Cal United wants to be a bigger small bank, but would-be targets aren't cooperating.

"We've spent a lot of time over the past 12 months trying to find targets that understand the story we're telling," said Scott Carpenter, chairman and CEO of the $280 million-asset bank.

In its first attempt to buy a healthy bank in June, Cal United signed a letter of intent to acquire Bay Cities National Bank. The Redondo Beach, Calif.-based bank, with $60 million in assets, appeared to fit Cal United's need for a commercially oriented bank in the Los Angeles area.

But the deal fell through two months later; the two sides could not agree on price. "It wasn't a strategic enough acquisition for us to merit paying the price they were asking," Mr. Carpenter said.

He hasn't given up the hunt. Cal United continues to look for other small business banks in business-rich areas such as the San Fernando Valley.

The desire to grow by acquisition is understandable: The company's 84% efficiency ratio can be blamed on a infrastructure that will support a company three times its current size.

So far the bank's growth strategy has combined internal growth with limited expansion. Last spring, Cal United completed its only deal, buying deposits from the Encino branch of the failed Mechanics National Bank from the Federal Deposit Insurance Corp.

"We think we've put together the horses," Mr. Carpenter said of the banks small business strategy. "Now we need to put together the wagon to pull."

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