To grasp their reach.

For the first time, BNC crosses state lines to rank Tar Heel-based banks and thrifts by total revenue.

To industry watchers, the returns on assets and equity that North Carolina-based banks have been posting must look like misprints. Where an ROA of 1% was once impressive, it's now routine. An institution has to hit 1.3% or so before it stands out. With ROE, the target has shifted from 12%-13% to 15%. NationsBank, Wachovia, BB&T and Yadkin Valley broke 17% last year. Bank ROEs are almost mimicking manufacturers'.

One reason for the increased profitability is low interest rates, which make for healthy spreads between savings and lending rates. Another is that banks are diversifying into investment banking and brokerage operations, which earn a lot of money but require few assets, says Tony Plath, director of the UNC Charlotte Center for Banking Studies, which compiled BUSINESS NORTH CAROLINA's ranking of the state's financial institutions.

In an industry that revolves around numbers, there are some interesting stories in the figures. First Citizens has the worst efficiency ratio of the five biggest banks, spending 70 cents in overhead to generate a dollar of revenue. Visit their Raleigh headquarters and one reason is strikingly obvious - expensive art, fancy furniture. Its branches also are more lavish than most.

Its ratio contrasts dramatically with the perennially profitable Bank of Granite Corp., which Forbes magazine speculates might be "the best little bank in America." It's certainly one of the most frugal banks in North Carolina. It spends 32 cents to bring in a dollar. "They basically have plywood for furniture," Plath quips.

This year marks several firsts for the list. For one, we ranked financial institutions by revenue rather than assets. For another, we looked at national holdings, not just state operations. Also, we've added savings banks and S&Ls to what had traditionally been a list of commercial banks.

Why the changes? Because the industry is changing. Holding companies used to charter separate subsidiaries in each state. [TABULAR DATA OMITTED] But subsidiaries increasingly operate across state lines, especially after the Riegle-Neal interstate-banking act, which took effect June 1, made it easier to consolidate operations. Wachovia merged its South Carolina and Georgia banks into its North Carolina-based subsidiary the very next day. It makes more sense to show banks in their entirety now that the biggest ones are well on their way to operating nationwide. NationsBank, for instance, will be the nation's third-biggest bank after it completes its $15 billion buyout of Jacksonville, Fla.-based Barnett Banks.

Revenue figures are now a better measure than assets. As of the end of last year, 32 North Carolina banks offered full-service or discount brokerage operations. Those can be very profitable but show relatively few assets. After its buyout of Richmond, Va.based Wheat First Butcher Singer, First Union will have the largest retail brokerage in the Southeast. Four years ago, 4% of the bank's revenues came from capital management and investment banking. Last year, the share was 14%, and by 2000 it's expected to be 27%.

The diversification means North Carolina has fewer banks and more and more "financial institutions," with services ranging from insurance to IRAs. The change stems from both customer demands and industry pressures, says Joel Smith, president of NationsBank Carolinas. Once it became standard to pay interest on nearly all accounts, banks had to find more ways of generating income. On the consumer side, that includes charging more fees on basic accounts and offering more products customers will pay for, such as mutual funds and other money-management services.

Many of the shifts reflect nationwide trends, but North Carolina has some features that set it apart. It has long been a progressive banking state, allowing branch banking from the get-go. That helped it spur some of the biggest banks in the country. Big branch systems mean Tar Heels are used to convenience. It also means they are slower to take to telephone and computer banking, Smith says. They're used to visiting a nearby branch and like the face-to-face interaction. That's why it took automated-teller machines so long to be accepted here.

Smith points out that computer and phone banking have caught on in the state's big cities. But NationsBank has found customers continue to use their branches just as much as they always have. They just do more banking. As a result, more and more people are becoming financially sophisticated. They're demanding increased access, attention and products, Smith says.

Plath points out that NationsBank's experience hardly applies to all institutions. There are actually five banking industries in North Carolina, he says, each with different financial expectations.

The superregional banks - NationsBank and First Union - have diverse operations and higher demands. Then there are large regional banks such as Wachovia and BB&T that also offer an array of products, many of which generate fee income. Now less interest-rate sensitive, they are looking better on measures such as ROA.

The third tier is supercommunity banks such as Triangle Bank and First Charter. They might offer limited untraditional products but only when most customers demand them. Next are the small, typically rural community banks, which, for the most part, operate the same way they always have, making loans and taking deposits.

Last, there are S&Ls and state savings banks, which have most of their operations tied up in mortgages. They tend to perform the worst of the five groups, partly because many are mutually owned and don't have the pressure from shareholders to perform, Plath explains.

