Method of Ranking Independent Banks

As is your practice each quarter, you reported in your Jan. 14 issue on the status of Orange County independent banks as of the end of the third quarter (“Independent Banks’ Profits for 9 Months Top All ’87 Income”). The 39 banks were ranked in descending order according to the size of their total assets. That also is your customary way of ranking banks. However, that is not the way that investors would rank banks.

For once, we at United American Bank would like to see you rank the banks according to their return on equity. That is what shareholders want to see. Obviously, we make this point because the ranking for United American Bank would dramatically change. Instead of being considered a small bank, people would then look upon us as a well-managed, very profitable bank. Incidentally, our profit on beginning equity will exceed 16% for 1988. That would put us near the top of your “corrected” list, which is where we believe we rightfully belong.

HORTON SHERWOOD

President and Chief Executive

United American Bank

Westminster

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