A seasoned banker is joining the ranks of the retired-for now.

Anthony P. Terracciano, president of First Union Corp., announced this week that he would retire at yearend.

The announcement caught few people in the industry by surprise but raised the tide of speculation about the future of an accomplished, high- profile executive.

Mr. Terracciano, 58, stayed on at First Union long after it had acquired the company he headed, First Fidelity Bancorp of New Jersey. Bankers of his stature tend to leave in similar circumstances.

"Everyone knew that at some point he would step aside and think about doing something else," said Hal Schroeder, an analyst at Keefe, Bruyette & Woods.

Mr. Schroeder and other observers said they expected Mr. Terracciano to take another job in or close to banking.

Analysts who followed Mr. Terracciano during his 33-year career said he has continually been the subject of rumors about his next move. First Fidelity has been fully integrated into First Union for almost two years.

Industry watchers suggested Mr. Terracciano would pursue a government post, perhaps in the Treasury Department, the Federal Reserve System, or another regulatory agency.

Some analysts view Mr. Terracciano as a candidate to head the Office of the Comptroller of the Currency. The current comptroller, Eugene A. Ludwig, is widely believed to be nearing his own departure announcement. His term will end April 4.

Under conflict-of-interest rules, Mr. Terracciano as a regulator would have to divest his bank shareholdings and might find the tax bill prohibitive-a problem he would not face if he moved into a private-sector position. Mr. Terracciano was not available this week for interviews, said a First Union spokesman.

Mr. Terracciano became president of Charlotte, N.C.-based First Union in January 1996, when the First Fidelity takeover became official.

First Union has not named his successor. One leading candidate is David M. Carroll, 40, a rising star recently named president of First Union's Florida operations, said Brown Brothers Harriman & Co. analyst Nancy Bush.

When it was announced in June 1995, First Union's agreement to buy First Fidelity had the biggest price tag-$5.6 billion-in U.S. bank merger history. Analysts saw it as a forerunner of even larger market extensions and consolidations, which are continuing.

Analysts describe Mr. Terracciano as "intense" and "provocative" and as one of the banking executives most respected on Wall Street.

He is credited with making contributions to First Union, including a tighter management discipline, that are atypical of "acquired executives."

His impact was "far greater than what CEOs at acquired companies normally have," said Ms. Bush.

"He brought a wealth of banking knowledge," said Mr. Schroeder. "The merger would not have worked nearly as well as it did had he not been involved."

"We knew at the time we announced the First Union-First Fidelity merger that this combination would be terrific, and it has turned out even better than we hoped," First Union chairman Edward E. Crutchfield Jr. said Monday, when Mr. Terracciano issued his announcement. "Tony and his team made it happen."

Mr. Terracciano was instrumental in establishing clear criteria for further acquisitions, Ms. Bush said. Mr. Crutchfield "had not enunciated the circumstances under which the bank would do deals" before Mr. Terracciano's arrival, she said.

Mr. Terracciano was chairman and chief executive officer of First Fidelity for six years. He was credited with improving management quality and reversing credit problems.

Mr. Terracciano began his banking career in 1964 at Chase Manhattan Bank, rising to vice chairman before leaving for Mellon Bank Corp. in 1987 to be president and chief operating officer.

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