As part of an ongoing iniative to streamline operations, St. Louis-based First Banks Inc. is installing loan origination and compliance software developed by Formation Technologies Inc.

The software, Loan Publisher, uses personal computers to automate the entire loan-origination process including credit application, document preparation, reporting, and looking of loans to a bank's core system.

Assets Have Doubled

According to Mark Winz, executive vice president at Denver-based Formation Technologies, this installation is unique because First Banks will use its existing International Business Machines Corp. AS/400 midrange computer to pass Loan-Publisher documents throughout its branch network.

"To get this kind functionality, most banks are building wide-area networks [of PCs] or investing in third-party main-frame software," said Mr. Winz.

"The inherent capabilities of the AS/400 network allow organization to deliver decentralized functions at a much lower cost."

First Banks began re-examining their technology in 1991 after embarking on a series of mergers and acquisitions which doubled their assets to over #2 billion today.

According to First Banks executive vice president Tom Bangert, the bank needed to both accommodate growth as well as position itself for future expansion. Mr. Bangert estimated that the First Banks would grow to $5 billion within five years.

Flexibility Provided

Currently, each of First Banks's 92 branches throughout Missouri and Illinois use stand-alone loan-origination systems.

"Loan Publisher will provide the branches with flexibility and freedom while insuring that the documents adhere to all internal policies and comply with state and federal regulations," Mr. Bangert said.

In addition, because Loan-Publisher will interface to First Banks'AS/400 computer, the bank can upload information automatically. The need for manual re-entry of data is eliminated.

Electronic Delivery

After the system is installed, the banks' branches will complete about 75 percent of the required loan application documentation on PCs.

The documentation will then be electronically delivered to First Banks' central loan processing facility in St. Louis.

There, the documentation will be completed, the loans disbursed and booked.

Once the central site finishes the documentation, the files will be sent bank to the branch via the AS/400 network where the documentation will be printed on a laser printer.

Ms. Sullivan is a freelance writer based in New York.

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