The urge to consolidate community banks in Southern California has prompted two veteran banking executives in Laguna Hills to turn to Wall Street.

E. Lynn Caswell, former vice chairman of Western Bancorp., and Robert F. Keller, a onetime New England banker, recently announced separate plans for public offerings. The goals for the two offerings total $126 million.

Both executives are interested in making more acquisitions in Southern California, where a solid concentration of independent banks remains. But without the ability to offer stock-the preferred payment vehicle among acquirees these days-they could find themselves on the sidelines when consolidation occurs.

"Many of these banks have been hanging on for a long time, working their way through the recession," Mr. Caswell said. "And some believe this is the best chance they'll have to sell at a profit."

Still, the two men can expect the competition to be fierce, with acquirers such as Western, Newport Beach, Calif.; Zions Bancorp., Salt Lake City; First Banks Inc., Creve Coeur, Mo.; and also Bank of Commerce, San Diego, prowling the marketplace. What's more, the window of opportunity could be closing as prices decline in the bank stock markets and year-2000 issues demand attention.

"They may be a little late to the game," said Scott Burford, principal of Burford Capital, an institutional brokerage in La Crescenta.

Mr. Caswell, who recently formed Pacific Community Banking Group, a holding company with no banks under its umbrella, said he intends to raise about $80 million. The funds would primarily be used to buy Bank of Hemet (Calif.) and Valley Bank in Moreno, which have signed purchase agreements. A formal Securities and Exchange Commission filing is anticipated after Labor Day.

Although industry watchers called Pacific Community's strategy unusual, Mr. Caswell said a handful of banks are entertaining his idea. His strategy is to buy eight to 10 well-managed banks by 2008, slash administrative costs by up to 30%, and amass more than $1 billion of assets.

Mr. Keller, president and chief executive of Commerce Security Bancorp, did not return calls seeking comment about his acquisition plans. His company is seeking permission to raise up to $46 million for the $1 billion-asset Commerce Security, according to an Aug. 17 SEC filing.

Mr. Keller entered the state in 1995 after selling his New Hampshire bank. He organized a limited partnership-Dartmouth Capital Group-with the idea of establishing a network of community banks.

So far, Mr. Keller has bought four banks-SDN Bancorp, Liberty National, Commerce Security, and Eldorado Bancorp.-paying in cash. It has assembled a loosely strung franchise stretching from San Diego to Sacramento and comprising of 17 branches and eight loan production offices.

But the cash-purchase strategy appears to have stalled, according to the documents Commerce Security filed with the SEC. It admitted in its filing that "the boards of directors and shareholders of many prospective acquisition candidates prefer stock acquisitions."

Van Kasper & Co. analyst Joseph R. Morford said the Southern California market is gaining momentum after finally rebounding from the early to mid- 1990s recession.

However, he said, it remains to be seen whether Commerce Security and Pacific Community can afford to pursue deals. "It's an expensive proposition to do acquisitions these days with the premiums being bid up," he said.

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