THE bank-merger wave keeps rolling along.
This week it hit two financial linchpins of the Pacific Northwest: US Bancorp of Portland, Ore., and West One Bancorp of Boise, Idaho, which are joining to create a $30 billion regional giant, comparable to other ''superregional'' banks such as New England's Bank of Boston.
The bank-industry consolidation trend is no longer driven by dire circumstances, such as the severe real estate loan losses that many banks suffered in the last recession. The theme today is pleasing shareholders. They want an even better return, despite the industry's record earnings in the last two years.
Monday's deal is typical for today.
''Our shareholders deserve better,'' says US Bancorp chairman Gerry Cameron. (The company's stock price is little changed from 1991.)
Mr. Cameron argues that the merger will create a larger and more efficient bank in one of the nation's fastest-growing regions. The new US Bancorp bank would be dominant in Oregon and Idaho and stronger than before in Seattle, the region's biggest market.
US Bancorp currently faces tough competition in this city, lagging behind BankAmerica's Seafirst Bank, Key Bank of Washington, and First Interstate Bank. The merger would make US Bancorp No. 3 in Seattle, passing First Interstate.
''This clearly solidifies our position as the premier Northwest banking institution,'' Cameron says.
Analysts say more such mergers can be expected this year.
For many bank chiefs, this is a good time to sell the company at a premium to a bank that is hungry to expand, says Warren Heller, research director at Veribanc in Wakefield, Mass.
For buyers, the motive is often to expand geographically into a superregional or even a nationwide bank. Also, well-managed banks can reap profits by buying their less-efficient peers and reforming them.
''It's the low average-cost banks that are winning,'' says Alan Hess, a finance professor at the University of Washington in Seattle.
Leading the acquisition charge over the past few years have been NationsBank in the Southeast, Banc One Corporation in the Midwest, and Fleet Financial Group in New England, Mr. Heller says.
Some other banks, such as Wells Fargo & Co., have been trying to please shareholders by buying back their own stock. This boosts the value of remaining shares.
How successful US Bancorp's buyout will be remains to be seen.
So far, it has done little for investors. US Bancorp shares fell 11 percent on the NASDAQ exchange on Monday and Tuesday, to $23.88. Among shareholder concerns are whether costs will fall enough, whether the price (roughly $1.3 billion) for West One was too high, and whether US Bancorp should have been selling itself to a larger bank instead of buying West One.
Work-force cuts of 1,100 are anticipated as the two banks consolidate branches. US Bancorp will pay for its buyout by issuing 1.47 shares of its own stock for each share of West One stock.
Consolidation is seen as the long-term trend in the industry for several reasons.
First, the nation has so many banks. As technology becomes more important to success, larger banks will have an advantage, Professor Hess says. Deploying new technology means high upfront costs, and ''big banks have more transactions to spread costs over,'' he says. In the long run, the investment in technology promises to lower costs and add valuable services at these banks.
Second, competition from other types of financial companies is strong. ''Nonbank'' firms offer loans to consumers and businesses, or offer money-market mutual funds to depositors. This is one reason Congress is now considering bank-reform legislation that would roll back the Depression-era ban on banks underwriting securities.
By letting banks into broader lines of business, the industry will become more profitable and more diversified, some researchers say.
Third, a federal law passed last year makes it easier for banks to expand geographically. Formerly, a bank that wanted to have operations in many states had to have a separate corporation in each state. The ''interstate branching'' law will reduce administrative burdens for multistate banks.
Since the 1980s, the continuous shrinkage in the number of banks in the United States has come to be taken for granted. Just since the start of 1992, the number of banks has declined 11 percent -- to 11,063 on Jan. 1. And the number of savings-and-loan institutions is down 30 percent -- to 1,546 -- because of mergers and failures.
Heller says the pace of buyouts could be slowed by a recession or offset in a boom by formation of new banks.