TINY CENTERPOINT BANK has just opened its first branch, and it's all geared up for a turf fight with the giants.

Centerpoint, based in Bedford, N.H., has made small business lending its top priority since day one, which was back on May 30, 1990.

Since then, the de novo has grown rapidly; it now holds $54 million in assets. But its new branch in nearby Manchester -- strictly for small businesses -- is just a couple of blocks away from an office building that soon will house the New Hampshire operation of Shawmut National Corp.

But that doesn't worry Centerpoint's chairman and president, Philip M. Stone. For one thing, he has a technological innovation going for him. And, like most community bankers, he feels his knowledge of the community gives him an edge.

The high tech gimmick is new software, known as the MAC Icon System, for the bank's automatic teller machines. It will enable businessmen to, among other things, exchange coins for currency, deposit checks without using envelopes, pull daily transaction statements of up to 75 lines in length, and cash checks to the penny.

"We're the first bank in New England with this technology," says Mr. Stone, who has spent most of his professional life as a consultant to banks. Now, having started his own bank, he's about to mix it up with Shawmut and the state's other big players.

The new office has been set up in the lobby of City Hall Plaza, a gingerbread skyscraper built last year which happens to be New Hampshire's tallest building.

Across the street is the main office of $3.4 billion-asset First New Hampshire. The $963 million-asset Bank of New Hampshire also has a major downtown presence, as does $1.7 billion Fleet Bank New Hampshire. Shawmut will gain entry by taking over 37-branch, $1.7 billion New Dartmouth Bank.

Shawmut in April unveiled a small-business lending unit. Aimed at businesses with less than $2.5 million in sales, it features speedy servicing using simplified forms and procedures.

"That'll work for some of the market," says Mr. Stone, "but our main positioning will be personally working with the businessman, and a system to make turnaround time as fast as possible. We will have a lending structure for the larger loans, but our commercial lenders [in City Hall Plaza] are all very experienced, and we'll deliver answers as fast as possible."

As fast as Shawmut?

"That's impossible to say, but their approach is totally different than ours," Mr. Stone says of Shawmut's plan to distribute 40 specially trained "community business bankers" -- as the superregional puts it -- throughout its three-state branch network. "They're taking an overview approach."

Thus, Centerpoint isn't "frightened of them, or First N.H., which will be our main competitors."

Mr. Stone's efforts to attract small businesses seem to be working. "We have twice the demand deposits -- $12 million -- banks our size would normally have. That's because we deal with businesses, and we develop full relationships with them."

The Personal-Service Advantage

"It's the classic Walmart story," says Kevin Tynan, president of Tynan Associates, Chicago. "What do you do when Walmart moves in? Sam Walton said in his book that the best way to beat Walmart, or live with them as neighbors, is finding out what they don't offer.

"Where businesses have done that, they've survived. But you can't beat Walmart on price, or on clothes. And you can't beat Shawmut on price or sophistication or technology. But the Achilles' heel for any large bank is paperwork.

"Any large bank achieves economies through structure -- and they're locked into certain formalities. The small bank has an advantage with personal service, which allows them to delve into a customer's needs."

Frank J. Barkocy, managing director of Advest New York, says Mr. Stone and other community bankers trying to carve out a small business-lending niche have a solid shot at success as long as "they stick to their niche and their service areas. The danger is overreaching.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.