NationsBank looms large in size, competitiveness Critics say it ignores low-income areas

February 28, 1993|By David Conn | David Conn,Staff Writer

CHARLOTTE, N.C. -- From the 60th floor of the NationsBan Corp. tower, even on a cloudy day you can see forever. Maybe even to the boundaries of the corporate realm: north to Baltimore, south to Miami and west to El Paso, Texas.

The year-old tower rises above an otherwise small-town skyline, 22 stories higher than rival First Union Corp.'s headquarters a few blocks away, as NationsBank officials are pleased to note. And it reflects the NationsBank approach to business and life: Where other companies may make a splash, NationsBank creates a tidal wave.

The company runs more than 1,800 branches and employs more than 50,000 people. With $118 billion in assets as of Dec. 31 -- seven times more than MNC Financial Inc. -- NationsBank is the fourth-largest bank holding company in the nation and holds the No. 1 market position in five of the nine states where it operates.

Now it's coming to Baltimore in a big way.

This month, NationsBank announced it will buy MNC, the parent of Maryland National Bank and American Security Bank in Washington, for $1.36 billion, if MNC shareholders and the government agree.

Today, NationsBank holds third place in Maryland's banking market, with few branches in Baltimore. But if the merger is completed by September, as expected, a pen stroke will make NationsBank the biggest bank in town.

What Marylanders can expect first is an overwhelming promotional splash. When it acquired the $40 billion Atlanta-based C&S/Sovran Corp. in 1991, for instance, the former NCNB Corp. gave $40 million to Atlanta's 1996 Olympics organizing committee.

Baltimore's boards of directors, chambers of commerce and parent-teacher associations will find their former MNC colleagues joined by an army of polite, well-groomed bankers with mild Southern accents and a strong drive to succeed. That spirit is inspired by their headline-grabbing chairman, a South Carolina native and ex-Marine named Hugh L. McColl Jr., and cultivated through the ranks.

"I think there's a competitiveness among us that manifests itself as a will to win that is incredibly strong," says Kenneth D. Lewis, the Atlanta-based president of the company's General Bank, which serves retail customers and businesses with less than $100 million in annual revenues.

Mr. Lewis, 45, is widely recognized as the likely successor to the 57-year-old Mr. McColl, though the chairman says he won't retire any time soon.

In NationsBank's wake comes controversy. Community activists say the company ignores the needs of low-income, minority and rural areas.

Several Texas small businesses have sued the bank, charging that it unfairly revoked loans. And the Atlanta City Council, unimpressed by the Olympian largesse, has barred NationsBank from doing business with the city because of a controversial branch-closing in a poor neighborhood.

After acquiring C&S/Sovran, NationsBank announced plans to close the Stewart/Lakewood branch on the city's predominantly black Southside.

"What brought a lot of this on," says Southside Councilman Dozier Smith, who sponsored the resolutions that shut the bank out of the city's business, was "we tried to work with them, and they were claiming that their loan business was not enough to justify their being out there. They've never said they were losing money."

Even some stock analysts argue that NationsBank's profits come mainly through negotiating acquisitions and merging operations, rather than from running a bank. They say it's only a matter of time before the takeover express runs out of steam.

Mr. Lewis disagrees: "I would say that NationsBank is an entity with the muscle of a large company, but with the personality of a small company. We have a fundamental abiding principle that we can never lose that focus on the community."

He insists that NationsBank's business and consumer lending officers have more lending authority than most of their competitors.

And he says that the company's geographic diversity assures that economic problems in one region won't cause a cutoff of charitable donations, as Baltimore has faced with MNC and other local companies.

At the height of its power, MNC and its chairman, Alan P. Hoblitzell Jr., were unsurpassed in charitable and cultural contributions. The company donated more than $2 million a year, not counting special projects such as the Baltimore Symphony Orchestra's capital campaign.

But as MNC's commercial real estate lending binge in the late 1980s brought it close to failure, the company cut its work force and its community profile. Keeping up with its annual United Way commitment was about all the company could muster by 1991.

"I will assure the people in Baltimore . . . that we will be as or more active, both in terms of giving of our financial resources and our human resources, as the predecessor bank [ever was]," Lewis promises.

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