Some of California's community banks are racing against the clock to take advantage of what could be a once-in-a-lifetime opportunity when Wells Fargo & Co. sells 61 branches.

Wells' upcoming divestiture of the branches, with $2.54 billion in deposits throughout the state, will rank as the largest such sale in California and the third-largest overall.

The divestiture, a result of Wells' impending merger with First Interstate Bancorp, will free up branches in 28 geographical markets, the three largest being the San Diego area (14 branches), Sacramento (nine), and Bakersfield (five).

While there are several big banks, both in California and out of state, interested in acquiring the branches, there is also a community bank consortium and a Southern California community bank holding company with deep pockets in the running.

A knowledgeable source said Hovde Financial Inc., New York, has put together a consortium of "approximately eight banks." The deal, though, is actually made up of two groups of banks - one group will bid for branches in the southern part of the state and one will go after the northern branches.

The bids would then be packaged. Wells Fargo has expressed a desire to sell to one buyer. Should a community bank consortium be successful, it would most likely divide up branches along geographical lines.

Wells announced the first cut on Wednesday, and it is believed there are a total of nine banks or groups interested.

Hovde has successfully put together community bank consortiums before. Last year, the firm organized a consortium that acquired 27 branches of Metropolitan Financial Corp. in four states after it was bought by First Bank System Inc.

Among the eight companies believed interested in participating in this consortium are Westamerica Corp., Vallicorp, and the Bank of Stockton's parent corporation. Westamerica officials declined to comment; officials for Vallicorp and the Bank of Stockton could not be reached. The others could not be determined.

Westamerica and Bank of Stockton would likely have an eye on Wells' branches in the Sacramento area. Vallicorp would probably be interested in branches in the southern part of the state.

The biggest obstacle a consortium may face is time.

Wells accepted bids March 11. Final bids are due March 25, and Wells is expected to announce its selection March 28.

The Federal Reserve has required Wells to select buyers of the branches before consummating the merger, which Wells plans to complete by April 1.

Bringing a group together for a successful bid in such a short time would take considerable effort.

"I think it would certainly be a challenge, but not an impossible challenge," said Claude B. Hutchinson, an analyst with Smith & Crowley Inc., San Francisco.

Cost is another factor. The going rate of an 8% premium for deposits would mean a price tag of around $2.8 billion for the 61 branches.

SDN Bancorp, Encinitas, Calif., is another community bank player interested. SDN is relatively new company in the state. Backed by the wealthy Dartmouth Capital Group, SDN announced deals to acquire Liberty National Bank, Huntington Beach, and Commerce Security Bank, Sacramento, within the past six months.

SDN chairman and chief executive Robert P. Keller has said his group is interested in continuing to make acquisitions in the state, but he would not comment on the company's interest in the Wells branches.

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