2 Major Banks in Southeast Plan Mergers : Deals Come in Wake of OK for Regional Pacts

Two more major Southeast bank mergers were announced Monday as so-called regional interstate banking began to pick up steam.

Last week, the Supreme Court ruled that states could set up regional interstate banking compacts that would exclude banks not based in the region.

Monday, Wachovia Corp. of Winston-Salem, N.C., and First Atlanta Corp. of Georgia announced plans to merge and create First Wachovia Corp. The new bank company would have assets of $15.5 billion.

Meanwhile, another big North Carolina bank company, First Union Corp. of Charlotte, said it will acquire Atlantic Bancorp of Jacksonville, Fla. The combined bank companies would have assets of $14.4 billion.

G. J. Manderfield, president of Bethesda, Md.-based Suburban Bancorp, said there will be many more mergers among larger regional banks in the months to come as banks seek to make themselves bigger and more geographically diversified. He said that the early mergers, like those announced Monday, will be among strong institutions seeking to make themselves stronger.

Holders to Receive Stock

Shareholders in Wachovia will receive one share of the new First Wachovia Corp. for each share of stock that they own, while shareholders in First Atlanta will receive 0.8 share of First Wachovia stock. The new parent company will own 100% of the stock of Wachovia and of First Atlanta.

A spokesman for First Union said the Charlotte bank company will give shareholders in Atlantic Bancorp 1.05 shares of First Union stock for every share they own in the Florida bank. He valued the deal at $496 million.

First Union had $7.9 billion in assets at the end of March but is in the middle of acquiring another North Carolina bank company--Northwestern Financial Corp. of North Wilkesboro. Northwestern has assets of about $3.6 billion. Atlantic Bancorp has assets of $2.9 billion.

Both mergers announced Monday need the approval of regulators.

The regional banking pacts are designed to permit banks within the member states to strengthen themselves before the expected arrival of full interstate banking.