Urge to merge averts purge.

• Position: First Union Corporation of North Carolina's acquisition of Dominion Bankshares Corp.; ousting of Warner Dalhouse

Warner Dalhouse wasn't mentioned in First Union's 1992 annual report, but he's due a lengthy chapter when the Charlotte-based bank's history comes to be written.

As CEO from 1981 to 1992, Dalhouse led Roanoke, Va.-based Dominion Bankshares into the big time with assets of $10 billion and about 275 offices in Tennessee, Virginia, Maryland and Washington, D.C. Like many banks, Dominion stubbed its toe in the late '80s on commercial real-estate loans, causing a $37 million loss in 1990. Federal regulators in March 1992 forced company directors to sign an agreement promising to stiffen Dominion's lending practices.

A board revolt ensued as several directors signed a letter to Dalhouse demanding more accountability, according to the Roanoke Times & World-News. Smelling blood, First Union, NationsBank and Signet Banking Corp. of Richmond last May made unsolicited "expressions of interest" in Dominion, the newspaper reported. The board's investment banker, Goldman Sachs & Co., suggested that a fair price for Dominion was $28 to $30 a share, according to three Times & WorldNews sources. (H. Rodgin Cohen, a New York lawyer who represented Dominion and later First Union, denies price was discussed.)

The...