Nearly 200 community banks were created in the United States last year, while roughly 600 banks of all sizes were gobbled up in merger deals, according the Federal Deposit Insurance Corp.

By comparison, 146 banks were chartered in 1996, while 554 were absorbed in mergers.

Much of last year's start-up activity occurred in nine southeastern states, where 44 new banks were chartered.

Richard P. Hunt, chairman and chief executive officer of Kendrick, Pierce & Co., a Tampa-based bank consulting firm, said that is no surprise considering the population booms in states such as Florida and North Carolina.

"The deposit base is expanding, so this is an attractive place to be," said Mr. Hunt.

But the de novo wave can also be explained by the fact that the Southeast lost more banks-large and small-than any other region in 1997.

According to FDIC statistics released last week, 163 southeastern banks disappeared in 1997, compared with 73 in the West and 44 in the Northeast.

Overall, 188 new banks were formed in 1997. Closely trailing the Southeast are the 10 states in the FDIC's western region, where 42 new banks were chartered last year.

On Dec. 31, banks with less than $1 billion of assets totaled 8,776, down 354 from a year earlier but still nearly 96% of the industry's total. These community banks held $995.6 billion of assets, about a fifth of the total.

Of the record $59.2 billion in net income earned by all banks last year, banks with less than $1 billion of assets snagged just over 20%, at $12.3 billion.

In releasing the statistics, acting FDIC Chairman Andrew C. "Skip" Hove Jr. expressed concern about weak lending standards. Nevertheless, he was clearly pleased at the industry's overall performance, noting that banks posted record returns on assets and near-record returns on equity.

For the year, community banks with assets of $100 million to $1 billion returned 1.34% on assets, up from 1.28% in 1996. That same group saw return on equity increase to 13.98%, from 13.56% in 1996.

ROA for the 5,853 community banks with less than $100 million of assets rose slightly, to 1.19%, while ROE slipped to 10.91%, from 11.02% in 1996.

Collyn Bement, an analyst with Ferris, Baker, Watts in Baltimore, said that those performance figures are not a reason for concern. Increasing returns is less of a priority for small banks than for larger ones, she said.

"The larger banks are much more widely held and are under more pressure to provide results for shareholders," she said. "With less pressure on smaller banks to reach high ROA and ROE goals, those banks can allocate resources differently."

The number of banks and thrifts insured by the FDIC dropped below 11,000 for the first time last year, to 10,922. Total assets topped $6 trillion, rising 7.8%.

Total deposits stood at $4.1 trillion on Dec. 31, up 5.1%. Insured deposits only grew 3.1%; overall growth was fueled by large uninsured deposits and foreign deposits.

The FDIC said insured deposits now represent less than half of all liabilities-49.6% on Dec. 31.

Only 92 banks and thrifts, with $7 billion of assets, made the FDIC's "problem" list in 1997, down from 117, with $12 billion in 1996.

What is more, only one commercial bank-$26 million-asset Southwest Bank in Jennings, La.-failed in 1997, the lowest number since 1962. And for the first time since 1959, no thrifts collapsed.

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