First Market Bank, a Richmond, Va.-based grocery store banking network, said merger-related turmoil is bringing in deposits much faster than it had anticipated.

The three-and-a-half-month-old venture, owned by National Commerce Bancorp. of Memphis and Ukrop's Super Markets Inc. of Richmond, would not divulge specific figures. But it has revised its deposit projection of $100 million by the end of the first year to between $200 million and $300 million.

The bank now expects to have $750 million of deposits by November 1999, the end of its second year of operation, said National Commerce chairman and chief executive officer Thomas M. Garrott.

Because of several sizable bank mergers, analysts said, 20% to 40% of deposit relationships in the Virginia market are expected to change hands this year.

"I don't think there is any question that the tremendous loyalty to Ukrop's gives First Market Bank a leg up," said Anthony Davis, an analyst at SBC Warburg Dillon Read. "With the amount of flux in the market, Ukrop's stands as a stable franchise for consumers to turn to."

Late last year Winston-Salem, N.C.-based Wachovia Corp. bought $10.6 billion-asset Central Fidelity Banks, Richmond, and $2.1 billion-asset Jefferson Bankshares, Charlottesville, Va. First Union Corp. of Charlotte, N.C., bought $12 billion-asset Signet Banking Corp., also of Richmond, on Dec. 1.

Mr. Garrott said First Market is interested in buying branches divested by Wachovia and First Union in the wake of the mergers.

First Market has 10 branches, all but one in Richmond. At least eight more are scheduled to open this year. The joint venture plans to open its first nonsupermarket branch next month.

Mr. Garrott said First Market also plans to speed its entry into commercial lending, a business it had not planned to enter until the end of its second year. "We need to be opportunistic," he said.

Before the Wachovia and First Union deals, First Market expected to rely on Ukrop's grocery presence in Richmond to drum up banking business. Ukrop's has a 36% market share in the Richmond area, according to Food World, a regional supermarket trade magazine. All but one of Ukrop's 26 stores is in that region.

Of the 114 branches of $4.5 billion-asset National Commerce, 95 are in stores, mostly Wal-Marts in Tennessee, North Carolina, Mississippi, Georgia, and Virginia. It has a subsidiary, National Commerce Bank Services Inc., that provides consulting services to other banks on supermarket banking and other retail delivery systems.

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