Liberty Bancorp of Oklahoma City has announced plans to build one of the most advanced computer networks in the banking industry.

Charles E. Nelson, chairman and chief executive of the $2.3 billion-asset company, said the system will help trim operating costs and improve service - vital steps to ward off out-of-state acquirers.

"Liberty must be competitive from a processing and technology standpoint," Mr. Nelson said. "If we can't, we'll lose our option to remain independent, because the shareholder will demand we merge with someone that can do it more efficiently."

The new network, to be installed over two years, will be anchored by more than 1,000 advanced personal computers, called Vectras, from Hewlett-Packard Co., Palo Alto, Calif.

Powerful Chip

These machines are based on one of the most powerful microprocessors in the computer industry, Intel Corp.'s 80486, and will run advanced operating system software from Hewlett-Packard called New Wave that employs a graphics-based user interface.

So far, no other bank in the country is believed to have distributed personal computers this powerful to most of its employees. Some observers said Liberty might be going overboard - handing out the computer equivalent of Maseratis when Hyundais would do.

"That's tremendous overkill," said James Moore, president of Mentis Corp., Eden, Md., a bank technology research firm.

But Liberty officials said they got a good deal, because Hewlett-Packard is eager for a toehold in banks. A Hewlett-Packard spokesman said the deal with Liberty is its largest ever with a bank in the United States.

To illustrate the favorable terms, John Cooper, Liberty's chief information officer, said the bank is paying 2,600 each for Vectras that have a list price of nearly $4,000.

Liberty officials declined to say how much they are spending on the new computers. But the bank expects to spend $70 million to $75 million over seven years on computers and telecommunications, about 5% less than it currently spends, Mr. Nelson said.

Productivity gains will eventually enable employees to perform the same administrative work they do now at 10% to 20% less cost, Mr. Nelson said.

Liberty posted net income of $9.8 million for the first half of this year, up from $3.4 million a year ago. It has reported steadily increasing profits since 1988, when it lost $22 million, mainly due to sour loans.

That year, two wealthy Oklahoma oil men, John Kirkpatrick and Walter H. Heimrich, along with investment adviser Robert E. Torray of Bethesda, Md., raised $75 million of capital in an effort to keep the bank's ownership in-state, Mr. Nelson said.

At the time, Mr. Nelson was a financial adviser to Mr. Kirkpatrick. In December 1988 he assumed chairmanship of the bank and, in 1990, he also became chief executive.

Mr. Nelson's background is unique for a bank CEO as he worked for International Business Machines Corp. from 1964 to 1978, selling computers to to the financial industry. He said this experience gave him greater appreciation for the benefits of information technology.

The Hewlett-Packard personal computers will be placed in 17 retail branches and offices throughout Oklahoma, including Liberty's head offices in Oklahoma City and Tulsa.

The personal computers will be linked to each other and to two powerful minicomputers from Hewlett-Packard. The personal computers will also be linked to Liberty's other computer hardware, including an IBM mainframe computer, a Digital Equipment Corp. minicomputer and a Sun Microsystems Inc. workstation.

Software Choices

The new personal computer network will run branch automation software from Systematics Financial Services Inc., personal computer spreadsheet and word-processing software from Microsoft Corp., and will also store customer information.

Liberty's system will be installed by Systematics, Hewlett-Packard, Northern Telecom Ltd., and SouthWestern Bell Corp.

Mr. Cooper said Mellon Information Systems and IBM'S Integrated Systems Solutions Corp. also bid for the Liberty contract. But IBM was too expensive, he said, and technology from these vendors was less sophisticated than what Liberty contracted to buy.

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