old, his father doled out $1,000 so he could play a real-life game of "financial markets." First he won, amassing a whopping $40,000 in options investments. Then he lost - nearly everything. About the only thing Mr. Ranzini didn't lose was his passion for finance. "Most people at age 12 are reading the sports page; I'm reading the business section," said Mr. Ranzini, who in 1988 was a 23-year-old still fresh out of Yale when he bought a bank with his father here in Michigan's Upper Peninsula. At the time he was the youngest chief executive of a bank holding company in the nation. Now 30, Mr. Ranzini's unconventional banking career is still unfolding - and evolving. His banking adventures as chief executive of Newberry Bancorp are akin to those of a college undergraduate who can't decide on a major. A strategy of investing in the debt of troubled banks and thrifts has come and gone, as have plans to start an East Coast mortgage business through an unsuccessful attempt to acquire a Baltimore thrift in 1993. Finally, last year he sold all of his Newberry State Bank's retail branches and moved $35 million-asset Newberry Bancorp to downstate Ann Arbor, where a newly renamed University Bank is set to open next month. Mr. Ranzini said he doesn't believe his relative youth has hindered his banking endeavors. "There are a minority of people that for one reason or another aren't going to react positively" to his age, he said. "If you sit and talk to me for any length of time, you're going to realize I know what I'm talking about." Some observers agree that Mr. Ranzini has done a good job heading the company. Others say he still has much to learn. For instance, Mr. Ranzini ruffled some feathers in San Antonio in 1990 when he became chairman of a creditors' committee of a bankrupt thrift holding company he had invested in. He pushed a liquidation instead of a reorganization, prompting lawyers on the case to call him a "kid who thinks he's an expert on everything" and "incredibly cocky" in published reports. Sault Ste. Marie competitor Willard "Frenchie" LaJoie, chairman and chief executive of $94 million-asset Central Savings Bank, shares some of those sentiments. "He is a well-educated, young, cocky banker," Mr. LaJoie said. "He has been in the business for a limited time and tries to impress people that have been in the business for many more years than he has been." But Mr. LaJoie and others aren't writing Mr. Ranzini off, either. "Given some ... on-the-job training and some experience, he's got the capabilities of being one hell of a competitor," Mr. LaJoie said. Now, Mr. Ranzini is gearing up for competition in Ann Arbor, where he said he intends to stay for the foreseeable future. He said his family hadn't intended to sell the Upper Peninsula branches, but First Northern Bank and Trust, Manistique, Mich., made an offer too good to refuse, paying $3.5 million last December. Subsequently, Mr. Ranzini decided to open a new retail bank in southern Michigan. Branches that were for sale were too pricey, so he opted to start from scratch. He chose Ann Arbor, one of the state's fastest-growing areas and home to the University of Michigan, and purchased a former credit union building. Patrick M. McQueen, commissioner of Michigan's Financial Institutions Bureau, conceded that Newberry's strategy "is unusual." But he said he understands that the company sought a more vibrant market. "I firmly believe that they will be successful," Mr. McQueen said. "Otherwise I wouldn't have approved it." Asked why regulators have agreed to his innovative banking requests, Mr. Ranzini said: "They like me. Having said that, they know that we're very cooperative." The company also owns Varsity Funding, a subprime residential loan purchaser, and is active in a state program to fund rural businesses. In addition, Newberry is in the process of buying a mortgage servicer, Midwest Loan Services. Looking the part of the Ivy Leaguer, in a blue shirt, green vest, and khaki pants, Mr. Ranzini has a lot on his plate. During the course of a recent interview, he stopped frequently to answer two ringing cordless phones on his desk. Mr. Ranzini majored in economic history and East Asian studies at Yale. But it wasn't until the summer before his senior year that he first thought about a career in banking. A project from a 1985 summer internship with T. Rowe Price Associates, where he did banking industry analysis, stuck with him. While he worked as a investment manager for three years after college, he put together the deal to buy Newberry in 1988. "I really realized from the research I was doing that the banking industry would be a good place for me ultimately to be, not just myself, but my father too," said Mr. Ranzini, the youngest of five children. He said he and his father are "a very good team, and our strengths and weaknesses are very complementary. The thing that the two of us have always been able to do is identify good business opportunities. The weakness that we always had was not having access to the capital." His search for a small bank or thrift led to Newberry, Mich., in 1988, a Rust Belt town that had fallen on hard times. And dad helped with the funding again, putting up $1.5 million in equity, along with a $3.1 million bank loan. "I was not apprehensive at all about buying a bank and sending Stephen up to deal with things," said Joseph L. Ranzini, the 66-year-old chairman of Newberry Bancorp. "And he has quintupled the amount of monies that he started with." The Ranzinis retained the bank's management and focused on long-term strategies and opening locations 70 miles east in Sault Ste. Marie, to implement another far-flung strategy: a foreign exchange business. The younger Mr. Ranzini, who had been working as a financial analyst for Triangle Industries in Palm Beach, Fla., since October 1988, moved to Michigan full time in late 1989. The company went public in 1990. The subsequent branch sale has both hit and helped the company's bottom line. Newberry lost $14,961 for the six months ended Sept. 30, which management attributed to the elimination of most of its interest income, as well as decreased spread income from securities and unusual operating expenses during this transition year. For the same period in 1994, the company reported a loss of $22,640 - again partially because of the impending sale - but ended 1994 with income of $1.8 million, return on assets of 3.02%, and return on equity of 54.47%. Going forward, the company's focus on Ann Arbor is a "smart move," said bank analyst Tony Howard of Detroit-based First of Michigan Corp. "I think he's a capable bank executive," he said of Mr. Ranzini. "He sort of has the entrepreneurial spirit which it takes to make it in Ann Arbor. The main risk is being able to compete against the bigger established regionals there." When University Bank opens, Mr. Ranzini will relinquish the bank president title he assumed after the branch sale, but will oversee the mortgage banking operation and continue as Newberry's president and chief executive. "Day-to-day management is not the thing that I'm after," said Mr. Ranzini.

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