DATE: Thursday, August 28, 1997             TAG: 9708280476

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY TOM SHEAN, STAFF WRITER 

                                            LENGTH:   46 lines

WACHOVIA WINS GO-AHEAD FOR JEFFERSON ACQUISITION THE DEAL, AGREED TO IN JUNE, IS VALUED AT $542 MILLION.

The Federal Reserve has approved Wachovia Corp.'s application to acquire Jefferson Bankshares Inc., the Charlottesville-based parent of Jefferson National Bank.

Wachovia, based in Winston-Salem, N.C., agreed in early June to buy Jefferson Bankshares for an exchange of shares valued at $542 million.

The Wachovia-Jefferson merger application was reviewed by the Federal Reserve Bank of Richmond but required approval by the secretary of the Fed's Board of Governors in Washington, D.C.

The Board of Governors was involved because the president and chief executive of Wachovia's principal bank subsidiary, J. Walter McDowell, sits on the board of the Richmond Federal Reserve Bank, said Fred Bagwell, vice president in the banking supervision and regulation division at the Richmond Fed.

However, there were no challenges filed against Wachovia's proposed merger with Jefferson, Bagwell said. Advocacy groups often use a merger application to challenge a bank's record of meeting the lending needs in communities where it does business.

The Wachovia-Jefferson merger still must be approved by Jefferson's shareholders. A proxy statement describing the terms of the transaction will be distributed to shareholders next month, and a vote will be held some time in October, Donald W. Fulton Jr., a Jefferson spokesman, said.

Wachovia said it expects to complete the merger by the end of October and to convert Jefferson's branches by next spring.

Jefferson has $2.1 billion of assets and 96 branches in the state, including 14 in Hampton Roads. Wachovia has assets of $48.5 billion and 451 offices. One is in downtown Norfolk.

During June, Wachovia also struck a deal to acquire Richmond-based Central Fidelity Banks Inc. for an exchange of stock valued at $2.3 billion.

Its application to merge with Central Fidelity is pending before the Federal Reserve. That will require approval from the Fed's Board of Governors because of the transaction's size and the potential concentration of Wachovia's bank deposits in certain parts of Virginia, Bagwell said. ILLUSTRATION: Graphic

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