William H. Spane can rightfully be called a pioneer of the bank brokerage industry.

In 1983, after 14 years in banking, Mr. Spane helped launch the first clearing firm exclusively for bank-run brokerages - BHC Financial Corp.

Banks had just won approval from the Federal Reserve to engage in discount brokerage, and they needed someone to settle their trades. But while 20 banks ponied up a total of $5 million in start-up capital for BHC Financial, only a brave few waded into brokerage.

How things change. Today, some 400 banks run brokerages, and Mr. Spane, now chairman of the Philadelphia-based firm, is reaping the benefits of being ahead of his time.

Over the past decade, Mr. Spane has had a front-row seat for banks' growing involvement with investment products. The biggest change? Banks "have become more knowledgeable, more professional, and more skilled at serving customers," he said in an interview.

Although BHC services just 35 banking companies, its client list includes some of the biggest, most active banks in the brokerage business, such as Chase Manhattan Corp., Citicorp, PNC Bank Corp., and NBD Bancorp.

This blue-chip clientele represents nearly 1 million brokerage accounts, and new accounts are being added at a rate of 14% a year. As of late July, the firm was clearing an average of 7,100 transactions a day - up 17% in a year.

Increased activity among its clients is translating into higher profits for BHC. Net income for the second quarter totaled a record $3.5 million, a 49% increase in 12 months. Earnings per share have also skyrocketed, rising 55% in the second quarter to 48 cents a share.

Such results have helped BHC gain a following among growth investors. Lynn Laughna, financial services analyst at Raymond James & Associates, St. Petersburg, Fla., recently reiterated her "buy" rating on BHC, citing the stock's low valuation.

"As more banks look to cut overhead and other costs, BHC Financial has the potential to become a major provider of its clearing and processing services," Ms. Laughna wrote in a July 21 report.

BHC's stock, which was trading at $19.125 on Tuesday, currently carries a price-earnings ratio of 10.3 times projected 1996 earnings. Ms. Laughna estimates the price could go as high as $22.50 this year.

To be sure, BHC has its rivals; indeed, it is the No. 2 competitor in a three-way race, just behind National Financial Corp., a subsidiary of Fidelity Investments, and ahead of Pershing, a unit of Donaldson, Lufkin, and Jenrette.

But Mr. Spane, seated in his downtown Philadelphia office, said he believes BHC has a special edge: its link to the banking industry.

While National Financial and Pershing serve a range of brokerage clients, BHC focuses almost entirely on banks, which make up 85% of both its client roster and its transaction volume.

"Pershing and National Financial are worthy competitors," Mr. Spane said."Our strength is that we concentrated on a particular market niche."

It's no accident that Mr. Spane has trained BHC's sights on banks. After all, he was a money manager at Provident National Bank before joining BHC during its start-up. He has run the clearing firm since 1987, when founding chairman and close friend J. Richard Boylan died.

Mr. Spane's voice drops an octave when he talks about Mr. Boylan, his boss at Provident, who is credited with creating the first bank-run mutual fund.

"He had a reputation for innovation and taking the path least traveled. He was a very far-sighted banker," Mr. Spane said.

The company tries to keep that creative flame burning, Mr. Spane said. BHC was one of the first companies to offer clearing services for annuities, a fast-growing business at banks. And it is preparing a PC-based service to supply brokers with investment strategies, customer profiling models, and scheduling services.

"The demands of customers today are for all types of services," Mr. Spane said. "We want to do our part to supply them."

BHC has also invested heavily in the systems needed to make its back- office services hum. "The velocity of technology has enabled us to give customers improved efficiency," Mr. Spane said.

Clearing securities transactions is a complicated job, requiring specialized technology and training to make sure trades are properly executed and recorded.

The activity creates a constant clatter from processing, quotation, and trading equipment, but employees at BHC's labyrinthine offices appear oblivious to the din. Colleagues attribute the low-stress atmosphere to Mr. Spane's informal management style.

A Nevada native who went east as a young man to attend the U.S. Naval Academy, Mr. Spane shuns grueling executive meetings in favor of talking with a top lieutenant over a games of dominoes.

Staff turnover is virtually nonexistent, according to Morris Miller, a senior vice president and Mr. Spane's primary domino partner. One former employee, Barbara Schaefer, waited several years for an open slot and jumped back on board as a sales executive when the position became available.

Clients appear well satisfied with the services they receive.

"We have a very good relationship with BHC," said Edward Wallander, chief operating officer of PNC's brokerage unit.

In fact, PNC recently parlayed the relationship into a deal that's meant to benefit both companies. BHC agreed to buy a discount brokerage that PNC wanted to shed in favor of focusing on full service investment sales.

The purchase, whose price is not being disclosed, gives BHC access to 400 correspondent banks that were linked to PNC's unit.

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