First Union Buys a Small Piece of Nashville's Commerce Union

Article excerpt

NEW YORK--In what may be a signal of a future merger, First Union Corp. in Charlotte, N.C., has agreed to buy a small equity interest in Commerce Union Corp. of Nashville, Tenn.

However, Commerce Union denied reports that First Union was near signing an agreement to acquire a majority interest in the Nashville bank holding company.

With $2.7 billion in assets, Commerce Union ranks as Tennessee's fourth largest bank holding company.

First Union, with $7.9 billion in assets, is North Carolina's third biggest banking firm. When its proposed acquisition of Northwestern Financial Corp. in North Wilkesboro, N.C., is completed, First Union will become the state's second biggest, moving ahead of Wachovia Corp. in Winston-Salem.

On July 1, statutes will take effect in North Carolina and Tennessee that will permit interstate mergers and acquisitions between banks from both states. The U.S. Supreme Court this week affirmed the constitutionality of these regional interstate banking laws.

"Commerce Union has not entered into any agreement to be acquired by First Union or anyone else," said Dennis C. Bottorff, chairman of Commerce Union, in a prepared statement. …