Byron E. Hodnett, who once dreamed of a career in the U.S. space program, is now at the throttle of First Union Corp.'s biggest acquisition to date -- the former Florida franchise of Southeast Banking Corp.

Mr. Hodnett, 47, is chairman and chief executive of Jacksonville-based First Union National Bank of Florida, the parent company's largest subsidiary.

Southeast was seized by federal regulators and sold to First Union in September.

Formidable Challenges

"He has the toughest job in Florida banking -- maybe in southeastern banking," said Benjamin C. Bishop Jr., chairman of Allen C. Ewing & Co., an investment banking firm based in Jacksonville.

"I'm not relaxed about it, certainly," Mr. Hodnett said. "But things are going the way they should go."

The challenge facing Mr. Hodnett and his experienced merger team is to preserve as much of Southeast's business as possible while cutting costs and integrating the battered franchise into the mainstream of his operations.

Miami-based Southeast had $10 billion in assets, $9.2 billion in deposits, and 6,500 employees; First Union National Bank of Florida had $16 billion in assets prior to the acquisition.

So far, according to Mr. Hodnett, deposits have held steady, expenses are lower than expected, and noninterest income has met projections. Since closing the deal, First Union has found $35 million in additional savings.

Mr. Hodnett, a native of LaGrange, Ga., was in seventh grade in 1957 when the Soviets' Sputnik went into orbit. He majored in aerospace engineering at Georgia Institute of Technology but became disillusioned during a summer job with an aircraft manufacturer.

Not for Him

"I walked into what looked like the world's largest room," he recalls, "and it had what seemed to be thousands of drawing tables. And behind those tables there were thousands of guys who looked just like me.

"I thought: Man, I'm not sure this is what I want to do."

Mr. Hodnett switched his undergraduate major to industrial engineering and went on to Georgia Tech's master's program in systems engineering. He also took a part-time job at First Atlanta Corp., now Wachovia Bank of Georgia. Subsequently, he joined the management consulting firm of Booz Allen and Hamilton.

By the time he joined First Union, in 1972, Mr. Hodnett had definitively shifted career preparation by earning a master's degree in business administration from the University of North Carolina's night school in Charlotte.

Commitment to Flexibility

At First Union, Mr. Hodnett broadened his experience by working in operations, accounting, marketing, consumer credit, and real estate. When he talks to First Union trainees, Mr. Hodnett said, he tries "to discourage them from having a fixed career ladder in their minds.

"If they're not flexible, they cut off options -- and are sometimes less successful than they could be."

Mr Hodnett left First Union in 1982 to become executive vice president of Northwestern Financial Corp. He returned to the fold in 1985, when First Union acquired Northwestern.

He was sent to Florida in 1986 as executive vice president of First Union's general banking group in that state. A year later, he was appointed president of First Union National Bank of Florida. Mr. Hodnett became chairman and chief executive in March 1991.

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