CHICAGO – Large bank mergers and takeovers attract all the attention, but the same activity is taking place frequently in the competitive space closest to credit unions – community-based financial institutions. According to Grant Thornton Corporate Finance, more than 180 such transactions took place nationally between July 2003 and August 2004. "While not the same scope and scale as mega-bank transactions, community banks are making deals that are significant to their marketplaces," said Chris Kampe, a manager with the Chicago-based consultancy. He said his analysis shows that most of those acquisitions involved acquiring smaller banks in existing or adjacent geographic markets to expand the community bank's footprint. "Community banks want to expand their base, but are conservative by nature," Kampe says. "By acquiring other banks in their current or outlying territory, these banks are building critical mass, while mitigating serious risk." He also says that merger and acquisition activity could continue to exist "for decades," while the major banks are facing limited "consolidation opportunities."

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