First National Bank of Anchorage is about to take community banking to places accessible only by seaplane or dogsled.
The bank, based in Alaska's largest city, is setting up 17 automated teller machines inside general stores located in some of the most remote areas of the 49th state. Eight of the communities are so isolated they have no roads in and out of them.
Though many of the areas the $1.5 billion-asset bank is targeting have never had anything resembling banking services, chief operating officer Betsy Lawer said she anticipates the move will be a big success.
"We've really gotten an enthusiastic response from the communities," she said.
Most of the ATM sites are in far western Alaska, where there is no road service to connect them with the rest of the world or each other. Residents, mostly native Americans who fish for a living or hold jobs with the state or federal government, are cut off from the amenities of modern civilization.
"When they get their checks, there is no way to cash them and the checks in fact become their own currency," Ms. Lawer said. "When they want to cash the checks, they have to charter an airplane to get somewhere to do so.
"Many of these are four-figure checks and what happens is they cash the whole thing and walk around with all the money in their pockets. It's not that safe."
Cheri Gillian, the bank's vice president for marketing, said that many of these isolated Alaskans have a tough time accomplishing even simple banking transactions during occasional city visits because they lack proper identification.
The venture in remote ATMs has come about through a partnership with Alaska Commercial Co., a statewide chain of general stores.
Each First National ATM will be inside an Alaska Commercial Co. and will be maintained by a store employee. The chain hopes to benefit from added business that the ATMs might draw.
The expansion should be complete by yearend.
'Our affiliation with Alaska Commercial makes the entire operation feasible," Ms. Lawer said. "Without an affiliate, we would have had to charter a plane to service each of the communities. We wouldn't be able to do it.
She said that recent improvements in ATM technology have made it possible for the bank to place machines in remote locations. "Up until recently, automatic teller machines weren't reliable enough to put them in distant locales."
For many citizens of these remote towns, particularly Native Americans, the teller machines represent their first exposure to banking. Ms. Lawer said that local residents will be hired to educate the Native American community about teller machine procedures and banking in general.
First National has several urban branches, including nine in Anchorage, three in Juneau, and two in Fairbanks.
But it also has branches in more remote locales like Kodiak, Sitka, and Bethel. Bethel, far to the west, serves some 50 villages in an area the size of Oregon.
The bank is a good performer, with a 1995 return on assets of 1.96% and a remarkably high 24% equity-to-assets ratio. Despite its remote locale, it has gained the attention of some on Wall Street.
Legendary investor Philip L. Carret recently called it one of his favorite bank stocks.
Not surprisingly, First National has had little precedent to draw upon as it worked on the Rural ATM Project. With some of the ATMs more than 1,500 miles apart, the bank has had to rely on itself to solve potential problems.
"If you were to take a map and superimpose it over the United States, southeast Alaska would be in Florida and the Aleutian Islands would be past California," Ms. Lawer said.
But given advances in technology, the bank feels that it can serve all points of Alaska without need for additional staffing.
"This is all part of where we see banking going," she said.
