First Charter Bank of Beverly Hills, still staggering from heavy real estate loan losses, may have trouble setting a new course because of its small size.

The bank recently engaged Sandler O'Neill & Partners, New York, to help in evaluating alternatives, which could include an outright sale, a merger, or a capital infusion.

Peter Bustetter, First Charter's president and chief executive, declined to discuss what path the bank might take.

First Charter has suffered through difficult times in the 1990s. Wedbush Morgan Securities analyst Charlotte Chamberlain said the bank lost $5 million in 1993, $1.5 million in '94 and another $1 million in the first three quarters of this year. The bank has also been shrinking, from $203 million of assets on Jan. 1, 1993, to $130 million last Sept. 30. It's deposits fell 34% during the same period, to $123 million.

The losses are the result of the big drop in Southern California real estate prices that hurt many financial institutions there in the last six years.

"All the banks that have had problems later in the game - and that includes First Charter - had real estate loans in the west side of Los Angeles, where prices went down later than elsewhere, but went down hard," Ms. Chamberlain said. "First Charter has about 50% of its loans in real estate and had more nonperforming assets than equity in reserves."

First Charter has been under an agreement with the Office of the Comptroller of the Currency since March 1992.

Ms. Chamberlain said First Charter could be hard to sell because its deposit base is small and includes a high percentage of time deposits and the bank has only two branches.

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