A Baltimore commercial bank and a thrift in Wilmington, Del., are trying to stave off small-business competition from First Union Corp.

The Charlotte, N.C.-based juggernaut encroached on the territory of Baltimore-based Provident Bankshares by acquiring Signet Banking Corp. of Richmond, Va., last year.

Provident, which has $4 billion of assets, is retaliating with an advertising campaign and an offer to discount small-business checking accounts and credit lines.

Meanwhile, WSFS Financial Corp., a $1.3 billion-asset thrift, is feeling the heat from First Union's deal to buy Philadelphia-based CoreStates Financial Corp., which has more than a dozen branches in the Wilmington area. WSFS has started its own advertising blitz, claiming it serves local businesses ignored by larger banks.

The two promotional efforts are further signs that smaller institutions see profits in the small-business market at a time of rapid consolidation in the banking industry.

"We try to sell the fact that we are a local bank with roots in Baltimore," said John Goedeke, Provident's vice president of commercial services.

In newspaper and radio ads, Provident is using the slogan "We're a local business. You're a local business. Let's do business."

As part of its two-month discount offer, Provident said it would waive closing costs and require borrowers to pay interest only on the first three months of small-business loans. The bank wants to increase its small- business checking accounts and loan applications by 50% this year, Mr. Goedeke said.

Provident has also promised to make loan decisions in 48 hours and charge interest rates 0.25% lower for businesses willing to have loan repayments automatically deducted from their checking accounts.

"With the regionals and superregionals, their decisions aren't made in our market," said Ellen Fish, Provident's vice president for business banking. "We have the advantage that our decisions are made locally."

WSFS Financial is also touting fast decision-making and local loan approval. In addition, the thrift is promoting credit lines, equipment financing, and on-line banking for small businesses.

One of its newspaper advertisements reads, "WSFS opened its doors in 1832 to take care of people big banks ignored. Today, that includes local businesses."

Karl Johnston, WSFS executive vice president and chief lending officer, joined the thrift last June from CoreStates, where he was senior vice president for the regional middle-market division.

Mr. Johnston hired 10 small-business relationship managers from other commercial banks, expanded the thrift's small-business product offerings, and now wants to attract customers away from his former employer.

"I saw a great opportunity to come here and get this institution focused on small businesses that the larger institutions, particularly First Union and CoreStates, were ignoring," he said.

Mr. Johnston said he hopes to post a 25% gain in small-business accounts during each of the next three years. He said the thrift can compete with the superregionals for small-business customers by charging lower fees and using trained lenders.

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