A Phased Approach to a Systematic and Effective Transition

Based in Lincoln, Nebraska, West Gate Bank is a community bank with assets exceeding $1 billion. With a strong presence in the Lincoln and Omaha, NE markets through its 10 branches, West Gate has been at the forefront of community-focused banking.

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The collaborative journey between NuSource and West Gate Bank commenced in 2019, evolving into a full-fledged project in 2020. The objective was to leverage technology for an enhanced customer experience, allowing for increased self-service transactions, extended banking hours, and reduced staffing costs.

 

West Gate Banks leadership team recognized the advantages of core integrated ITMs and opted for NuSource/Hyosung technology to align with the operational goals of the project. The implementation unfolded in phases, ensuring a systematic and effective transition.

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• Phase 1 (2020): Installed 11 ITMs in Lincoln branches.

• Phase 2 (2021): Added 4 ITMs in Lincoln branches and 4 in Omaha branches.

• Phase 3 (2022): Implemented 2 ITMs in the new Maple Street location.

• Drive-through teller lanes were permanently closed, and concierge services ensured a smooth transition for customers, resulting in excellent consumer adoption.

• ITMs are currently supporting 26,500-28000 transactions per month per branch.

• Teller staff reductions occurred naturally through attrition and transfers/promotions.

 

Cost Highlights

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• Comprehensive ITM Investment Breakdown (Including Acquisition, One-time Installation, and Video Teller Equipment Costs)

• Depreciation of ITM Machines spans 5 years, reaching full depreciation by 2027.

• Annual servicing costs range between $450K and $500K, anticipated to increase by 1-2% annually once all ITMs are operational.

• Initial costs for concrete and electrical work amounted to a one-time charge of $361K.

• Upon full implementation, staff savings are projected to reach $525K annually, excluding annual pay increases.

 

Impact on Bank Performance:  12/31/2019-9/30/2023

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• Westgate Bank's strategic investments in ITM technology have significantly elevated its performance compared to peers, boasting an impressive ROA of 1.19%, while the peer group averages 1.10%.

• Notably, deposits witnessed a remarkable growth of 78%, soaring from 611M to 1.087B, outpacing the 18-22% growth rate seen in the peer group over the same three-year period.

• The bank's profitability stands out with an average 10% higher than the peer group, showcasing the substantial impact of technology investments on Westgate's financial performance.

• Overall, these technology-driven initiatives have propelled Westgate Bank to operate at an exceptionally high level in the banking sector.

 

Conclusion

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Since 2020, West Gate Bank has implemented significant changes, resulting in a reduction of 22 full-time equivalents (FTEs) in staffing. The addition of ITMs has proven to be particularly beneficial during the pandemic, offering 24-hour operation capabilities and allowing our staff to assist customers from remote locations. To mitigate employee risk, CIT oversees balance and cash replenishment for the ITMs. Through these investments, we've not only enhanced our technological capabilities but also reduced staffing costs, ultimately providing our customers with an improved self-service banking experience.