THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, October 24, 1995 TAG: 9510240284
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: STAFF AND WIRE REPORTS
LENGTH: Medium: 70 lines
BankAmerica Corp. has held talks recently with Charlotte-based NationsBank about a possible merger that would create the nation's largest bank, sources said.
A high-level BankAmerica source confirmed that the bank this summer talked with NationsBank about a possible merger, with one stumbling block being the location of the headquarters for a merged bank.
Sources said that BankAmerica executives went so far as to suggest a compromise on the headquarters issue - Washington - since a merged operation would create the country's closest thing to a true nationwide bank.
BankAmerica sources cautioned that there is no guarantee that any deal would be consummated, adding that BankAmerica has come very close before on other major deals that eventually fell apart.
Earlier this year, BankAmerica came close to striking a deal with New York's Chase Manhattan Corp., but those talks fell apart over succession-related issues. Chase has since agreed to merge with Chemical Banking Corp. in an $11-billion deal that would create the nation's largest bank, barring a deal between NationsBank and BankAmerica.
NationsBank, with $197 billion in assets, is the nation's fourth-largest bank following the Chemical-Chase merger. It is spread largely across the South and employs almost 60,000, including 2,900 in Hampton Roads. This includes 1,600 at a credit-card processing center in downtown Norfolk. The bank, formed in 1991 from the merger of Charlotte-based NCNB Corp. and C&S/Sovran Corp. of Atlanta and Norfolk, operates 57 branch offices in the region, and more than 1,800 from Maryland to Florida and Texas.
San Francisco-based BankAmerica, the nation's third-largest bank with $226 billion in assets, has offices mostly across the West.
A BankAmerica spokesman declined to comment. Officials with NationsBank could not be reached.
Unconfirmed reports of a possible combination of the two banks had been strongly rumored on Wall Street this summer and reported in various trade publications.
A NationsBank-BankAmerica combination might provide some benefits to NationsBank customers, said Arnold G. Danielson, a Rockville, Md., banking consultant. ``BankAmerica is the premier retail bank in the country,'' he said.
However, securities analysts surmised that a merger would have little impact on the availability of banking services in Virginia. NationsBank is scaling back operations to increase its efficiency, said Vernon Plack, an analyst with the Richmond-based securities firm Scott & Stringfellow Inc. ``NationsBank now has 1,850 branches. Over time, notwithstanding any mergers, you're going to see that number go down,'' Plack said.
David West, an analyst with the Richmond-based securities firm Davenport & Company of Virginia, questioned whether a NationsBank-BankAmerica merger would benefit the two companies' shareholders. In contrast to most bank mergers, there would be no premium paid for their shares, he said.
The shares of both companies rose in active trading Monday. NationsBank's stock closed at 70 3/4, up 3/4. Shares of BankAmerica advanced 1 1/8 to 63 3/4. MEMO: Staff writer Tom Shean contributed to this report by the Los Angeles
Times.
ILLUSTRATION: [Color Photo]
NationsBank Chairman Hugh McColl
by CNB