Feeling a little edgy about the latest stock market tumble?

Calm down with a decaf cappuccino from the corner cafe. And while you're there, sell a few shares of deadweight stock and open a certificate of deposit account.

That's what customers at Sterling Bank and Trust in San Francisco have been doing since July 3, when the $1 billion-asset bank began serving up free coffee along with investment products and advice at its first "cafe branch."

The strictly self-serve cafe branch also provides customers free pastries and gratis copies of The Wall Street Journal. Thebranch is staffed by two bank employees as well as two Series 7-licensed brokers who sell mutual funds, annuities, and individual securities.

Located in renovated quarters that once housed a dry cleaners, the small branch with mahogany trim and marble floors has attracted a steady flow of pedestrians who sip the three different varieties of gourmet coffee, open checking accounts, use the automatic teller machine, and peek at the latest stock and mutual fund prices.

"The coffee and their curiosity" bring customers in, said Stephen H. Adams, West Coast managing director for the Southfield, Mich.-based bank.

In recent years, banks have set up shop in a variety of nontraditional locations, including supermarkets and airport terminals. Sterling's approach provides the same convenience, observers said, while attracting a coffee-klatch crowd of young professionals who are more likely to invest in mutual funds or securities.

"Sterling is focusing on the affluent marketplace, and for that crowd, a relaxed cafe atmosphere might be more conducive to starting a conversation about investing than a regular branch," said Les Dinkin, principal of NBW Consulting Inc., Westport, Conn.

The bank moved into the California market in 1993 when it purchased a failed savings and loan in upscale Newport Beach from the Resolution Trust Corp. The bank also has branches in the Detroit metropolitan area.

R. Scott Durcanin, the principal in charge of Sterling's investment sales program, said his brokers aggressively target customers who are attracted to Sterling's above-average CD yields but who want more return. So far, the brokerage has penetrated 20% of the bank's deposit base, Mr. Durcanin said. He expects to do even better as the bank expands.

Work is already under way on three new cafe branches, slated to open in San Francisco during the next six months.

Sterling's brokers are employed by the bank and Linsco/Private Ledger, a Boston-based brokerage firm that provides sales support and clearing services.

Roger Thomas, president of Thomas Marketing, a Columbus, Mo.-based brokerage consulting firm, said Sterling's move is a reaction to Wells Fargo & Co.'s aggressive push to offer banking services in 472 supermarkets and kiosks throughout California.

Sterling's Mr. Adams said the casual cafe branches are attractive to West Coast consumers and are easier to navigate than a busy supermarket. Plus, they can be set up for about a third of the cost of a regular branch, he said.

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