Edison. N.J.-based Midlantic Corp. has merged its two principal subsidiaries into one bank in an effort to cut marketing costs and make banking more convenient for customers. the bank announced Tuesday.

By merging Continental Bank in Philadelphia and Midlantic National Bank in Newark, N.J.. the holding c9mpany can allow customers to cash checks and make deposits in both banks. Previously, customers could not make transactions with the Midlantic unit outside their home states, because the subsidiaries operated under separate charters. The name of the new subsidiary is Midlantic Bank N.A.

When the $13.9 billion holding company purchased Continental Bank in 1986, it clung to the bank' s name - probably because Continental was very well established in Pennsylvania, said Elizabeth Summers, an analyst at Ryan. Beck & Co.

But these days intense competition is forcing banks to cut costs. Since Gary J. Scheuring took over as the bank's president chairman, and chief executive officer in 1991, the bank has eliminated duplicate back office operations and taken other steps to achieve most of its cost-saving goals, said a bank spokesman.

Even though cost savings from the latest move are probably minimal, Ms. Summers said, by merging subsidiaries. Miadlantic can now use a single marketing campaign to promote both banks.

Customers benefit from the consolidation too, said Mr. Scheuring.

"This merger will enable Midlantic customers, whether in New Jersey or Pennsylvania, to transact their business at any of our banking offices in the state," he said. Now that the bank has recovered from the loan problems that threatened it a few years ago, Mr. Scheuring added, "this is a good time to mount a new image campaign."

To market the merger, the bank also said it was changing its 21-year-old logo and corporate colors. Currently, the name Midlantic is spelled on signs in tow shades of brown. The bank plans to brighten the device with a hunter green-colored "M," adding a burgundy-colored accent above the letter in the form of a torch.

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