Lining up against some of the biggest banks in the country, a trio of Northern California community bank executives said last week that technology has been a key point in their competitive stance.

Speaking at Keefe, Bruyette & Woods' West Coast Banking Forum, held here April 28-29, the chief executive officers said that even though they compete in the same markets as Wells Fargo and Bank of America, they do not believe they are at a technological disadvantage.

The executives came from some of Northern California's most prominent business banks: $302 million-asset CivicBank of Commerce, Oakland; $320 million-asset San Jose National Bank; and Truckee-based SierraWest Bank, with $475 million of assets,

"The cost of technology has dropped incredibly," said Herbert C. Foster, chief executive officer at CivicBank, which serves small-business and middle-market customers in the Bay Area.

Mr. Foster noted that the IBM AS/400 computer his bank bought in 1995 for $1 million can now be bought for about $400,000. "We're very PC-driven; all of our officers are linked to the mainframe. We also have about 100 of our clients tied into what we call our 'commerce connection' so they can initiate transactions themselves."

He added that CivicBank in-vested only $25,000 to develop its cash management system. "If we found it wasn't competitive, we'd just scrap it and put in a new one."

"I think once a technology is proven, then there is going to be a third- party vendor willing to sell it to the thousands of independent banks as fast as it can," said James R. Kenny, chief executive officer of San Jose National Bank, another institution focused on small and midsize companies. "Frankly, I think our cash management system is as good or even better that Wells Fargo's."

SierraWest, in the Lake Tahoe region of Northern California, doesn't "necessarily always need the latest or fastest gadget," said chief executive officer William T. Fike, who added that his bank offers PC banking to its small-business clients. "The key for our customers is efficiency and accuracy. What we have to do to is balance what we really need with what we can afford to spend."

The panelists also noted that in some cases, big banks' technological orientation works to smaller banks' advantage. Both Mr. Foster and Mr. Kenny said that Wells Fargo's much-publicized use of computerized credit scoring for small-business loans works well for credits under $100,000, but businesses with larger, more complex borrowing needs usually require the advice and consultation that their institutions can deliver.

On the other hand, consumer banking technology "is something you can invest a heck of a lot of money in, and it's much more difficult to attract customers from a U.S. Bank or a Bank of America if you don't have on-line banking," Mr. Fike said.

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