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

DATE: TUESDAY, June 22, 1993                   TAG: 9306220094
SECTION: BUSINESS                    PAGE: B7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Short

FIRST UNION PLEDGE PAVES WAY FOR PURCHASE OF FIRST AMERICAN

First Union Corp. said Monday it would invest $200 million in poor neighborhoods in the nation's capital as part of its purchase of First American Bank.

The pledge cleared the way for the $453 million sale of First American banks in the District of Columbia, Maryland and Virginia to the Charlotte, N.C.-based bank.

The D.C. Council threatened to block the deal last week, charging First Union tried to circumvent the city in violation of federal banking law.

First American's trustee was under a federal court order to sell the bank by June 23, as part of a settlement involving First American's former owners, Bank of Credit and Commerce International.

The accord was reached after six hours of negotiations Friday before U.S. Magistrate Alan Kay. The plan calls for a doubling of First Union's investment, but over 20 years instead of the original seven.

The package calls for an annual investment of $7 million for the first five years and $11 million for each of the following 15 years, according to Calvin H. Cobb Jr., the bank's attorney. In addition, First Union agreed to open two new branches, one in a poor neighborhood and another in an unspecified "underserved area."

First Union also agreed to add two minorities or women to its board of directors for its Washington regional operation.

With an estimated $1.2 billion in deposits, the merged banks would make First Union the third largest bank-holding company in the Washington metropolitan area, with a 9 percent share of the market.

by CNB