LANCASTER, Pa. -- On the menu at Gold Cafe on a suburban commercial strip here: coffee, espresso and biscotti.
Oh, and self-directed individual retirement accounts.
Taking a cue from the large bookstore that cross-sell magazines and lattes, and from Starbucks, which hawks its own brand of caffeinated brew alongside music CDs, Union National Financial Corp. is building branches that bear almost no resemblance to traditional brick-and-mortar bank establishments.
The Pennsylvania community bank has opened its first "financial barista," an upscale coffee house that doubles as a full-service bank branch that takes deposits and loan applications.
Last week, it began construction on a second location.
Its business model is the latest twist on a branch-building bonanza in the banking industry. After aiming to save money by pushing customers to the Internet in the late 1990s, banks in an intensely competitive race for deposits are again seeking face-time with customers. Many people are still more comfortable completing some banking transactions in person, such as opening an account, than in cyberspace, some lenders have determined.
To stand apart, many banks are staying open longer or adding plasma TVs to entertain customers while they wait in teller lines.
Few banks, however, have trained employees to prepare espressos and set up new checking accounts.
That the latest in 21st-century banking tactics are being deployed in a place better known for sustaining 18th-century living, in the heart of Pennsylvania Dutch country, underscores the broad pressures on retail banking.
"They're going along with the trend to create a unique environment in which to do banking," said Brian Shullaw, a banking analyst at SNL Financial. "But I haven't heard of any company taking it to this level of running two types of businesses out of the same building."
By tapping into the burgeoning coffee culture that has Americans lining up for expensive cappuccinos made from fine beans, Union National hopes its new branches draw more foot traffic -- and potential customers.
Believing in coffee
The bank believes in coffee's pull so much that it gave its own name second billing on signage that prominently features a coffee cup and Gold Cafe in bright yellow above Union National Community Bank in letters so small they can't be read from down the street.
"If you see that a new bank branch is opening in your neighborhood, you won't wander in on a Saturday to check it out," said Mike Frey, president of Union National bank. "But if a new coffee shop opens, you would stop."
To make the concept of a seamless dual operation work, Union National had to devise some creative approaches to architectural and regulatory issues.
The bank designed the building so that it could offer a spectrum of financial services and retain the feel of a modern coffeehouse.
Outside, the bank has drive-through lanes as well as a patio with umbrella tables. Inside, the bank is done in Southwestern colors of gold, terra cotta and sage to blend the coffee stand with a nearby conference room, seating areas and teller stations. Instead of the old-school teller counter, the bank uses closed-circuit TVs and pneumatic tubes -- like the kind usually found at bank drive-through lanes, but not typically inside bank lobbies -- to connect customers with tellers in a locked room at the back.
Because banks are prohibited by federal law from commercial enterprise, a separation that has been around since the Great Depression to ensure that banking deposits aren't used for risky ventures, Union National can't make any profit from the coffee.
To follow regulations, the bank signed a licensing agreement with Lancaster County Coffee Roasters for supplies and set up dual employee arrangements, mostly used by banks in conjunction with brokerages or insurance firms.
Union National employees, each of whom has attended barista training with the West Coast's Bellisimo Coffee InfoGroup, essentially get two paychecks, one for pouring coffee and one for banking.
"We had some concerns over whether someone would want to be a banker and also schlep coffee," said Frey, the bank president. "But they all said, `That is so cool,' and wanted to be a part of it. This is a career for them."
A long history
In fact, the financial industry has had a long history with coffee. The London Stock Exchange can be traced to Jonathan's Coffee House where brokers did business three centuries ago. The New York Stock Exchange had its origins in the Tontine Coffee House about a century after that.
That potent combo of business and coffee has survived in various ways because of the brew's effect on people, said Ken Bernhardt, a marketing professor at Georgia State University.
"People slow down when they have a cup of coffee in their hand," he said. "You have to wait for it to cool down a bit, you take five to 10 minutes to drink it, and meanwhile you're wandering around a shop, and you may find something you want to buy."