Florida's regional banks are firing salvos of deposit and loan discounts that community bankers there say hit them where it counts: small- business customers and traditional deposit accounts.

"They've been much more aggressive than they've ever been," said Gary L. Tice, chief executive of Southwest Banks Inc., a $313 million-asset holding company in Naples. "They've become much more focused on small business customers . . . absolutely."

A core group of community banks has traditionally offered the highest deposit rates - if not the lowest loan rates - in the savings-rich state, but some of the large, multistate banks are supplanting them.

SunTrust Banks Inc.'s Florida subsidiary, with $22 billion of assets, escalated the rate war earlier this year by offering a 6.5% savings rate for a limited period. The average savings rate in the state hovers in the 2% range.

Joining the fray, NationsBank Florida responded with competitive rates on one-year certificates of deposit last month. The Tampa-based subsidiary of the Charlotte, N.C., giant also began appealing more to small-business customers with 15-year loans at fixed rates below prime, available on a selective basis.

"Yes, I would imagine that the community banks are feeling the sting a bit more now from the larger banks," said Katie Scanlan, spokeswoman for NationsBank. "Small-business lending is a profitable margin for us."

A soft loan market is the primary explanation for the revamped small- business efforts by the big banks, analysts said. Plus, with few large businesses in Florida, if a bank wants to expand its commercial lending, small businesses cannot be avoided, they said.

Some community banks - primarily in the southern and western parts of the state - are doing their best to match the rates. A number are even offering deposit rates above 5%. As of Sept. 30, four Miami community banks had rates in the 5.5% to 6% range, according to data from Sheshunoff Information Services.

Cape Coral National Bank, a $65 million-asset bank that opened about two years ago, is offering a 4.75% rate on deposits, which is actually a bit lower than what it offered six months ago.

"Call it lean and mean," said chief executive David W. Gomer. "We don't have a multistory building or a lot of overhead, so we can be pretty aggressive. It's a competitive market, and it's probably good for the economy. It doesn't concern us what the big banks are doing."

But other community bankers and analysts said that in part because of their comparatively high transaction costs, small banks can only lose in a rate war with large banks. To hold onto their customers, analysts said, community banks have to stress their one clear advantage: customer service.

"They simply cannot match these rates," said Richard X. Bove, analyst with Raymond James & Associates in Tampa.

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