A Pennsylvania banking company has laid the groundwork for a network it says will help community banks compete on the Web with larger banks.

Patriot Bank Corp. in Pottstown is seeking banks to join its BankZip.com Web site -- but no more than one per ZIP code. A consumer visiting www.bankzip.com would be referred to the Web site of a nearby member bank -- or if there is no member bank nearby, to Patriot Bank's site.

Customers could use their member-bank ATM cards without surcharges at any other member bank.

Banks would be charged a start-up fee to join BankZip.com -- about $35,000 for a 10-branch institution, for example.

The first bank partners will be announced by the end of the month, said Richard A. Elko, president of BankZip.com and former chief financial officer of $1.1 billion-asset Patriot, which has 19 branches in the Philadelphia suburbs.

Plans are to start advertising the site in Northeast in January and in the rest of the country soon afterward, he said.

BankZip.com would help member banks underwrite and service loans and will provide a 24-hour customer service call center. The most important benefit: More marketing money will be available because the banks are working together, Mr. Elko said.

"Our on-line competitors are some of the biggest banks in the country -- banks using $100 million marketing budgets to attract our customers," he said. "There is no way a small community bank with a $100,000 marketing budget can compete with that."

The idea for BankZip.com came from the difficulty Patriot Bank had generating new business with its Web site, Mr. Elko said.

"Most community banks are on the defensive," he said. "They put up their Web site and pray to God they don't lose customers. They aren't attracting new customers to their site."

Mr. Elko said he hopes to have 500 banks, with 7,000 branches and 10,000 ATMs, signed up within five years.

Right now BankZip.com is a subsidiary of the bank holding company, but negotiations are under way to sell half of the unit to investors for $21 million to pay for advertising.

If things go well, BankZip.com could go public by the end of the first quarter, Mr. Elko added.

But he insisted that Patriot had created the site to boost its banking business, not to cash in on the IPO.

"We believe we have come up with an affordable way for community banks to keep pace with the changes taking place in the financial services marketplace," he said. "We know it was something we struggled with, and we believe others are struggling with it too."

It remains to be seen if BankZip.com's price is right for budget-conscious community bankers. Dave Koto, a bank technology consultant, said he is skeptical.

"The concept sounds great, but it is only going to work if bankers sign up for it," said Mr. Koto, executive vice president at Brintech Inc. in New Smyrna Beach, Fla. "I am not sure how easy it will be to convince bankers that they will get enough business out of this to make it worth their money."

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