Two major northeastern banks have begun intense reviews of their cost structures, and both efforts will probably lead to layoffs, the banks said.

Meridian Bancorp, Reading, Pa., has begun a cost-cutting analysis that will affect every employee, according to Ezekial "Zeke" Ketchum, president and chief operating officer.

And Republic New York Corp. confirmed it had hired Tandon Capital Associates Inc., a New York consulting firm known for helping banks restructure.

Republic will not reveal details about its reorganization until May, according to spokesman Phil Burgess.

The restructuring at Republic probably won't be as draconian as at other banks Tandon has worked with, said Mary Quinn, an analyst at Keefe, Bruyette & Woods Inc.

The $41.4 billion-asset company's efficiency ratio of 55% is better than most, she said.

Meridian, however, has an expenses-to-revenues ratio of 67%, which it is trying to reduce to 59.9%.

Analysts said they expect Meridian to cut about $135 million, or 9% of total expenses, to reach its performance target.

Mr. Ketchum said the company had not yet determined how large the cost- cutting would be. He also said it was too early to know how many of the bank's more than 7,000 employees would lose their jobs.

Meridian may outsource some operations to find savings, Mr. Ketchum said. The bank is also renegotiating all contracts with vendors and is scrutinizing every employee's work output to find superfluous duties.

The company is also considering raising prices on some of its investment products.

Even the bank's coveted corporate jet is in jeopardy; it could add as much as $300,000 to pretax earnings if sold, Mr. Ketchum said.

Mr. Ketchum acknowledged that some layoffs are inevitable. "I would think it's only natural if you eliminate a fair amount of work that has low value you will eliminate some people. (But) our focus has not been (to say) let's eliminate 8% of our staff," he said.

Mr. Ketchum, who is leading the reorganization, said he would present recommendations in May to chairman and chief executive officer Sam McCullough. New York-based First Manhattan Consulting Group is advising on the process.

Meridian's fourth-quarter earnings last year were up 5% from 1993's fourth quarter. However, the bank had dismayed analysts when it reported third-quarter earnings 15% below the consensus estimate.

The bank also took an unexpected $8 million restructuring charge in the third quarter to consolidate its mortgage operations, a process that had been thought to be complete a quarter earlier.

The bank's Fort Lauderdale, Fla.-based brokerage unit also did poorly in the third quarter.

Mr. Ketchum, who plans to retire when the review ends, said employees have offered almost 1,000 cost-cutting suggestions via E-mail and voice mail.

Before the current review, Meridian had cut 700 jobs in 1991 when it went through a similar process, using Atlanta-based BBI Golembe Associates as an adviser.

Meridian's restructuring is part of an industrywide trend that includes Philadelphia-based CoreStates Financial Corp., among others.

J.P. Morgan & Co. announced last week that it was taking a $55 million charge to first-quarter earnings related to cutting about 5% of its work force.

Lawrenceville, N.J.-based First Fidelity Bancorp. has also said it will lay off 1,000 people this year.

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