Sticker Shock Easing U.S. Banker (10/00) Vol. 110, No. 10 p.60; Grossman, Wendy M.
An increasing number of community banks are looking to
partner with larger banks because they are not willing to hold
out long enough to find out whether financial services
modernization legislation will boost fee income, according to
David Martin, managing director of the New York-based investment
banking firm Sandler O'Neill & Partners. And the prospects for
net interest margins, which have been down for some time,
improving in 2001 do not look good. What is more, community
banks are still dealing with the issue of a lack of deposit
growth and the higher-than-anticipated expense of offering
banking services over the Internet. Even though community banks
are being offered deals with prices that are lower than those of
two years ago, today's currency is more attractive to the banks.
Moreover, more small banks are willing to merge these days
because larger organizations are now offering them a larger
ownership share of their companies, says Martin.