California's stumbling economy has prompted insiders at banks in the state to cash in some of their chips this summer.

Sales of stock by officers and directors have risen significantly since May at banks ranging from Wells Fargo & Co., the huge San Francisco superregional, to smaller community institutions.

While insiders sell for a variety of reasons, including options-related transactions, the concentration of activity in California is too unusual to ignore, said Robert J. Gabele, president of Invest/Net Group Inc., Fort Lauderdale, Fla. The firm tracks insider buying and selling through filings with the Securities and Exchange Commission.

Message from Best Informed

"It has to be seen as a sip that some of the best-informed people do not see a serious business recovery in the cards soon," Mr. Gabele said.

California banks have been hit by real estate lending woes, while unemployment in the state has been driven up by retrenchment in the defense and aerospace industries. In addition, a budget impasse has led the state to issue scrip to pay its bills for the first time since the 1930s.

At Wells, 127,600 shares have been sold, according to Invest/Net. The largest seller was David M. Petrone, a former vice chairman of the bank and one of the banking industry's best known real estate lenders. He left the bank in March. Under SEC rules, Mr. Petrone is considered an insider because he left the bank only five months ago.

The other large seller of Wells stock was Donald M. Koll, who recently quit as a director of the banking company. He is the chairman and chief executive officer of the Koll Co., Newport Beach, a real estate development company.

Neither Mr. Petrone nor Mr. Koll was available for comment.

"The selling doesn't surprise me," said Campbell K. Chaney, the banking analyst at Sutro & Co., San Francisco. "California is suffering the deepest economic recession since the Great Depression."

A Star in Decline

The most striking example of insider selling occurred at Silicon Valley Bancshares, San Jose, where about 80,000 shares have been shipped to market. The list of sellers includes Roger V. Smith, chairman, as well as a number of vice presidents.

Silicon has been a star of the California banking scene and viewed as a means of investing in the high-technology industry in its area. But the bank has recently encountered problems with delinquent loans.

Nonperforming assets jumped 76% at the bank in the first quarter versus the fourth quarter and rose again in the most recent quarter.

Silicon Valley officials were unavailable for comment.

Heavy selling of shares, about 105,600 since May, also occurred at Guardian Bancorp., Los Angeles. The bulk was by several directors. A bank spokeswoman said the recession was a factor but also noted that a significant part of the activity involved exercising of options.

Not Option Related

Watchers of insider selling view straight sales of stock as more significant than option-related sales, though option-linked selling can occur for the same reasons. The selling at Silicon Valley wasn't option-related.

Other banks in California where substantial insider selling has taken place this summer are First Commercial Bancorp., Sacramento; CVB Financial Corp., Ontario; Eldorado Bancorp., Tustin; and Centennial Bancorp., Carlsbad.

The selling has overwhelmed the normal pace of insider buying that occurs at banks and many other companies. Mr. Gabele noted that banks in the West, principally in California, ranged seventh in insider accumulation among stock groups. They have since dropped precipitously to the 25th spot.

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