Two of the nation's biggest regional banks, NCNB Corp. of Charlotte, N.C., and C&S/Sovran Corp. of Atlanta and Norfolk yesterday announced plans to combine, creating the first "mega-regional" bank with 1,900 offices in a network stretching from Baltimore to Key West, Fla., to El Paso.

To be known as NationsBank, the merged institution would be headquartered in Charlotte and would be the nation's largest bank based outside of New York City. With assets of $118 billion as of July 1, it would rank third behind Citibank and Chemical Bank, after Chemical merges with Manufacturers Hanover later this year.

The new NationsBank would be a major player in the Washington market, where Sovran owns what were formerly D.C. National Bank, Suburban Trust Co. of Maryland, Virginia National Bank and First & Merchants Bank.

The merger would create "a bank with a southern accent and a truly national reach," said NCNB Chairman Hugh McColl Jr., who initiated the merger talks and would run the bank as chief executive.

The announcement of the merger came only a week after Chemical and Manufacturers decided to join forces, and it provided additional evidence of how rapidly the U.S. banking system is changing.

U.S. banks are suffering huge losses from the collapse of the nation's commercial real estate market and are facing brutal competition ranging from credit card companies to foreign banks. As a result, U.S. banks are in the midst of a massive consolidation that will leave the nation with fewer banks, branches and bank employees.

The two recent merger proposals illustrate the different strategies being pursued by banks with different goals, banking experts said.

Chemical and Manufacturers Hanover concentrate on serving large business customers in New York City; merging would allow them to eliminate more than 6,000 employees and 100 branches and to be even bigger players in that market, the experts said.

NCNB and C&S/Sovran are more consumer-oriented banks with little overlap in their territories; joining forces would give them a much broader geographic market as well as the size necessary to be highly efficient, analysts said.

NCNB first approached C&S about a merger two years ago, but it had been rebuffed -- a decision that C&S/Sovran Chairman Bennett Brown said yesterday was a mistake but "correctable." C&S then merged with Sovran, a move that many experts also regard as a mistake because the Washington real estate market crashed, leaving Sovran with more than $1 billion in bad loans.

Under the names North Carolina National Bank, NCNB Texas, Citizens and Southern and Sovran, the two bank companies operate in nine states with about one-quarter of the nation's population. The combined bank would be the biggest in five states -- North Carolina, South Carolina and Texas, where NCNB is dominant; Georgia, where C&S is No. 1; and Virginia, where Sovran is the biggest. It would be second in market share in Florida and third in Maryland and Tennessee.

"They say they're the premier retail banking franchise in the United States. I think you have to agree with that," said Guy W. Ford, vice president and banking specialist for the Richmond investment firm Scott and Stringfellow Investment Corp.

Another Virginia banking expert, Tony Davis of Wheat First Securities Inc. in Richmond, said the merger with C&S/Sovran is "the crowning jewel in McColl's drive to create the banking franchise he has long desired."

The banks plan to merge later this year by swapping stock valued at about $4.3 billion. Each share of C&S/Sovran would be traded for 0.84 of a share of NCNB stock. Brown would become chairman of the board of the new company and McColl would be president and chief executive.

The merger would require the approval of the Federal Reserve Board and must be reviewed by the Department of Justice for antitrust consideration.

Historically, the U.S. banking system has consisted of thousands of small community banks, a number of medium-sized banks in big cities around the country and a handful of giants in New York City.

The past decade has seen the rise of a new kind of banks, as institutions went from serving metropolitan areas to serving regions and then evolved into "super-regionals" as states repealed their laws prohibiting interstate banking.

NCNB and C&S/Sovran are already "super-regionals" and by merging would move to the next stage, creating a "mega-regional" bank, said Sandra Flanagan a banking analyst for Alex. Brown & Co. in Baltimore.

"It creates a formidable franchise," said Flanagan. In addition to its geographic reach, she said the new NationsBank would be one of the country's biggest credit card issuers and one of the biggest in mortgage servicing -- the business of collecting monthly payments on home loans. It also has a huge trust department that manages investments for wealthy individuals and is big in the business of providing credit for businesses.

Experts said NCNB also is highly regarded in another business that would be crucial to the success of the merger -- handling bad real estate loans. When it acquired two failed Texas banks from the Federal Deposit Insurance Corp., NCNB took on $8 billion in bad real estate investments and has succeeded in disposing of more than half of it, said Frank Anderson, a banking analyst for Stephens Inc. in Little Rock, Ark.

"They clearly have the capability to manage troubled real estate, at least to the extent that any bank can do it," said Anderson. NationsBank would start with about $1.25 billion in bad real estate loans as of July 1, most of them loans made by Sovran's banks in the Washington area.

"They'll be more aggressively attacking the problem," he said. "They believe that the sooner you attack it the better off you are."

A "SWAT team" of about 150 NCNB employees from Texas would be dispatched to the Washington area to help C&S/Sovran deal with the bad real estate, the banks said.

Officials of the two banks also disclosed that they plan to set aside at least an additional $600 million for possible losses on bad real estate loans by C&S/Sovran before the merger is completed. They told investment analysts the future real estate losses are expected to wipe out most of the profits C&S/Sovran will earn in the remainder of this year.

The banks said they hope to save $350 million in expenses over the next three years through the merger and plan to eliminate about 9,000 employees -- more than 10 percent of their total work force. Both banks announced an immediate hiring freeze.

After merging, the banks hope to raise $200 million to $400 million by selling stock. McColl would not specify when or how much the stock would cost but said the offering would be "not early and not cheap."

Staff writer Stephen Levine contributed to this report from Atlanta.