THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, March 15, 1995 TAG: 9503150437
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Medium: 57 lines
Federal banking regulators have approved a NationsBank Corp. application to consolidate its banking activities and branches in Maryland and Washington into the company's Virginia bank.
The Charlotte-based company said in a merger application filed with the comptroller of the currency in December that it expected to save $1.5 million annually from merging the two banks. Almost half of that amount - $714,000 - would come from savings in wages and benefits, the application said.
NationsBank said it planned to consolidate the data-processing operations, marketing and advertising activities of its Maryland-Washington bank with those of its Virginia institution. Certain regulatory reporting costs, and legal, accounting, personnel and occupancy expenses also would be eliminated after the proposed merger, the application said. NationsBank used an obscure provision in a 19th-century federal statute to argue for the merger.
The consolidation, it said, would provide greater convenience to its Washington-area customers, many of whom live in one political jurisdiction but work or shop in another.
Interstate banking laws have restricted banks, even those with common ownership, from accepting the deposits of customers with bank accounts in another state.
``With banking offices only in Maryland and the District (of Columbia), NationsBank-Maryland/DC cannot effectively serve its many customers who live, work or operate businesses in dynamic Northern Virginia,'' the merger application said. NationsBank successfully used the same argument last year to merge its Washington bank into its Maryland bank.
NationsBank has 271 branches and $13 billion of deposits in Maryland and Washington but said in the application that it had no plans to close any of those branches.
State banking regulators in Maryland initially objected to NationsBank's latest merger application but later withdrew their objection.
Nationsbank has been an especially vocal advocate of interstate branching powers for banks. Three years ago, NationsBank Chairman and Chief Executive Officer Hugh L. McColl Jr. orchestrated a letter-writing campaign by NationsBank shareholders to get interstate banking legislation through Congress.
Last September, President Clinton signed into law a measure that will open the entire country to interstate banking beginning in 1997.
The combined Virginia-Maryland-Washington bank will be called NationsBank National Association, instead of NationsBank of Virginia N.A., and will be headed by R. Eugene Taylor. In addition to becoming president of the Virginia bank, Taylor will retain the post of president of the NationsBank Mid-Atlantic Group.
Randolph W. McElroy, currently president of NationsBank of Virginia, will become president of the company's Virginia Banking Group. by CNB