First Union Corp. and Wachovia Corp's combined banking operations would still have a strong regional emphasis, but their brokerage unit, assembled mainly by First Union through acquisitions ranging from Chicago to Boca Raton, Fla., to Albany, N.Y., cover much more ground.

The proposed merger would create the country's second-largest bank-owned brokerage force, with 8,380 licensed brokers. Citigroup Inc.'s Salomon Smith Barney is the largest, with 12,439.

By itself, First Union Securities Inc. is the nation's sixth-largest brokerage firm, with 7,780 registered representatives operating in 47 states, including the 12 in which First Union's bank has branches.

One key to the unit's reach is its parent's October 1999 purchase of Everen Capital Corp., a full-service brokerage and asset management firm based in Chicago. The unit also includes Wheat First Butcher Singer Inc., a Richmond, Va., investment banking and brokerage firm bought in February 1998; and First Albany Cos., a retail brokerage and investment banking firm purchased last May.

First Union's brokerage presence also includes First Union Securities Financial Network Inc., which provides back-office support and sponsors the series 7 license for about 500 independent representatives. The unit was formed in January, when First Union bought J.W. Genesis Financial Corp., a Boca Raton independent broker-dealer.

A First Union spokesman said it is too soon to say how it would take advantage of the combined brokerage operations, but in a conference call Monday the two banking companies predicted the combined unit's net income would grow substantially.

First Union Securities Inc. caters to a mostly affluent clientele, for whom it offers financial planning-oriented services, the spokesman said. It also offers discount brokerage through its parent company's bank branches and the Internet, though only 290,000 of First Union Securities' three million brokerage accounts are online, he said.

Wachovia's brokerage reach, though shorter than First Union's, stretches along the East Coast and tends to be more oriented toward private banking, analysts said. Its core is Wachovia Securities Inc., which has about 600 brokers. The unit was formed in April 1999, when the company bought the Charlotte, N.C., brokerage Interstate/Johnson Lane Inc.

In September 1999, Wachovia acquired Barry Evans Josephs & Snipes Inc., a Charlotte insurance agency that serves the affluent market. The agency's Mecklenburg Securities Corp. broker-dealer unit was merged into Wachovia Securities.

Though the combined brokerage operations would be big, observers questioned whether it would be able to compete on equal footing with wire houses.

Geoffrey H. Bobroff, a consultant in East Greenwich, R.I., said companies like Merrill Lynch & Co. are appealing to wealthy customers by adding more private banking-style services, but also can dedicate all of their resources to wealth management, which a banking company cannot. "It's going to be hard for a bank to compete today with what Merrill's going to be doing," he said.

Harry Milling, a bank stock analyst at Morningstar Inc. in Chicago, said that while First Union's brokerage in particular is sophisticated for a bank-owned operation, the deal simply would not give it the clout and the track record to match a major wire house. He also predicted that the combined unit would face a variety of integration challenges - such as staff defections.

"It comes down to execution," said Henry Dickson, a bank stock analyst at Lehman Brothers in New York. "There's a lot of opportunity, but 15% is a challenging goal."

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