FIRST UNION PRESIDENT DISCUSSES PLANS TO GROW

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, March 26, 1993                   TAG: 9303260543
SECTION: BUSINESS                    PAGE: A-11   EDITION: METRO 
SOURCE: MAG POFF STAFF WRITER
DATELINE:                                 LENGTH: Medium
FIRST UNION PRESIDENT DISCUSSES PLANS TO GROW
First Union National Bank of Virginia must expand in the eastern part of the state, its president said Thursday.
Speaking at a business forum sponsored by the Jefferson Club, Benjamin Jenkins said the bank intends to grow internally and through mergers as opportunities arise in eastern and Northern Virginia.
Warner Dalhouse, chairman of First Union Corp.'s Virginia bank, specifically cited the company's gaps in Charlottesville and Lynchburg after its acquisition of Dominion Bankshares Corp. of Roanoke and First American Metro Corp. of McLean.
A company organizational chart shown at the breakfast meeting by Jenkins showed that Vice Chairman David Caudill is now in charge of mergers.
But Jenkins said First Union prefers growth that is "ordered and methodical." Companies must have the ability to react when opportunities present themselves, he said.
Dalhouse said that First Union, although it ranks second in Virginia (behind NationsBank), stresses profitability over market share.
And, said Jenkins, "we've got a pretty full plate."
He also said First Union "has got some work to do as a company" to continue to improve asset quality of the banks it has acquired in Virginia.
In his talk, Dalhouse likened the First Union merger to that of the Norfolk & Western and Southern railways which resulted in Norfolk Southern Corp.
Both, he said, were taken for the benefit of shareholders to whom the boards owed a legal and fudiciary duty.
In the case of the First Union merger, he said, the market value of Dominion at the start of 1992 was $415 million. Now, he said, with First Union stock trading near $50 a share, Dominion shareholders have a value of more than $1 billion.
"Also, I believe [Dominion] would have had to wait until after the first quarter of 1994 to begin to pay a dividend," Dalhouse said. "With this merger, Dominion stockholders will receive a dividend a little over two months from now." First Union is paying $1.40 per share in dividends.
Although the merger had significant impact on Roanoke, he said, it was "not nearly as terrible as many have predicted or reported."
Roanoke, he said, is still headquarters of a three-state banking operation "with the largest concentration of employment anywhere in that system."
First Union of Virginia, Dalhouse said, is bigger than Dominion ever was.
He cited plans to move 400 new jobs from Charlotte, N.C., to Roanoke as evidence of "assuring job growth here for years to come."
About 300 of those jobs will be downtown, he pointed out, and Roanoke's operations center will be one-third larger than any similar unit in First Union's entire system.
Designation of Roanoke for all new mortgage servicing, he said, promises "very steady growth in jobs for a very long time."
Predicting the arrival of interstate banking within the next few years, Dalhouse said First Union is positioned to grow and add jobs "far beyond anything Dominion would have been able to do."
In answer to a question by Roanoke Councilman Mac McCadden, both speakers said First Union sets a high priority on community reinvestment in low-income areas, especially affordable mortgages and home improvement loans.
Jenkins said such lending is "the right thing to do" and also good for business.
To other questions, they said that First Union is an active lender to small businesses.
"We will be prudent but aggressive lenders," Dalhouse said.

STEPHANIE KLEIN-DAVIS/Staff. Scott Spencer of Lamar Advertising helps remove sections of a Dominion Bank billboard on a hill near the Elm Avenue exit off Interstate 581. A spokeswoman for Dominion Bank said the sign was one of its two Dominion billboards in the valley for which long-term leases had expired. The other, on Virginia 419, was removed earlier. She said First Union Corp., which acquired Dominion this month, "does not do a lot of advertising." *NOTE: Banks: First Union.

by Archana Subramaniam by CNB