Oregon bankers, once content to stick close to home, are branching out.

The state's 42 independent banks-all with less than $1 billion of assets-have opened 55 branches in the last three years. And the pace is accelerating, with 12 branches opened in 1996, 18 in 1997, and 25 last year, according to the Oregon Division of Finance and Corporate Securities.

Cascade Bancorp typifies the trend.

After gaining the top market share in central Oregon, Cascade officials realized they could no longer afford to be isolated from the majority of the state's population.

Patricia L. Moss, chief executive officer, said the $301 million-asset banking company recently ventured over the Cascade mountain range and into the booming Interstate 5 corridor. This area is home to high-technology firms, semiconductor makers, and a wide array of small service and trade firms. "If we are to continue to grow, we need to expand geographically," Ms. Moss said.

Cascade, which is based in Bend, this year remodeled an historic bank building in the heart of downtown Salem, the state capital, and hired former U.S. Bancorp and KeyCorp employees to run the branch.

Next stop: Portland.

The 10-branch banking company is opening a loan production office in the state's largest city this spring, to be followed by a traditional branch later in the year.

South Umpqua Bank, a $319 million-asset bank in Roseburg, also is opening sites in Portland and Salem this year. "Our strategy is to branch up and down the I-5 corridor," said Raymond P. Davis, CEO. "Portland is the largest market in the state. For us to grow, we have to be there."

Eugene-based Centennial Bancorp is also on a branching tear.

In 1998, the $570 million-asset company opened three branches in Portland and Eugene and acquired a branch in Vancouver, Wash. Additional sites are planned for Salem and Portland this year, which would bring Centennial's network to 17.

The population of Oregon's largest cities-Portland, Eugene, and Salem- has jumped more than 16% this decade. The state's job growth has been spurred by the high-technology boom around Portland and along a 110-mile stretch of Interstate 5.

Most banks are building, rather than buying, branches.

"If you're going to grow, you're going to have to build," Mr. Davis said. South Umpqua in the past two years has more than tripled its branch network, to 10. Five of South Umpqua's seven new offices were built from scratch.

A limited number of sellers has spurred the decision to build. Through Sept. 30, Oregon banks with assets above $100 million posted average returns on assets of 2.19% and on equity of 18.79%, compared with national averages of 1.22% and 14.51%, according to the Federal Deposit Insurance Corp.

"When they're making money, they are less likely to sell," said James R. Bradshaw, bank analyst at Pacific Crest Securities in Portland.

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