Wachovia on the Prowl for Deals in Fla., Va.

After years of standing aloof while other banks joined the consolidation frenzy, officials at Wachovia Corp. said they are finally ready to do deals.

Florida and Virginia are where they're likeliest to look, they said.

"You will see Wachovia in Florida," said G. Joseph Prendergast, executive vice president and second-in-command at the Winston-Salem, N.C.- based company. "We have a good idea of what we want to do with acquisitions, and we are looking at a range of things in Florida right now."

Though Wachovia officials have long spoken about entering states throughout the Southeast, Mr. Predergast stressed in a recent interview that the company is now positioned to do more than just talk. Technology has been spiffed up, an aggressive sales strategy has been implemented, and business lines and branches have been restructured.

"We have worked our way through our strategic planning process," said chief executive officer Leslie M. "Bud" Baker Jr. "We are at a point in the development of our product and international systems and capabilities where acquisitions make a little more sense than they have made in the past."

Analysts said that is good news for $46.9 billion-asset Wachovia. The company currently operates in the Carolinas and Georgia.

The company's stock price has reflected some market discontent. It has risen a mere 3.9% since Jan. 1; the American Banker index of the 50 biggest regional banks' stocks has risen 9.93%.

"The track record is five years of doing nothing," said John J. Mason, an analyst with Interstate/Johnson Lane. "It's time."

Neither Mr. Baker nor Mr. Prendergast would provide details of their dealmaking efforts, but they said Wachovia considers Richmond, Va., and the region just north of Washington as particularly attractive. The company opened a banking office in Norfolk, Va., last April to serve corporate customers, and Wachovia officials said they have been impressed with the results.

Central Florida is also a possibility, they added. However, they noted the banking market in the Sunshine State is extremely competitive. NationsBank Corp., First Union Corp., Barnett Banks Inc., and SunTrust Banks Inc. together control more than 57% of Florida's market share. The rest is shared by several smaller banks and thrifts, including Great Western Financial Corp., which has a 4% share.

They also said they would consider doing a hostile deal and would accept dilution to shareholders as long as a transaction added to earnings within 12 to 18 months.

The executives said the deals they are looking for would more likely add revenue growth than geographic reach.

"Our emphasis is not on doing a transaction that looks financially O.K. and justifying it on cost savings. Our real interest is in revenue," Mr. Baker said.

Analysts said that Wachovia's rich market cap of $10.2 billion allows it to shop around. They pointed to a few possible targets, including Richmond- based Crestar Financial Corp., which has $18 billion of assets and more than 500 offices in Virginia, Maryland, and Washington.

They also named Richmond-based Signet Banking Corp., with $12 billion of assets, and Falls Church, Va.-based First Virginia Banks Inc., with about $8.2 billion, as possible candidates.

"I can think of different reasons why each one of them would be a good fit for Wachovia," said Vernon C. Plack, an analyst with Scott & Stringfellow Inc.

In Florida, the pickings are slimmer. Anthony R. Davis, an analyst with Dean Witter Reynolds Inc., predicted Wachovia will forgo trying to create a large infrastructure in the Sunshine State. He said he expects the company to open its own locations in attractive markets like Orlando and Jacksonville when interstate branching takes effect July 1.

"There's a lot of shaking and baking going on in Winston-Salem," Mr. Davis said.

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