Shares of California State Bank have surged this week on speculation that it may be acquired by Zions Bancorp.

Market sources said Zions, headquartered in Salt Lake City, may offer $42 per share for California State. Officials at California State, based in West Covina, did not return phone calls.

In the past week shares of California State, which has assets of $800 million, have jumped 6% on heavy volume. On Wednesday the stock rose a modest 25 cents, to $39.625. Meanwhile, Zions' shares climbed $1.50, to $42.25.

Such a deal would be fairly easy for Zions, an adept acquirer, and in line with its strategy to build market share. "We don't comment on specific transactions," said a Zions' official. "However, we do have a community bank focus and have announced two acquisitions in California. California's economy is rebounding, and you can get prices that would be immediately accretive to Zions' shareholders."

Last year the $7.2 billion-asset Zions bought eight banking companies, three finance-related companies, and 31 branches. Its two California deals involved GB Bancorp and FP Bancorp.

-Tania Padgett

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.