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.

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