Dave: Vineyard doesn’t surprise me, they were in extremis for a long while. It’s funny, I happened to drive by their branch off the 15 and the 91 in Corona on my way back from Ontario Airport on Wednesday.
Too bad about SDNB, though. Several of my construction clients back in my consulting days used to bank with them and they had an excellent construction lending and surety bonding support program. Solid mid-level local players like SDNB and Grossmont Bank (before they became CB&T) really helped “grow” San Diego and did so with solidly underwritten loans, smart, careful programs and long-term personal relationships. Soon, it’ll be nothing but big nationals like Wells, BofA and Citi and totally impersonal, automated banking.[/quote]
Not to worry, Allan. There will always be community banks like SDNB and the others. The names just change. Assuming SDNB fails, some larger bank will acquire it (probably not BofA, Wells, etc. – they’re too capital constrained) and the good community banking teams will leave to start their own banks. These guys will grow their banks for ten years, sell out, and the cycle will repeat. There will always be good small banks around. Although the industry is consolidating. Back in 1985 there were 16,000 banks and thrifts – most of them tiny and fairly inefficient. Almost 25 years later, we still have about 8,000 left. My guess is that we’ll be down to 4,000 or so over the next 15 years and the decline in numbers will slow down. At some point the number of start-ups and acquired banks will roughly cancel each other out. And my guesstimate is that happens somewhere around 3,500 – 5,000 institutions.
