Small Banks Continue to Merge Undetected, Survey Says

NEW YORK - Months after J.P. Morgan Chase's acquisition of Bank One, small banks continue to merge and consolidate at a brisk pace.

Chris Kampe, an adviser with Grant Thornton's broker-dealer practice, said small banks continue to jockey for position in their marketplace through M&A. The deals are generally less than $100 million, but are flourishing.

"By acquiring other banks in their current or outlying territory, these banks are building critical mass, while mitigating serious risk," Kempe said Tuesday.

Between July 2003 and August 2004, there have been 180 small deals. The deals are taking two forms: acquisitions of smaller rivals that boost market share inside a small footprint and acquisitions of non-bank financial institutions such as financial advisors or insurance brokers.

Banks, using the low cost of capital that comes with lower interest rates, also have been buying specialty finance companies that can originate loans at higher interest rates.

For this complete story, please visit Small Banks Continue to Merge Undetected, Survey Says.