Megamerger takes N.C. banking bicoastal.

• Position: North Carolina

It's a new scale - one bank, coast to coast, with nearly one dollar of every 10 on deposit in the nation. The deal that combined Charlotte-based NationsBank Corp. and San Francisco-based BankAmerica Corp. created the biggest U.S. bank. But size isn't the only scale it redefined. Risk was another. Before the merger ink was dry, a game of financial Russian roulette cost the former BankAmerica CEO his job. And the high-flying stock got walloped in Wall Street's swoon, dropping the deal's value from $60 billion to $45 billion when it closed in September.

BankAmerica executives aren't the only Charlotte bankers thinking about scale. Four blocks down Tryon Street from their 60-story tower, in the tiny architectural model shop of Sam Yue, sits a model of a 70- to 80-story tower planned by rival First Union Corp. Insiders say it will be needed to absorb merger targets already in the cross hairs of the nation's sixth-largest bank.

"It was the year of the megamerger," says analyst Marguerite Sons of Interstate Johnson/Lane Inc. But none approached that of BankAmerica, with its $572 billion in assets. It is second in asset size to New York-based Citigroup Inc., and first if you exclude insurance assets.

First Union's $16.3 billion buyout of CoreStates Financial Corp. closed in April. It gives First Union $229 billion in assets and the largest share of East Coast deposits of any bank. Through September, it posted record earnings of $2.7 billion, up 25%.

Wachovia Corp. in Winston-Salem didn't shake the earth, but its October buy of Charlotte-based Interstate/Johnson Lane was typically savvy. The $230 million deal gives the bank a full-service brokerage. By waiting until the market tanked, Wachovia got IJL at less than its trading price.

Late in the year, chest thumping gave way to nervousness about the economy. John Forlines Jr., president of Bank of Granite Corp. in Granite Falls, urges caution. "It hasn't been 12 months since all we were hearing was the Goldilocks economy and how all the stars were in line." His bank halted at 62 its streak of consecutive quarterly earnings improvements to cover loan losses to a textile company. Still, it had $9.6 million in net income through September.

Bank investors took wild rides. NationsBank peaked at $88 in July, then plunged to $44. First Union fell from almost $66 to $41. Both later rebounded. "When people fear a recession, bank stocks move down faster than others," says Hal Schroeder, an analyst with Keefe...