Magazine article American Banker

N.D. Bank Stresses Brokerage, and Profits Flow

Magazine article American Banker

N.D. Bank Stresses Brokerage, and Profits Flow

Article excerpt

At most community banks, a single investment adviser stationed in the lobby is enough to qualify as a brokerage unit.

But not at $100 million-asset Bank Center First. The Bismarck, N.D. bank has only two branches. But it boasts five investment advisers, and it's looking for another.

"I have banking friends that come to me that think I made a mistake putting in the first broker," said Myron Pfeifle, president of Bank Center First. "But we've proven them wrong."

The five brokers were responsible for 10% of Bank Center's net income last year, Mr. Pfeifle said, while his peers get only 1% to 2% of profits from their brokers.

What's different about Mr. Pfeifle's effort? For one thing, his brokers work on the third floor of the bank in an area designed to create a brokerage-firm aura. Mahogany desks and plush chairs set the tone.

"It's very, very rich looking," Mr. Pfeifle said. "When you walk in, it's striking and elegant compared to what you would see in the real estate lending office."

But as impressive as their offices are, Mr. Pfeifle said, brokers at Bank Center are not encouraged to sit in them all day. Instead, they are expected to get out into the community to lead investment seminars and help corporate clients set up retirement plans.

"If my customer walks down the street to a brokerage firm, he's gone forever," Mr. Pfeifle said.

As a small bank in the state capital, Mr. Pfeifle is surrounded by brokerage firms. …

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