A Carmel, Ind., community bank is counting on automated loan machines to get a competitive edge in the increasingly high-tech financial services arena.

The bank, MetroBank, installed the machines in November at a health club, a corporate headquarters, and an automated branch.

"I think all community banks need to be looking at how technology is going to fit in their mix of product and service offerings," said Ike G. Batalis, MetroBank's president and chief executive. "We look at the ALMs as being where ATMs were when they first started."

Automated loan machines are similar to automated teller machines. They allow customers to get unsecured consumer loans, usually between $1,000 and $5,000.

In an approximately 10-minute process, customers show identification and have their credit checked. If approved, they can get a check or a deposit in a bank account.

MetroBank is not alone in using the technology. The machines have been embraced by larger institutions, such as Banc One Corp. and Mellon Bank Corp., as well as several other community banks. In all, 23 banks - half of them community banks - have the machines, according to a spokesman for the company that manufactures them, Affinity Technology Group, Columbia, S.C.

The first bank to implement the machines was Carolina First Bank, Greenville, S.C. A 1986 start-up, it now has $1.4 billion in assets. Beginning last year, the bank installed seven machines, and it plans 11 more this year, said executive vice president William S. Hummers.

"Our philosophy is to deliver the products the customer wants when he wants them," he said.

Carolina First will own a 20% stake in the company after Affinity's initial public offering, expected soon.

The machines don't detract from personal service, Mr. Hummers said. "It frees up the people so they have more time to service customers that have special needs," he said. "It actually increases our ability to increase service to the customer."

Bankers said the machine's cost is comparable to that of an ATM. The company leases the machines per transaction.

Community banks using the machines said they hope the technology will be profitable, but that it is too early to assess. "It's not going to happen overnight," Mr. Batalis said.

Jeffrey L. Davis, an analyst with Natcity Investments Inc., Indianapolis, questioned the feasibility of the machines.

"As a prudent consumer, how many times do you need $1,000 on the spur of the moment?" he asked. Credit cards and their easily increased lines of credit are the machines' biggest competition, he said.

On the plus side, "the advantage for a community bank to offer this would be to satisfy the convenience needs of the consumer and hopefully make an impression as to greater serviceability, which community banks like to do to differentiate themselves," Mr. Davis said.

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