DATE: Wednesday, October 15, 1997           TAG: 9710150463

SECTION: BUSINESS                PAGE: D2   EDITION: FINAL 

SOURCE: BY TOM SHEAN, STAFF WRITER 

                                            LENGTH:   41 lines

FED OKS FIRST UNION-SIGNET DEAL

The Federal Reserve gave First Union Corp. the go-ahead Tuesday to acquire Richmond-based Signet Banking Corp.

The transaction, valued at more than $3.5 billion, will provide First Union with a much greater presence in Hampton Roads and several other areas of Virginia.

The agreement still must be approved by Signet shareholders, who are scheduled to vote on the transaction Nov. 13.

Charlotte-based First Union struck its agreement with Signet in mid-July after rival Wachovia Corp. of Winston-Salem, N.C., had announced plans to buy two other Virginia banking companies: Jefferson Bankshares Inc. of Charlottesville and Central Fidelity Banks Inc. of Richmond.

When First Union came knocking on July 1, Signet was in the midst of a major restructuring program that called for scaling back its use of branches and concentrating on the delivery of financial services by telephone, home computer and direct mail.

Signet, whose roots go back to the 1920s, has more than 200 branches in Virginia, Maryland and Washington D.C. It has 27 branches and about 245 employees in Hampton Roads. First Union has 285 employees in the region and operates 21 branches.

First Union chairman and chief executive officer Edward E. Crutchfield said at the time of the merger agreement that the companies expected to spend more than $30 million in severance payments to employees who lose their jobs in the consolidation.

First Union entered Virginia four years ago. By making scores of acquisitions since the mid-1980s, it has built a banking network running from Florida to New England and become the nation's 6th-largest banking company.

In late August, First Union struck a deal with Wheat First Butcher Singer to buy the Richmond-based brokerage and investment banking firm. Their agreement, which calls for an exchange of First Union shares valued at $523 million, is scheduled to close late this year.

First Union's shares closed Tuesday at $51.375, up 31.25 cents for the day. KEYWORDS: MERGER

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