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

DATE: FRIDAY, April 7, 1995                   TAG: 9504080027
SECTION: BUSINESS                    PAGE: A-7   EDITION: METRO 
SOURCE: MAG POFF STAFF WRITER
DATELINE:                                 LENGTH: Medium

MERGER WILL ADD NEW JOBS

First Union Corp. said Thursday it has agreed to pay $222 million for a Northern Virginia savings bank, a merger that almost certainly will add jobs at the company's Roanoke Valley operations.

Charlotte, N.C.-based First Union signed an agreement to acquire Columbia First Bank, a federal savings bank based in Arlington. The operations would be added to those of First Union National Bank of Virginia, which has its headquarters in Roanoke.

Ben Jenkins, president of First Union's operations in Virginia, Maryland and Washington, D.C., said that any company growth, regardless of where that growth occurs, has "an impact on Roanoke in a positive way."

Jenkins said he could not predict the number of new jobs the Columbia First purchase would trigger in Roanoke, adding that the impact would take a while to be felt.

But he said Columbia First has 120,000 customers. Many of them will be using First Union's systemwide credit card customer service operation and the mortgage processing center, both of which are based in Roanoke. "Jobs will be added here," he said.

The savings bank has 33 branches, nine of them in Northern Virginia, 13 in Washington and 11 in the Maryland suburbs.

Even though Columbia First is chartered as a thrift, Jenkins said, its operations are "very bank-like" in terms of services and operations.

The acquisition would make First Union the second-largest bank in the Washington metropolitan area behind NationsBank. Jenkins said it would vault ahead of Crestar Financial Corp. as its deposits increase from $4.7 billion to $6.2 billion.

Jenkins said First Union will have a 13 percent share of the Washington metropolitan markets compared to 16-17 percent for NationsBank, based on deposits.

Assets held by First Union's subsidiary banks in the Washington area would increase to $8 billion from $5.1 billion.

Columbia First reported $2.9 billion in assets and $1.5 billion in deposits at the end of last year.

Under terms of the agreement, owners of Columbia First's 3.7 million outstanding shares of common stock would receive $60 worth of First Union common stock for each share of Columbia First stock they own.

The approximate purchase price of $222 million is about 167 percent of Columbia First's book value of $35.93 per share at the end of last year.

First Union said it intends to purchase, on the open market, an amount of First Union shares equal to at least 50 percent of the number of First Union shares that would be issued in the transaction.

In trading Thursday, First Union common stock rose 621/2 cents a share, closing at $44 on the New York Stock Exchange. Columbia First stock rose $10.50 a share, closing at $56 on the Nasdaq market.

First Union expects to complete the acquisition during the second half of this year. The deal is subject to approval by regulators and Columbia First shareholders and to other conditions of closing.

by CNB