First American's buyer plans to cut 1,100 jobs

May 18, 1993|By David Conn | David Conn,Staff Writer

First Union Corp., the Charlotte, N.C., banking company that is buying the three Washington-area First American banks, said yesterday that it would eliminate 200 jobs when the merger is completed next month and an additional 900 positions through the rest of this year.

First Union's $453 million purchase of First American Metro Corp., a McLean, Va., holding company, was announced in February. First American Metro owns the First American banks of Virginia, Washington and Maryland, and has $4.6 billion in assets and 174 branches. The Maryland subsidiary had deposits of $900 million and 44 branches as of Dec. 31.

Most of the initial 200 positions will be headquarters jobs in McLean, such as legal and accounting, according to First Union's spokesman, R. Jeep Bryant. About 32 positions will be eliminated in the District of Columbia, and few will be affected in Maryland, he said.

First American Metro has 2,965 employees. The 200 employees will have a chance to apply for other jobs within First Union, but Mr. Bryant said not many are likely to find new positions in such a short time frame.

The 900 additional employees affected by the cuts will be placed on temporary status at the time of the merger, First Union said. Most of those jobs would be "back-office" support positions, in areas such as systems operations and data processing. The company said it was confident many of them would be placed in new positions at First Union before their old jobs end.

Mr. Bryant said no more than 10 people in Baltimore are expected to be laid off in both phases of the consolidation. First American has two branches in the city and three in Baltimore County. Decisions about branch closings would not be made until September, Mr. Bryant said.

First American Metro's parent company, First American Bankshares Inc., had been under court order to be sold by June 23 because of its connections to the now-defunct Bank of Credit jTC and Commerce International, which was based in Luxembourg.

By purchasing the operating banks and not the parent company, First Union has said it assumes none of the legal liabilities stemming from the BCCI scandal.

The proposed sale to First Union, which still awaits regulatory approval, would sever the last ties BCCI has in the United States. BCCI, headedby Pakistanis and owned by Persian Gulf investors, pleaded guilty a year ago to federal racketeering charges and agreed to forfeit a record $550 million in U.S. assets.

First Union, the nation's 11th-largest bank holding company, had assets of $63 billion as of March 31. The bank had previously announced a takeover of Dominion Bankshares Corp., based in Roanoke. First Union also is in the process of acquiring Meritor Savings of Pennsylvania.

When the three acquisitions are complete, it would be the eighth-largest banking company in the nation, with $72 billion in assets.

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