The merger numbers are in for the first half of 1998, and they leave all previous records in tatters.

The total value of bank deals struck in the six months was $239.6 billion-more than in the prior three full years combined, according to Securities Data Co.

Led by the $74 billion valuation of Citicorp's agreement with Travelers Group, five megadeals accounted for all but $30 billion of the total.

The numbers dwarf the $95 billion of mergers arranged in all of 1997, $45.5 billion in 1996, and $77 billion in 1995.

A staggering 69% of this year's first-half volume came during a frenzied two weeks that began with the Citigroup announcement on April 6, and included NationsBank Corp.'s with BankAmerica Corp. and Banc One Corp.'s with First Chicago NBD Corp.

If anything, the numbers understate the rate of churn within the U.S. financial services industry, because they do not include sales of specialty financers, insurers, or credit card companies.

But the numbers do suggest the urgency bank executives feel to sell their businesses before year-2000 computer worries become overwhelming. They also illustrate the drive of expansion-minded executives to complete acquisitions while the stock market attaches high values to their companies-and to the U.S. banking business in general.

At the same time, investors faced the uncomfortable reality that mergers are not delivering the riches they have in the past. Many of the combinations are mergers of equals, meaning no huge premium is paid above the stock market price.

Indeed, First Union Corp. chief executive officer Edward E. Crutchfield, who often speaks out on matters his colleagues prefer to keep to themselves, has said that large-scale mergers of equals are the best way to build companies that span the nation, and perhaps the globe.

The recent deal explosion, meanwhile, raises regulatory issues that may take years for Washington to resolve. And they raise questions about the obligations of multistate or multinational financial services conglomerates to the communities where they are still regarded as the place to deposit paychecks and withdraw $60 for dinner and a movie.

The Citicorp announcement shocked just about everyone-including investment bankers, since none had been called in for the biggest-ever merger deal in any industry.

"I was shaving when I heard the news and damn near cut myself bloody," one banker recalled. "Then I raced to the TV."

Once Citicorp chairman John S. Reed, who stubbornly avoided consolidation fever until Travelers chief Sanford I. Weill made an offer, decided to join the trend, nothing would stop rival bank leaders from indulging their own nationwide, and perhaps worldwide, ambitions.

With his April 13 announcement with BankAmerica, NationsBank CEO Hugh L. McColl Jr. moved to build a business that lives up to the name of his company. The bank created by this merger would have 8.2% of the nation's deposits, closing in on the limit of 10% set by Congress in 1994.

That same day, Banc One said it would merge with First Chicago NBD to become a leader in the Midwest and one of the biggest credit card issuers.

Almost as stunning as the bank deals was the news on March 17 that a thrift executive with nationwide aspirations of his own, Washington Mutual CEO Kerry K. Killinger, would acquire his top rival, H.F. Ahmanson & Co. of California.

Reflecting the heady times, investors at a late-April banking conference in New York sponsored by UBS Securities (an investment bank that has since disappeared via consolidation) toasted the age of mergers with glasses of champagne. Then they went to lunch.

But while investors reveled and executives self-congratulated, some shareholders quietly fretted that the deals "of equals," with power and director seats shared by companies not paying stock-price premiums, had not brought the anticipated financial bonanzas.

This trend worried some investors and for a while appeared to dry up enthusiasm for bank stocks-enthusiasm that had driven bank share prices to unprecedented heights and allowed banks to pay up for ever-more expensive mergers.

But on July 1, the start of the third quarter, came heartening news for investors that Firstar Corp., a recent earnings laggard, had agreed to sell to Star Banc Corp. for a rich 44% premium.

"I guess this means things are getting back to where they used to be," said Scott Edgar, director of research at Sife Trust Fund.

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