From first to worst

Best return on assets

Avery County                                                  3.31
Bank of Granite                                               2.69
First Charter                                                 1.69
First National                                                1.67
Yadkin Valley Bank & Trust                                    1.63
First Savings Bancorp                                         1.53
LSB Bancshares                                                1.48
The Bank of Currituck                                         1.44
Wachovia                                                      1.43
Stone Street Bancorp                                          1.43
Piedmont Bancorp                                              1.42
Fidelity Bancshares                                           1.40
CCB Financial                                                 1.39
BB&T                                                          1.38
Morganton Federal S&L                                         1.34

Worst return on assets

First Gaston                                                 (3.51)
Essex Savings                                                (2.91)
Surrey Bank & Trust                                          (2.68)
First Commerce                                               (2.48)
Southern Community B&T                                       (1.68)
Cooperative Bankshares                                       (1.01)
First Savings Financial                                      (0.70)
Carolina Savings                                             (0.61)
Gibsonville Community Savings                                (0.52)
Catawba Valley                                               (0.39)
Asheville Savings                                            (0.29)
Mutual Community Savings                                     (0.26)
Shelby Savings                                               (0.14)
Hertford Savings                                             (0.05)
Mount Giliad S&L                                             (0.04)

Best return on equity

NationsBank                                                  17.95
Wachovia                                                     17.62
BB&T                                                         17.21
Yadkin Valley Bank & Trust                                   17.15
First Union                                                  16.41
Bank of Granite                                              16.29
Citizens                                                     16.00
First Charter                                                15.71
Fidelity Bancshares                                          15.71
CCB Financial                                                15.67
The Community Bank                                           15.66
Centura Banks                                                15.02
Carolina First Bancshares                                    14.43
FNB                                                          13.97
First Bancorp                                                13.63

Worst return on equity

Essex Savings                                               (44.97)
First Gaston                                                (13.15)
Cooperative Bankshares                                      (11.40)
Gibsonville Community Savings                                (7.86)
First Commerce                                               (6.25)
Surrey Bank & Trust                                          (5.30)
First Savings Financial                                      (3.88)
Asheville Savings                                            (3.27)
Southern Community B&T                                       (2.83)
Mutual Community Savings                                     (2.29)
Catawba Valley                                               (1.33)
Carolina Savings                                             (1.14)
Shelby Savings                                               (1.06)
Hertford Savings                                             (0.53)
Mount Giliad S&L                                             (0.24)

Best efficiency ratio

Belmont Federal S&L                                           0.12
Avery County                                                  0.25
Bank of Granite                                               0.32
Blue Ridge Savings                                            0.45
Yadkin Valley Bank & Trust                                    0.46
Industrial                                                    0.49
First National                                                0.50
First Savings Bancorp                                         0.50
Bank of Mecklenburg                                           0.51
First Federal S&L                                             0.52
High Point Bank                                               0.53
Stone Street Bancorp                                          0.54
The Community Bank                                            0.55
CCB Financial                                                 0.57
Home Federal S&L                                              0.57

Worst efficiency ratio

Southern Community B&T                                        3.94
Carolina Savings                                              2.87
First Commerce                                                2.03
Surrey Bank & Trust                                           1.90
First Gaston                                                  1.61
Essex Savings                                                 1.53
First Savings Financial                                       1.27
Cooperative Bankshares                                        1.26
Gibsonville Community Savings                                 1.20
Mount Giliad S&L                                              1.03
Mutual Community Savings                                      1.00
Shelby Savings                                                0.99
Anson Savings                                                 0.96
Citizens Savings                                              0.94
Piedmont Bancorp                                              0.94

Net income (in millions)

NationsBank                                              $2,375.00
First Union                                               1,499.00
Wachovia                                                    644.56
BB&T                                                        284.00
CCB Financial                                                70.32
Centura Banks                                                68.15
First Citizens BancShares                                    65.47
Bank of Granite                                              12.70
Triangle Bancorp                                             11.30
First Charter                                                 8.85
Home Federal S&L                                              6.80
Fidelity Bancshares                                           6.56
LSB Bancshares                                                5.84
Piedmont Federal S&L                                          5.52
High Point Bank

Assets (in millions)

NationsBank                                            $185,794.0
First Union                                             140,127.0
Wachovia                                                 46,904.5
BB&T                                                     21,247.0
First Citizens BancShares                                 8,055.6
Centura Banks                                             6,294.0
CCB Financial                                             5,384.1
SouthTrust                                                1,187.9
Triangle Bancorp                                            971.1
Home Federal S&L                                            826.1
Piedmont Federal S&L                                        665.8
First Charter                                               546.9
Southern Bancshares                                         540.8
Fidelity Bancshares                                         534.5
Bank of Granite                                             487.5

Deposits (in millions)

NationsBank                                            $106,498.0
First Union                                              94,815.0
Wachovia                                                 27,250.1
BB&T                                                     14,953.9
First Citizens BancShares                                 6,954.0
Centura Banks                                             4,733.1
CCB Financial                                             4,589.5
Triangle Bancorp                                            847.8
SouthTrust                                                  744.4
Piedmont Federal S&L                                        546.9
Southern Bancshares                                         480.6
Fidelity Bancshares                                         479.2
First Charter                                               455.2
Home Federal S&L                                            445.5
Bank of Granite                                             397.7