First Busey Corp. of Urbana, Ill., plans to combine its trust and securities services into one unit.
The merger, scheduled for February, is intended to end customer and employee confusion over where to get investment services, said Curt Anderson, president of First Busey Securities Inc.
"We're hopefully creating a new identity for the organization," he said. "Typically trust departments and the securities operations don't even talk to each other."
Community banks are increasingly offering brokerage alongside trust services. But by doing so, they open themselves up to rivalry between departments, as well as with national brokerage companies.
One way for banks to compete is to fold their brokerage operations into the trust area, where most services are already fee-based. Cape Cod Bank and Trust Co. of Hyannis, Mass., for example, melded its trust and brokerage operations in July.
"The smaller banks can't develop sufficient volume on the securities side without combining it with the trust department," said Burton Greenwald, a Philadelphia-based mutual fund consultant.
"It's just a more efficient way to operate if you're not a huge bank," he added.
The new unit-Busey Investment Group-would have $1.2 billion of assets under administration, 40 employees, and about 5,000 clients, Mr. Anderson said. First Busey is a $1 billion-asset bank.
It is to concentrate on financial planning and asset manage-ment-ideally for high-net-worth individuals and institutions - rather than straight securities sales, Mr. Anderson said.
Busey Investment Group will have offices in Champaign, Ill., about a mile from the nearest bank branch. In that way, it hopes to attract more nonbank customers, Mr. Anderson said.
He added that he would like to snare some customers from Bank One Corp. and National City Corp., which also have branches in the area. Customers of those banks might be more likely to buy securities away from a Busey bank branch, he said.
Busey has about a 35% share of deposits in Champaign County, about 130 miles south of Chicago, Mr. Anderson said.
