Wal-Mart Stores Inc.'s application in June for permission to buy a small Oklahoma thrift made many community bankers uneasy.

They worried that the retailing giant, which said it may use the thrift charter to build a branch network, could run them out of business, just as it has done to countless general stores, hardware stores, and drug stores.

But Wal-Mart has leased space to banks in its superstores, and the bankers in that program say they are not fretting about the possibility that they might be thrown out on the street. Indeed, they say they are going full steam ahead with plans to put more branches in the superstores.

"It is not something I am worried about," said Peter Montpelier, president and chief executive officer of Norway Savings Bank in Maine. Norway, with $345 million of assets, has one Wal-Mart branch and another on the way. "By the time they start looking at where to put branches, my hope is that we will be doing so well here, they will look elsewhere."

Wal-Mart applied to the Office of Thrift Supervision to buy Federal BankCentre of Broken Arrow, Okla.

Wal-Mart said in its application, which is still under review by the OTS, that it would like eventually to put branches of the $26 million-asset thrift in some of its stores.

Robert L. Epling, president of Community Bank, a $260 million institution in Homestead, Fla., said that he was concerned when he first heard of Wal-Mart's plan.

Only months before, he had negotiated a deal to open branches in 15 Florida superstores throughout Florida.

Mr. Epling said subsequent discussions with the retailer quieted his fears.

"They have given us their word that the thrift deal will not affect their dealings with us," he said. "I have that and a long-term lease. I don't know what else I could ask for as assurance."

Mr. Epling said his leases are in the "15- to 20-year range." Norway Savings has a five-year lease with three five-year options to renew, Mr. Montpelier said.

More than 200 banks have branches in Wal-Mart stores, in 450 of the chain's 600 superstores nationwide, company spokesman Mike Maher said. Wal-Mart would like to put FederalCentre branches in some of the other 150 stores, he said.

"Our goal is to constantly add new services to our stores, which is why we bring banks into them in the first place," he said.

"This thrift is a way to offer banking services in stores that no bank has chosen to occupy."

Wal-Mart said that it does not plan to open any branches until it has owned Federal for two years, and that even then it would move slowly. In the meantime, it is continuing to seek new bank tenants and has signed up 12 this month, Mr. Maher said.

William F. Frank, president and CEO of Rocky Mountain Bank in Chandler, Ariz., encouraged other community bankers to consider going into any Wal-Mart location they can.

"We will never find a more inexpensive way to reach out to such a large number of people, and we should be taking advantage of it," he said.

"This isn't a threat; it's a potential bonanza."

Rocky Mountain, with $91 million of assets, operates one Wal-Mart branch and has three others in the works.

The first has taken in $4.2 million of deposits in four months and has made $5.5 million of loans. Mr. Frank would not disclose the details of his leases but said they, too, are long-term.

Mr. Epling agreed that the opportunity with Wal-Mart was too good to pass up. He saw it as an inexpensive way to expand beyond Homestead -- which was devastated by Hurricane Andrew in 1992 -- and into more profitable markets.

Some contend that banks are playing with fire by teaming up with Wal-Mart, given the Bentonville, Ark., retailer's reputation for in wiping out its competition in other business lines.

"The downtown areas of small communities across America reflect the demise created by Wal-Mart stores," John R. Stipe, president of Forrest City (Ark.) Bank, wrote in a letter to the OTS.

They "now want to do to banks, thrifts, and to the communities the same as they did to the small retailers."

Mr. Frank of Rocky Mountain Bank disagreed, contending that Wal-Mart would not be working so closely with banks if it really intended to conquer them. He said Wal-Mart and the community banks are of common mind and have similar objectives.

"Wal-Mart has been successful by offering good prices, friendly people, and service," he said. "In that respect, there is a real parallel between them and community banks."

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