NationsBank Corp., seeking to broaden its presence at retail stores and other nonbranch locations, is planning a sweeping expansion of its automated teller machine network.

The Charlotte, N.C.-based banking giant plans to install some 1,400 new machines by yearend, increasing its network by nearly 60%, said Marc Ricci, a senior vice president at the company. In addition, he said, the company is markedly upgrading all of its existing machines.

More than half of the new machines are to be placed in nonbranch locations, underscoring a persistent industrywide trend. The top 50 banks in ATMs increased their off-premises ATMs by 32% in the 12 months through last June, compared with 10% growth at branches, according to an American Banker survey.

Banks are exploring alternative locations for a simple reason: consumers are visiting branches less frequently.

"Our primary strategy is to provide convenient and reliable service, while aggressively expanding our network," said Mr. Ricci, who oversees customer access and distribution for NationsBank.

NationsBank is the nation's third-largest operator of ATM machines. It trails far behind BankAmerica Corp., which had 6,400 at the end of 1995, and Electronic Data Systems, which had 5,500 at that time. NationsBank, which had 2,205 ATMs at the end of 1995, currently has about 2,400.

The company, however, is far ahead of its closest general competitors in banking. First Union Corp., also based in Charlotte, had 1,300 ATMs at the end of 1995, and Winston-Salem, N.C.-based Wachovia Corp. had only 699 ATMs in its domain.

During the past 12 months, NationsBank has signed contracts with several prominent retailers to place ATMs on their premises.

Last September, in one of the largest ATM installation deals ever, it signed a deal to place 661 machines in Stop-N-Go convenience stores in Texas.

Other contracts garnered machines at Albertson's; Bi-Lo markets; Exxon Corp.; FasMart; Golden Gallon, a Tennessee-based convenience store; Hyde Park convenience stores in Florida; RaceTrack, a Florida gasoline marketer; Royal Farms markets in the Mid-Atlantic states; Walgreens; Winn Dixie; and on the University of Texas campus.

Meanwhile, NationsBank is actively upgrading its existing machines. To date, 1,600 existing ATMs have been improved or replaced. The company purchases its ATMs from NCR Corp., an AT&T subsidiary in Dayton, Ohio, and Diebold Inc. of Canton, Ohio.

A standard operating platform to drive all of the machines should be completed by year end as well, Mr. Ricci said. Acquisitions of BankSouth and smaller banks in Florida have added ATMs to NationsBank's network this year, and a single platform will provide smooth transaction flow, he said.

The bank, which has five million ATM cardholders, hopes the added convenience translates into market share. Observers generally support the effort.

"It makes more sense than ever to do exactly what NationsBank is doing," said Linda Zitelli, director of research, Carmody & Bloom Inc., Woodcliff Lake, N.J. "In terms of gaining market share, protecting what they have and adding revenue potential - it's almost a no-brainer."

The bank denies that profits are an explicit motive in deploying off- site ATMs. But Richard T. Robida, executive vice president, Speer & Associates, an Atlanta-based consulting firm, said, "They can call it customer service, but they're looking purely for transactions they're going to get paid for."

He added, "They certainly don't miss any opportunity to surcharge in areas where the market is moving in that direction."

Sheryl S. Harrison, fixed income analyst for PNC Asset Management in Philadelphia, said that NationsBank puts ATMs in the right places. "Clearly the financial results show their execution is quite good."

The company is also in the midst of revamping its branch locations and building automated banking centers and supermarket branches, further lowering operating expenses.

Mr. Ricci said branches of the not-so-distant future will have areas with advanced-function ATMs for cash withdrawal, deposits, check imaging, and cash back from check deposits. Phone service will connect customers to a bank representative, and sales people could be available to provide mortgages, home equity loans, and investments. Tellers might be on hand, but fewer than at a traditional branch.

"The move from one-size-fits-all (branches) to a number of convenience centers is based on being where people are already going," said Mr. Ricci. "In the past, we built it and they came - now we build it where they're already coming" like malls and corporate campuses.

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