Birmingham's four largest local banks are all over the map as they expand their small-business banking divisions.

The city's big banks all are enlarging those divisions and expanding to different markets outside their home base.

Birmingham, home to Amsouth Bancorp., SouthTrust Corp., Regions Financial Corp., and Compass Bancshares, is second only to Charlotte, N.C., in the Southeast banking landscape.

"We've got some really tough competitors here," said Cris Stone, Regions executive vice president and corporate banking manager.

While the North Carolina-based regional banks gobbled midsize banks in Atlanta and elsewhere in the South, Birmingham's four banks remained largely intact. They were able to cling to their existing small-business customers and battle for budding local entrepreneurs.

"You have a lot of people calling on small business in Birmingham," said Byrd Williams, Compass' director of retail banking.

"We're going after SouthTrust's best customers, just like they are going after ours," said William Horton, Amsouth senior vice president for business banking.

To ease this local cannibalization, Amsouth has its eye on Florida, SouthTrust is interested in Atlanta, Compass is expanding in Texas, and Regions sees strength in the middle Tennessee market around Nashville.

The Birmingham banks are acquiring smaller banks in nearby states and setting their strategy for the future. All four say small business will be a key part of their growth.

The $12-billion asset Compass is targeting other markets rife with competition - Houston, Dallas, and San Antonio. Compass entered Texas in 1987 and grew though a string of acquisitions.

Compass recently doubled its small-business staff in Dallas and plans to focus on Small Business Administration lending because one of the banks it acquired had expertise in that area.

Mr. Williams said the bank is in the midst of a small-business study to devise individual strategies for each of the bank's metropolitan markets.

Butting heads with much bigger competitors, SouthTrust plans to do battle with the North Carolina-based regional giants in Atlanta and Florida.

The $20-billion asset SouthTrust recently instituted a two-day turnaround time for small-business loans, centralized underwriting offices, and reduced its documentation requirements.

While the Atlanta area is experiencing rapid business growth largely fueled by this summer's Olympics, the banking market is dominated by NationsBank Corp., First Union Corp., and Wachovia Corp.

"We're winning our fair share," said Marc Angle Jr. senior vice president of the business banking department at SouthTrust Bank of Birmingham.

Regions Financial Corp. just unveiled a new series of banking products in its Alabama and Georgia offices tailored to small, owner-operated businesses .

The $8-billion asset bank plans to offer business checking accounts, credit cards, credit lines, sweep accounts, trust services, and computer banking in Tennessee, Louisiana, and Florida by March.

Tom Hazuda, Regions' small-business product manager, calls the offerings the "Cadillac of small-business products" and predicts the banks' small- business loans will increase 5% in the next year.

Regions wants to forge 30-year relationships with family-owned businesses, such as a small-town gutter-cleaning service, Mr. Stone said.

"When we help them manage their money, they can spend more time fixing the gutters and not worrying about their finances," Mr. Stone said.

Amsouth, which is expanding in Northern Florida and along the Panhandle, began looking at small businesses as a distinct market segment more than two years ago.

"We have a small presence there in terms of branches, but we have done a good job of marketing to this specific niche," Mr. Horton said.

Amsouth, which has $18 billion in assets, has 82 small-business bankers in its 273-branch network who cultivate prospects and develop a referral network.

Amsouth's small-business bankers and branch staff are paid by commission to encourage them to bring in new accounts and sell additional products to existing customers.

The bank increased the amount it spends marketing small-business services more than fivefold in the last year and generated double-digit growth in small-business accounts.

Birmingham is roughly at the center of the 14-state stretch from Virginia to Texas that generated more than 45% of the national job growth in the last five years, according to Al Neimi, dean of the School of Business at the University of Alabama-Birmingham.

Yet despite the richness of the region, some say reaching out to new markets can be risky. The best way for banks to increase business in competitive markets like Birmingham is by selling more products to existing customers, said Charles Wendel, president of Financial Institutions Consulting.

"The banks can only gain market share by gaining wallet share," Mr. Wendel said. "That comes from selling deeper to existing customers rather than selling wider in new areas."

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