As the nation's biggest banks look to expand their small-business lending, community banks are getting more aggressive in their approach to the business. Take Advantage Bancorp in Kenosha, Wis. Since forming a commercial banking division nine years ago, the $980 million asset savings bank has built a $96 million portfolio of small business loans. "We've been growing at a net pace of about 25% a year," said Wesley Ricchio, vice president and head of the commercial banking division. In an effort to continue this growth, Advantage is looking to invest in new technologies, such as credit scoring software, that can help it keep pace with the rising competition for small business loans. But bringing in new business also requires technology investments in back- room operations. "The portfolio was getting to a size that we were not able to maintain it properly with the amount of staff that we have where it was cost effective," said Nancy Rupp, commercial banking administrative officer. To better track its portfolio and improve efficiency, Advantage has upgraded its systems in recent years and has installed software from Baker Hill of Indianapolis. The software, called React, tracks loan exceptions. "Prior to React, we were tracking exceptions on index cards," said Mr. Ricchio. Advantage subsequently bought three other Baker Hill products. A risk management tool, called Stan, analyzes financial statements. A sales support tool helps manage customer and prospect information. And the "lending library" supplies a data base of Robert Morris Associates loan information. "The fact that React shared the same customer information screens as the other Baker Hill products gave them a slight edge as we purchased more," said Mr. Ricchio.
Baker Hill of course, faces competition from well-known names in bank technology, including Financial Proformas Inc., Broadway & Seymour, and CFI Proservices Inc., among others.