Jul. 20--Valley-based banks are building cash reserves and should survive -- even thrive -- through the economic crisis, experts say.

"In the Valley, I don't see any banks in imminent danger of closure," said Dan Doyle, chairman of the California Bankers Association and chief executive of Fresno's Central Valley Community Bank.

Doyle said that while some local banks "are going to be very challenged," he believes all will have enough capital to survive the recession. They've been building reserves after getting stung when the housing market collapsed.

One local bank -- Merced-based County Bank -- didn't make it. It crumbled in February under the weight of bad real-estate and construction loans.

And the survivors are not out of the woods. Among the 11 surviving local banks headquartered in Fresno and Tulare counties, the value of past-due loans has more than quadrupled since last year, and earnings have dropped by nearly half.

But seven of the banks remain profitable. And compared with a year ago, most have seen gains in key financial categories -- total assets, total deposits, loans outstanding and available capital.

Last week, some big national banks reported large profits. On Friday, Citigroup announced a $3 billion second-quarter profit, and Bank of America reported $2.4 billion. But bank executives cautioned that weaknesses in the economy still could hurt profitability during the second half of the year.

The big picture among Valley-based banks also is mixed. Even as assets have increased, more loans have gone bad and profits have fallen.

Yet even the newest local bank, Suncrest Bank in Visalia, expects to turn a profit by next summer, just two years after it was established, bank president Mike Wilson said.

"It's all about capital and reserves," said Tim O'Brien, an industry analyst with Sandler O'Neill & Partners, an investment banking and research firm. "How much capital do they have? That should be on every banker's mind, on every investor's mind."

Three local banks -- Central Valley Community Bank, Valley Business Bank in Visalia and Fresno First Bank -- boosted their capital earlier this year by selling preferred stock to the U.S. Treasury under the federal Troubled Asset Relief Program.

All of the Valley banks are considered "well capitalized" under standards set by the Federal Deposit Insurance Corp., which insures customers' deposits against bank failure. Lower categories would be "adequately capitalized" or "undercapitalized."

But the best-capitalized Valley banks aren't necessarily the biggest.