstar Corp. would exchange 1,265 shares of Firstar common stock for each share of U.S. Bancorp stock in a tax-free exchange agreement.

The agreement would keep it in the family: Jerry Grundhofer is president and chief executive of Milwaukee-based Firstar, while brother John is chairman, president and chief executive of Minneapolis-based U.S. Bancorp.

The Grundhofers would remain in those positions in the company. John Grundhofer would serve as chairman of the board until his planned retirement Dec. 31, 2002.

The board of directors will be composed of 14 members from Firstar and 11 members for Bancorp.

Firstar, itself a product of the 1998 merger between State Bank and the old Firstar, purchased Mercantile Bancorporation in 1999.

The Firstar signs started making an appearance in the area in March of this year. At that time,

Firstar was the nation's 15th largest bank.

Firstar, founded in 1853, is a regional bank-holding company with approximately $74 billion in assets. Firstar has nearly 1,200 full-service banking offices and more than 2,200 ATM locations in Ohio, Wisconsin, Missouri, Kentucky, Illinois, Indiana, Iowa, Minnesota, Tennessee, Arkansas, Kansas, Arizona and Florida.

U.S. Bancorp, with 86 billion in assets, operates approximately 1,000 banking offices in the Midwest and West. It operates a network of 5,000 ATMS and provides a 24-hour, seven-day-a-week, telephone customer service.