Firstar-Mercantile merger cleared by Federal Reserve

Northwestern Financial Review, Sep 18, 1999

A deal that would unite Milwaukee's Firstar Corp. and Mercantile Bancorp. Inc. was approved on Sept. 1 by the Federal Reserve Board. A $75 billion company will emerge once the deal closes in the fourth quarter.

Firstar had agreed to buy the St. Louis-based Mercantile for $10.6 billion on April 30. In preparing for the merger, Firstar has had to take several steps in Iowa to ensure the move. Under Iowa law, banks are prevented from controlling more than 10 percent of the state's deposits.

In June, Firstar announced it was selling four Iowa branches, thus eliminating $105 million in deposits. The branches to be sold are in Dubuque, Waterloo and two in Mt. Pleasant. By early August, Firstar moved $1 billion in deposits out of Iowa to comply with the latter state law on market share cap.