First Pennsylvania Corp

CoreStates Financial Corp. and First Pennsylvania Corp. today announced a $730-million merger agreement that will create a leading mid-Atlantic banking organization with nearly $23 billion in assets. Announcement of the tax-free $18.75-a-share deal, approved this morning by First Pennsylvania's board, followed a weekend during which the battle for control of First Pennsylvania intensified. On Saturday, Meridian Bancorp Inc.

CoreStates Financial Corp. and First Pennsylvania Corp. agreed Monday to a $730-million merger that rival Meridian Bancorp Inc. said was less than its own bid for First Pennsylvania. The tax-free, $18.75-a-share stock deal also ended an earlier agreement for First Pennsylvania to be acquired next spring by Marine Midland Banks Inc., the New York-based unit of Hongkong & Shanghai Banking Corp. of Hong Kong.

First Pennsylvania Corp. said Wednesday that it had reacquired the last of some 20 million stock warrants once held by the federal government, effectively completing a $1.5-billion rescue plan for what an analyst said was a new, "leaner and meaner" First Pennsylvania Bank. George Zimmermann, regional director of research for Gruntal & Co. here, said the nation's oldest commercial bank was the first to enter and complete a federally guaranteed rescue program.

Marine Midland Bank announced Tuesday that it plans to buy First Pennsylvania Corp. for about $585 million in what is believed to be the largest interstate banking merger so far. Marine Midland is the 16th-largest U.S. bank holding company, and First Pennsylvania is the parent of Pennsylvania's third-largest bank, First Pennsylvania Bank. The merger is expected to take place within a year after receiving approval from regulators and First Pennsylvania shareholders.

The prospective marriage of Manufacturers Hanover Corp. and Chemical Banking Corp. is a watershed event that could trigger a wave of mergers in the next three years and test the long-touted theory by banking experts that combining big institutions is needed to revive the nation's ailing banking system. No sooner was the announcement made Monday than Wall Street was abuzz with rumors of who the next merger candidates might be. The talk centered mostly on money center rival Chase Manhattan Corp.