software trade-in. Users of financial statement analysis software from Sheshunoff Information Services Inc. in Austin, Tex., can swap their versions for more advanced ones from Baker Hill Corp., Carmel, Ind. Sheshunoff decided to get out of the software business about a year ago so it could focus on its data base and other subscription services. But about 1,500 banks use Sheshunoff's financial statement analysis software, which tracks historical trends within a balance sheet, and relationships between various elements of an income statement and balance sheet in any given year. Sheshunoff wanted to move as many of those customers as possible to products from other companies. "We looked briefly at other software companies' products, but none of (the firms) was interested in working with us on a proactive basis," said Bill Murray, senior vice president of Sheshunoff. Baker Hill, on the contrary, was willing to work out a deal. Baker Hill's software is unusual in that it will integrate many of the commercial lending functions on a single workstation screen, allowing users to access from a single point data that may be spread across dozens of computer systems across the bank. Baker Hill's product, called One Point, will by the end of this year contain software modules for statement analysis, collateral management, business development, and pricing and profitability analysis. The entire suite of products will start at $40,000. Software companies tend to specialize in one aspect of the commercial lending process; companies like Financial Proforma Inc. and Crowe Chizek, for example, are leading vendors of statement analysis software. "What makes Baker Hill unique is the integration of the four functions," said Patricia McGinnis, a technology analyst at the Tower Group consulting firm. "The fact that it has those four pieces means it encompasses a lot." One Point Stan - the statement analysis piece of the system - has been commercially available since May 1995. Baker Hill also sells tools that help banks customize the software and the reports it generates. "The big theme in commercial lending reengineering is, 'We don't want to rekey this information over and over again,'" said Mark Hill, president of Baker Hill. In order to woo Sheshunoff's customers, Baker Hill, based in Carmel, Ind., developed a scaled-down version of its standard, $3,000 Stan software. By subtracting features such as the ability to monitor covenants, and rules-based systems for identifying risk, Baker Hill came up with a $1,500 package called Stan Entry Level. Baker Hill also offered to buy back the Sheshunoff software for $500, bringing the cost to the Sheshunoff customer to $1,000. So far, about 30 of Sheshunoff's customers have taken the companies up on the offer, and the companies hope to attract at least 500. All the One Point software runs on the Windows operating system, while the Sheshunoff software runs on DOS. One Sheshunoff customer who traded in his software said the Baker Hill product has helped to train him to do credit analysis. Tommy Poche took a job at Bank of Commerce in Baton Rouge, La., in May, with no previous experience as a credit analyst. Formerly an operations manager at the Federal Reserve Bank in New Orleans, Mr. Poche is now Bank of Commerce's one-man credit analysis department. If a company has a big increase in turnover during the course of a year, the software prompts the user to find out why, Mr. Poche said. "It has taught me to notice these things a lot sooner," Mr. Poche said. Ms. McGinnis said Baker Hill has been most successful selling to the next tier of banks after the top 100. The top 100, she said, tend to buy mainframe-based systems, while medium-size banks are more likely to buy integrated packages of software. "Banks are struggling across the board to deliver business credit in more efficient ways, and products like this are pieces of that solution," Ms. McGinnis said. "Loan officers are expensive, and the more they can be supported by software and administrative staff, the more they can focus on their primary assignment, whether it's credit analysis or sales."

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