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Most startup banks report robust growth: region viewed as hot spot for de novos.

Article Excerpt
San Diego has proven to be fertile--and mostly lucrative--territory for newly chartered financial institutions.

From 2000 to 2004, 15 banks were started in San Diego County. That represents 25 percent of all de novo banks formed in California during that period.

Most of the local startups are doing well. Ten are profitable, and an 11th broke into the black just last quarter.

One of the money-losing institutions recently announced it would give up its independence and merge with a local rival. Yet financial experts say the planned sale of Legacy Bank of La Jolla to Landmark National Bank of Solana Beach, each of which opened in 2002, doesn't signal a trend for more local de novos to consolidate.

"That was a unique situation where the banks were in complementary market areas and overlapping of the branches, so combining the banks would create efficiencies," said Ed Carpenter, who heads an Irvine-based banking consultancy, Carpenter & Co.

One of the main reasons for this being such a hot spot for startup...