Two community banks in western Pennsylvania are profiting from accounts that big banks don't want.

First Commonwealth Financial Corp. and S&T Bancorp are aggressively selling mutual funds and trust products to a clientele that has long clung to the safety of deposits. What's more, they are peddling their wares in Indiana, Pa. - an economically depressed region.

But both banks have managed to double their assets under management during the past five years. They have done so by amassing many small accounts - the kind that would not qualify for private-client service at big banks.

"There are still a lot of people out there who are uneducated about investments. They're still savers," said Gerard T. Morda, a consultant at Financial Planning and Management Inc., a Boulder, Colo.-based firm that advises community banks on trust and investment management issues.

"If they trust you - this is where community banks have a leg up - they'll go in," Mr. Morda said. "They'll start with $100,000 to get their feet wet."

First Commonwealth cobbled together a trust company in 1992, culling $200 million in assets under management from its nine subsidiaries. By the end of this April, it had $450 million under management, from clients whose accounts typically hold less than $100,000.

"We thrive on that,"said Domenic P. Rocco Jr., president of First Commonwealth Trust Co. "Our niche is to take the crumbs that the big banks don't want."

First Commonwealth hired Mr. Rocco, a retired Army brigadier general, to rev up its sales in 1991. The bank now looks to hook young customers with low-interest mortgages and competitive deposit rates before moving in with a mutual fund sales pitch.

"We came from nowhere and worked our butts off," Mr. Rocco said. "We became an extraordinary company in an environment that one would think was not really conducive to this kind of stuff. We destroyed that theory."

Mr. Rocco is not alone in his triumph. His crosstown competitor, S&T, had $430 million under management in its trust department at April 30, up from $170 million at the end of 1992.

Like First Commonwealth, S&T brought in new trust talent. In 1992, it hired Bruce W. Salome, an experienced trust banker formerly with Banc One Corp. and NBD Corp., to lead its effort.

"Our bread-and-butter account is in the range of $200,000 to $1 million," said Mr. Salome, now an S&T executive vice president. "There are more of those kind of people than multimillionaires."

Buoyed by new assets and a new fee schedule, S&T is now reaping three times as much fee income from trust management and mutual fund sales as it did three years ago.

Mr. Rocco and Mr. Salome said they consider each other friendly competitors but are more concerned about brokers. Wheat First, Advest, and Edward D. Jones & Co. all have offices in Indiana. To contend with them, Mr. Salome recruited brokers and financial planners for his new sales team.

"What I preach is that we never do a proactive contact with an existing client without asking for additional assets and referrals," Mr. Salome said.

Mr. Rocco urges his salespeople to do the same. "We came in with a philosophy of aggressive growth. We eliminated a lot of personnel that couldn't adjust to that," he said.

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