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BANK SHARES, FIRST BANK SYSTEM SIGN LETTER OF INTENT

 BANK SHARES, FIRST BANK SYSTEM SIGN LETTER OF INTENT
 Agreement Includes 27 Marquette Bank Offices
 in the Twin Cities and Rochester, Minn.
 MINNEAPOLIS, Jan. 16 /PRNewswire/ -- First Bank System, Inc. (NYSE: FBS) and Bank Shares Incorporated (BSI) today announced that they had signed a letter of intent whereby Bank Shares would become part of First Bank System. BSI is a privately held bank holding company that owns Marquette Bank Minneapolis and Marquette Bank Rochester, with approximately $2.4 billion in assets. The announcement was made by John F. Grundhofer, FBS chairman, president and chief executive officer and Carl R. Pohlad, president and CEO of Bank Shares Inc.
 Terms of the agreement call for an exchange of 9.4 million shares of FBS common stock in a stock for stock exchange for all the outstanding shares of BSI. Total value of the transaction is approximately $230 million. As a result, Pohlad will become one of FBS' largest shareholders.
 The transaction is subject to execution of a definitive purchase agreement, regulatory approval and approval by the shareholders of BSI. The companies expect the transaction to close in 1992.
 Pohlad said, "Marquette Bank Minneapolis and Marquette Bank Rochester have established themselves as strong members of these communities. First Bank is also very committed to the community and will continue Marquette's traditions of concentrating on the basics of banking and providing excellent customer service. This merger will provide added conveniences and service for customers of both organizations."
 Grundhofer said, "This is an excellent strategic fit with an outstanding banking organization. Marquette and First Bank customers have very similar needs and we see this as an opportunity to serve the customers of both organizations. We're happy to have the opportunity to provide banking services to more people in these communities."
 The companies said that a hiring freeze has been initiated at both organizations in order to blend workforces and preserve as many jobs as possible at both institutions. The companies also noted that any decisions about potential branch office consolidations would be based upon careful evaluation of customer demand and service expectations.
 Marquette Bank Minneapolis, BSI's flagship, has $2.2 billion in assets and 22 offices in the Twin Cities area. Marquette Bank Rochester, with $190 million in assets, has five offices.
 The 11 other Marquette banks in Minnesota and South Dakota are owned by the Pohlad family, but are not included in the merger. Those banks will continue to operate as community banks and retain their Marquette names. A list follows of the Marquette banks in Minnesota that are and are not part of the transaction.
 Bank Shares Incorporated was established in 1940 with three member banks: Marquette Bank Minneapolis, Marquette Bank University and Marquette Bank Lake. The University and Lake banks were merged into Marquette Bank Minneapolis in 1989. Marquette Bank Rochester joined Bank Shares in 1972.
 Pohlad has been affiliated with Marquette since 1946. He has been president of Marquette Bank Minneapolis and Bank Shares since 1955. He and his family will retain ownership of community banks with assets totalling approximately $2.5 billion in the Twin Cities, Midwest, Arizona, Texas and Montana.
 First Bank System is a regional bank holding company headquartered in Minneapolis with assets of $18.3 billion. The company provides complete financial services to individuals and institutions through 25 banks and trust companies with more than 158 offices located in Minnesota, Colorado, Montana, North Dakota, South Dakota, Washington and Wisconsin.
 INCLUDED IN FBS TRANSACTION
 OFFICES OF MARQUETTE BANK MINNEAPOLIS
 Abbott Northwestern Hospital Office
 Marquette Bank Apache
 Marquette Bank Apple Valley
 Marquette Bank Bloomington
 Marquette Bank Burnsville
 Marquette Bank Columbia Heights
 Marquette Bank Dinkytown
 Marquette Bank Eden Prairie
 Marquette Bank Edina, Southdale Office
 Marquette Bank Edina, Grandview Heights Office
 Marquette Bank Fridley
 Marquette Bank Knollwood
 Marquette Bank Lake
 Marquette Bank Minneapolis, Sixth and Marquette Office
 Marquette bank Minneapolis, IDS Office
 Marquette Bank Minneapolis, Centre Village Office
 Marquette Bank Northeast
 Marquette Bank Oakdale
 Marquette Bank Park Center
 Marquette Bank Robbinsdale
 Marquette Bank West St. Paul
 Marquette Bank University
 INCLUDED IN FBS TRANSACTION
 OFFICES OF MARQUETTE BANK ROCHESTER
 Rochester:
 Broadway at Second Office
 Northside Office
 Southside Office
 Subway Office
 Stewartville:
 Marquette Bank Stewartville
 NOT INCLUDED IN FBS TRANSACTION
 OTHER MINNESOTA MARQUETTE BANKS
 Marquette Bank Brookdale
 Rosedale Office
 Marquette Bank Brooklyn Park
 Northtown Office
 Marquette Bank Cannon Falls
 Marquette Bank Golden Valley
 Plymouth Office
 Marquette Bank Hutchinson
 Dassel Office
 Marquette Bank Lakeville
 Orchard Lake Office
 Marquette Bank Mound
 Spring Park Office
 Marquette Bank New Hope
 Marquette Bank New Prague
 Marquette Bank Shakopee
 Prior Lake Office
 -0- 1/16/92
 /CONTACT: Wendy Raway (media relations), 612-370-5154; Thomas Rice (investor relations), 612-370-3596, both of First Bank; or Lisa Billingham of Bank Shares, 612-341-7891/
 (FBS) CO: First Bank System, Inc ST: Minnesota IN: FIN SU: TNM


AL -- MN014 -- 0772 01/16/92 18:18 EST
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Publication:PR Newswire
Date:Jan 16, 1992
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