Bob Spadafora flew to Dallas in 1994 to meet with executives of International Bank of Commerce about starting an investment products program. Two days later, he knew IBC was not just another bank.

Mr. Spadafora, executive vice president at Independent Financial, a third-party marketer, had been told that investment representatives at the south Texas bank would have to be bilingual.

But a couple of days into his visits to the bank's various branches, Mr. Spadafora joked that he hadn't heard a word of English.

"We knew then that we needed to understand the culture of the bank," Mr. Spadafora said. "We couldn't impose New York or Boston on them."

Laredo-based IBC is unusual in many ways. With more than 68 offices in south Texas, the minority-owned bank maintains a strong presence in its market.

Its influence starts at the Mexican border in Laredo and reaches hundreds of miles north to San Antonio and east to Bay City along the Gulf of Mexico.

Because half the depositors of the 30-year-old banking company, which has about $3.7 billion of assets, are natives of Mexico, IBC has developed a time-tested expertise in international banking and commerce.

Although IBC had established itself as among the best-performing financial organizations on the Texas-Mexico border, however, it was bleeding deposits by 1994.

Prodded by outside stockbrokers, bank customers were taking money out of low-yielding bank certificates of deposit and putting them into mutual funds.

"The stockbrokers were getting their hooks into our customers," said Luis Guerra, senior executive vice president, who was one of the first on IBC's management team to detect the problem. "These guys are playing the same game with different rules."

Together with Mike Amici, vice president of IBC's financial services division, Mr. Guerra started looking into the bank's options in mutual fund and annuity programs.

One was to get the bank into a dual-employee investment services program, in which employees of the bank would sell mutual funds and annuities. Mr. Guerra and Mr. Amici decided against it because of the strict federal regulations. "Plus, we weren't experts at selling," Mr. Guerra said.

Mr. Amici then recommended that IBC look into third-party contractors and, after some searching, came up with Liberty Securities Corp., which in March 1996 acquired Independent Financial.

The marketer sells about $2.5 billion worth of mutual funds, annuities, and insurance products a year through 150 banks.

From the beginning, Mr. Guerra and his team proceeded very cautiously.

Most of IBC's depositors own small businesses that pull in less than $5 million a year.

"These are family-owned businesses," Mr. Guerra said. "They learned the hard way and act accordingly. We didn't want to put them into something that was too risky for them. By nature, we want to stay with something that's stable."

In addition, small-business owners generally are accustomed to reinvesting profits, so IBC's customers had to be educated about investing elsewhere for estate planning, business growth, and extra income.

Finally, IBC's international customer base has long seen the bank as a safe haven away from Mexico, so investing in uninsured products was also seen as risky.

The first step the bank took was to establish the service-mark name Wall Street International for its investment services program, thus ensuring continuity in case the relationship with the third-party provider was ever terminated. Then the groundwork began, slowly.

"We really had to start from scratch," Mr. Guerra said. "Our employees were used to advising customers against investing into these types of products. All of a sudden, we were recommending them."

Bank management also had to be instructed in the offerings. Mr. Guerra and his wife, for example, had nightly tutoring sessions from some of the reps.

In typical IBC fashion, much of the education began over informal barbecues that the bank holds frequently as a way of communicating new programs to its customers or simply as a social event that mirrors customers' culture.

There, Liberty's investment representatives were introduced. "We're guests in their homes," Mr. Spadafora said. "We need to adapt to their culture and their priorities."

Given the bilingual culture of the bank and the long distances between bank offices, recruiting the right reps took a while. In Laredo, for example, the bank has had three reps in a year and a half.

"It's not easy persuading stockbrokers to leave a secure job and to go to an insecure, untested type of environment," Mr. Guerra said.

But Mr. Guerra said he is convinced that his bank's "start-up headaches" have been put behind it.

IBC achieved sales of about $13 million so far this year, up sharply from last year's pace but far from the $50 million the bank has set as a goal for 1998.

Mr. Guerra said he has the right people in place, with six reps led by sales manager Steve Barnes.

One representative, Sofia Sewell, has distinguished herself among her peers and has won the trust of the bank's customers by learning their culture and joining in their activities.

A native of Singapore, Ms. Sewell took Spanish lessons after work. Her personality and resourcefulness have won her awards and garnered her many sales.

Mr. Spadafora tells of Ms. Sewell's pursuit of a successful but busy local lawyer. After weeks of trying to get to talk to him, Ms. Sewell learned that he would take part in a benefit walk.

"She got up at 6 a.m., went to the place, and walked next to him," Mr. Spadafora said. She got to know him, and the rest fell into place.

With people such as Ms. Sewell on board, the IBC program is starting to reap what it has sown.

Although 72% of program investors come from outside the bank, the remaining 28% are bank customers who would perhaps have taken their money elsewhere, Mr. Amici said.

About 95% of the investment program's customers are U.S. nationals, but the bank seeks to tap its international base-which would entail jumping some regulatory hurdles.

They also plan to go after bigger-ticket items, such as the multimillion-dollar retirement funds at hospitals and other institutions.

Mr. Amici and Mr. Guerra said they are happy with the packaged mutual funds and variable annuities into which most of IBC customers' investment money is placed and the short list of fund companies on which Independent Financial has settled, including Colonial, AIM, and Stein Roe.

Insurance products also have been added.

"The program is very successful for us," Mr. Guerra said. "We feel that we're just scratching the tip of the iceberg, although we still need to proceed in our own careful way."

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