More than 10 years after starting one of the nation's first branchless banks, a New Jersey executive is now trying to form a more traditional institution.

Michael Devlin, who was president and chief executive officer of Direct Financial Corp. from 1987 until last year, is organizing the first new bank in Atlantic County in more than 15 years.

Direct Financial solicited customers nationally through the mail, by phone, and on the Internet. At its peak, it had customers in more than 40 states. Mr. Devlin sold Direct Financial in August to Telebanc Financial Corp. of Arlington, Va.

The strategy works best, he said, with people who are willing to chase the best rate even if there is no branch to visit. However, he said, the tactic does not work nearly as well with his new target customers: small businesses.

"Small businesses still need the physical presence, the place they can go to meet with someone face-to-face," he said.

To appeal to those businesses, his new enterprise, Atlantic Bank, is to operate in a former First Union Corp. branch in Linwood, just outside Atlantic City.

Atlantic Bank is one of several institutions being formed in southern New Jersey, an area that spreads from the Philadelphia suburbs in the west to ocean resorts in the east. At least three other banks are being organized, and one has already been opened down the coast from Linwood, in Ocean City.

Mr. Devlin said Atlantic Bank will collect deposits from the local community. But if that proves too difficult, he said, it might turn to alternative funding methods. "You can always get certificate of deposit money nationally if you are willing to pay the right rate," he said.

He plans to raise $5 million to $15 million, Mr. Devlin said, to capitalize the bank, which he expects to open by June. Most of the money is to come from a public offering. However, three other banking companies, including Telebanc Financial, have pledged to invest $1.5 million.

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