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Article: Stalled Deposit Growth Challenges Community Banks: The value of community bank stocks remains high, but many challenges await. Buckle up. The road ahead could get bumpy.
- Article from:
- US Banker
- Article date:
- July 1, 2005
- Author:
CopyrightCOPYRIGHT 2005 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Community bankers better prepare for a tough road over the next few years. They face a slew of challenges, including increased competition from bigger banks, slimmer margins, slowing deposit growth and the often-cited increase in regulation. They also are likely to suffer from their own missteps in the recent past and, oddly, their own successes, says Mark Fitzgibbon, director of research at Sandler O'Neill & Partners.
Yet, despite the potential pitfalls, community banks' stock prices have remained relatively high, trading at 14 times future earnings estimates-outpacing big banks' 10 times future earnings, he says. And while that's indicative of healthy investor ...