Charles John Koch, chairman of rapidly growing Charter One Financial Inc., says he would consider making yet another big acquisition this year, but only because he expects year-2000 adjustments to keep the Cleveland thrift out of the market for much of 1999.

"Our druthers would be not to do anything" but concentrate on integrating $4.1 billion Albank Financial Corp., which Charter One just agreed to buy, Mr. Koch said. But noting the year-2000 issue, Mr. Koch said this week that "we would be maybe a little more aggressive if the right opportunity came along."

Mr. Koch's stance on dealmaking for the rest of 1998 illustrates how concerns about the year-2000 glitch are heightening the already-feverish pace of mergers, analysts said.

Those who do not want to invest in a technology fix are urgently shopping their institutions. Buyers, knowing they must eventually take a break from the frenetic M&A pace of the past few years, are willing to make more deals this year-while they still can.

Charter One has limited itself to one big deal a year. Though not eager for the extra work another big deal would bring, Mr. Koch clearly is keeping his ears to the ground.

"We want to be able to close a deal sufficiently early in 1999 to give an opportunity for our (information systems) people to get a look at it," Mr. Koch said, "or late enough in 1999 that it could not close."

For larger deals, Charter One will "probably be out of the market from Jan. 1 to Sept. 30" next year, Mr. Koch said.

The 52-year-old executive, known around the industry as Bud, has built Charter One into a $19.5 billion-asset institution that has emerged as one of a handful of thrift consolidators in the nation. Others in that category include Dime Bancorp in New York and, most notably, Washington Mutual Inc. in Seattle.

But unlike Washington Mutual, which has flourished against the backdrop of the strong economy in the Northwest, Charter One is based in slow- growing Midwest markets. The upstate New York markets into which it has expanded - Rochester last year, and now Albany - are similar.

Mr. Koch asserts that the slow-growing, steady markets make for better business in the home loan and home equity arena.

"If you look at our strategy, we don't typically look at fast-growth communities," he said. The thrift has concentrated on areas with close to average growth rates, stable housing markets, and average unemployment levels.

Slowly appreciating homes are safer to lend against than rapidly appreciating ones, Mr. Koch said, because fast-growing markets run the risk of being overheated. Second mortgages, or home equity loans, are among Charter One's most profitable offerings.

Analyst Fred A. Cummings of McDonald & Co. Investments, Cleveland, said Mr. Koch may have no choice but to accept moderate growth. "Bud is playing the hand that's dealt him. If he had his druthers, the Midwest would be a higher growth market," he said.

For now, Mr. Cummings said, Mr. Koch probably will restrict himself to expanding in such markets. Jumping over too many state lines to enter higher-growth markets, such as the Southeast, probably would make investors uncomfortable, he said.

Mr. Cummings said that in the longer term, Charter One may target the Carolinas, as well as Virginia, where its mortgage company is based, to get a piece of the high-growth action.

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