Hometown Bank Stores Paper Documents in the Circular File

As Missouri's Hometown Bank (Carthage, Mo.) grew in the years following its 1998 founding, bank officials realized that its loan processing could be more efficient. "We had problems with storage capabilities," says Mark Elliff, an executive vice president at the bank. Hometown Bank, which has four locations and total assets of $165 million, has a loan portfolio of $150 million. "We maintain all our original files in the Carthage location. We have 'shadow' files - photocopies of original documents - in other locations," Elliff explains.

In the past, if branch relationship managers needed a piece of paper that was not stored at their branch, they had to contact the bank's credit administration department, which then located the document, made a copy and sent it by interoffice mail or fax. "That can take anywhere from one hour to a day," says James Troub, a project manager at Hometown Bank. In addition to the space needed to store the files, the bank also had to buy folders, file cabinets and other supplies to support the paper-based system.

By 2002, however, Hometown Bank officials knew they needed to computerize their files. "Instead of copying all that and keeping the storage capabilities," Troub says, "we wanted to be able to image it and retrieve it."

"We were looking at being able to retrieve the information in a timely manner and reduce our costs and the duplication of work efforts," adds Elliff.

To achieve that goal, executives at the bank looked at several vendor solutions, Elliff says, using as the main evaluation criteria the technology's flexibility, ease of use, accompanying service and price. The bank selected Fortis version 2.01, a document management software suite from Branford, Conn.-based Westbrook Technologies. The solution captures documents from scanned, faxed and electronic files; is compatible with more than 200 file formats; and shares documents via LAN, WAN, Internet/intranet, e-mail, fax, CD or printed copy, according to the vendor.

Hometown Bank began implementing the new technology in July 2003. "We did not have any trouble getting the system up and running," Troub says. "The only thing we ran into was that we probably underestimated how much space we needed on an SQL server." The inputting of documents continued at press time.

The conversion of files for consumer lending, home equity, secondary market and real estate mortgage lending has been completed; commercial loans, agricultural loans and files for loans already paid off are areas still to be converted. The bank is creating three databases for computerized files: loans, accounts payable and human resources.

The project's number one challenge is being 100 percent accurate, Troub says. "Ninety-nine-point-nine percent accuracy is not good enough in this situation," he stresses. Meeting all the regulatory standards makes for another challenge. "This is kind of a new technology, and the rules on some of this stuff are in flux," Troub says.

Hometown Bank may put scanners on employees' desks in the future, Troub says, so they can scan the information themselves. But the bank has already profited from the new system. "The main benefit on a day-to-day basis is that our relationship managers and loan assistants are going to have the information at their fingertips," Troub says. "We will be able to provide better and faster customer service ... and it will allow us to save money by limiting the space and supplies we have to allocate."

Snapshot

Institution: Hometown Bank (Carthage, Mo.).

Assets: $165 million.

Business Challenge: Streamline document management and storage.

Solution: Fortis v. 2.01 document management software from Westbrook Technologies (Branford, Conn.).