plans to build its own brokerage unit, the banking company is expanding its effort to sell investment products. By yearend, the $3.2 billion-asset bank will begin a direct marketing campaign that will use demographic data to pinpoint individuals in the region who are most likely to buy investment products. Central Carolina will also add six investment sales representatives to complement the 18 brokers who began selling Central Carolina investments earlier this year after the banking company signed on Invest Financial Corp. to sell and market investments through the bank's 154 branches. "I think we're off to a great start but we're not at our potential yet," Stephen M. Angelis, vice president in charge of investment sales at the Durham, N.C.-based bank. Mr. Angelis said his sales reps have each sold an average of $225,000 of investment products this year, but he hopes to boost that to $350,000 next year, with the help of extra training and the added marketing initiatives. Central Carolina has a tough job ahead as it competes for investment dollars with North Carolina-based banking giants like First Union Corp. and NationsBank Corp. Bank officials, however, are confident they can carve out a niche for themselves. Indeed, the bank has always bet against the odds. In a move that ran counter to industry practice, Central Carolina contracted with Invest after assessing Security Capital Corp., a small Charlotte-based bank Central Carolina purchased earlier this year. "We thought it best to investigate the possibilities before we pulled the trigger," said Richard L. Furr, chief operating officer and director of retail banking for Central Carolina. "What we found was that we stood a better chance of success with their program than with our own." Convention usually calls for the larger merger partner to impose its own investment sales strategy on the bank being acquired, experts say. But in this case, Central Carolina was in the process of developing its own brokerage unit after years of selling investments through the trust department. In a flurry of negotiations, Invest was able to interest Central Carolina bank officials, who had begun to harbor reservations about the feasibility of starting a brokerage subsidiary from scratch, said Mr. Furr. "As soon as the we heard the news that Central Carolina had a proposal to buy Security Capital, we mobilized our people to try to win the contract," said Merlin R. Gackle, Invest's chairman. Indeed, Invest sent more than five executives out to meet with officials at Central Carolina last fall, including the normally office-bound Mr. Gackle himself. By January, Central Carolina had signed a three-year contract with Invest. Edward Whitfield, who had been hired to head up the scuttled brokerage unit, quit shortly after the contract was signed, bank officials said. Mr. Angelis, who was Security Capital's investment sales chief, was put in charge of the new Invest program in May. "What turned it around for us was the tremendous amount of overheard involved in setting up your own broker-dealer," said Central Carolina's Mr. Furr. "All the due diligence, training, compliance, and the research was very expensive to do on our own," he said. Mark Naber, a partner with the Fairfield, Conn.-based consulting company Optima Group, said it often makes sense for banks to outsource their brokerage business, especially if the volume of business that's expected won't make up for the fixed costs involved. "Let's say, sometimes it's better to rent something in short term, and make sure it works, before buying it yourself," Mr. Naber said. "In this case (Central Carolina) probably got trained sales people, back-office and clearing services, and compliance expertise" in the deal.

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