It happens when you lose interest.

• Position: Banks - Statistical Data Included

When Winston-Salem-based Wachovia Corp. announced in June that it wouldn't meet earnings targets and was setting aside $200 million to cover loan losses, the message was clear: North Carolina's biggest banks were in retreat after years of unprecedented growth. As 2000 progressed, the big banks laid off thousands, came clean about millions in bad loans and pulled back from aggressive merger strategies.

But even as large banks retrenched, small community banks continued to enjoy a resurgence. And at least one of the larger banks -- Winston Salem-based BB&T Corp. -- managed to thrive.

BB&T's growth has come not just as a bank but as an insurance agency and brokerage. Through October, BB&T announced 11 acquisitions -- banks, insurance agencies and a financial brokerage -- pushing assets past $50 billion and moving it into 18th place in the country, from 21st a year ago when it had $41.6 billion.

At the other end of the spectrum is Charlotte-based First Union Corp. One of the highest fliers of the '90s, First Union entered the year struggling. Its last two major acquisitions -- Sacramento-Calif.-based The Money Store Inc. and Philadelphia-based CoreStates Financial Inc. -- proved to be drains on earnings. The result was a corporate overhaul, complete with a new CEO, Ken Thompson. Ed Crutchfield quit as CEO in April to undergo cancer treatment and later said he would give up his chairman post to Thompson in March. Under Thompson, First Union has transformed from buyer to seller. He cast off poorly performing lines, selling the bank's credit-card and mortgage-servicing operations. He shut down The Money Store, purchased just two years earlier for $1.9 billion. The cuts eliminated 5,300 jobs, about 7% of the bank's work force. In December, the bank cut its dividend in half to save $1 billion a year.

Acquisition talk now portrays First Union as a target. Rumors of a takeover by Wells Fargo Corp. of California grew so loud in the fall that First Union took the unusual step of issuing a denial -- a break from the bank's policy of maintaining silence on merger rumors.

The problem for First Union is the same one affecting other banks: a general slowdown in economic activity that not only cuts into bank business but causes an increase in bad loans. In November, First Union announced it would likely take a bath on $450 million in loans to Florida-based Sunbeam Corp., the troubled maker of consumer products.

Charlotte-based Bank of America Corp. had an...