ATLANTA - First Financial Management Corp. said it had received approval last week from Georgia regulators to form a new bank - a move widely viewed as a precursor to the company's sale of Georgia Federal Bank.

First Financial said the Georgia Department of Banking and Finance approved its plan for First Financial Bank to assume Georgia Federal's credit card functions.

A First Financial spokesman declined to comment on the company's next step. A source close to the Atlanta-based data processor said the approval was only the first in a "multistep process" that could eventually lead to the sale of Georgia Federal, the state's largest thrift, with $4.5 billion in assets.

Access to MasterCard, Visa

First Financial, a leading processor of credit card transactions for retailers, bought Georgia Federal in 1989 and used it to gain membership in the MasterCard and Visa associations.

The source said First Financial is not likely to sell Georgia Federal until it has assurances that its credit card bank will have full access to the MasterCard and Visa systems.

In its state application, First Financial Bank said it intends to apply for those memberships "so that it will have the necessary authority to assume the [merchant processing] responsibilities of Georgia Federal."

Exploring |All Alternatives'

The source also confirmed that First Financial is exploring "any and all alternatives" for divesting Georgia Federal, including an outright sale, a public offering, or a spinoff to current shareholders.

First Financial's ownership of Georgia Federal is believed to depress its stock price. Its price-earnings multiple of 19 is lower than that of similar data processors.

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