Magazine article American Banker

Upper Midwest Bankers See More Consolidation

Magazine article American Banker

Upper Midwest Bankers See More Consolidation

Article excerpt

Mergers and takeovers will eliminate many more small bank, by the year 2000, with space-age technology fueling the consilidation, community bankers said in a recent survey.

Allen I. Olson, president of the banking group that surveyed upper Midwest bankers, said the results matched his perception of the region.

"There was nothing that made me blink my eyes and say, |Gee whiz,'" said Mr. Olson of the Independent Community Bankers of Minnesota.

For instance, 96% of respondents predicted that the number of independent community banks would decrease by the year 2000. The fact that 62% forecast a decrease of 5% to 20% suggests consolidation will be gradual, Mr. Olson said.

PCs as Small-Bank Saviors

Respondents also heralded telecommunications and data imaging as technologies that will affect community banks most positively in the next five years.

In the 1980s, "probably the personal computer saved the small financial institution," Mr. Olson said. "We're at another transition point - the next phase of the technological revolution."

About 42% of respondents described the economy with "guarded optimism," while 20% called themselves optimistic.

"It indicates that the ag recession of the '80s has been digested," Mr. Olson said, "and the flooding shock wave of '93 was not overwhelming.

Survey Highlights

"I think the survey suggests that the economy will be there to support the bank and the bank will be there to support the economy. …

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