With the ink still drying on First Union and Wachovia’s $14.6 billion merger, executives in the combined company’s wealth management and capital management divisions are already thinking about expansion.

On the wealth management side, Stanhope A. Kelly, the chief operating officer of the unit, said in an interview last Wednesday that he is looking to expand the bank’s penetration in the Northeast among high-net-worth individuals who are not the new wealthy.

The first step, he said, will be to open wealth management offices in New York and Boston -- two markets in which the bank has comparatively little penetration.

Wachovia has wealth management offices in Greenwich and Hartford, Conn., and owns Offitbank Asset Management in New York city. First Union also has bank branches, but not wealth management offices, in New York state. Neither company has ever had a presence in Massachusetts.

Mr. Kelly, who was the executive vice president in charge of wealth management at Wachovia before the merger, said he believes a lot of opportunity still exists in the high-net-worth markets in those two cities. He said he knows that the market is saturated, but believes that, based on the success First Union has had in the Northeast, it can be successful in Boston and New York.

“We want to take what works here and bring it to other regions,” he said.

The newly combined wealth management unit is based in Winston-Salem, N.C., and has $90 billion of assets and 126 offices in Connecticut, Virginia, New York State, New Jersey, Maryland, Delaware, North Carolina, South Carolina, Georgia, and Florida. First Union brought 76 of those offices and $48 billion of assets under management, and Wachovia brought the remainder.

The unit’s strongest presence is still in the Southeast — Wachovia has a strong beachhead in eastern North Carolina and around Columbia, S.C., and First Union had strength in North Carolina and further north in New York State and in New Jersey.

Before the merger, Wachovia, in Winston-Salem, N.C., managed $42 billion of assets, $15 billion of which were holdings of ultra-high-net-worth individuals in the Offitbank unit. The other $27 billion were in high-net-worth assets under Wachovia Asset Management, which offered investment management, alternative investment products, estate planning and trust services, and insurance products.

Offitbank will continue to function as a separate entity under the wealth management unit. Milton Offit will report to Mr. Kelly.

First Union’s wealth management unit, which had been under the firm’s capital management group, provided a wider array of products and services than did Wachovia. First Union customers had asset management services for retirement and estate planning; insurance products; private banking services such as customized lending, online banking, and bill paying; fiduciary trust services; alternative investment products; and brokerage services.

Donald McMullen, who ran First Union’s wealth management unit and whose title in the new structure is chief operating officer of the capital management group, said the wealth management group was split away from capital management so that Mr. Kelly can concentrate on expanding the firm’s wealth management business. Mr. McMullen’s Capital Management Group will concentrate on expanding investment product distribution through bank branches. He will manage the $101 billion of mutual fund assets that come from the Wachovia Funds and First Union’s Evergreen Funds. The Wachovia Funds had 22 funds with $11 billion in assets under management, and the Evergreen Funds had 106 funds with $90 billion in assets under management.

Mr. McMullen will also run the combined insurance operation and the retail brokerage operation, which combines First Union Securities and Wachovia Securities. Although the capital management and wealth management units will be run separately, the two will work together closely to maximize cross-selling and other growth opportunities, both executives say. “When Stan and I first met, we realized we have a great opportunity to create more mass and scale” for wealth management, Mr. McMullen said.

Geoffrey Bobroff, a high-net-worth analyst with Bobroff Consulting in East Greenwich, R.I., said a coordinated effort between wealth management and capital management is needed for the new Wachovia to succeed in wealth management.

Wachovia comes in with a strong reputation as a wealth manager, and First Union offers strong new channels for investment product distribution, he said.

The key to the future success of the wealth management and capital management groups will rest in how well the former Wachovia’s wealth management unit meshes with the former First Union’s distribution channels, and how well the two groups coexist.

Mr. Bobroff also said that Mr. McMullen would need to relinquish his hold on First Union’s wealth management capabilities and embrace the product side. He should offer support while giving Mr. Kelly’s wealth management group room to grow, Mr. Bobroff advised.

Mr. Kelly and Mr. McMullen agreed it is far too early to know how either unit will expand. For the time being, the duo is excited about the opportunities.

“At First Union, we always wanted to keep expanding our wealth management business, but always seemed to have digestion problems. Now we have a partner, and we have momentum,” Mr. McMullen said.

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