North Fork Bankcorp. is going it alone -- with a vengeance.

The Mattituck, N.Y., bank this month took in-house a retail mutual funds program that had been run for three years by Financial Insurance Service, a Lincoln, R.I., marketing company.

At the same time, $1.9 billion-asset North Fork is seeking to put its own staff in charge of annuity sales, takes advantage of a state court ruling in March permitting bank employees to sell these products. North Fork applied for regulatory approval within days of the ruling and is now awaiting the reply.

The strategy marks a sharp break from the normal practices of community banks. As they follow their larger brethren into investment products, most small banks are preferring to rely on the resources and experience of outside marketers.

'I Hated It'

But John Kanas, North Fork's strong-willed chairman and chief executive, was clearly uncomfortable surrendering operations to an outside firm.

"I hated it," said the former high school English teacher who, through trial and error, has built North Fork into one of Long Island's largest community banks during his 12 years as chairman.

The decision to shift strategies in investments products hardly resulted from weak sales. The investment products program has posted steady gains since its inception, with annual mutual fund and annuity volume topping $35 million last year.

Rather, Mr. Kanas and his team simply wanted to gain greater control over the program and to stop giving a share of commissions to outsiders.

Moreover, Mr. Kanas believes that an in-house investment sales team can be used to stoke sales efforts in other products throughout the bank.

"We want the representatives to serve as prototype for where we want to take the bank," Mr. Kanas said in a recent interview.

He maintains that just about any bank product -- from credit cards to commercial loans -- can be much more actively sold.

"Sales seminars and training films really haven't worked," Mr. Kanas said. "Now we're putting a complete group in, and placing our people in close contact with them."

Hired Broker's Employees

To get its first brokers, North Fork has simply hired eight salespeople who had been serving the bank as employees of Financial Insurance Service.

The bank has told everyone from receptionists to executive vice presidents to study the investment representatives closely.

"We want the sales culture to rub off," Mr. Kanas said.

In another sign of the sales team's status within the bank, North Fork has placed the operation under Donald DeMaio, senior vice president in charge of the bank's retail unit.

The positioning makes clear that the unit -- Compass Investment Services -- is part of the bank's mainstream operations. By contrast, some banks treat their investment businesses as experimental units that operate off of the side.

"We're telling the rest of the bank these people are on equal footing with them," Mr. DeMaio said.

As Mr. DeMaio acknowledges, solid teamwork can go only so far in the face of a down market. The bank would be happy to match last year's sales volume, given climbing interest rates that have dampened enthusiasm for mutual funds.

"It's a tough year," Mr. DeMaio said.

But North Fork should be able to weather the slowdown, said Mary Quinn, bank analyst at Keefe, Bruyette & Woods Inc.

"John Kanas is a very energetic and bright guy," Ms. Quinn said. "He's made a commitment to growing fee income and [the sales program] is a part of that."

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