The summer surge by bank customers into stock mutual funds continued through September, fueling another month of sales growth at bank brokerage units.

"August was our biggest month of the year, and our sales are about the same in September," said Lincoln Yersin, president of Amsouth Securities Inc.

Provided the economic environment doesn't change, brokerage chiefs said the high sales volume in the summer months, usually a slow season, indicate growth through the fall.

Mr. Yersin said he had expected that sales at Birmingham, Ala.-based Amsouth would be flat over the summer, because many of the banks branches are in Florida. The so-called "snowbird" customers generally return to the North in summer, and branch lobbies empty out.

"We were pleasantly surprised to see that the summer months were as strong as they were," Mr. Yersin said.

In August, traditionally the slowest month, sales jumped 15% from July at the $17.7 billion-asset bank, he said.

Popular funds at the bank over the last couple of months include the bank's own family of portfolios, Amsouth Funds, as well as Oppenheimer Mainstreet Income and Growth Fund. The balanced funds and income funds of Fidelity Investment's Fidelity Advisor series are also popular.

Bank brokerage chiefs said their sales results for August and much of the summer mirrored those of the mutual fund industry in general, which has been witnessing strong sales of stock funds.

Net new sales of stock funds in August were $11.4 billion, slightly less than $11.9 billion in July, according to the Investment Company Institute's monthly results.

Bond fund sales in August were $688.4 million, a slight increase over the $647.4 million recorded in July.

Fueling most of the stock fund sales growth are the most conservative portfolios, growth and income funds, which are also by far the most popular group sold at banks.

Investors poured $3.8 billion of new money into those funds last month, the second-best month ever for the group, behind April 1994. Growth funds and aggressive growth funds also surged.

"Our overall brokerage business has grown in the last three to six months," said J. Edward Diamond, president of Dime Securities Inc., the brokerage unit for Dime Savings Bank of New York.

Mr. Diamond estimated that September's sales would jump about 11% from August. Brokerage executives still had a few days left in the month when they were interviewed by the American Banker.

The growth and income funds of Putnam Investments, Oppenheimer Management, Franklin Resources, and Fidelity Investments are popular at Dime.

Mr. Diamond said about half of sales were now coming from stock funds, a significant shift from 1993, when they contributed a mere 20%. But he warned that banks should not rely on stock fund sales just because they were outstripping bond funds so easily.

Bank customers are generally older and need income-generating investments, so "bond funds are still a staple product" at banks, he said.

Mr. Diamond also warned that many bank brokerage units were reaching a maturity stage, and that no matter how much longer the stock market booms, bank brokerages face a limit to their sales potential.

"The growth rate overall in the bank mutual fund business is not as dramatic as in 1993," said Mr. Diamond.

David Strickland, chairman and chief executive officer at Barnett Securities Inc., is more optimistic. He said productivity of brokers was contingent on how well the bank places its brokers.

Some branches have much more productivity than others because of their locations, so a bank should determine its brokerage force by the number of households it has, not branches, he said.

Mr. Strickland estimated a September sales jump of 7% over August. August sales were 12.9% higher than July, he said.

Mr. Strikland's 200 brokers are seeing much more demand for stock funds than bond funds, he reported.

"The mix of stock and bond fund sales has changed," he said. "But we continue to increase new customers at a rate faster than we lose them."

Not surprisingly, sales of mutual funds to banks are up at the mutual fund companies. Pioneer Group, a tiny company still trying to get a foot in the door at most banks, has seen sales continually climb.

"September sales are not as big as I want them to be, but I continue to have double-digit growth," said Barry Knight, the Boston-based fund company's vice president, financial institutions.

Mr. Knight, whose fund company manages $11.6 billion in assets, said the "majority" of sales are through its Capital Growth Fund, which invests primarily in undervalued small-capitalization stocks.

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