ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Friday, March 7, 1997 TAG: 9703070043
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: MAG POFF THE ROANOKE TIMES
A federal law that permits interstate banking will allow 13 banks to become one.
Starting June 1, First Union will fold its 13 separate state banks into a single entity, First Union National Bank, based in Charlotte, N.C. The process is expected to take a year.
The bank previously had announced its intention but had not put a timetable on the move. The unification was made possible by a 1995 law that goes into effect in June and permits interstate banking.
Ben Jenkins, president of the Virginia, Maryland and Washington, D.C., banks, will remain as chief executive of the same region. He said all existing management and operations in Roanoke will remain unchanged.
Customers will notice no difference either, Jenkins said, because interstate branches have been permitted for the past year.
That means that customers have been able to do their banking anywhere in First Union's 13-state region, which extends from Florida to Connecticut. A Roanoke customer visiting Florida, for instance, can already make deposits and cash checks against a Roanoke account.
Dave Scanzoni, a spokesman for the company, said First Union expects to save more than $6.5 million every year with the change. Most of the money will be realized through lower capitalization requirements, and the rest in administrative costs, he said.
He, too, said there will be no impact on Roanoke management and operations. Even though First Union will have only a single bank, based in North Carolina, each state will have its own president and will continue to be divided into regions with regional executives.
"Local control is essential" to a successful banking operation, according to Scanzoni.
Each bank has been supervised by a separate board of directors, topped by a companywide board based in Charlotte. After the unification, Scanzoni said, the state boards will become advisory bodies to the main board of directors.
Scanzoni said the amalgamation will begin in June with consolidation of the state banks in Georgia and Florida into the North Carolina Bank.
Other states will follow until the job is completed in March 1998.
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