One Valley Bancorp, situated here in the shadow of 955-foot-high Coonskin Ridge, is easily overlooked by regional banking executives scouring the country for acquisitions.

Though a dominant player in most of the larger communities of West Virginia, $4.4 billion-asset One Valley has yet to catch the eye of the investment community or the companies leading the consolidation craze.

One Valley is a solid company with a strong capital base and few asset- quality issues, analysts said, but West Virginia's unspectacular growth has tended to blunt interest in the company.

In addition, One Valley's preeminence in its home state-it has the lead market share in many communities - would raise serious antitrust concerns if it merged with any in-state competitor.

Moreover, One Valley's single-digit income growth over the last 18 months doesn't give acquisition-minded bankers a lot to get excited about. Per-share earnings will grow only 6% next year, analysts project.

But One Valley is working to change that. After focusing on quality and productivity-oriented initiatives over the last five years, it is embarking on a push for internal growth and for expansion through acquisitions outside West Virginia.

"Our philosophy is to control our destiny," said chief executive officer J. Holmes Morrison. "Today you can't put your head in the sand."

The goal is to continue an 11-year track record of increased earnings per share while making investments that will kick revenue growth into high gear.

"One Valley is considered the best retail bank in West Virginia. They have been the dominant player in the state," said Charles Wittmann, an analyst with Wheat First Butcher Singer. "But they really have to try to figure out what's next.

"One Valley has to look in the mirror and say, 'How are we going to add value for shareholders?' "

To answer the question, executives are undertaking several internal growth initiatives, many involving technology.

The most recent was the July rollout of 130 ATM machines in convenience stores throughout West Virginia and also in some surrounding states. The company signed deals with six convenience-store operators. The new machines are more accessible than the 96 ATMs that One Valley already had, mostly in its 89 branches.

Also in July the bank introduced an array of products and services, including PC banking and telephone banking, as well as pricing breaks on various combinations of them. A debit card introduced last year is also getting a sales push.

"We're trying to grow our market share and migrate customers to lower- cost delivery options," said Phyllis H. Arnold, executive vice president and chief executive officer of One Valley's lead bank.

In addition to these consumer initiatives, One Valley is pushing corporate purchasing cards, Visa travel and entertainment cards, and enhanced cash management services for businesses.

One Valley is also adding products to its $3 billion trust department, whose revenue growth-12% to 15% a year in the last few years-has made it one of the fastest-growing areas of the company.

Finally, One Valley is working to expand a proprietary family of mutual funds started in 1995, and there are plans to start selling life insurance next year.

These projects should help increase One Valley's fee income from about 20% of revenue to more than 30%, officials said.

"We're trying to get that noninterest income closer to the national average," said Mr. Morrison. "Now we have the products in place and the technology in place to do that."

For external growth, One Valley is looking to Virginia, where some large southeastern regional banks have recently announced deals.

Its last Virginia acquisition was the April 1996 purchase of a $336 million-asset thrift in Lynchburg. Now, as it watches competitors big and small gobble up opportunities, One Valley wants to start making some more aggressive plays.

Mr. Morrison would like to have at least $1 billion of assets in Virginia within the next year, he said. Thanks to One Valley's strong market cap, he has the cash to go shopping.

Stock appreciation-shares hit $37 last week, up from $24.70 (adjusted for two stock splits) in early 1996-has given the company a market capitalization of nearly $1 billion. It started trading in May on the New York Stock Exchange to increase liquidity for shareholders and benefit from a larger market.

Mr. Morrison said the addition of a prominent new board member also will help with the acquisition effort. He is H. Rodgin Cohen, a partner with the New York law firm of Sullivan & Cromwell. Mr. Cohen is considered an expert in banking mergers and acquisitions.

One avenue for growth in Virginia may be the fallout from big deals there that North Carolina-based Wachovia Corp. and First Union Corp. are closing. One Valley is waiting to scoop up branches that will be divested as a result of those deals, Mr. Morrison said. It is particularly interested in Charlottesville, Va., where Wachovia is expected to sell off branches because of antitrust concerns.

One Valley is also exploring acquisitions of community banking companies with about $200 million to $1 billion of assets. Central Virginia is particularly attractive; Maryland is also under consideration.

"Virginia is a very good market," said Mr. Morrison. "Virginia and Maryland are probably the most attractive markets for us."

Competing head to head with the likes of Wachovia, NationsBank Corp., and First Union is not on the agenda, though. Mr. Morrison said One Valley, which operates 12 banks, each with its own board and chief executive officer, views itself as a super community banking company that will serve the small communities the giants ignore.

Expansion would address some of One Valley's critics, such as the rating agencies that have punished it for its lack of geographic diversity.

Expansion should also help fuel revenue growth, according to analysts.

"As the No. 1 player in West Virginia, they've been bumping elbows against the borders," said Marni Pont, an analyst with Keefe, Bruyette & Woods in New York. "They need to broaden out. And Virginia is a much faster-growth market."

Still, even without much accomplished in the way of out-of-state growth, Ms. Pont gives high marks to One Valley.

"Other stories have more sizzle. In heady markets like this, they don't look as exciting," she conceded.

But One Valley's motto is "no surprises," she noted. "It's low- volatility. If we ever get a down market, you want a company that lets you sleep at night. This company is it."

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