Redwood Empire Bancorp is bulking up its thrift subsidiary and extending its reach southward by buying La Cumbre Savings Bank in Santa Barbara. The deal also could signal the beginning of a new surge in midsize thrift mergers in the Golden State. Redwood Empire in Santa Rosa, north of San Francisco, owns both a thrift and a bank, Allied Bank FSB and National bank of the Redwoods. It has $471 million in assets.

La Cumbre, with $150 million in assets, will go for about $9.5 million, or a little less than book value, according to Redwood Empire officials. It has been a lackluster performer in recent year's, with a relatively low 5.14% core capital ratio.

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