With this week's merger announcement by H.F. Ahmanson & Co. and Coast Savings Financial Inc., California may finally begin living up to its reputation as the end of the bank acquisition rainbow.

The long-anticipated gold rush from out of state never materialized, observers of the California market said, because the Golden State had to go through an internal shakeout. The $901 million Coast deal is just the type of "second-tier" acquisition that will create more attractive buyout targets.

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