An unusual arrangement between the nation's third-largest discount brokerage firm and a small Florida bank is exceeding both partners' rosiest expectations.

Last August, a Quick & Reilly broker moved into a 10- by 12-foot office once occupied by a branch manager at Admiralty Bank here. Bank executives thought the firm had the cachet needed to attract well-heeled investors to a bank-based brokerage.

What began as an experiment has quickly evolved into a winning formula.

The arrangement has brought 310 accounts with more than $20 million of assets into the lobby of the $41 million-asset bank. And while Admiralty hasn't exactly hit the jackpot, it is earning a slice of what is proving to be a growing commission base, plus rental income from the brokerage office.

"On a per-square-foot basis, it's making more money than anything else in the bank," said Keith S. Duffy, Admiralty's president.

Quick & Reilly, for its part, is so pleased with the branch's success that it's looking to add more bank partners. By summer, the company expects to have opened similar offices at banks in Texas, California, and the Carolinas, said Thomas C. Quick, president of Quick & Reilly Group, the brokerage firm's Palm Beach, Fla.-based parent.

"This is allowing us to experiment in smaller communities where it might not make sense from an overhead point of view to open" a stand-alone office, said Mr. Quick.

Although banks have long looked to outsiders for help getting started in the brokerage business, not since Charles Schwab & Co. was part of Bank of America has such a brand-name firm lent its luster to a bank lobby.

The new option offered by Quick & Reilly promises overnight credibility to banks' efforts to woo investors while instantly contributing noninterest income to a bank's coffers.

To hear the two companies' executives tell it, the whole arrangement happened more by luck than design. The deal was hatched during a half dozen meetings last summer after a mutual friend introduced Paul L. Donohue, an Admiralty Bank vice president, to Bruce B. Blatman, a Quick & Reilly executive who manages several South Florida offices.

Quick & Reilly executives said they have no master plan to begin sharing space with banks, although the company does sell securities services to banks through its U.S. Clearing Corp. subsidiary.

But the bank was on the hunt for a new brokerage partner, after some unhappy experiences with a company that specializes in helping banks market investments. In April, Mr. Duffy had given one such company the boot after just six months, saying the relationship "failed miserably," actually losing the bank money.

Mr. Duffy, 35, said he had big concerns about the marketing company's professional standards: One broker had received her securities license only weeks before arriving at the bank, and another moonlighted as a laundromat attendant.

After this experience, Mr. Duffy didn't want to hitch his brokerage aspirations to another marketing firm. But the other obvious option - building his own brokerage - was out of the question for a small bank like Admiralty, whose main office is tucked just a few palm trees off the atrium of an Embassy Suites hotel.

So when Mr. Donohue came to him with the idea of working with Quick & Reilly, Mr. Duffy saw some tantalizing possibilities. A few meetings confirmed in his mind that a deal would work.

However, when he went to the board of directors with the proposal to pair up with Quick & Reilly, several board members were skeptical. After all, they reasoned, the discount firm had no special expertise in helping banks run investment sales programs.

Mr. Duffy countered that discount brokerage was the way to go: "We don't want a hard-seller," he said. "We want an information giver and an order- taker." What's more, by using a brand-name partner with a big advertising budget, Admiralty would have a crack at attracting customers who'd never even heard of the three-branch bank.

Finally, the board gave its assent - and Mr. Duffy was able to show swift results. Thanks to a lease arrangement that guarantees the bank $100 a square foot for space that costs $20, the Quick & Reilly office "started making money for us on day one," he said.

Of course, the real money is in sales commissions - and those are starting to add up nicely. For walk-in clients without a tie to the bank, Admiralty reaps 10% of gross commissions. When a bank customer, or someone it refers, makes a trade, the bank gets 20%. And although the bank collects no commissions on Quick & Reilly customers who transfer accounts from other offices, it does get a shot at capturing their banking business.

So far, 40% of customers are walk-ins, 40% are transfers, and the rest come from the bank's base.

Mr. Duffy is pretty impressed with Quick & Reilly's asset-gathering efforts. "In three or four months they had the same assets under management as we have deposits. I wish I had the traffic they had."

Observers say the combination of revenue and piggy-backing on a national brand has obvious appeal for community banks - especially start-ups.

"It's a fairly creative approach for banks under $100 million, because you're getting a visible brand name right out of the chute," said Edward R. Hipp, president of the broker-dealer at Rocky Mount, N.C.-based Centura Banks Inc.

An added benefit for Admiralty, executives said, is the lure for seasonal residents who know Quick & Reilly from their homes in other states.

"Quick & Reilly is a direct link to capture 'snowbirds,'" Mr. Donohue said. "It's a great tie-in."

One example is Barry Wattenberg, 61, a seasonal resident for more than 10 years who relocated from New York to West Palm Beach for good last September.

A self-described trading "addict," he doesn't match most notions of a bank investment products customer. Mr. Wattenberg spurns bonds for stocks, saying, "I like to see action." In a recent two days, he dropped $179 in trading fees to buy and sell 1,000 shares of stock.

Mr. Wattenberg, a sage investor, drew a lesson from his own razor-thin trading profits that could equally appeal to Mr. Duffy's community bank: "It's a nickel-and-dime business, but it's fun."

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