Were First Union's eyes bigger than its stomach?

Were First Union's eyes bigger than its stomach?

Ed Crutchfield insists that high-school chums pinned the nickname "Fast Eddie" on him. Securities analysts and investors have another explanation: Once the barriers to regional interstate banking fell five years ago, Crutchfield led his First Union Corp. on a classic shop-'til-you-drop spree.

Between 1985 and 1989, Crutchfield, chairman and CEO of the Charlotte-based bank-holding company, orchestrated 21 deals, or "mergers" as bankers politely describe an arrangement in which the big guys swallows the little one.

Back in 1984, before all this activity commenced and banks had to make do within their homestate borders, First Union (FTUNYSE) had banks only in North Carolina, ranking third in deposits in the nation.

The way the investor-relations folks at First Union calculate it, these days the bank holds 8.28 percent of the deposit market, ranking first in five Southeastern states. That's right, first. Of course, they don't include NCNB's Texas holdings. Nor do they factor in Georgia-based Citizens & Southern's proposed merger with Virginia's top bank, Sovran. Still, First Union has become a major player in the Southeast - precisely what Crutchfield intended.

Its most recent deal, acquiring Jacksonville-based Florida National, makes First Union the second-largest bank in Florida. What's more, excluding corporate banking, First Union will have more assets in Florida than it does in North Carolina. The big picture? As analyst Jeffrey Levin of Scott & Stringfellow points out, the Florida National deal gives First Union the largest concentration of banking assets of any bank in the Southeast and the largest bank-branch system in the Eastern United States (852 offices and 795 automated teller machines).

With about $40 billion in assets, including what is on Florida National's books, First Union ranks as the 14th-largest bank in the country.

Big indeed, especially in what some say is the beginning of a Darwinian age of banking in America. But remember, size is just one measure of success. First Union has yet to generate the financial version of what George Bush had back in 1988 - the Big Mo. Substitute "earnings" for "political" and you quickly realize First Union's problem: no earnings momentum.

No earnings momentum because, as bank analyst John Mason of Interstate/Johnson Lane puts it, "First Union made a terrible blunder" when it acquired First Railroad & Banking Company of Georgia in 1986.

Not...