One of California's newest bank-owned investment banks has wasted little time getting busy.

Capital West Group Inc., Merced, which was formed in April, announced July 3 that it had provided organizational financing for the founding of Bank of Lakewood.

The new community bank, still in the organizational stage, will be based in a Southern California city of 80,000 north of Long Beach.

Capital West chief executive Edward E. Schmidt described the loan as "sizable." "The credit facility provided the initial operational funds during the institution's formation and stock offering period," he said.

The deal is the first for Capital West, a subsidiary of $210 million- asset Capital Corp of the West, but Mr. Schmidt said his company is working on "seven or eight deals" with banks that include start-ups and mergers, as well as consultation. Capital Corp of the West is the parent of County Bank, Merced.

Mr. Schmidt said the current climate of consolidation in both California and the West should offer abundant potential deals.

"There is a new emerging interest in new bank formations because of the trend toward consolidation in the industry," Mr. Schmidt said. "The current banking environment of mergers and acquisitions has created a significant void in independent banking nationwide."

Bank of Lakewood, currently making its initial public stock offering, has its sights set on opening by yearend.

Gene Rich, chief executive of Bank of Lakewood, said Capital West's loan had been instrumental in his institution's progress.

"Without an organizational loan, I just don't think we could do it," he said. "Until the bank opens, all the funding has to come from the directors, and I'd estimate the average cost for a start-up like ours at between $400,000 and $750,000."

Bank of Lakewood is Mr. Rich's second start-up. In the mid-1970s he helped open Illinois Trust and Savings Bank, Ottawa, Ill., and remained there as CEO until 1991.

Mr. Rich said that, thanks to Capital West's backing and ongoing industry consolidation, Bank of Lakewood should have a bright future.

"It's a wonderful market and a wonderful opportunity," he said. "Lakewood has never had an independent bank in its 45-year history, and there are more than $1 billion in deposits within the city limits."

Mr. Rich said that, at last count, there were 12,000 people per bank branch in the community, quite a bit more than the norm in California. In addition, the former First Interstate branch in Lakewood will be merged into the Wells Fargo branch as a result of Wells' takeover of First Interstate.

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