CHICAGO -- Three floors above Phillip D. Short's quiet office in the Chicago Board of Trade building, the trading pits erupt with shouts for soybeans and oats.

Runners scurry across the floor while traders crammed together in bunches flail their arms as commodities prices flash onto a screen above their heads.

These are the customers of Burling Bank. And Mr. Short, the bank's 49-year-old president and chief executive, has built a solid business serving them since Burling opened five years ago.

Other institutions might balk at doing banking business with traders because of their fluctuating incomes or reputations as risk takers, but not Mr. Short or Burling.

"They just simply are not the risk takers that most people perceive them to be," said the low-key banker, who has been in the business 23 years. "They're looking to make money over the long term rather than make a killing on any given day."

Burling, which has grown to $62 million of assets, targets one of the more unusual niches of the Chicago area's many start-up banks.

The six-county metropolitan area has given birth to 24 banks since 1989, and six more are under organization. From 1992 through last June, Illinois led the nation in new banks with 11, mostly in the Chicago area, according to Grant Thornton.

"It's a continuation of a reaction to the significant consolidation that's been happening in the Chicago metro area," said Richard A. Soukup, a bank consultant at Grant Thornton's Chicago head-quarters. "Some of these situations ... have been very successful and you see people getting on the bandwagon."

Burling, which returned 1.02% on assets for the first half of the year, developed because its founder, David Goldberg, previously had worked in the trading business and felt traders needed a new bank.

He raised $5 million in capital and opened Burling, even though Harris Bank and Lakeside Bank already had offices in the Board of Trade building.

Those companies have several locations and serve other interests, whereas about three-fourths of Burling's customer base is involved with the trading community, said Mr. Short. "It took us a period of time to earn our stripes and be accepted," he said. "Once that happened, we've moved forward very nicely."

The bank is named for Edward Burling, the Chicago architect who designed the original Board of Trade building that burned in the Great Fire of 1871.

It offers a variety of loans and deposits. But over the years it has developed expertise in financing memberships on Chicago's major trading floors. Prices vary, but a full seat at the Board of Trade recently went for $650,000 and one at the Chicago Mercantile Exchange for $925,000.

Because customers' schedules are married to the markets, Burling's 11 employees have learned to bend over backwards for their customers. They frequently make appointments before the bank opens at 8 a.m., and after it closes at 3:30 p.m.

"It's a very demanding customer base," Mr. Short said. "They may be coming down off the floor with a matter of minutes to transact a piece of business."

While most of the other Chicago-area start-up banks don't have as narrow a niche as Burling, new banks need something to set themselves apart to survive said Robert L. Riter, a pioneer of the current new bank crop.

"The idea of the community bank is not a viable business idea today," said Mr. Riter, chairman of American Chartered Bancorp., Schaumburg, Ill. "I think community banks that say, "I'm here, come bank with me,' are going to fail."

That's why his three start-ups, which were combined into one $150 million-asset institution this summer for regulatory and logistical reasons, are focusing on small-business lending.

Mr. Riter's start-up career began after he left American National Bank in 1987. Then, new banks were scarce.

"The de novos really started to be done when it was uneconomic to purchase a bank," said Mr. Riter, who initially considered buying one.

He rounded up investors and $2.25 million, and opened American Chartered Bank in Schaumburg. Profitable on a monthly basis after a year, the bank soon could not fund its booming loan demand.

To get more deposits, another American Chartered Bank opened in Lake Zurich in 1989. Likewise, a third bank opened in Bartlett in 1992. Each new bank required more capital and more time, he noted. Today, the banks have combined ROA of 0.90%.

Another common niche for new banks is serving a particular ethnic community. Two Chicago banks that started to target the Windy City's Korean community met different fates.

A 1987 start-up, Mayfair Bank, was the only new bank to fail, succumbing to capital and loan problems when regulators shut it in 1992.

Foster Bank, which bought Mayfair's $27.5 million of deposits and cherrypicked its loan portfolio, is a 1989 start-up that fared better.

The $92 million-asset bank now has a 1.5% return on assets, draws Korean customers from all over the city, and is about to be approved as a certified Small Business Administration lender, said Peter Morrison, chief financial officer.

Although Foster encountered its own credit problems, it prevailed because it immediately took the measures recommended by regulators and infused capital. The start-up trend in the Chicago area likely will continue, said bankers, including Tom Johannesen, president and chief executive of First Community Bank, Elgin.

Mr. Johannesen, who previously was president of Larkin Bank, Elgin, left in 1992 after it was acquired by NBD Bancorp. He capitalized First Community with $3.5 million and opened it in October 1993.

Although it hit snags in plans for its permanent building and still operates out of a temporary store-front, First Community has reached $22.4 million of assets, has been profitable on a month-to-month basis, and should be profitable on the bank level this year and on the holding company level next year, Mr. Johannesen said.

His bank is an example of many that appear in communities where regionals recently have snapped up banks, hoping to succeed as a local alternative.

"The people who are starting banks are doing so because they believe there's a need for a bank with a closer identity to the community," he said.

Tapping Fellow Start-Ups' Wisdom

CHICAGO -- With few resources to guide would-be start-up banks, organizers often seek out those who have gone before them.

And in the Chicago area, which has spawned 24 new banks since 1989, there are plenty of people to talk to.

"We do have a tendency to rely on each other," said Phillip D. Short, president and chief executive of Burling Bank, a 1989 start-up serving Chicago's trading community.

Among the relatively small group who have gone through the same experience, "it's almost like a fraternity," said Tom Johannesen, president and chief executive of First Community Bank, Elgin, Ill.

Before opening his bank in 1993, Mr. Johannesen contacted many previous new-bank organizers and has since shared his experiences with others.

At the larger bank companies he has worked for, presidents used to meet and swap ideas.

"This cooperation with the other de novos; it's an opportunity to have some of that same spirit," Mr. Johannesen said.

Robert L. Riter, chairman of American Chartered Bancorp., Schaumburg, Ill., launched his first new bank in 1987 and has advised most subsequent de novo organizers in the area.

The questions most frequently asked include how to structure the business, who to have on the board, and how to sell stock, he said.

The same camaraderie that draws start-up bankers together for advice also prompts them to participate in each other's loans, Mr. Johannesen said.

For a loan beyond his bank's capabilities, "I'm more likely to call up one of the other de novo bankers I know and sell them the excess portion of the loan," he said.

Once start-up bankers get going, they also find themselves doing tasks that they probably didn't do at their last banking jobs.

"You fill the brochure racks," Mr. Short said. "You change light bulbs as necessary. [Customers] see you're willing to get up and make a Xerox copy for them.

"There are not a lot of bank presidents, I think, that do that in the ordinary course of the day. You do what it takes to get the job done."

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