Rarely does a community bank have the cash or the nerve to try to match the technological innovations of a superregional institution.

But Glenview State Bank, a $464 million-asset institution based in the affluent northern suburbs of Chicago, plans to do just that.

The bank has almost finished installing a new check processing system that will allow it to send its customers a new breed of statement with computer images of deposited checks rather than the items themselves.

A Rare Offering

Currently, only about a dozen financial institutions nationwide offer the so-called image statements.

And when Glenview begins sending the statements out in January, $48 billion-asset First National Bank of Chicago will be the only other institution in Glenview's market offering a competing product.

"Until a few months ago, one who wanted to be running off image statements really had to be in a mainframe environment," said Stanley E. Miltko, a consultant with Littlewood, Shain & Co., Exton, Pa. "But the personal computer innovations have opened up the technology to [community] banks."

As image statement technology has been adapted for the PC, the price for an entry-level system has dropped dramatically. A PC-based system typically costs $200,000 to $400,000, while mainframe systems start in the millions of dollars.

Opportunity to Excel

That price drop has opened the door for small banks like Glenview, which might not otherwise have any interest in being on the cutting edge of technology.

"A desire for new technology is not really what's driving our purchase of the system," said John E. Jones, chairman and chief executive of Glenview State Bank, Glenview, Ill. "We feel like the system will give us the ability to provide our customers with a product they will find useful."

As Mr. Jones allows, Glenview is anything but a technology-driven institution. Under Jones' family ownership for more than 30 years, the bank is a conservative institution that designs its products and services for the affluent residents of Chicago's North Side.

From Father to Son

Part of the bank's conservatism is evident in its approach to promoting officers: Mr. Jones inherited the helm of the bank from his father, and he is the process of handing it over to his son, Paul.

The father-son transitions are at least partly responsible for the bank's ability to garner and keep deposits in an increasingly competitive Chicago marketplace, said John Jones. "I wouldn't say any of the family's been pushed into the [banking] business, but there's a lot to be said for having the same name on the door when you do business in the communities that we do."

Glenview has had an extremely stable customer base that has enabled the bank to rope in more than 50% of available deposits in the areas where there are Glenview branches -- no mean feat for a community bank in a market like Chicago.

Part of Glenview's success in this area is attributable to the fact that it aims many of its products specifically at its up-scale customers.

The most obvious example of this is the bank's discount brokerage service, but there are also subtler ways in which Glenview has adapted its business to fit the more sophisticated niches in its market.

One of these is the image statement product, which the elder Mr. Jones feels in customers will accept so readily that there is no need for incentive pricing schemes.

But the bank is also strong in the more traditional areas of banking.

Aggressive Lending

For instance, while loan problems have had a paralyzing effect on many community banks, Glenview is aggressively lending again, especially in jumbo mortgages and auto loans.

And if the bank's well-heeled customers are trying to keep up with the Joneses, those auto loans could be hefty: John Jones can often be seen tooling to work in his Rolls-Royce Corniche or his Bentley Continental. "a lot of customers get a kick out of riding around in them when I call on them," he said.

Despite the rapidly expanding loan portolio, Glenview's asset quality has remained high. According to figures from Sheshunoff Information Services, Inc., Austin, Tex., only 0.59% of Glenview's $228 million in loans are nonperformers, a statistic that is better than three-fourths of similar banks of its size. In addition, loan-loss reserves and net chargeoffs are low, relative to those at peer institutions.

The bank's midyear profitability numbers were slightly lower than average for its peer group: It logged returns on assets and equity of 1.07% and 14.81%, respectively. However, over the past five years, it has ranked consistently above average in these categories.

While it is too early to tell if Glenview's image statement will pay dividend, it is providing further evidence that community banks can keep up with larger competitors in the technology race.

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