Dennis W. Burnette's life of late seems like something out of a spy novel.

But secret meetings at discreet locations, government investigations, and fingerprints of his closest associates are all part of organizing a new bank.

In the wake of merger mania, there has been an astonishing surge in the creation of banks. Last year 290 were chartered, 27% more than in 1997 and nearly triple the number chartered five years ago. The trend is expected to continue as long as a strong economy keeps funding the dreams of chief executives bounced by mergers.

Mr. Burnette, 52, is one such executive.

He ran Pickens County National Bank in Jasper, Ga., for 20 years until it was bought in 1996 by Regions Financial Corp. of Birmingham, Ala. Mr. Burnette could have been president of Region's Pickens County operation, but he passed and took a job with an executive search firm.

"Being purchased gave me some time to do some soul searching," he said. "I just couldn't imagine being a branch manager after running a bank for 20 years."

Come July he plans to open Cherokee Bank NA in this suburb 40 miles north of Atlanta. His story illustrates the challenges of starting a bank.

The chartering process has changed since Mr. Burnette helped start Pickens County National in 1976. Back then, for example, organizers needed only $800,000 in start-up capital, and the bank did not have to worry about competitors outside its home county.

Today regulators require $6 million to start a bank in Georgia, and competition comes from everywhere. Still, Mr. Burnette said the formula remains the same.

"It's a combination of management and market," he said. "If you're in a growing area where there is customer unrest, you can be very successful."

He first considered starting a bank in 1996, but decided there were too many community banks anchored in Canton's Cherokee County, which has a population of 132,000.

"The competition was en-trenched," Mr. Burnette ex-plained. "It's a terrible business plan to open a bank anticipating taking satisfied customers from the competition."

But things changed in the first half of 1998. Synovus Financial Corp. of Columbus, Ga., announced a deal for Bank of North Georgia, a big player in town. Soon after, Canton's Etowah Bank agreed to be purchased by Regions.

"I had been keeping my eye on the market, looking for an opportunity," Mr. Burnette said. "This was the opportunity I was looking for."

Three community banks and six large banks have offices in Canton, but Mr. Burnette decided Cherokee County could support another bank. Deposit growth there has averaged 14% over the last five years.

Donald F. Stevens, who will be chairman of Cherokee's board, said the Cherokee County Chamber of Commerce added 177 members in 1998, bringing its total to 1,000. It hopes to add 200 more businesses this year.

"We had 38 ribbon cuttings last year, twice as many as we did the year before," said Mr. Stevens, a retired Delta Air Lines Inc. pilot who is the chamber's president this year. "This bank is in the right place at the right time."

Cherokee Bank began to take form early last fall when Mr. Burnette started quietly contacting local businessmen. He held a private meeting with potential investors in September to explain the business plan. A consultant from T. Stephen Johnson & Associates of Atlanta did most of the talking.

"I was uncomfortable telling people. 'I can do this, and you should pay me $100,000 a year to do this,'" Mr. Burnette said. "Having a consultant there gave me more creditability."

Investors were told it would cost about $150,000 to organize the bank. Roughly 10 directors would split the expenses, and there would be no refunds if the bank never got off the ground. Those who wanted in had to ante up $5,000 within three weeks, and commit to buying at least $100,000 of the bank's stock.

Two other warnings were issued.

First, directors would have to disclose plenty of personal financial information. "In small towns, where everyone knows each other, that is a huge headache," Mr. Burnette said. "There has to be a lot of trust built up very quickly to turn that sort of information over."

Second, an FBI background check is required, complete with fingerprinting. "You don't always know everything you think you know about someone," Mr. Burnette joked. "You might save someone a lot of embarrassment by making sure they know about that from day one."

By mid-October Cherokee Bank had a 10-person board, including two physicians, a real estate agent, and several local business owners. Half of the board has either worked at a bank or served on a bank board. It includes not only the incoming Chamber of Commerce president, but also a former mayor of Ball Ground, a nearby town.

The new board met with federal regulators in late October to vouch for Mr. Burnette and justify the bank's need. The group chose a national bank charter simply because the consultant felt most comfortable dealing with the Office of the Comptroller of the Currency.

"We are relying on these people to guide us through the regulatory process, and it makes sense to utilize their strengths," Mr. Burnette said. Besides, "there are successful state banks, and unsuccessful national ones, and I don't think what charter you have makes that much of a difference."

Six weeks and $40,000 later, the bank's consulting firm completed the regulatory application. Cherokee filed the one-inch thick document on Dec. 15. Mr. Burnette hopes to receive a preliminary charter in April.

Since the application was filed, Mr. Burnette has received a flood of phone calls from lawyers, architects, and vendors eager to assist him. The top priority was a law firm. For a flat fee of $25,000, Mr. Burnette found a firm to prepare a prospectus for Cherokee's initial public offering, and write the bylaws for the bank and its holding company.

The group filed its application for a public offering with the Securities and Exchange Commission last week. Mr. Burnette said he hopes to have an approved circular and begin selling stock in April.

The bank will rely on its directors to hawk the stock, instead of paying a brokerage. The primary reason was cost. Brokers charge 8%, or in Cherokee's case about $500,000. And besides, by bringing in outsiders, Cherokee would risk spreading its stock wider than the organizers want.

"We aren't interested in an investor from Boston who might buy our stock hoping to make a profit if we sell in three years," Mr. Burnette said. "We want people who understand the direct link between our community bank and our community."

Depending on demand, Cherokee Bank will sell up to $10 million in stock to fund the bank. "Because now is such a good time to raise capital, we will go over the minimum if we can," Mr. Burnette said. "And besides, if there are townspeople who want to buy into our company, I would hate to close the door on them."

Mr. Burnette hopes to be in business by July-four months earlier than he promised investors at the first meeting last year. To open, he needs a temporary office, and OCC examiners must approve the bank's security procedures and operations policies.

The bank will target small businesses, consumers, and home builders. Its first branch will be in Riverstone Plaza, a shopping center under construction. "We are going to be right in the middle of the future of this town, and the focal point of this community," Mr. Burnette boasted.

The business plan calls for the bank to be profitable by the end of its second year. "It's exciting," he said. "I think we have found a niche that needs to be filled.

"This is not a venture where we hope to be successful. We are planning on it."

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