Baseball season may be a few months off, but Crestar Financial Corp. of Virginia is already warmed up.

With a slew of new marketing efforts, including the signing of Baltimore Orioles third baseman Cal Ripken Jr. as a spokesman, the company at the top of many analysts' acquisition-prospect lists does not appear to be letting up in its competitive intensity.

The parent of Crestar Bank gained a formidable competitor in 1997 when Wachovia Corp. entered Virginia, buying Central Fidelity Banks Inc. of Richmond and Jefferson Bankshares of Charlottesville.

First Union Corp., meanwhile, boosted its market share with the acquisition of Signet Banking Corp. of Richmond.

Now $23 billion-asset Crestar can claim it is the last of the big hometown banks-an appealing promotional message that also implies some serious challenges.

"There is a feeling within the company of wanting to remain the last major independent Virginia bank," said Edward R. Najarian, an analyst at Wheat First Butcher Singer. "They've got to prove they deserve to be that bank by performing."

Analysts and company officials said Crestar must seize the immediate opportunity to attract customers confused or angered by the changes at the other banks. At the same time, Crestar must strengthen its overall sales and service culture.

Executing this strategy is the key to remaining independent, they said. Takeover speculators have already bid up Crestar's stock price 50% in recent months.

Careful to stress that Crestar is committed to satisfying its shareholders, president and chief operating officer James M. Wells 3d said management is not ready to concede that a sale is inevitable.

"We are competitively and technologically positioned to continue to succeed in our markets," he said in a recent interview. "Our shareholders have been well served. They will continue to be. We are running a bank for the future."

Under the current game plan, Crestar hopes to boost its proportion of profitable households from 60% to 75% within two years. It also expects to increase return on equity from 16.4% to 18% and attain No. 1 deposit market share in the Virginia, Maryland, and District of Columbia markets in which it operates.

Crestar says its share of deposits is close to those of leaders NationsBank Corp. and First Union Corp. in the combined Maryland-D.C. market, where it has $6.8 billion of deposits.

Adding Virginia to the mix, Crestar, with $16 billion of deposits, is third in regional deposit market share, behind NationsBank and First Union and ahead of Wachovia.

But the distance between No. 1 NationsBank and No. 3 Crestar is "very overcomeable," said Eugene S. Putnam Jr., Crestar's director of corporation finance. "We want to be the key provider of service or product in whatever location we choose to do business."

To hit its goals, Crestar will have to continue a pattern of making in- market acquisitions, and it will have to attract new customers, Mr. Putnam said.

In a sign that marketing is a top priority, Crestar nine months ago hired Craig J. Kelly away from Columbus, Ohio-based Banc One Corp. to be executive vice president and marketing chief. Under Mr. Kelly, the company is spending about 40% more on marketing and advertising than it did in 1996.

It also introduced four products in 1997 and has planned many more for 1998.

Hoping to capitalize on Mr. Ripken's image as "determined, talented, and dedicated," the company is offering a package of "Crestar cash guarantees." It promises various payments if customers are unhappy with new accounts. The campaign ran from Oct. 27 through Dec. 14. A second series of ads will begin this month, Mr. Kelly said.

The effort to win customers in the wake of market consolidation could turn into meaningful revenue growth-if Crestar executes well, said Wheat First's Mr. Najarian.

But observers said more acquisitions would also be required if Crestar is to hit growth targets.

"They feel they can continue to do acquisitions and take out costs," said Anthony Davis, an analyst at Dillon, Read Inc.

The company got a big boost from its largest acquisition ever, of Citizens Bancorp. in December 1996.

The addition of the $4.1 billion-asset Maryland company contributed to 8% commercial loan growth for the first nine months of 1997, pushing return on assets at Sept. 30 to 1.41%, from 1.01% at yearend 1996. It also helped reduce 1997 expenses by about 6%.

With Citizens fully integrated, Crestar is ready to buy more banks, though Mr. Wells said current prices reduce the appeal of some transactions.

"It would be difficult to achieve the No. 1 market share without mergers and acquisitions," he said.

In addition to gearing up for more deal-related growth, Crestar is focusing on fundamental business lines such as retail and commercial banking, investment services, and mortgage banking.

Like many institutions, Crestar is carrying out a product sales program. It is also expanding its telephone and home banking offerings.

On the commercial front, the company is exploring many new avenues. A new equipment leasing company run by a former Signet executive closed three deals totaling more than $50 million in recent months and is projected to put more than $700 million on the books in the next couple of years.

Crestar is also evaluating a move into asset-based lending, officials said.

Other areas of emphasis include trust and mortgages. Trust grew 13% during 1996 and should continue double-digit growth, Mr. Putnam said. Fees from mortgage servicing and originations were up 25% in 1996 as well, he said.

Earnings per share growth will hit about 16% for 1997, thanks to the Citizens acquisition, according to Keefe, Bruyette & Woods analyst R. Harold Schroeder. Profits should grow a still-healthy 11% in 1998, he predicted.

The company suffered sizable losses from national credit card solicitations. But during the last two years, Crestar has shrunk its credit card portfolio to $1.1 billion, from $1.7 billion, and stopped soliciting outside its core market areas. Credit quality has improved as a result, though the return on equity of the card business has diminished to between 20% and 25%, from 40% to 50%, Mr. Putnam said.

"They sort of stepped on a rake" in credit cards, said Mr. Davis of Dillon Read.

Such problems are mostly history, Crestar officials said. Lessons have been learned, and a new growth strategy is in place.

"We are fully competitive and expect to succeed," said Mr. Wells. "We want to compete effectively in the marketplace. We follow that path wherever it goes."

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