A Cautious Revolution In Progress

L.M. "Bud" Baker Jr. is trying to jump-start a revolution at Wachovia Corp., but a revolution there would look like cautious plodding anywhere else.

A case in point is Wachovia's approach to alternative delivery channels, which provide cheaper ways of delivering bank services than traditional branches. While Wachovia is developing the full array of alternative channels, including automatic teller machines, telephones, and personal computers, the company rules out any radical downsizing of its branch network, which comprises 489 offices in Georgia and the two Carolinas.

"You're probably not going to see us go out and close all our branches," Mr. Baker affirmed.

John G. Medlin Jr., Mr. Baker's predecessor as chief executive, had once mused publicly about the fading attraction of branches. But Mr. Baker said Wachovia's internal studies show that its branch network, by and large, is profitable, apparently because Wachovia has attracted more upscale customers than some of its competitors.

The most recent statistics on deposit market share from the Federal Deposit Insurance Corp., collected in June 1995, show that Wachovia branches compared very favorably with major competitors in terms of deposits per branch. In North Carolina, for example, Wachovia operated the smallest number of offices, 215, but still controlled 15% of the state's deposits, vying for the No. 1 position with Southern National Corp., which has 314 branches.

Given that relative degree of efficiency, Mr. Baker is not about to cut many branches, except perhaps in South Carolina, where Wachovia's coverage is relatively less efficient. Company officials suggested the total number could go down to about 420. "We're not at the point in our operating history where we feel enormous pressure to go out and make a rash decision about the future of our franchise," Mr. Baker said.