N. Calif. Bank Said to Raise Bid for Rival After 3 Rebuffs

has made yet another pitch for hometown rival Six Rivers National Bank.

Humboldt, which offered Six Rivers $17.25 per share in May, has raised its bid to $18 per share, according to sources. The unsolicited, $26.5 million bid for $200 million-asset Six Rivers is Humboldt's third this year and fourth since January 1997.

Unlike the previous offers, this one comes off the table by Aug. 31 if Six Rivers does not act, the sources said.

Humboldt, the parent of Humboldt Bank and Capitol Valley Bank in Roseville, Calif., has $330 million of assets. Both Humboldt and Six Rivers were founded in the fall of 1989; they operate eight branches in Northern California.

Six Rivers has rebuffed previous overtures because its board believes the bank could fetch more if it continues improving asset quality and earnings.

Michael Martinez, president and CEO of Six Rivers, declined to comment on the bid but said Six Rivers shareholders view competition with Humboldt as healthy.

Theodore S. Mason, Humboldt's president and chief executive officer, would not say whether his company had raised its offer. But he said a deal makes sense because it would let the banks more effectively compete against bigger banks, credit unions, and other financial services firms.

"I don't think there is enough room for two banks in this town doing the same thing," said Mr. Mason.

Indeed, though banks in other parts of California can barely keep pace with torrid loan demand, Eureka's two banks are struggling to find quality loans. According to Mr. Mason, Humboldt's deposits are growing faster than its loans.

And with the region continuing to lose manufacturing, logging, and other industrial jobs, both Humboldt Bank and Six Rivers are looking outside the area for growth.

Humboldt recently agreed to buy Capitol Thrift and Loan Association of Napa, Calif. The deal, which is expected to close this year, would add $125 million of assets and 10 branches.

Six Rivers announced last month that it would expand into consumer lending through alliances with third parties. Six Rivers said it expects to add $500,000 to $1 million of loans per month by financing boats, automobiles, recreational vehicles, and manufactured homes.

"This is a chance to expand geographically and diversify our risk," said Mr. Martinez.

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