SAN FRANCISCO — Wachovia Corp., the nation's fourth-largest bank, is muscling into the West with a $24.2 billion deal to buy Golden West Financial Corp., a mom-and-pop shop that blossomed into a prized savings and loan.

The stock-and-cash acquisition initially valued Golden West at $25.5 billion, or $81.07 per share — 15 percent above the company's last price on the New York Stock Exchange before the takeover was announced late Sunday.

But the proposed sale price dropped as Wachovia's stock declined amid investor concerns about how the deal will affect the bank's future earnings. Wachovia shares fell $3.97, or 6.7 percent, to close at $55.42 on the New York Stock Exchange, where Golden West shares rose $4.39, or 6.2 percent, to finish at $74.90.

With the takeover, Charlotte, N.C.-based Wachovia would pick up a 285-branch network spanning 10 states that would fill a void in the company's operations. Wachovia especially wants to raise its profile in California, where Golden West holds $32 billion in deposits and operates 123 branches under the World Savings Bank brand.

Golden West earned $1.5 billion last year, primarily from making the adjustable rate mortgage loans that have been its bread and butter for decades.

The Oakland, Calif.-based company began to take shape 43 years ago when the husband-and-wife team of Herbert and Marion Sandler paid $4 million for a San Francisco Bay area savings and loan with just $34 million in assets and 25 employees.

Boasting $125 billion in assets and 11,600 employees today, Golden West now ranks as the nation's second-largest savings and loan behind Washington Mutual Co. The Sandlers, now in their mid-70s, have remained Golden West's co-chief executive officers in one of corporate America's unique partnerships.

In a report yesterday, CreditSights analyst David Hendler said the deal raises questions about whether a large bank like Wachovia will be able to retain the same touch that made Golden West such a success under the Sandlers, who have promised to remain on board as long as Wachovia Chairman Ken Thompson desires.