First Union Corp.'s problems of the last year may be best symbolized by its purchase of Money Store.

The $2.1 billion deal, announced in March 1998, was supposed to add to earnings immediately and give First Union a commanding position in the hot subprime lending market.

Instead the unit has produced one disappointment after another.

"The Money Store to date has not produced the results that we expected," Edward E. Crutchfield Jr., First Union's chief executive officer, said this week. "This is fixable, and has been factored into our ongoing strategic planning and financial monitoring."

Some analysts now question whether First Union should have done the deal at all.

"As of today, you'd have to say no," said Bear, Stearns & Co. analyst Sean Ryan. "There's a lot of potential, but an enormous amount of work to be done, before you can begin to think of it as a winner from a shareholder perspective."

Just two months after the purchase was announced, the bank said it would take a $2.2 billion "accounting adjustment" for it, essentially writing the value of the company to zero.

Then in January, First Union warned it would miss 1999 earnings and attributed half of that error to revisions of Money Store's accounting.

In March, First Union fired 750 Money Store employees as part of a bankwide restructuring program. In early May the bank said it was taking further charges related to the acquisition.

Rather than beef up Money Store's well-known ad campaign featuring baseball Hall of Famer Jim Palmer, First Union has removed Mr. Palmer from commercials for the unit's home equity loans.

Mr. Palmer "remains on contract" and is serving as the pitchman for First Union's AAA sponsorship, a bank representative said. "He will continue to be used in other areas as opportunities are identified," he said.

And most recently, longtime Money Store chief executive Marc Turtletaub resigned unexpectedly last week.

Mr. Turtletaub, 53, issued a statement Friday saying he was leaving because his work was done at the company his father, Alan, founded in 1967.

"I have accomplished all I could have hoped for," he said. "My mission culminated in the sale of the company to First Union Corp."

All this contrasts with the early predictions of First Union executives.

They had expected to keep Money Store's management and branch network in place, make the most of the well-known brand name, and garner profits from the bank's lower funding costs. At the time of the purchase First Union's consumer chief, Jack Antonini, said, "We're not making a lot of changes."

A First Union spokesman said company executives were not available to elaborate on strategy changes related to Money Store. The bank could not provide origination or profitability figures for the unit by press time.

Mr. Turtletaub was applauded by finance company analysts when First Union said it would buy Money Store. Funding sources for subprime companies would dry up, he predicted then, and securing funds at low cost was necessary for Money Store's survival.

Mr. Turtletaub's words rang true several months later when asset-backed securities investors shied away from higher-risk industries. Several companies restated profits, took losses, or even filed for bankruptcy protection.

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