Amid a swirl of systems conversions, branch sales, and competitive pressures, First Union Corp. is putting the finishing touches on its integration of the former CoreStates Financial Corp.

Officials of Charlotte, N.C.-based First Union have hit a few unexpected speed bumps in the drive to bring CoreStates into the fold. But merger- related activities are on schedule and moving apace toward completion in November.

"We have had some challenges," said Charles P. Connolly Jr., First Union's regional president and a former vice chairman of Philadelphia-based CoreStates. "But we're very pleased with where we are right now with all the constituencies-employees, customers, and the community."

In one of the biggest changes yet to be felt by customers of the former CoreStates, 200,000 of them will be transferred this weekend to Sovereign Bancorp. of Wyomissing, Pa. Sovereign acquired $2.3 billion of CoreStates deposits and $800 million of loans to meet regulators' divestiture requirements.

The transfer has been more complicated than expected. Because many of the customer relationships being sold to Sovereign included accounts and loans at branches not included in the sale, First Union officials have had to spend time working out how those splits should be handled.

In the end, the company is handing to Sovereign tens of thousands of accounts more than it originally intended.

"It's more than we wanted or we thought it would be ... but we did it to benefit the customers," said P. Sue Perrotty, First Union's general banking group executive for Pennsylvania and Delaware, the former CoreStates territory.

In addition to the Sovereign transaction, many other changes are also under way.

By the last weekend in August, First Union had completed about half of the conversions of the programs that run its systems. Among those recently converted were certain loan systems, consumer credit cards, mortgage operations, and funds management.

Still to be done are commercial credit cards, by mid-September; the commercial loan system by the third week of October; and the massive conversion of CoreStates deposit accounts scheduled for Nov. 5.

About 150 branch closings will begin next month and be completed in November.

All of about 7,400 job cuts have been made, offset in part by 3,000 newly created jobs.

Throughout the conversion process, observers said snafus have generally been few and minor, boding well for the final transition stages.

"First Union Corp. is a leader in technology and that makes the integration smoother," said Bradley Ball, an analyst with Credit Suisse First Boston. In addition, he said, the company has product lines and delivery capabilities that "would give anybody a run for their money."

The pressure is on because as First Union works on merger matters, competitors are circling.

PNC Bank Corp. of Pittsburgh and Summit Bancorp. of Princeton, N.J., in particular, have been aggressive in recruitment of customers and executives, observers said. Community banks are angling for their share as well.

"The competition has been all over our customers," said Mr. Connolly. "But we've had more customers coming to us than leaving us."

He would not provide specific numbers, but Mr. Connolly said loan and deposit totals were both up in the old CoreStates geographical footprint since the beginning of the year.

First Union's asset management account, called CAP, has been a particular bright spot, with an average of 100 new accounts added per day in Pennsylvania and Delaware, officials said.

To try to counter its competitors, First Union is putting teams of business bankers on the streets for face-to-face meetings with customers to explain new pricing levels for cash management services, for instance. And this month the company begins a two-month-long project dedicated to phoning 100,000 small-business customers, thanking them for their business.

First Union has lost some relationship managers to competitors, but about 90% of that key group has stayed, Mr. Connolly said.

In a further step to minimize customer disruptions, First Union is letting former CoreStates customers keep accounts and fee structures in place for an indefinite time while First Union products are being introduced.

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