NationsBank Corp.'s agreement to sell off two branches in Rome, Ga., exemplifies a trend: big banks retreating from smaller markets where they don't have dominant market share.
NationsBank's decision to sell the two branches in Rome (pop. 30,326) last week to Synovus Financial Corp. for an undisclosed sum follows First Union Corp.'s recent divestiture of two branches in Albany, Ga., and one each in Franklin, Va., and Courtland, Va.
NationsBank, which is based in Charlotte, is the dominant bank in metro Atlanta, but holds only sixth-ranked deposit share in Rome.
"Clearly, we were not a market leader and were not able to improve our market share over the years," said NationsBank spokesman Scott Scredon. "You make a decision to invest your resources in places where you can improve your position - and Rome was not one of those."
Synovus, on the other hand, was happy to pick up the two branches, $58.5 million of deposits, and $14.5 million of loans held by NationsBank. Thomas J. Prescott, Synovus executive vice president and treasurer, said Rome is a "pretty viable market on our radar screen."
The deal is set to close in the third quarter. With the acquisition of the NationsBank deposits, Synovus will improve its market share in Rome to 20% from 15%, maintaining its No. 3 ranking and gaining ground on No. 2 SunTrust Banks Inc. and No. 1 First Union, Mr. Prescott said.
Atlanta-based consultant T. Stephen Johnson said the heavily centralized operating style of NationsBank and First Union tends to be ineffective in smaller markets. NationsBank also recently sold branches in coastal South Carolina and middle Tennessee.
"While they do really well in the urban areas and with the bigger businesses, the small markets put them at a real disadvantage," Mr. Johnson said. "The little community banks are taking market share from them right and left."
Mr. Prescott said NationsBank's decision to abandon Rome meshed well with Synovus' desire to bolster its own share in existing markets. Columbus, Ga.-based Synovus has $8 billion of assets and owns 34 separately chartered community banks in Georgia, Alabama, South Carolina, and Florida.
In Rome, where it has $150 million of assets, Synovus operates under the name of Citizens First Bank.
