Community banks' stock prices are heating up in California as investors bet that consolidation activity is about to ignite.

Stocks of at least a half-dozen community banks in the state climbed more than 5% in the past month amid brisk interest from investors and potential acquirers.

One institution - $384 million-asset Eldorado Bancorp in Tustin - saw its shares jump 21% during the four weeks ending Monday. That's well above the 2.5% gain posted by the American Banker's index of western bank stocks during the period.

"These things are all moving, and they're moving because of speculation on takeovers," said Campbell K. Chaney, a bank analyst at Rodman & Renshaw in San Francisco.

The intensified focus on community banks comes in the wake of merger announcements by some of California's largest banks and thrifts. With American Savings Bank about to be acquired by Seattle-based Washington Mutual, and California Federal Bank and First Nationwide about to merge, the expectation is that smaller banks are next.

Investors saw more evidence of takeover fever on Monday, when Fresno- based Vallicorp Holdings Inc. announced it was in talks to be acquired by an unidentified bank holding company.

Although executives of the $1.3 billion-asset bank would not name the prospective buyer, speculation has centered on Portland, Ore.-based U.S. Bancorp, which displayed its appetite for community banks with its deal to buy Sacramento-based California Bancshares. The purchase closed in June.

Vallicorp, with 55 branches, is the largest publicly traded bank in California's agricultural Central Valley and would fit in with U.S. Bancorp's existing franchise, analysts said. The bank's stock rose 6.2% on the takeover talk, though it has dropped a bit in subsequent days.

But takeover speculation has led to more sustained price rises at other banks in recent weeks. Oakland-based Civic Bancorp, for example, peaked on Sept. 6 at a 52-week high of $8.63 and, two days earlier, reported a volume of 87,000 shares, four times its average daily volume.

San Mateo-based Bay View Capital Corp.'s stock is up 8.3% over the past 20 trading days, with almost 300,000 shares trading hands Monday, nine times its typical volume. Mr. Chaney said the thrift is a likely target for Washington Mutual or First Nationwide.

The growing interest in the California bank market comes amid signs that the state's economy is finally on the mend, Mr. Chaney said.

Other likely California-based acquirers include Inglewood-based Imperial Bancorp and WestAmerica Bancorp. of San Rafael. In addition, large thrifts such as Glendale Federal Bank are eyeing acquisitions to enhance their commercial lending.

Observers all but rule out such large out-of-state superregionals as Minneapolis-based Norwest Corp. and First Bank System, as well as Charlotte-based NationsBank Corp. To stand up against big competitors, any new entrant would want a statewide franchise, not a community bank, said Steven J. Didion, bank analyst for Hoefer & Arnett in San Francisco.

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