But Jacqueline Reeves, managing director of Putnam Lovell in Boca Raton, Fla., said in a telephone interview Wednesday, “In the beginning you couldn’t find an analyst who thought it was a good deal. The old economists just thought it was awful, but the only reason was because it’s just in vogue to be negative on any kind of bank transaction.”

Stock prices reflected that, dropping to a low of $39, according to David Jordan, vice chairman of the CCB board of directors.

“The analysts spanked us,” CCB spokeswoman Eileen Sarro said.

Since then stock prices have ranged between $39 and $46.50, Jordan said, although they remain off about the same as other banks. At Friday’s close, CCB stock stood at $41.

Reeves said Putnam Lovell is “very excited” that the merger has been approved. “We had one of the few firms that followed both companies so we have a different perspective,”she said, “so when we saw the two companies come together we were very excited. Two very good franchises together make an even better franchise.”

At least six shareholders don’t see it that way, including Miles Smith and Joe Rutledge of Salisbury. Smith is former chairman and Rutledge former president of Security Bank, which has since become part of CCB Financial Corp.

The group has hired a lawyer and sent a letter to the shareholders of CCB asking them to vote no when the vote comes up June 29. A majority of shareholders of both CCB and National Commerce must approve the deal. If they do, Sarro said the merger would be closed formally by mid-July or early August.

According to their three-page letter, the six shareholders own more than a million shares of CCB stock and have more than 100 years of experience in banking investment and securities. The bank has 38.8 million outstanding shares. The protesting shareholders own about 2.5 percent of that.

The letter reiterates objections Smith has been raising since the merger was proposed. It lists nine reasons why the six men think the merger is not a good deal for CCB shareholders. One of their objections is that top executives of the two banks will receive cash payouts of $38.6 million as well as stock options and new contracts after the merger. Of that, $12.6 million goes to CCB officers and $26 million goes to National Commerce officers.

Jordan said in a letter to the Post editor recently that almost half of the $12.6 million is excise tax and acceleration of long-term incentives that benefits a broad group of employees.

In a telephone interview from where he is vacationing on Pawley’s Island, Jordan said, “In spite of differences of opinion on the compensation packages, I still think and the board of directors thinks that the merger is in the best interests of CCB and the shareholders long term. What comes from the analysts’ community just reinforces what I think and what the directors think.”

Institutional Shareholder Services, an independent institutional stockholder advisory firm, endorsed the proposed combination of the two companies after the Federal Reserve approved it, saying that based on the “merger of equals” structure of the transaction and the ways the two companies will fit together, the merger agreement “warrants shareholder support.”

Earlier this month, CCB Chief Executive Officer Ernie Roessler, along with spokeswoman Sarro and Chief Financial Officer Sheldon Fox, spoke with a Post reporter before a presentation about the merger at a conference sponsored by Wachovia Securities in Charlotte.

The CCB officials repeated many of the responses they have been making since Smith and some other shareholders first protested the merger. Roessler said the boards of National Commerce and CCB approved incentives to keep the people who have brought both organizations to where they are today. Sarro called it “doing what it takes to keep the star quarterbacks.” Cash payments of $12.6 million to CCB executives amount to less than 35 cents per CCB share and less than 1 percent of the deal value, they said, and analysts are forecasting growth of more than 20 percent in earnings per share in 2001 because of the merger.

Sarro said Wachtell, Lipton, Rosen &Katz, a New York firm that has worked with most of the major bank mergers, worked with the CCB board and advised that the compensation packages are “reasonable in amount and comparable to amounts in similar banking transactions.”

John Moore, senior vice president for bank analysis at Wachovia Securities, said that the cost of the compensation to shareholders needed to be “put in perspective” and would amount to a small percent per share.

Laney Orr, managing director of the Orr Group in Winston-Salem, said that in acquisitions, the acquirers “do what you gotta do to get the deal done.”

The six protesting stockholders also object to locating corporate headquarters of the combined company in Memphis, Tenn., where National Commerce is already headquartered.

