A low point of the savings and loan debacle of the '80s was the failure of Empire of America, which in its heyday was the country's 15th-largest thrift.

The demise of the Buffalo institution put $10.2 billion of assets into the hands of the Resolution Trust Corp. and disrupted the lives of numerous customers and Empire employees.

But the failure wasn't bad news for everybody involved. It also created a golden opportunity for at least former employee, Roger Arnold.

Mr. Arnold joined Empire of America in 1983 to launch a unit that sold insurance and annuities. After Empire failed in 1990, he bought that division's assets from the RTC, and used them to seed a successful brokerage, dubbed Empire Financial Services, where he is now chairman and chief executive.

And, in an ironic twist, part of Mr. Arnold's game plan is to pick up business from other banks that get out of investment sales.

"Everyone wanted to get on the bandwagon when the market was going strong," Mr. Arnold said.

When many of these bankers inevitably realize they can't compete, there will be "opportunities for me to step in and take over" what they abandon, he said.

Mr. Arnold's brokerage firm is based just outside Buffalo in Williamsville, N.Y.

His story shows that enterprising bank investment pros can prosper, even if their units go into the tank.

When Mr. Arnold bought Empire's insurance sales unit, the division had 45,000 customers. Mr. Arnold said that most of the customers stayed with his company after the acquisition.

But Mr. Arnold's aspirations went beyond insurance. He also wanted to deal in investments. So he began wooing customers of Empire National Securities Inc., the failed thrift's brokerage unit. "Customers were concerned with what would happen after the RTC takeover,. said Gregory J. Bentley, president of Empire Financial. "So they were happy to talk to us about their other investments."

In addition to scooping up Empire of America's customers, the brokerage firm has grown by acquisition.

"We have successfully acquired blocks of business that have been set adrift by banks," Mr. Arnold said.

Today, Empire Financial Services has more than 60,000 brokerage clients in all the states the thrift formerly served: New York, California, Florida, Michigan, and Texas.

Of the company's 23 financial counselors, 85% formerly worked for Empire of America's brokering subsidiary.

"They were the biggest producers," Mr. Arnold said. The company also operates a life insurance agency, EFS Insurance Brokerage Services, with 8,000 customers.

Mr. Arnold has expanded his firm in other ways, too. Because of Empire Financial's banking roots, other banks are turning to the company for help with marketing retail investments.

Providing such services "was a natural extension of what we were doing before," Mr. Arnold said.

In Florida, for example, Empire Financial has set up and is now running investment products programs for First Federal Bank of New Smyma and First Federal of Citrus County.

Mr. Bentley, who runs the Florida operation, said more of these marketing relationships are "on the horizon."

"Our main thrust is not going after banks, but they find out about us by word of mouth, and come to us," he said.

Although Empire Financial has not actively offered its services as a consultant, Mr. Bentley said many banks have tamed to his company for marketing advice. Topics covered have included whether or not to start an investments sales effort and how to position mutual funds and annuities in branches.

"Bankers realize we [walked] in their shoes and know what they need," Mr. Bentley said.

But Mr. Bentley, who fonnefiy worked at the failed Empire, also has worn the shoes of a nonbanker. After the thrift failed in 1990, he worked for a year as national insurance manager at Invest Financial Corp., which has helped develop or actually operates investment programs for about a hundred banks.

Though Mr. Bentley admits that Empire Financial doesn't have the resources of an Invest, he said that isn't necessarily a problem. The company's smaller size helps it "cater to the smaller banks" that sometimes don't get the attention that bigger banks enjoy.

"Bankers like the personal anention,. Mr. Bentley said.

Mr. Arnold's peers in the investment business see the small-bank focus as a sound strategy.

Empire is "providing financial services to part of the bank community that sometimes gets lost in the shuffle," said Thomas E. Ryan 3d, a business development manager at Keystone Group Inc., Boston.

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