SAN FRANCISCO -- In this third California expansion move in less than a year, First Interstate Bancorp on Wednesday said it will buy First State Bank of the Oaks for $23 million in cash.

The Thousand Oaks-based bank, which has five branches in Ventura Country, west of Los Angeles, controls $144.5 million of assets. The transaction price equals 1.71 times the bank's book value.

Fits Strategy

Bank of th Oaks, whose business mix is balanced between consumer and commercial accounts, has avoided the losses that have plagued many other Southern California banks.

It earned a return on assets of 0.42% for the first half of 1993, while nonperforming loans were a slight 0.13% of total loans at the end of March.

The acquisition, which is expected to close at the end of the year, fits First Interstate's strategy of buying institutions with few credit problems and a big market presence. The transaction will make the Los Angeles-based company third among banks in deposit market share in Ventura County.

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