Analyst Says State Banks in Courting Mood, Predicts 22 Mergers This Year : BANKING/FINANCE

In recent years, bankers have been saying that California has too many banks--more than 450 at one time--and that bank “consolidation” is coming.

But mergers and acquisitions were few. Since 1982, most of the banks closing their doors were shut down by regulators, who had declared them insolvent.

Now, Gerry Findley, a Brea-based financial institutions consultant, has predicted that 22 banks in California will be sold or merged this year and another three banks will fail. That’s a sharp change from seven failures and 10 mergers last year.

“There’s a lot of romancing going on,” said Findley, whose firm is acting as a consultant on several proposed mergers.

Findley cited several reasons for the merger mania he sees. The plethora of banks--about 260 were created in the first half of the 1980s--has led to greater competition and caused some banks to turn in lackluster performances. Also, he said, some owners and managers have mismanaged and misdirected their banks and made bad judgments on what loans to make and how much to spend on their offices.

To a lesser extent, he said, a number of banks want to beef up their share of the market either to fend off unwanted takeover efforts or, more likely, to attract top dollar from acquisition-minded East Coast banks when nationwide interstate banking takes effect in 1991.

In this county alone, three banks have been sold this year. American Merchant has become part of Eldorado Bank, Pacific Regency is now a branch of National Bank of Southern California and El Camino Bank retains its separate operations but is owned by Citizens Holdings--the same company that owns Citizens Bank of Costa Mesa.

American Merchant was struggling, and shareholders took a loss of more than $2 a share. Pacific Regency was broke, and shareholders lost their investment.

But El Camino has been one of the county’s healthiest banks, and Citizens Holdings has reached a definitive agreement to buy another well-run operation, Rancho Santa Fe National Bank in north San Diego County.

“They’ll be much more of the Citizens-type mergers this year,” he said.

A few years ago, 44 full-service banks called Orange County their home. The number is now down to 38.