Not that mergers are a given. The pace of takeovers has slowed in recent months as banks digest previous acquisitions. Banks and thrifts are also busy making sure their systems are free of year 2000 bugs.
Perhaps most important, the currency used in most mergers--strong bank stocks--has weakened in recent months as investors worry about how banks might hold up during an economic slowdown.
"Their stocks have dropped, and they haven't come back up," Carpenter said.
There's also no guarantee of success. Start-ups face all the economic uncertainties and problems of other community banks, with the added problem of being unknown, Ancell said.
"A lot of start-up banks are going to struggle," he said. To succeed and grow, or get to the point that anyone wants to buy them, "they have to show a decent level of profits, and that's not easy."
Times staff writer Liz Pulliam can be reached at liz.pulliam@latimes.com.
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Southland Banks and Thrifts: How They Stack Up by Key Measures
Profitability and capital levels have improved for Southern California banks and thrifts over the last year.
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Return on Assets
This is a key measure of bank profitability. An ROA of 1% or more is considered a decent return.
All Southern California banks and thrifts
12 mos. ended Sept. 30, '97: 0.73% 12 mos. ended Sept. 30, '98: 0.95% *
Southland community banks and thrifts*
12 mos. ended Sept. 30, '97: 1.04% 12 mos. ended Sept. 30, '98: 1.10%
*
Risk-Bsed Cpital
Risk-based capital measures a bank's financial cushion relative to the credit obligations, or risk, the institution is taking. To be considered well-capitalized, a bank or thrift must have risk-based capital of at least 10% of total assets.
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All Southern California banks and thrifts
Sept. 30, '97: 12.73%
Sept. 30, '98: 13.37%
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Southland community banks and thrifts*
Sept. 30, '97: 14.89%
Sept. 30, '98: 114.86%
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*Community banks and thrifts are institutions with $500 million or less in assets.
Source: Bauer Financial Reports, based on data as of Sept. 30, supplied to the Federal Deposit Insurance Corp.
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Trouble Spots
The Southland banking industry overall is better capitalized and has fewer bad loans, relative to total loans, than it did a year ago. But some small banks and thrifts have run into problems, as indicated by data for the third quarter ended Sept. 30.
Capital Levels Below 10%
The following banks and thrifts had risk-based capital--a key measure of an institution's financial cushion against losses--below the 10%-of-assets level that regulators have set as a minimum to be considered well-capitalized. Data as of Sept. 30:
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Assets Risk-based Institution City (millions) capital Industrial Bank Van Nuys $29.67 6.89% Brentwood Bank Los Angeles 64.32 7.39 Centennial Bank Fountain Valley 61.00 8.53 Western Security Burbank 136.44 8.58 Fidelity Federal Glendale 3,823.37 8.66 Banco Popular Commerce 169.72 9.13 Valley Oaks Solvang 45.95 9.22 Fallbrook NB Fallbrook 131.11 9.28 Vineyard NB Rancho Cucamonga 113.82 9.57 Alliance Bank Culver City 76.34 9.58 First Fed S&L San Bernardino 107.98 9.68
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High Levels of Bad Loans
The following banks had the highest proportion of loans that were at least 90 days past due, as a percentage of total loans outstanding. Data as of Sept. 30:
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Bad Institution City loans Farmers & Merchants Long Beach 14.24% Industrial Bank Van Nuys 13.73 Mercantile Natl Bank Los Angeles 13.51 Valley Bank Moreno Valley 7.64 Asian Pacific Natl Bk San Gabriel 7.32
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Source: Bauer Financial Reports
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Fewer Bad Loans
Bad loans as a percentage of total loans declined for Southern California banks and thrifts in the 12 months ended Sept. 30, with the smallest banks showing the biggest improvement. Bad loans are those that are 90 days or more past due.
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All Southern California banks and thrifts
3rd-quarter 1997: 1.35%
3rd-quarter 1998: 1.07%
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Southland community banks and thrifts*
3rd-quarter 1997: 2.52%
3rd-quarter 1998: 1.27%
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*Community banks and thrifts are institutions with $500 million or less in assets.
Source: Bauer Financial Reports
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How Is Your Bank Doing? You can check the performance of independent Southern California banks and thrifts at http://www.latimes.com/socalbanks. The list includes key financial measures such as capital ratios, return on assets and delinquent loans. It also breaks down each institution's loan portfolio by type.
