Regions Financial Corp.'s recent decision to enter the Atlanta market illustrates the allure Georgia holds for banks from slower-growth Alabama.

The plan by Birmingham-based Regions also underscores the fact that the attractive Atlanta area now offers only niche opportunities for acquirers.

Regions said it had agreed to acquire Enterprise National Bank, which has $51 million of assets. This would be the third entry by an Alabama- based depository institution into the Atlanta market.

The transaction's terms were not disclosed, and the deal is subject to due diligence and the execution of a definitive agreement. But sources close to the situation estimated the price at about $9 million.

SouthTrust Corp., also based in Birmingham, led the way into the Atlanta market in 1989, buying a community bank in the northern suburb of Roswell. SouthTrust has since built its Peach State assets to $3.9 billion, mostly in Atlanta.

Amsouth Bancorp of Birmingham bought a community bank in Rome, in the northwest corner of Georgia, in December 1993 and expanded to Calhoun and Oglethorpe last year. But Amsouth has clearly stated it has no plan to venture into Atlanta any time soon.

The most recent move by an Alabama bank into Atlanta came in March when Montgomery-based Colonial BancGroup bought a $198 million-asset thrift in Dunwoody, the affluent north Atlanta suburb that is also home to Enterprise.

Except for Amsouth, which wanted to stay close to its existing markets in Tennessee and Alabama, the Alabama banks were lured into Georgia by Atlanta's soaring growth rate.

"If you want to expand your business, you need to be in a growth market, and if you look around the Southeast, Atlanta is hard to beat," said Thomas H. Coley, chairman of SouthTrust of Georgia.

By getting in early and embarking upon an aggressive acquisition program, SouthTrust has been able to build a sizable presence in Atlanta. It now operates 80 branches in the metropolitan area.

But that kind of expansion is out of reach for Regions or Colonial due to the lack of sizable targets. The largest community bank left around Atlanta is Decatur-based Fidelity National, which has $441 million of assets. The others are much smaller.

But Regions doesn't mind, since it intends to build a retail and small- business-oriented community bank in suburban Atlanta, rather than a metrowide branch network, according to executive vice president and comptroller Robert P. Houston.

"We don't have any ambition to go to downtown Atlanta and compete in the commercial business with the big Atlanta banks," Mr. Houston said.

Morgan Keegan analyst John Moore said the $13.5 billion-asset Regions has employed a community banking strategy in other states to earn high margins while avoiding the cutthroat competition endured by larger banks in the credit card and commercial lending markets.

"Over the next few years, you're going to see the banks that are not in the superregional category find more and more niches where they can go in and compete well and have less competition," said Mr. Moore, who is based in Memphis.

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