Shares of SunTrust Banks Inc., which reached new highs in recent days on news of an aggressive bid for consumer deposits, surged further Thursday amid renewed rumors it might merge with Wachovia Corp.

By the close of trading, the Atlanta bank's shares were at $74 a share, up $2.75. Wachovia shares also gained to close at $47.625, up $1.875.

Traders attributed the activity to merger rumors and to anticipation of a speech scheduled today by SunTrust chief financial officer John Spiegel for an analyst conference in Coral Gables, Fla. SunTrust said the New York Stock Exchange was inquiring into the unusual trading but declined to comment further.

"If the merger isn't true, it's a shame," said Raymond James Inc. analyst Richard X. Bove. SunTrust's deposit-gathering prowess makes it a perfect match for Winston-Salem, N.C.-based Wachovia's "massive asset- generating capacity," Mr. Bove said.

But Mr. Bove also said merger-happy investors could be in for a disappointment if a deal is announced.

A deal between Wachovia and SunTrust probably would be a merger of equals, with no premium to either company's shareholders, he said. With both banks' stock prices currently inflated by merger speculation, the prices could drop on an announcement, he warned.

Analysts remained skeptical that the often rumored deal would be struck between a centralized company like Wachovia and a decentralized one like SunTrust.

"While it looks like a great combination on paper, a lot of cultural issues might prevent that from happening," said Christopher Martel at Dean Witter.

Still, Mr. Bove said, plenty of reasons exist to like SunTrust stock right now.

SunTrust chairman "Jimmy Williams is a smart guy," Mr. Bove said; "he has ramped up his bank dramatically, and he's hitting the market aggressively."

Mr. Bove said he raised his rating on SunTrust to "accumulate" from "neutral" on Jan. 29, a few days after the bank initiated a 6.5% rate on three-month certificates of deposit. The shares were trading before then at less than $67. The analyst estimated $100 million of new deposits had flowed into the bank daily since the higher rate was offered.

SunTrust is not merely trying to buy market share, a strategy that by itself would just hurt profit margins. Mr. Bove said SunTrust has added 1,500 people to its sales force, which will enable it to put the deposit funds into higher-yielding assets.

"These guys have thought the program out. You have to take your hat off to them," Mr. Bove said.

"SunTrust's timing for the program is exquisite," he said, "because NationsBank is going to be attempting to meld in BankSouth in May, and wants to shut 70 branches."

Although he still recommends NationsBank stock, Mr. Bove reduced his 1996 earning estimate for the Charlotte, N.C., superregional to $7.90 a share, from $8.05, on the assumption that it would lose some customers in Georgia and Florida to SunTrust's new program.

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