Recently released 1994 annual reports from several major southeastern banks reveal companies scrambling to position themselves for heightened competition when national interstate banking begins to take hold this year.

The ferment is most evident at two of the region's most conservatively run institutions: Wachovia Corp. and SunTrust Banks Inc. Both say they are in the midst of adopting major organizational and structural changes.

Wachovia's report is the most striking in terms of physical appearance and content, reflecting the bank's strategic shift under new chief executive L.M. "Bud" Baker Jr. The 1994 report is 16 pages longer than 1993's and sprinkled with color photographs of Wachovia bankers, customers, and products.

"It's not wild, but compared to previous years, it is jazzed up," said Andrew T. Trincia, Wachovia's public relations manager in Winston-Salem, N.C.

During the 17-year reign of chairman John G. Medlin Jr., who relinquished his CEO post to Mr. Baker last year, Wachovia's annual reports eschewed fancy illustration in favor of straight financial text and tables.

In his letter to shareholders, Mr. Baker emphasized a "comprehensive strategic assessment" that Wachovia did last year, as well as major organizational and managerial realignments done in 1994 and early 1995.

Chief financial officer Robert S. McCoy Jr. said Wachovia chose the annual report as its "forum" to discuss recent changes, a message that will be amplified at investor conferences throughout the year.

A six-page analysis following Mr. Baker's letter noted that revenues from traditional interest and fee-based businesses "will be more subdued than in the past." As a result, Wachovia is "identifying opportunities for new services and alternative delivery channels."

The analysis mentioned, for example, an effort to expand Wachovia's customer base beyond its home markets "by employing nontraditional methods minimizing the need to invest in on-site facilities." Mr. McCoy said this refers to telemarketing, direct marketing, and electronic banking.

Wachovia's big structural change was the consolidation of previously autonomous business units into two divisions: corporate financial services and general banking.

The latter division, headquartered in Atlanta under executive vice president G. Joseph Prendergast, covers all retail banking in Wachovia's three-state territory, along with personal trust, credit card, residential mortgage, sales finance, and telephone banking.

Wachovia's 1995 proxy statement charts Mr. Prendergast's evolution into the company's strong No. 2 executive.

In 1992, Mr. Prendergast's salary and bonuses were roughly equal to those paid three other Wachovia executive vice presidents. By 1994, he had clearly emerged at the head of the pack, with salary ($353,333) and bonus ($176,700) second only to Mr. Baker's.

SunTrust's annual report also sets a new tone. While past reports tended to be self-congratulatory, the 1994 report emphasizes change.

Chairman and CEO James B. "Jimmy" Williams told shareholders that SunTrust began "reshaping the focus of our core businesses" in 1994.

Innovations mentioned in the accompanying analysis include an increase in corporate relationship managers, a new companywide sales referral program, and investments in image processing and mortgage processing. Like Wachovia, SunTrust upgraded its telephone banking services last year.

"Change for us is in a very evolutionary rather than revolutionary style," said investor relations spokesman Jim Armstrong, "but I think we're keeping up."

Among structural changes at SunTrust, trust and investment services were brought together under one management. And a new unit, SunTrust Capital Markets Inc., was formed to diversify financing alternatives for corporate customers.

Based on SunTrust's proxy statement, the No. 2 status of president L. Phillip Humann seems secure. Mr. Humann, who is 49, made considerably more in salary and bonus ($580,674) than his nearest rival, chief financial officer John W. Spiegel ($439,228).

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