Roessler repeated that CCB will keep its name and identity as a North Carolina bank and that he and his wife will continue to maintain a residence in North Carolina, as well as a new home in Memphis.

The dissidents’ letter also says that although the transaction has been billed “a merger of equals,” it isn’t really equal, because CCB shareholders will own 47 percent of the combined company while National Commerce will have 53 percent. The opponents say CCB should have looked for other bidders.

Roessler repeated what he told shareholders at the April 18 meeting. National Commerce and CCB don’t have much overlap in markets, which means a merger will have little effect on jobs or branch consolidations but, instead, broadens territories.

Laying off as few employees as possible was a major consideration, Roessler said. A written statement from his office explains that under the proposed merger, CCB employees fall into three situations:

• Most employees will continue to work in the same location with little, if any, change in their responsibilities. In a few cases, responsibilities stay the same but the job is bigger because of the merger.
• Some positions will be eliminated. “We will work hard to place these employees in other CCB positions,” the statement says and if not successful, provide job-placement assistance. Employees who have been there more than six months will receive generous severance packages.
• In the third case, some employees’ positions will change significantly or require them to relocate. This applies mainly to executives. “In this case, the individuals are being paid a retention bonus instead of allowing them to leave and receive a severance payment. The cost to the shareholders is the same,” according to Roessler’s statement.

“If Ernie Roessler were to elect to leave, he would receive a somewhat higher cash payment than he is to receive by moving to Memphis and becoming CEO of NCBC. And NCBC would have to offer a package of restricted stock and options to attract someone else to become CEO.

Wachovia Securities’ Moore said, “A bank has a legal responsibility to its community. Employees can definitely be a consideration. Layoff is a consideration that one can use in picking a merger partner. The other one the banks can use is community service and disruption to the community.”

As for shareholder value, Moore said the extent to which the companies complement each other and do not overlap means they “don’t have to go through a lot of expense cuts.”

To some degree the issue is balancing responsibility to the community with responsibility to employees and responsibility to shareholders while still finding ways to remain competitive and grow. Moore said. “If I am returning 20 percent and if I merge with somebody earning only 15 percent, I have forever hurt my shareholders. But you have to find new capital, new blood, new ways to go.”

The dilemma a high performance bank faces, Moore said, is to get beyond the next plateau. “CCB and NCBC see this as a way to pool their resources.”

He has rated the stock as a long-term buy. “Both firms have had fairly credible investment bankers opine as to the fairness of this merger from both sides,” he said. “These are both high performing companies that earn materially more than most banks do on their equity base, yet are trading at near average multiples. “In my opinion there is some value here.”

Orr, the Winston-Salem analyst, said, “A merger of equals is purely about creating shareholder value. On paper the transaction makes a lot of sense. From outside looking in, it is a solid merger.”

Other mergers would have hurt many more CCB employees, Orr said. “It really depends on the appetite of the board. It is very apparent to me that Ernie and the board were trying to do what is best for the employees.”

Reeves, the Putnam Lovell analyst, put a similar spin on it. “CCB and Ernie did a fantastic job of trying to improve productivity and profitability. The complementary aspects of each franchise and their business lines should prove out well positioned to grow.”

On the opposing side, Robin Hinson, the Charlotte lawyer the shareholders trying to stop the merger have hired, said, “There’s a very intelligent, experienced group of people who feel this is not a good deal for stockholders.

He said he had received a letter from a “prominent stockholder in Durham” who tried to call CCB headquarters in Durham to find out about voting his shares and “got a complete runaround.”Hinson said it appeared the company is making it hard for people to change their votes. “I know one other person to whom it has happened,” he said.

According to Hinson, the group is still considering what action they will take after the vote, including litigation. “We don’t really know at this point.”

Analysts Moore and Orr agreed the dissenters probably can’t stop the merger now. “It is not unusual to have some unhappy shareholders at this late date,” Moore said. “I do not recall any such shareholders groups ever succeeding. It’s relatively low odds.”