BANKING/FINANCE : Some Community Banks Could Use the ‘4 Rs,’ Guru’s New Book Advises

Every community bank in California can be a top performing bank, Gerry Findley, the state’s guru of independent banking, argues in a book due out next month. But many of them first need “redirection, reorientation, reform and renewal,” he said.

Findley, a Brea-based industry consultant, should know. For 20 years, he has been collecting and evaluating the mass of statistics that the state’s 444 banks file with regulators.

The new book, “In Pursuit of Premier Performances,” reviews how 86 of the better banks in the state have regularly turned in good results, and how other banks can follow suit. Among those S&Ls; is a list of the 30 most consistent “premier performers,” including Citizens Bank of Costa Mesa and Orange National Bank in Orange.

County banks among the remaining 56 well-managed institutions are Pioneer Bank in Fullerton, Landmark Bank in La Habra, Eldorado Bank in Tustin, El Camino Bank in Anaheim, National Bank of Southern California in Santa Ana, Mariners Bank in San Clemente, Bank of Anaheim, Mission Viejo National Bank and American Commerce National Bank in Anaheim.

Those banks with substandard results usually can trace their problems to the “design” of their financial structure, operations and marketing, Findley said, and the remedy typically requires changes in the designs and the “designers.” Too often, he said, banks got into trouble when they strayed from the business they knew best and branched out into communities with which they weren’t familiar.

To perform better, banks stick to fundamentals--such as “staying close to the customer, knowing what you’re doing and not taking collateral you can’t see,” he advised.

“We found that contrasting--not being the same as a big bank--was important,” Findley said. “Independents have to have flexibility and responsiveness, and they have to be ahead of any changes in the industry.”

It also helps when the bank president and senior management hold stock in the company, something he calls the pocketbook principle. “You put the pocketbook at risk, and it makes them perform better,” he noted.

Findley’s book, his fourth, isn’t cheap. It costs $60 a copy.