Six new banks are being organized in Arizona and, surprisingly, not all are in Phoenix and Tucson.

Since 1995, about a dozen banks have received Arizona state charters and nearly all are located in the booming Phoenix-Tucson corridor. But of the six awaiting regulatory approval, only two - Southwest Bank of Phoenix and Desert Hills Bank - are in major markets. The others are First Bank Yuma and Yuma Community Bank in the southwestern city of Yuma; Mission Bank in the northwestern city of Kingman; and First Country Bank in Pinetop, a town of 3,300 in the eastern part of the state.

"What's interesting about this current round of applications is that most of them are from outlying communities of Arizona," said John Coyle, Arizona deputy superintendent of banks. "There's a perception in those communities that big banks aren't providing the level of customer service that folks might want. So smaller banks are coming in to try to serve that marketplace in better and different ways."

Moreover, the absorption of many of the state's community banks by the larger banks has displaced a lot of managers who were not yet ready to take early retirement, Mr. Coyle added.

Over the last several years, Bank of America, Banc One Corp., and Wells Fargo & Co., as well as regional players including $22 billion-asset Zions Bancorp of Salt Lake City, have gobbled up many Arizona banks. As a result, 87% of bank assets in the state are held by large, out-of-state banks, according to the Federal Deposit Insurance Corp.

The deputy superintendent expects more charter applications, in smaller communities as well as Phoenix and Tucson.

"Arizona just remains a very vibrant market, so there's plenty of opportunity for banks," Mr. Coyle said.

According to its commerce department, Arizona is the second-fastest-growing state, after Nevada. Much of the economy is fueled by tourism, which pumps about $12 billion a year into the state. Trade and manufacturing are also prominent industries, and Arizona has been particularly successful in attracting high-technology companies such as Motorola Inc. and Intel Corp.

One out-of-state banking company - St. Louis-based Mississippi Valley Bancshares - agrees that the Arizona is a good place to be. The $1.7 billion-asset parent company of Southwest Bank in St. Louis and Southwest Bank in Belleville, Ill., is venturing out of the Midwest for the first time to start its newest subsidiary, Southwest Bank of Phoenix.

"It's a growing market, in which we think we will have a lot of business opportunity," said Linn H. Bealke, vice chairman at Mississippi Valley Bancshares. "Phoenix has a very attractive labor market in the Sun Belt and a very favorable pro-business government environment. There will also be more light manufacturing and a lot more commercial industrial loans in the Phoenix market over time."

Joe Roberto, an analyst in the New York office of Keefe, Bruyette & Woods Inc., said Mississippi Valley's expansion into Arizona is a good move for the company.

"They've done well in St. Louis and now they are taking this model to a new market," Mr. Roberto said. "They are following the snowbirds to Arizona, which has a pretty good economy these days."

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