A Pennsylvania thrift that went looking for help in setting up an investment products program found the answer close to home.
First Federal Bank, a $440 million-asset thrift in Hazleton, began selling investments in late June through a program set up by T.H.E. Financial Group of Mechanicsburg, about 90 miles away.
Although T.H.E. Financial is a relatively small firm, it was highly recommended by the 15 small banks and thrifts-all in Pennsylvania-that were already using it, said E. Lee Beard, First Federal's president and chief executive officer.
In addition, First Federal found its products to be priced fairly, Ms. Beard said. "We're hoping that our brand-name recognition will attract the customers," she said.
About 100 companies specialize in helping banks run investment sales programs, including high-profile firms with nationwide operations such as Invest Financial Corp., St. Petersburg, Fla., and Essex Corp., New York. They tout the advantages of deep pockets and economies of scale.
But a consultant who helps banks select marketing partners said small regional or local companies have advantages as well. "Bankers sometimes prefer the smaller companies for more personalized attention," said Richard Ayotte, of American Brokerage Consultants, St. Petersburg.
T.H.E. Financial is giving First Federal two brokers, one in Mountain Top, Pa., the other in Bloomsburg, Pa. The representatives are to visit eight other First Federal branches in a set rotation, as well as by appointment, said Ms. Beard.
The number of brokers may increase but not for two or three years, said Anthony Tarantino, president of T.H.E. Financial.
The marketing firm is nine years old and has had bank clients for six years. At First Federal, it will offer stocks, bonds, annuities, mutual funds, financial planning, and discount brokerage.
First Federal decided to offer investment products in late 1997 as it was considering conversion to the stock form of ownership. Its initial public offering closed in March, and the brokers, who are on the marketing firm's payroll, were hired in June.
"As we were thinking about what we wanted to do and be for the future, alternative investments were part of the services we thought would be important to provide for our customers," Ms. Beard said.