Undeterred by the wave of start-ups in Oregon, an Arizona bank consultant is organizing three community banks in Greater Portland.

Ernie Garfield, president of Scottsdale-based Interstate Bank Developers Inc., is assembling boards of directors and interviewing potential presidents for banks in Hillsboro, Lake Oswego, and Vancouver, Wash., a Portland suburb. The three banks could open as early as the fourth quarter, pending state and federal regulatory approvals.

"Portland reminds me of Phoenix and Scottsdale 10 years ago," said Mr. Garfield, who has organized more than a dozen community banks in Arizona. "It's a dynamic market with plenty of room to grow."

He is most encouraged by the recent sales of Oregon's two biggest banks. In the past two years, Portland's First Interstate Bancorp and U.S. Bancorp were sold to out-of-state interests, leading many customers to defect to community banks.

The three unnamed banks would focus chiefly on small-business lending, making loans in the $50,000 to $300,000 range, Mr. Garfield said.

"The large bank mergers have left a big gap, and we're creating small banks to help fill that gap," said Mr. Garfield.

Of course, Mr. Garfield-who also organized Town Center Bank in Clackamas, Ore., which opened last July-is not alone in that thinking. In the past two years, seven community banks targeting small-business customers have opened in Oregon, four of which are in the Portland area.

Steven F. Polzin, president of 14-month-old Bank of the Northwest in Portland, said the new banks' success hinges on Mr. Garfield's ability to attract directors and officers who have sufficient business contacts in the community.

With increased competition from large banks and other financial services firms, he warned that the market for small-business lending has grown more combative.

"For those of us doing it day by day, it's pretty doggone tough out there," said Mr. Polzin.

Robert J. Rogowski, principal with Columbia Financial Advisors in Seattle, agreed that any new bank will face stiff competition. He noted, for example, that San Francisco-based Wells Fargo & Co. has stepped up its small-business lending efforts recently by offering loans through the mail and by telephone.

"It's not enough to just say, 'We're an alternative to the big bank' because the big banks have moved down the size scale," said Mr. Rogowski.

Strictly a consultant, Mr. Garfield does not take an active role in the banks he organizes. When he completes his work in Oregon, he will be paid a $120,000 consulting fee per bank.

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