For Southern National Corp., 1996 is shaping up as the year of technology.

Lagging badly behind its competitors in key areas, Southern National is planning to establish a 24-hour telephone call center, market a PC-banking program and add 100 more ATMs by the end of the year. All three initiatives will be coordinated by a new alternative delivery systems department under the management of senior vice president Tom McFarland.

Southern National executives first discussed their plans with analysts last fall. Mr. McFarland followed up with more details last week.

"We wanted to let the world know it's not just an idea, but something we're working on," said Mr. McFarland, 39, who managed the bank's commercial loan and branch lending operations before taking command of the new department.

Mr. McFarland said the major cost in the "multimillion-dollar" investment program is the telephone call center, which requires about $3.5 million for technology and facilities and another $5.5 million for the hiring of 250 to 300 customer service representatives. Mr. McFarland said Southern National would record most of the expenses in 1997.

Analysts said the investment is long overdue. When Dean Witter ranked the 28 banks it covers by technological capability last May, Southern National came in dead last. The survey found the Winston-Salem, N.C., company particularly weak in terms of customer information files, ATM usage, and alternative distribution channels.

Most tellingly, Southern National's three main competitors in the Carolinas - Wachovia Corp., First Union Corp., and NationsBank Corp. - ranked 10th, 11th, and 12th respectively. Both Wachovia and First Union operate 24-hour call centers, while NationsBank is a pioneer in PC-based banking.

"Right now, Wachovia and First Union are the most competitive in those markets in terms of systems and technology applications," said Dean Witter analyst Anthony R. Davis. "Southern National realized they needed to do more there."

Southern National's relative technological weakness is rooted in history. The present company was formed last year as a "merger of equals" between Southern National and BB&T Financial Corp., Wilson, N.C.

Since both Southern National and BB&T were in the $10 billion-asset range and focused primarily on small business lending and smaller, less competitive retail markets, neither bank felt much pressure to match technology with the larger players. "Southern National's strength is very good personal relationships," said analyst George A. Bicher, with Alex. Brown & Sons.

But ballooning to $21 billion in assets, with the second-largest deposit ranking in North Carolina and the third-largest in South Carolina, suddenly put the company into a different league.

"It was obviously difficult for a $9 billion or $10 billion organization to make the financial and personnel commitments necessary to take on initiatives like this," Mr. McFarland said. "But as a $21 billion bank, it's certainly something the customers and the market expects out of us in terms of being a player."

Southern National underlined the importance it attached to the investment program by establishing a separate department to manage it, as opposed to placing it under the bank's existing operations unit, according to Mr. McFarland.

"The problem most banks may have is treating it as an operational or technological problem," Mr. McFarland said. "We wanted to make sure that what we are doing is very sales-oriented, very customer-focused. That's why it's not part of the operations division."

Mr. McFarland said he hopes to market the PC-banking service by midsummer. Rather than link up with one of the big personal finance software products such as Intuit Corp.'s Quicken, Microsoft Money, or Meca's Managing Your Money, Southern National expects to sign up with a smaller vendor and offer the product under the logo of Southern National's bank subsidiary, which bears the BB&T name.

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