A group of investors in Charleston, W.Va., raised more than $12 million in just 45 days last fall - far more than it needed - to open the city's first new bank in at least 15 years.

As a start-up, Capital State Bank won't be alone - in its home state or in the country.

In fact, the number of community bank start-ups is exploding this year. Charter applications and actual openings this year total 187 so far. Only 50 start-up charters were granted all of last year.

Though the megamergers have dominated the headlines this year, scant attention has been paid to the other end of the consolidation process - the emergence of start-up community banks, founded in many cases by big- bank refugees.

"We think there is a retail base here that is falling through the cracks," said Mike Hudnall, president of Capital State and formerly a senior executive with one of the state's largest banks. "We think there's enough business here to go after that we won't even be noticed by the big banks."

The thinking of Mr. Hudnall and scores like him across the country appears to flout predictions that the days of community banking are numbered. And while the burst of new charters won't reverse the rapid decline in the overall number of banks, it will slow it.

In 1994, for every 10 banks that were merged out of existence, slightly less than one new institution - 0.95 to be exact - popped up to replace it. In the first half of this year, that figure increased to 1.3.

Through the first half, about as many new commercial bank charters were issued - 44 - as in each of the previous two years, according to the Federal Deposit Insurance Corp. National banks, in particular, have skyrocketed in 1995, to 53 through the end of November, more than twice that of last year and the most since 1987.

The figures aren't close to the start-up boom of the mid-1980s, when more than 300 charters were issued in a given year, but the trend marks a sharp turnaround from the decline of the previous 10 years.

"And it won't stop," said Robert R. Rader, president of BanXsource Inc., a bank consulting firm in Marietta, Ga., that has handled 56 start-up in the past eight years. "As long as the egos of the First Unions and NationsBanks keep getting bigger, they become more uninterested in the small communities. That's when the denovos come in."

Several other factors are driving the start-up resurgence.

Consolidation has left many small towns without a local bank, creating rampant demand for the personal service and attention that community banks are known for. The acquisitions have also displaced a lot of personnel - people too young to retire and too old to find another career - who are joining forces to start new banks.

"Consolidation puts a lot of bankers on the street," said Robert M. Moler, executive vice president of Financial Solutions, an Atlanta consulting firm. "If they can't find a job, they'll create one."

Bank stocks are also attractive again, making an investment in a start- up bank much more viable than in recent years, observers said. But while start-up bank investors 10 years ago often expected a quick sale and hefty profit, the latest round of speculators will have to be more patient, analysts said.

"There's nothing guaranteed about it," said James Marks, an analyst with Sutro & Co. in San Francisco. "It can be very profitable, but not if you have the expectation of a payout in one or two years."

Mr. Marks added that small banks can quickly become profitable thanks to the advent of cheaper and more powerful technology - another factor behind the latest start-up wave.

Technology allows small banks to immediately challenge their larger brethren, requiring just a fraction of the cost needed to compete in recent years, Mr. Marks said.

These forces have converged in varying degrees around the country.

The Midwest leads with 71 start-ups opening or in the process of opening this year, with Illinois contributing 22 to that number. Illinois had only three new banks last year and no more than six in any given year for at least a decade. This in a state that already has more than 800 independent banks, more than any other.

The Southeast is next with 54 new bank organizations either open or planned, with Georgia accounting for nine and Tennessee and Florida contributing seven each. The West, spearheaded by nine new California banks, has 40, followed by the Northeast, whose sluggish economy has allowed only 22 start-up efforts this year.

"It's an exercise in the entrepreneurial spirit of the country," said Richard A. Soukup, a bank consultant with Grant Thornton in Chicago, home to most of the start-ups in Illinois. "We have people who are taking advantage of an opportunity that's been created by the consolidation in the Chicago area."

Mr. Soukup predicts at least another six institutions will pop up in the state in the coming months. The success of the first ones, some of which have turned a profit within 18 months, will likely snowball into more openings, observers said.

Wisconsin, which has never had more than six start-ups in a given year for the decade, has nine new banks on its list. The heavy consolidation in Michigan in recent years has created fertile ground there for start-ups, yielding seven. Michigan had a total of only seven new state banks in the previous five years.

D'Auby H. Schiel, who is in the process of forming the first new bank in Mississippi in at least 15 years, exemplifies this year's start-up bankers.

Ms. Schiel was chief executive of a $43 million bank in southern Mississippi for 10 years, until it was bought out last year by SouthTrust Corp., an $18 billion-asset Birmingham, Ala., bank.

She stayed on within the larger organization for about 11 months, leaving last summer to launch Coast Community Bank in Biloxi. The new bank has raised $2.5 million and plans to open by the end of the month.

"I have seen the evolution of banking, and I think we're coming full circle," said Ms. Schiel, who has 34 years of banking experience. "We're coming back to reality, and reality is being able to put your hands on the customers."

She hopes the bank will grow to $17 million of assets within its first year, in part by tapping into the flourishing gambling industry in the area.

Finding a niche business is crucial, most of these start-up bankers said. In Georgia, for example, two banks are being created in part to cater to minority communities.

Quantum National Bank, for example, located in Suwannee, is 95% owned by Asian Indians, of which there are about 12,000 in the area. It completed a $5 million capitalization this week and plans to open by the end of the month.

Another Atlanta area bank will cater primarily to Asians. Global Commerce Bank, which opened two months ago, intends to do one-third of its business in international trade.

Most agree that the latest crop of start-up bankers have to be not only more focused but smarter than their predecessors 10 years ago. After the deluge of small bank failures in the late 1980s and early 1990s, many states revamped their start-up criteria, requiring more capital and banking experience, among other things.

Bank consulting firms are also demanding, and getting, more control over the start-ups, including the selection of the chief executives, computer contracts, and building sites.

"There were so many stupid mistakes done in the 80s in forming these," said T. Stephen Johnson, who heads a consulting firm. "We learned what worked and what didn't then, so these new ones will be much more successful as a class."

R. Kevin Dietrich, Barbara F. Bronstien, Jonathan D. Epstein, and Terrence O'Hara contributed to this article.

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