ATLANTA - First Union Corp. announced Monday it had agreed to buy Georgia's second-largest thrift for about $143 million in stock, a deal that would almost triple its Atlanta presence.

The acquisition of DFSoutheastern Inc., parent of Decatur Federal Savings and Loan Association, would build First Union's share of bank and thrift deposits in Atlanta to 11.3% from 4.4%.

First Union, which is based in Charlotte, N.C., would become the city's fourth-largest player, barely trailing Wachovia Corp., which has an 11.8% share.

Strategic Value Seen

"It's a good step toward building their position here," said Kathryn Bissette, banking analyst with Sterne, Agee & Leach Inc. in Atlanta.

DFSoutheastern's stock soared $9.25, to close Monday at $28. First Union's stock fell 75 cents to $38, but analysts attributed the decline to merger-related arbitrage.

Under terms of the agreement, First Union will exchange 0.82 share of its common stock for each share of DFSoutheastern common.

Based on First Union's stock price Monday, DFSoutheastern investors will receive about $31.16 a share when the deal is completed.

The price represents a handsome premium over DFSoutheastern's market value before the deal. The company's stock had been trading at a considerable discount to its tangible book value of $27.36 a share.

Thrift's Lackluster Results

DFSoutheastern, with $2.7 billion in assets and $2.1 billion in deposits, has been a mediocre performer in recent years.

It reported a $9.6 million loss in 1990; its $3.5 million in earnings last year represented an anemic 0.13% return on assets. The company reported a $3.9 million profit in the first quarter, representing a 0.59% return on assets.

Decatur Federal has 33 offices in Atlanta and north Georgia. Its loan portfolio is dominated by $1.4 billion in residential loans, with only $42 million in commercial loans.

First Union's Georgia bank has $4.7 billion in assets, but only $1.85 billion in Atlanta, the state's fastest growing market. First Union said it would merge Decatur Federal into its Georgia bank.

Few Independents Left

John R. Georgius, First Union's president, said Decatur Federal will provide the company with "the additional consumer outlets we desperately need in the Atlanta market."

Decatur Federal is the smallest of Atlanta's three largest independent financial institutions; Bank South Corp. and Georgia Federal FSB each has $4.5 billion in assets.

First Union reportedly looked at Georgia Federal before Decatur Federal, but First Union officials declined to comment.

The company had been negotiating with DFSoutheastern for three weeks, with the final pact signed Sunday evening. First Union chairman Edward E. Crutchfield Jr. made two trips to Atlanta early in the negotiations.

DFSoutheastern chairman and chief executive Robert C. McMahan said there had been discussions with others, but declined to comment on recent reports of negotiations with Georgia Federal.

Trimming Expenses

First Union said it expects "minor dilution" to its existing shareholders in 1993, but "positive financial contributions thereafter." The deal is expected to close by yearend.

The major source of earnings improvement is expected to be a 40% cut in Decatur Federal's noninterest expenses.

"Most of those savings will come in the back office," said Harold R. Hansen, chairman and chief executive of First Union National Bank of Georgia.

Mr. Hansen declined to say how many Decatur Federal branches would be closed or employees laid off because of the acquisition. About 10 Decatur Federal branches are located near First Union offices.

DFSoutheastern, whose investment banking firm is Atlanta-based Robinson-Humphrey Co., was long rumored to be on the block.

The company's stock traded at $10 at the beginning of the year but rose as high as $19 last month on speculation it would be acquired.

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