Having sealed its pact to acquire San Francisco-based Montgomery Securities, NationsBank Corp. said it is in a position to contend seriously for capital markets business it has been losing to rivals.

"This is the last arrow in the quiver that we need to have one- stop financing," Edward J. Brown 3d, NationsBank's president of global finance, said Monday.

"Last week we would not have made the short list," he said. "This week we make the short list."

The Charlotte, N.C., banking company agreed to pay $1.2 billion for Montgomery, 70% in up-front cash and 30% in stock over three years. The deal is slated to close in October.

"It's definitely going to help them keep customers," said Dillon, Read & Co. analyst Anthony Davis.

NationsBank said it has managed or co-managed debt offerings for 84 companies since 1993. Of those, 67 turned to other companies to do equity offerings.

As recently as last week, its executives said, NationsBank lost a $500 million deal to a competitor because it did not have equity research capabilities.

NationsBank "now has a chance to bid on all the business and build deeper relationships," said R. Harold Schroeder, an analyst with Keefe, Bruyette & Woods Inc. "They had a hole in their franchise; now they've filled it - and filled it extremely well."

NationsBank chief financial officer James H. Hance Jr. said Montgomery is a perfect fit because its expertise in equity distribution and research complement $239 billion-asset NationsBank's capabilities in syndicated lending, structured finance, and risk management.

Both companies are strong in high-yield debt, fixed-income research, institutional sales, and merger-and-acquisition advisory services, added Mr. Hance, who was recently given responsibility for NationsBank's global finance area, including capital markets.

He said Montgomery will be NationsBank's first and last investment banking acquisition. "This fulfills our aspirations completely," he said.

Analysts were largely pleased with the deal, even though San Francisco- based Montgomery is seen adding only about a penny per share to NationsBank profits. Montgomery's revenues are forecast at about $700 million this year and $875 million in 1998.

Overall, analysts viewed the alliance as significant because it will strengthen NationsBank's commercial products and services.

To encourage retention of Montgomery principals, NationsBank is creating a $100 million incentive pool of cash and stock in addition to the $1.2 billion purchase price. The bank said it would also grant Montgomery a large measure of autonomy, leaving its executive committee in place.

Montgomery's broker-dealer activities would continue to operate under the Montgomery Securities name.

NationsBank said it would rename its section 20 subsidiary NationsBanc Montgomery Securities Inc. and make Montgomery chief executive officer Thomas Weisel chairman of the unit. He stressed the organizations' cultural similarity: "We are both extremely performance-driven and team-oriented."

With offices in Boston, New York, and San Francisco, Montgomery specializes in small and midsize growth companies in consumer, technology, and health-care industries. It has achieved high ranks on Wall Street: eighth in institutional business, with about 4% of the market, and 10th among investment banks without proprietary trading.

The company reports relationships with more than 1,700 domestic and international institutions and said it did $20 billion in equity underwriting volume last year. Its research program is the ninth largest, covering 646 companies, and it is considered the third-largest research firm for growth industries.

Montgomery's revenues totaled $589.6 million last year, 43% generated by equity underwriting.

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