NationsBank Corp. has developed its own credit scoring system to help it target small businesses.

"We've already seen growth we can attribute to it," said William Couper, NationsBank's president for greater Baltimore and the business banking executive for NationsBank NA, its bank for the Carolinas and the Middle Atlantic states.

The Charlotte, N.C.-based banking company devised the credit scoring system - a tool for assessing loan risk using computer data bases - with loan data compiled from banks it has acquired.

Wells Fargo & Co., BankAmerica Corp., and Citicorp aggressively enlarged their small-business loan portfolios after they developed credit scoring systems.

As the first major Southeast bank to develop its own credit scoring system, NationsBank has a distinct advantage over competitors in the region.

"It gives them a capability the other players don't have, but that doesn't mean they will win," said Charles Wendell, president of New York- based Financial Institutions Consulting.

Mr. Couper said NationsBank is adjusting to the new system and wants to concentrate on serving small-business owners in its geographic market.

"We haven't been through the credit scoring cycle long enough that we feel we can go to Nebraska with the same model and come out alive," Mr. Couper said.

Already one of the largest lenders to small-business owners, the NationsBank branch network stretches from its home in North Carolina south to Florida and north to Maryland.

Still, competitors say NationsBank has not had a strong presence in small-business lending even in some areas where it has numerous branches, such as Macon, Ga., where it has eight.

"NationsBank has not been a player in this market," said Mark Stevens, senior vice president for First Macon Bank and Trust Co. in Macon. "That could change."

"There is a lot of small business here to get, and the NationsBanks and First Unions are realizing that they have been missing out," Mr. Stevens said.

NationsBank created credit centers in Richmond, Va., and St. Petersburg, Fla., and lending offices in the mid-Atlantic states, the Carolinas, Georgia, Florida, and Texas.

In contrast, NationsBank's hometown rival, First Union, uses a customized credit scoring system designed by Fair, Isaacs & Co. and has three centralized small-business lending offices.

Mr. Couper said NationsBank will use its retail presence as a springboard for a push into small-business banking that could shake up the competitive dynamic in the region.

"Small business is one of our principal growth areas for the rest of the century," Mr. Couper said.

Previously a jumble of acquired banks with different underwriting standards, NationsBank has centralized its small-business banking services and standardized its loan products.

"Historically, we would take something off the shelf that was designed for a large company like American Airlines," Mr. Couper said. "We would tell the small-business customer, 'It's too big for you, but if you really want it, we'll give it to you at a price you can't afford.'"

Now the bank has consolidated offerings designed specifically for small- business owners and wants to promote several products to each entrepreneur.

Ideally, NationsBank loan officers or branch staff will promote the bank's business loans, auto financing, and retirement planning, Mr. Couper said.

"The intent will be to migrate them up the food chain to expand the array of things we can do for them and give them a reason to consolidate, too," Mr. Couper said.

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