WASHINGTON -- David F. Holland, incoming chairman of Savings and Community Bankers of America, expects consolidation in the banking industry to go beyond the depository institutions themselves.

Mr. Holland also expects bank and thrift regulators, charters, and insurance funds to merge over the next few years.

There is a drive for "being more effective and efficient -- whether it be the banking environment or the regulatory environment," he said.

Even thrift and banking industry trade groups will be working together more, said Mr. Holland, who is also chairman, chief executive officer, and president of $500 million-asset Boston Federal Savings Bank, Burlington, Mass.

What's fueling the urge to merge that will change the face of the industry? Thrifts' record profits, Mr. Holland said.

"Because of the strong earnings and the strong capital position, the financial industry is in an acquisition mode," he said.

I see a continuation, if not even an acceleration, of the merger and acquisition mode. The days of bricks-and-mortar expansion are past, he said. "Now growth and expansion are done by acquisitions."

As Mr. Holland takes the trade group's helm from outgoing chairman Gerald J. Pittenger, he sees a bright future for thrifts.

"First of all, the industry has dramatically recapitalized itself, and I think that trend will continue," Mr. Holland said. Thrifts have focused on controlling their expenses, reducing their loan losses, and maximizing their spreads.

Mr. Holland ticks off the reasons he thinks S&Ls problems are past them.

"There is a far more conservative underwriting policy. There is a board of directors that is much more attuned to their oversight responsibility. We have regulators who have greatly intensified their examination process and frequency.

"We won't revert back to the business-as-usual ways," Me Holland said.

Spreads Expected to Shrink

Although he believes S&Ls will continue to be profitable, the record profits caused by today's enormous interest rate spreads won't be found much longer, he said. "It is unlikely that they will continue beyond this year."

Within the next few years, thrifts can expect to share a regulator with commercial banks, he believes. "It is not a matter of if, it is a matter of when and how," Mr. Holland said.

And they may share a charter too. "There is a strong probability that there will be a more uniform charter," Mr. Holland said. We are already seeing a "homogenization of the financial institutions industry," he noted "so that the distinction between a commercial bank and a thrift becomes more blurred."

Fight Foreseen

The federal deposit insurance funds will also be combined within the next decade, he predicted. But he acknowledged that commercial banks would probably fight against having to help thrifts pay for the part of the S&L cleanup.

Savings and Community Bankers will not immediately lobby to have the Savings Association Insurance Fund merged with the Bank Insurance Fund, he said. "It is more feasible to accomplish a merger of the two funds when they have the same financial strength," he said.

Because thrifts are expected to soon pay up to 15 basis points per $100 in deposits more to SAIF than banks pay to the bank fund, thrifts may seek to change their charters to escape payments to the thrift insurance fund, Mr. Holland said.

"The burden would be so significant that if it was feasible to switch from one fund to another, it certainly would be beneficial for the SAIF-insured institution to explore any alternative to achieve that objective," he said.

Savings and Community Bankers is "financially strong and sound, Mr. Holland said. "This year we have added almost 100 new members."

But because the interests of thrifts and banks are getting closer together, the thrift group will work more closely in the future with work more closely in the future with other trade groups, such as the Independent Bankers Association of America, the American Bankers Association, the homebuilders, and the Realtors, he said.

Common Causes

"Historically, there was always friendly competition between the commercial banks and the thrifts," Mr. Holland said.

"Now we find ourselves joined together" fighting for regulatory relief and against unregulated nonbank banks, he said.

"Someday down the road, some of the national financial institution trade associations may merge," he added, "but it is premature to make any judgments on that." Age: Turns 53 on Wednesday Education: Graduated in 1963 from Boston University, majoring in business administration. Mr. Holland is also a certified public accountant Title: Chairman, chief executive officer, president, Boston Federal Savings Bank, Burlington, Mass. He is also vice chairman of the Federal Home Loan Bank of Boston Job history: He has worked at Boston Federal for nearly 20 years. His only other job was in the Boston office of Peat Marwick as an accountant in 1963-74 Family: Wife, Linda, and three children: Jeffrey, 27, Janet, 25, and Sharon, 21 Hometown: Topsfield, Mass. Hobbies: Golf, boating, waterskiing, and meteorology

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