FIRST NATIONAL Bank of Platte County is just seven years old, but it's not wet behind the ears when it comes to technology.

Late last year, the $63 million-asset bank began to offer image statements to customers.

Leland Walker, president and chief executive of the Kansas City, Mo.-based bank, said the new system reduces postage and check handling costs while still providing customers with what they need.

"The image statements replace the physical check with a picture of the account information," said Mr. Walker. "The customer continues to get the same information through a much more manageable product.

"This is an opportunity to attain significant cost benefits so that we can continue to offer free personal checking to customers in the future," he said.

First National executives got the idea for imaging after visiting Central Fidelity Bank. The Alexandria, Va.-based bank was issuing image statements, and Mr. Walker like what he saw.

"When I came back, I told our data processing equipment sales representative that I wanted this function as soon as possible," he said. "Once the solution became available, we went after it, got it, and the rest is history."

The bank looked at three providers of imaging software that would run on NCR check sorting equipment. It selected Wausau Financial Systems Inc. of Schofield, Wis.

"We chose Wausau because they provide a user-friendly solution as well as work with us to meet our needs," said Mr. Walker. "They offered us what we thought was the right approach to the business."

The total cost of implementing the operation was $360,000. "We would not make a $300,000 loan to someone without first looking at their financial statements, and likewise we would not make a $360,000 purchase from someone without looking at their financial statements," he continued. "They were very quick to provide us with the financials, and we liked what we saw."

Mr. Walker said that after a year working with the firm, management is very happy with the system and believes it made the right decision.

D. Trout Fleming, a consultant at the Memphis accounting firm Reynolds, Bone & Griesbeck, says the bank is doing everything it needs to do in imaging to get the job done.

"There are more applications imaging can be used for, but the bank has decided to take a slow approach to the technology and it is working well for them," he said. "They have realized the important role imaging can play in the operation, and it has helped them with continued growth and improved levels of customer service."

In order to perform the image statement function, the bank is using Wausau's Imageworks imaging system with an NCR System 3000 computer running the Unix operating system. The system also uses an NCR 7780 check scanner.

The system also can retrieve and print stored check images at all of First National's four branch locations. At the time management decided to go with imaging, the bank was at a point where it needed to replace its item processing equipment.

"It made sense for us to evaluate imaging processing technology at that time," Mr. Walker said. "Our cost-benefit analysis showed that over a period of five years, we [will] achieve a savings of roughly $520,000."

"By using this technology, we will make money on this operation," he continued.

The application is allowing the bank to saving money in many different areas. "We are saving money in how we archive the data; we don't have to spend as many hours fine-sorting checks, which saves us people time," Mr. Walker said. "It takes the human touch out of the statement process and reduces the costs of the postage to get the information to the customers."

On average the bank sends approximately 11,000 statements a month, usually consisting of two pages of statement and three pages of checks.

The bank can get 18 check fronts on each page, and the cost is approximately 29 cents for each statement.

A customer who has lost the statement or wants an image of the back of a check can go into any branch and have the information printed out from the bank's optical disk storage system.

Outsourcing this function was not an option for First National because the bank wants to "be in charge of its own destiny."

"The last time we looked at outsourcing a function of our operation, the cost came in at roughly $60,000 higher then we were currently paying," said Mr. Walker. "When it came tune to look at it for this function, we decided to stay in-house.

"We are a rapidly growing bank, we anticipate being $150 million by the year 2000, and as a result, we felt it was far more advantageous to stay in-house and control our destiny," he continued. "It allows us to control our costs and not be subject to price increases and that sort of thing."

First National Bank's assets have been growing at a rate of $1 million a month for the last five years.

"Although we are a fairly new institution, the roots of our bank go fairly deep into the community," said Mr. Walker. "Everyone likes to do business with their own bank.

"We have been growing at a rate of 40% a year and expect even greater growth in the future," he said. "More growth means more customers. More customers means more volume, and more volume means more checks, deposits, and other items. Imaging will allow us to handle the growth while not compromising on our level of service." At a Glance FIRST NATIONAL BANK OF PLATTE COUNTY Headquarters Kansas City, Mo.Assets $63 millionEmployees 62Branches 4Hardware AT&T/NCR System 3000 computer 7780 check scannerSoftware Wausau Financial Systems Inc. Imageworks

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