Executives of BOK Financial Corp. in Tulsa, Okla., were worried. Having just bought a community bank in the suburbs, they were afraid BOK would start getting a big-bank image that would scare off small-business borrowers.

The acquisition had a small-business resource center, which BOK might have moved to its plush 50-story office building downtown. Instead, the bigger bank moved its own small-business staff to the one-story building in the suburbs.

The tactic worked so well, say executives of $4.3 billion-asset BOK, that they've set up a similarly understated center in Oklahoma City.

That's just one of the approaches smaller regional banks based in the Southwest - from Utah to Louisiana - are using to withstand small-business loan competition from the dominant players, all of which are based in the Midwest and the East.

"We haven't abdicated that market to Banc One or Norwest," said Mark Lliteras, president of business banking for $13 billion-asset First Security Corp., which is based in Salt Lake City. "We've invested in the same kinds of small-business banking centers, as well as the one-to-one relationships with customers."

Banc One, Norwest Corp., Chase Manhattan's Texas Commerce Bank, NationsBank, and soon-to-be-acquired Boatmen's Bancshares are the top five bank lenders to small businesses in the Southwest, according to data from Sheshunoff Information Services.

But five scrappy survivors of the Southwest banking market - BOK , First Security, First Commerce Corp. and Hibernia in New Orleans, and Cullen/Frost in San Antonio - are fighting to hold on to their share of the small-business loans in their core urban markets.

"We're attacking it with a vengeance," said Gene Harris, executive vice president of BOK's Bank of Oklahoma.

BOK is the top small-business lender based in the Southwest, with $451 million of such loans. But to get an idea of what these smaller regionals are up against, compare its small-business portfolio with NationsBank's.

The North Carolina company has $611 million of small-business loans in the Southwest. Even so, it ranks last in the region among banks based elsewhere; Banc One is No. 1, with $1.1 billion.

The strategies of local banks like BOK could offer lessons for banks in other regions that are striving to compete with an expanding slew of national lenders.

Bankers in the Southwest view the market as highly fragmented, with plenty of competition from San Francisco-based Wells Fargo & Co., and nonbank lenders like Money Store Inc. and Merrill Lynch.

"Small business is the backbone of the Texas economy, and everyone wants that business," said Richard Chelli, senior vice president of Chase's Texas Commerce.

The superregionals were among the first to streamline their lending procedures and adopt credit scoring to speed the approval process.

Although superregionals have 20% of the $20.6 billion of small-business loans outstanding in the Southwest, the smaller regionals are holding on to a solid 9%.

The pattern is different in the Northeast, Southeast, and Midwest. The five top bank lenders to small businesses in each of these regions are based there, and collectively they hold 18% to 31% of their regional markets.

Part of the reason for the scenario in the Southwest is that the energy and real estate crises of the 1980s took a harsh toll. They weakened the banking industry and turned most big local institutions into casualties of consolidation.

In the last year, smaller regional banks have instituted credit scoring and centralized underwriting to lend more efficiently. But southwestern bankers say their true keys to survival and carving out a niche in small- business lending are developing a reputation for local decision-making and building customer relationships.

The $7 billion-asset First Commerce began credit scoring small- business loan applications six months ago, but decided to keep the lending authority with branch employees.

"Most of our competitors, when you walk into a branch for a small- business loan ... refer you somewhere else," said Jay Toups, First Commerce vice president and retail sales coordinator for the New Orleans- based bank.

"We're unique, because we have left our lending authority closer to the customer."

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