Wachovia Corp., which enjoys a good reputation in the banking industry, is being criticized by a longtime admirer.

Citing disappointing fourth-quarter results, analyst George M. Salem of Gerard Klauer Mattison & Co., New York, cut his earnings estimate and stock price target.

Moreover, he said he was keeping his "buy" rating on Wachovia shares only on the basis of a potential merger with SunTrust Banks Inc.

"This is not a harsh reprimand, but I think it has to be recognized that they aren't Venus de Milo anymore," Mr. Salem said Thursday. "Barring a merger announcement with SunTrust, the outlook for the stock seems unexciting."

Mr. Salem has urged the combination since last summer, but said he has no insight about whether a deal is imminent. Other analysts, notably Nancy A. Bush of Brown Brothers Harriman & Co., have touted the benefits of such a deal.

Mr. Salem said he has followed Wachovia for 25 years "and until mid-1995 it was among the most attractive and least controversial of all the major banking companies.

"Today," he said, "although its financial strength is still among the very best, we feel the company is controversial because of sluggish fundamentals and its uncertain growth rate."

The 7% fall in Wachovia's net interest margin from the first quarter to fourth quarter last year was "among the worst 1995 trends we have seen," he said.

The analyst noted that Wachovia's earnings were up only 3% for the fourth quarter and 9% for the year. He lowered his 1996 earnings estimate to $3.65 from $3.75 and lowered his stock price target to $55 from $59 per share. The stock currently trades around $44.

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