consists of about 53 million people born between 1965 and 1978. Earlier this decade, the popular media portrayed Xers as being disaffected and lacking ambition. But as young Americans once derided as "slackers" take on positions of prominence through a high-tech-oriented economy, community banks should be there to help them with their financial needs, industry observers say. Whether the relationship begins at the branch by offering cafe latte or at graduate school orientation, observers say banks need to crack the code of this generation's particular desires and needs. "Just because their mommies and daddies bank here, we can't assume they will," says Jeff Johnson, chief executive of FNB Bank of Coffee County, Douglas, Ga. He adds that his $74 million-asset bank company is attempting to steer younger customers to its bank by sponsoring bus trips to sporting events and weekend ski getaways. Today, Gen Xers earn more than many think. According to Raddon Financial Group, a Chicago-based consulting firm, the average Gen X household earns about $40,200 per year, compared to $53,000 for Baby Boomer households. And their importance to banks will only grow as they age and generate higher salaries and more personal assets. Already, Gen Xers have become ticker-tape millionaires on Wall Street through involvement with successful Internet startup companies. Indeed, it is not uncommon to come across 28-year-olds sporting luxury cars their parents can only dream of driving. So what do these students and young professionals want from a community bank? To a greater extent than their elders, many Xers pick up the telephone to check their accounts, use debit cards to buy retail items, and prefer stocks and bonds to certificates of deposit, Raddon Financial's research indicates. Consultants acknowledge that luring younger customers is no easy task. It takes some creativity because their mind-set is unlike that of many buttoned- down boardroom execs. "The motivations and expectations of the younger generation are much different than that of bank CEOs and boards," says Bob Powers, an analyst with Compass Consulting Group in Providence, R.I. Indeed, it is a tough market to crack using conventional methods. Banks should pick one product - whether it be free checking, discount auto loans, debit cards, or a first-time-homebuyer program - and develop a theme driven by a cultural icon that speaks directly to the younger generation, marketing experts said. "Banks can't use a one-size-fits-all marketing approach to Gen X," said Joanne McKinney, senior vice president at North Castle Advertising, Stamford, Conn. "It just flies in their face." Ms. McKinney's firm, for example, recently drummed up a 30-second radio jingle for Peoples Bank, Bridgeport, Conn., to promote free checking. The ad, played on more than a dozen radio stations throughout the state, consisted of a goofy acoustic guitar song reminiscent of those popularized by Adam Sandler, the former "Saturday Night Live" cast member turned movie star. One Arkansas-based banker is taking a cue from Rodney Dangerfield: Joe Miles, president and chief executive officer of Elk Horn Bank and Trust, is going back to school. Mr. Miles said his $114 million-asset bank recently formed a student development advisory board comprised of 15 college students. Elk Horn, based in Arkadelphia, Ark., is within a stone's throw of two small colleges. He and his board are working to figure out how Elk Horn is "missing the boat" with students. To diversify beyond their base of older customers, banks are also gauging the merits of direct mail. Over the summer, Elk Horn conducted its first mass mailing designed to lure incoming freshmen. The letter offered students free checking, telephone banking, direct deposit, and a debit card. The bank has yet to tally the success rate of the initiative, but said that it did yield 29 new accounts in one day. Despite the fast-changing world of financial services, Mr. Miles said the bank still has faith in the way things used to be. "I don't believe loyalty is dead. Many of these graduates will remain and work here - maybe at our bank," said Mr. Miles. Durand State Bank in Illinois is taking a different tack, working to court another segment of Generation X - engaged couples. Bill Smith, president and CEO of $53 million-asset Durand, says the bank seeks out future newlyweds by scanning the newspapers for engagement announcements. It then sends a congratulatory letter and invites them to set up a special wedding-registry account - similar to an account established at department stores such as Nordstrom's. But instead of picking out a gift, a friend can deposit cash into the account. To make the wedding account alluring, the bank offers a higher rate of interest for the first year than its regular savings account. Mr. Smith said that once the relationship was established, the bank advised the couple on other financial matters such as credit card debt or home loans. Since August 1998, Durand has opened 10 accounts valued at more than $25,000. "It has been slow to catch on, but we still think it is worthwhile," said Mr. Smith. Products such as telephone and Internet banking can be useful tools to lure younger customers, especially from big retail banks. "The Internet can be a great equalizer for small banks," said Julie Oliver, research operations director at the Claritas Group, an Arlington, Va., consulting firm. But surprisingly, Raddon Financial research indicates that the high-touch Generation X still appreciates bricks-and-mortar, just like their parents. A bank such as South Umpqua can attest to that. Since 1994, the $334 million-asset bank, based in Roseburg, Ore., has overhauled its once-stagnant branch system into hip "retail stores." Customers can slump into couches, browse the Internet, or buy one of the bank's bags of coffee, hats, tee shirts, or skateboard stickers. "The younger generation doesn't want a stodgy environment," said Lani MacCormack, director of marketing at South Umpqua. "They like to see things evolve."

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