counterparts elsewhere can only dream about.

Since February, four San Diego County financial institutions have announced deals to sell at an average price of 3.75 times book value and 23.65 times 1998 earnings. That compares with 2.5 times book and 23.4 times earnings for all deals in California this year and the 2.44 times book and 21 times earnings for sales nationwide, according to statistics compiled by Alex Sheshunoff & Co. in Austin, Tex., and SNL Securities in Charlottesville, Va.

The highest price was for San Diego's Bank of Commerce, which last month sold itself to Minneapolis-based U.S. Bancorp for $306 million, or 4.6 times book value. Still pending are:

U.S. Bancorp's purchase of Peninsula Bank in San Diego for $104 million, or 3.5 times book value.

The sale of $241 million-asset Valley National Corp. in El Cajon to Community First Bankshares of Fargo, N.D., for $65 million, or 3.4 times book.

Wells Fargo & Co.'s agreement, announced late last month, to buy North County Bancorp in Escondido for $112 million, or 3.4 times book.

Southern California's red-hot economy is one reason large banking companies are so willing to pay such high multiples for San Diego operations.

Another is consolidation. Observers point out that since Zions Bancorp of Salt Lake City scooped up $364 million-asset FP Bancorp and $631 million-asset Grossmont Bank in 1997, the market has been left with few substantial jewels.

Then there is the performance of the sellers. Three of the four have posted returns on equity well above those of their peers nationwide.

"Aggressive buyers will pay those prices," said Nick Barbarine, senior vice president of Hovde Financial Inc., a Washington, D.C.-based investment banking firm that represented the sellers in two of the deals. "These San Diego banks were premier performers."

Peninsula Bank was certainly holding out for top price. Last year the $456 million-asset bank terminated its deal to be acquired by Western Bancorp of Newport Beach, Calif., after that company's stock price slid 20%.

John G. Rebelo Jr., Peninsula's chairman and chief executive officer, said he could not take that deal to his shareholders. In agreeing instead to be bought by U.S. Bancorp, Mr. Rebelo said, Peninsula had accepted a "very good offer from a fine company."

But the days of high prices are probably coming to an end in San Diego, observers say. That is because the only bank left in the market that could command a high premium is $600 million-asset Scripps Bank -- which seems to be in no mood to be acquired.

Ronald Carlson, president and CEO of Scripps Bank, said it is eyeing acquisitions of its own. In fact, Scripps bought Chula Vista-based Pacific Commerce Bank in April 1998, paying a whopping five times book value.

"Our board would like to remain independent and become a major player," Mr. Carlson said.

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