NationsBank Corp. chief executive officer Hugh L. McColl Jr. came to California on Friday to say there is more to his megamerger strategy than buying into the nation's most populous state.

Speaking to the California Bankers Association 32 days after he announced the $60 billion merger agreement with BankAmerica Corp., Mr. McColl touted the advantages of bigness, said the combined company would better serve its markets than either partner could separately, and rejected criticisms that Californians might lose out in the deal.

"I brought my company to California because I was convinced that building a nationwide banking franchise put our company in the best possible competitive position for the 21st century," Mr. McColl said.

He stressed the similarities between NationsBank and BankAmerica and said that as negotiations progressed "the only differences turned out to be advantages. We operate in different geographic areas, so our franchises will be complementary-not redundant."

Adding an element of diplomacy, he told his California hosts, "Let me say, we are pleased to be here."

Pointing out that BankAmerica founder A.P. Giannini was the first to envision a nationwide bank 75 years ago, Mr. McColl joked, "I was a bit put out to learn that it wasn't my idea."

Perhaps reassuring to community bankers in the audience of about 400, Mr. McColl said he expected thousands of small banks to survive as NationsBank, BankAmerica, and their peers pair off.

He estimated there will be four nationwide leaders-his company, First Union Corp., U.S. Bancorp, and one other. The fourth might be "Banc One in combination with somebody else (after its First Chicago NBD Corp. merger), but they better do that quickly," Mr. McColl said, drawing another laugh from the crowd.

Carl O. Schatz, a one-time BankAmerica officer and chairman of Encino (Calif.) State Bank, which has $30 million of assets, said Mr. McColl's appearance before the state bankers was "a necessity." He "must try to win the confidence and good will of the people out here and the people all over the BankAmerica organization."

Mr. Schatz said he agreed with most of what Mr. McColl had to say and was not concerned about the competitive effects of the merger on community banks. "I don't think (the new BankAmerica) will be able to provide the personal service that small banks can."

Mr. McColl would be chairman and chief executive officer of the post- merger BankAmerica Corp., which would have $572 billion of assets and a Charlotte, N.C., base. BankAmerica chairman David A. Coulter would be president, keeping his San Francisco office.

"The question for us was, 'Does it make sense to put these companies together now?" Mr. McColl said in his speech. "The answer to that question became clear to me when I looked closely at our two companies. The similarities are remarkable."

Both have sizable consumer and small-business operations covering large sections of the country, nationwide presences in credit cards and mortgage servicing, and strong middle-market, corporate lending, and capital markets groups, he said.

Their consumer banks would overlap in only two of 22 states-Texas and New Mexico.

The large scale would allow shareholders to benefit from a "highly efficient organization, a lean balance sheet, and a thoughtful long-term strategy for growth," Mr. McColl said. The bigger the company, the better able it would be to spread its marketing, administrative, and systems costs and to redeploy capital by securitizing assets off the balance sheet.

Also, a large organization is in a better position to diversify across business lines, geographies, and income sources to enhance stability.

"Information will be the most prized asset on the books," Mr. McColl said. "Information management systems will enable bankers to work with customers anywhere, any time."

Mr. McColl spent much of his talk making predictions about the banking industry's increasingly electronic future. Customers will demand to do electronically everything that can be done in a branch, he said, and banks will have to respond in kind.

Mr. McColl said the companies have similar philosophical foundations on the subject of territorial expansion, though NationsBank's was not quite as expansive as A.P. Giannini's.

NationsBank founder Addison Reese also dreamed of a bank that would not be hemmed in by geographical boundaries, Mr. McColl said. When Mr. Reese in the 1960s "wanted to build a North Carolina bank that stretched from the mountains to the sea, there was nothing to stop him."

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