Advertisement
 
YOU ARE HERE: LAT HomeCollectionsPolls

Banking/finance

BRIEFCASE

December 11, 1991|James S. Granelli / Times staff writer

Performance Criteria Lowered: The battering that banks have been taking from the economic slowdown and regulatory requirements has caused Brea banking consultant Gerry Findley to lower again the criteria banks must meet to win his designation as "premier performers."

Findley, whose Findley Reports on California Banks has annually dissected the financial condition of banks statewide since 1968, said he altered the criteria to reflect the changing environment in which banks operate.

Banks, for instance, now need to show a 5% growth rate, instead of an 8% growth rate, in assets, deposits or revenue to be classified as premier performers.

He said the changes were also necessary because well-managed banks that take proper measures to rein in growth during tough times wouldn't be able to meet the higher goals for growth and return on equity, a standard measure of profitability.

Typically, 25% to 35% of the state's banks are named premier performers. Many of the institutions then use that designation in advertising and promotions.

This isn't the first time Findley has changed criteria. He lowered the goals last year as the state fell into recession and regulators began requiring banks to adjust their books to reflect lower valuations for real estate loans.

Over time, he has also changed his formula for determining premier performers to avoid the type of embarrassment he faced in the early 1980s. At that time, a number of banks that had been named premier performers the previous year were declared insolvent and closed the next year.

Advertisement
Los Angeles Times Articles
|
|
|