The Southeast could prove a tougher competitive environment for at least one banking company if First Union Corp.'s deal for Wachovia Corp. is completed.

SunTrust Banks Inc., which analysts say had its eye on Wachovia at one stage, could come under pressure to merge with a larger company, according to Katrina Blecher, an analyst at Sandler O'Neill & Partners in New York. Ms. Blecher said she doesn't expect a deal any time soon but added that such deals "come in packs."

Michael L. Mayo of Prudential Securities in New York said, "SunTrust is in a quandary." The deal would eliminate Wachovia, one of SunTrust's biggest competitors but would create a much bigger rival in its wake.

SunTrust, he said, could try to benefit by picking up business from customers alienated by the deal.

"It might gain market share, but it has to compete for it," he said.

One analyst suggested that SunTrust could have a much bolder reaction to Monday's events.

Michael A. Plodwick of UBS Warburg wrote in a research note Monday that SunTrust could emerge as a possible rival bidder in an effort to take advantage of what many see as the low premium First Union is offering Wachovia shareholders. First Union is offering Wachovia shareholders two of its shares for each of theirs, valuing Wachovia at $63.84 per share.

According to Mr. Plodwick, SunTrust could afford to up the ante to as much as $72 a share. Other possible bidders could include BB&T Corp., offering the same amount; Wells Fargo & Co., which could even pay $76; and, less likely, Citigroup Inc., which could offer $75.

Gary Peacock, head of investor relations at SunTrust, said Monday that he is confident an expanded Wachovia would not alter SunTrust's ability to compete.

"We have successfully competed against them individually, and we will compete successfully against the new entity" - whether it is First Union's or Wachovia's business model that wins out, he said.

Nor is SunTrust daunted, he said, by the size of the competitor. He said the banking company already competes with even larger companies, like Bank of America Corp. of Charlotte, N.C.

"History shows that some customers will dislocate," Mr. Peacock said. And though Wachovia will try to minimize defections, SunTrust would be more than happy to provide banking services to those who are shopping around, he said.

On Monday, shares of SunTrust opened up slightly but ran into negative territory soon afterward. The stock closed down 1%, at $63.58. Wachovia rose 3.07%, to $62.05, and First Union fell 2.26%, to $31.20. The American Banker index of 225 banks was also down 1.04%, and the Standard & Poor's 500 index and the Nasdaq composite also fell, 0.32% and 2.64%, respectively.

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