At tiny Sidell State Bank in downstate Illinois, marketing investments is very much a one-man show.

Thomas Butler, president and chief executive of the $12 million-asset bank, also doubles as its resident stockbroker.

This year, he expects pull in $60,000 in commissions for the bank from sale of stocks, bonds and mutual funds.

While that sum wouldn't be much to crow about at a bigger bank, it is expected to be 28% of Sidell's total revenues for the year.

Mr. Butler already is ahead of last year's sales of $3.5 million.

"If I didn't also have to be CEO, I could have sold a lot more," Mr. Butler says almost apologetically.

Handsome Prospects

Within three years, he adds, securities sales could be the bank's main source of earnings.

Sidell, situated among corn fields and grain elevators, is an example of how even the smallest of banks can generate handsome fee income from securities and mutual funds. Mr. Butler convinced a reluctant board to jump into a non-traditional bank business five years ago, then made it work.

Though he's already got 165 investment accounts in a bank serving an agricultural community of 650, Mr. Butler figures the world is his oyster.

In the last year, he's plunked down $50 at time to register as a broker in seven other states. That way, if a client happens to move out of state Mr. Butler can keep the account.

Still, he spends most of his time prospecting right at home. While watching his children in school sporting events, he also works the crowd. "Everyone is a prospect," he says.

Mr. Butler's sense of salesmanship grew during his college years in the 1970s. While attending college he worked part-time as a salesman in a clothing store. That experience whetted his appetite for a career as a broker, he said.

But, as he was interviewing for brokerage jobs, he got a firm offer from a bank and grabbed it.

About six years ago, Mr. Butler, who has been CEO of the bank of 11 years, started seeing an opportunity in brokerage. When he broached the concept to his bank directors, they were cool.

"They were listening but I don't think they thought it was something that was going to happen in the next 10 years," he said.

"We were a little hesitant and fearful that it might harm our banking business," explained Beryl Spicer, a bank director for 34 years. The board worried that its core business should be traditional bank activities, not brokerage activities, he said.

Message from Customers

The turning point in the debate came quickly about three years ago, when customers told the board they were dissatisfied with the yields on traditional bank products.

"We saw that provide were saying, |Hey, we can't go along with you, you're not giving us enough rate of return on CDs," Mr. Spicer said.

"That's when we really began to realize that there are customers that we worked years for and now we were leading them by the hand out the door," Mr. Butler said.

The board authorized Mr. Butler to dip the bank's toe into the business with discount brokerage offerings in conjunction with Wayne Hummer & Co., of Chicago, a discount brokerage company dealing with banks. Wayne Hummer provided the products and Mr. Butler did the selling.

Inside Business

The program began with sales to directors -- Mr. Spicer made the first purchase. Then, Mr. Butler went to the stockholders and bank employees -- an effort, he said, to show to the community that the bank was behind the new business.

In March 1992, Sidell ended its relationship with Wayne Hummer and signed up with a program that Robert Thomas Securities offers banks. Robert Thomas, a unit of St. Petersburg, Fla.-based Raymond James Inc. that provides retail brokerage services, offered the bank a better commission split and better support services, Mr. Butler maintains.

Nowadays, a sliding door is all that separates Mr. Butler's main office from his 12 foot-by-12 foot brokerage area. That area is rented by Robert Thomas and Mr. Butler serves as a dual employee.

Mr. Butler finds Raymond James' stock-picking ability particularly appealing. In a Feb. 25 article, The Wall Street Journal identified Raymond James as the best stock picker among brokerages for the fourth quarter of 1992, the full year, and the five years ending in December.

While mutual funds account for the majority of investment assets under management among the 200 banks that Robert Thomas works with, Sidell customers have 75% of investment assets in individual securities.

Banks are too eager to sell mutual funds, according to Mr. Butler. He believes that banks shouldn't overlook securities in developing customers' portfolios. With some good picks, customers will avoid the ongoing fees that mutual fund companies charge, he said.

Mr. Spicer is an Mr. Butler's corner. "Mutual funds are fine but you are paying something for management."

Mr. Spicer isn't sure brokerage activities will ever account for the majority of the bank's earnings, as Mr. Butler predicts. But he admits that the business has done much better than he originally projected.

Certainly he is pleased with Mr. Butler's performance.

When bank first set up the program, Mr. Spicer says, the board worried that Mr. Butler wouldn't be able to handle the two jobs simultaneously. But, "Tom is very capable and he's played it very well," the director said.

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