DATE: Tuesday, July 22, 1997                TAG: 9707220069

SECTION: BUSINESS                PAGE: D2   EDITION: FINAL 

SOURCE: BRIDGE NEWS 

DATELINE: NEW YORK                          LENGTH:   34 lines

SHARES OF VIRGINIA BANKS SOARED MONDAY AFTER

Shares of Virginia banks soared Monday after Signet Banking agreed to be acquired by First Union for a steep 49 percent market premium.

Investors are scrambling to pick the next takeover target in the rapidly consolidating Virginia market, which has suddenly seen three major deals in the past two months.

The First Union transaction follows Wachovia's announced buys of Central Fidelity and Jefferson Bancshares last month.

The prime target in Virginia is Crestar Financial, the largest independent bank left in the state.

The next largest target is First Virginia, the $8 billion asset Falls Church bank.

First Virginia is a more realistic takeover candidate at this point, despite the steeper price rise Crestar has enjoyed.

First Virginia is small enough that any of the state's big 3 - NationsBank, First Union or Wachovia - could buy it. Crestar, which has a higher Virginia marketshare than NationsBank, is large enough to pose antitrust problems for any of those three companies.

``Most vulnerable probably is First Virginia, in terms of digestibility, and candidly I would say Wachovia is not through in the state,'' said Anthony Davis of Dillon Read. ``There is a very strong likelihood that First Virginia could end up being acquired, and Nations is not through either.''

Crestar has had impressive returns and wants its independence. KEYWORDS: MERGER FIRST UNION SIGNET

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