1994 is shaping up as the year of the annuity at banks. The tax-deferred investment products, which were little known at banks as recently as two years ago, have been strong sellers throughout this year, bankers and investment marketing executives say.

Indeed, annuities sales have eclipsed mutual faint sales at many banks.

Essex Corp., a New York firm that markets investments through 250 banks, says that annuities now account for 80% of it's sales volume, with mutual funds making up the balance.

Last year, the sales picture was exactly the reverse, said Gerald Cunningham, the company's president. "We expect to do well over $2 billion in the sale of annuities this year," he said.

A similar shift is under way at Invest Financial Corp.. which. sells investments through 150 banks.

Annuities now make up one-third of Invest's sales volume, up from 15% in 1993, according to Merlin R. Gackle, president of the Tampa, Fla., company.

Invest has stepped up its annuities training efforts, tutoring bank-based brokers in selling insurance products. At the same time, Mr. Gackle added, "there's no question that our mutual fund sales are nowhere near what they were last year, which is reflective of the industry as a whole."

The rise in annuities sales isn't confined to banks.

Sales of annuities in the first six months of 1994 were 19% higher than in the comparable period last year, according to the Life Insurance Marketing and Research Association, Hartford, Corm.

The gains have been confined to variable annuities.

Sales of these investments, whose returns vary with market conditions, were up 37%, according to the association.

Sales of fixed annuities, which offer a set yield, were down 5%.

At Summit Bancorp., a $4.3 billion-asset company in Chatham, N.J., that trend was very much in evidence.

"Our fixed annuities sales are the same as last year, but sales of variable annuities are way up," said Jack Coussen, senior vice president in the bank's Summit Financial Services unit.

Summit expects to sell $25 million of variable annuities this year, up more than 30% from last year, he said.

For all the excitement, bankers and marketing executives say the annuities boom may be short-lived.

As interest rates creep up, competition from certificates of deposit is intensifying. "As we see CD rates rise, there will be less of a tendency to buy annuities," Mr. Coussen said.

But Peter P. De Buona, who heads the brokerage unit of North Fork Bancorp, Mattituck, N.Y., says he is not worried about his ability to sell annuities in a rising rate environment. "It's a tad bit more difficult," he said, "but we'll just tout the tax deferral."

The annuities business at North Fork's brokerage, Compass Investment Services, is already up 70% from last year's level and should account for nearly three-quarters of investment products sales this year, he added.

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