Like an aspiring movie star, a Charleston, W.Va., banking company is aiming to make it big in California.

City Holdings Co. said last week that it would buy Summit State Bank, Rohnert Park, Calif., for $19 million. The deal would be $2.6 billion-asset City Holdings' third in California since 1997 and move the company closer to its goal of building a $1.5 billion-asset subsidiary in the nation's most populous state.

"The growth dynamics in California are much better than West Virginia," said Steven J. Day, president and chief executive officer of City Holdings. He said the company will expand its California operation by cobbling together banks and thrifts with less than $200 million of assets.

City Holdings entered the state when it acquired Del Amo Savings Bank of Torrance in December 1997. It added Frontier State Bank of Redondo Beach this July. Upon closing its deal for $181 million-asset Summit, which is expected to happen in early 2000, City Holdings would have $386 million of assets, seven branches, and 115 employees in and around Los Angeles and San Francisco.

City Holdings is not alone in its aspiration to bulk up in California.

Since 1994, First Banks Inc. of St. Louis has bought five California banks, and FBOP Corp. of Oak Park, Ill., has bought one and the assets of four others. And last week, $15 billion-asset Pacific Century Financial Corp. of Honolulu said it plans to expand into Southern California by acquiring small and midsize banks.

California has the world's seventh-largest economy, just one appealing attribute to expansion-minded bankers, observers said.

"It makes sense for any bank to go to California because of the growth rate in deposits," said Larry Fentriss, principal at Baxter & Fentriss, a Richmond, Va.-based investment banking firm that is working on several deals in California.

Mr. Day said City Holdings would like to buy a bank this year in central California to boost its assets to $500 million. The company then plans to consolidate all its California banks under one charter, form a senior management team, and tighten up its cost structure.

Ultimately, City Holdings wants to have about 25% of its assets in California, Mr. Day said This goal could be attainable within two years, he said, as small banks -- California has about 220 banks and thrifts with assets of less than $200 million -- look to sell before the elimination of pooling-of-interests accounting in January 2001.

"There are not many buyers for small banks in California," Mr. Day said. "And I think we can buy them at fair prices."

Other experts said that many California bankers -- frustrated by their depressed stock prices -- would be willing to negotiate.

One observer, however, questioned whether City Holdings' strategy of stringing together small banks will translate into profitability.

"Many of these banks are located in isolated markets or are ones that their neighbors don't want to buy," said Jean-Luc Servat, managing director of investment banking at Hoefer & Arnett in San Francisco. "I'm puzzled as to what they'll ultimately end up with."

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