First Union to buy 8 Florida branches from Chase.

The contest for market share the Sunshine State is heating as First Union National Bank of Florida reported an agreement to acquire $850 rollon in deposits and eight ranches from Chase Manbaton Bank of Florida, a former thrift.

Meanwhile, an even larger deal is looming. Informed observers say Alex. Brown & Sons Inc, the Baltimore-based investment banking and brokerage firm, is soliciting bids for American Savings of Florida, which has $3.2 billion in assets and 29 branches in the Miami area.

An American Savings official declined comment Thursday. First Union of Florida, a subsidiary of Charlotte, N.C.-based First Union Corp., said late Wednesday it planned to pay Chase $60 million in cash for its 850 million in dgposits and $11 million of consumer loans and mortgages. The price represents a rather steep 7% premium on the Chase deposits but is not unusual for Florida deals.

In April, Barnett Banks Inc. agreed to pay a 6.68% premium on $3.6 billion in Florida deposits belonging to California-based Glendale Federal Bank. Two months earlier, NationsBank Corp, paid 4,1% on $4 billion in Florida deposits belonging to California Federal Bank.

Larry Wertz, chief financial officer for First Union's Florida bank, said the Chase deposits were "halfway between a thrift and a bank," with about twothirds in certificates of deposit, 24% money market and savings accounts, and 10% checking accounts.

"The customer base of this particular institution is about 60% what we regard to be as the affluent market and 20% the mass market, so we think there's some opportunity there," Mr. Wertz said.

The deal, which is subject to regulatory approvals, is expected to close in the fourth quarter. It will be additive to First Union's earnings with help from cost savings, herald. There is "a lot of overlap" between the Chase branches and First Union's own offices, but he declined to reveal how many branches First Union plans to close.

Added Clout

The deal does strengthen First Union's position as Florida's second-largest bank, after Jacksonville-based Barnett Banks Inc. First Union of Florida has $27 billion in assets and 485 offices across the state.

New York-based Chase Manhattan Corp. said it is abandoning branch banking activities in the Sunshine State, but will continue to provide private banking, mortgage, and investment services there.

"Branch banking is an economy-of-scale business, and we could not compete with mass market Florida banks," said Charlotte L. Gilbert, a Chase spokeswoman.

About 130 employees will be affected by the sale. Another 2,450 Chase employees in Florida will remain in their positions.

Ms. Gilbert said Chase will focus its branch banking activities in the Northeast, including one branch in Maryland. Chase recently sold its branches in Arizona and Ohio, and with the Florida sale, has no branch networks outside the Northeast.

3 Offices Not Included

The sale to First Union does not include three offices - located in Palm Beach, Fort Lauderdale, and Miami - and about $100 million in deposits belonging to Chase's Private Bank, which has 30 offices worldwide and more than $63 billion in total client assets.

Meanwhile, sources say American Savings is likely to attract a lot of bidders because of its strong franchise in northI Dade County and its foundation of stable core deposits. American Savings is 49% owned by a bankruptcy trustee administering the estate of parent company Enstar Group Inc. of Montgomery, Ala.

Since the trustee is required to sell its stake in American Savings by June 1, 1995, a sale of the thrift before that date has long been anticipated.

In its most recent 10-K regularpry filing, American Savings says it and the Enstar Group "have commenced discussions concerning alternatives being considered by Enstar Group which may impact the ownership of American Savings." Among the alternatives listed is "the possible retention by Enstar Group of ownership of American Savings, the potential sale of Enstar Group's shares of American Savings' common stock or the sale of all of Ameriican Savings."

American Savings has a troubled past, but has shown improvement in recent years under chief executive Stephen Taylor, an ex-Citibanker. In the first quarter, the thrift reported pretax core earnings of $5.1 million, up 15% from $4.5 million in the year-ago quarter.

Much of the earnings lift came from improved asset quality. At March 31, nonperforming assets had fallen to $23.3 million, or 0.72% of total assets, from $51.8 million, or 1.68% of total assets, in the year-ago quarter.

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