For much of this year the nation's largest banking companies watched as mortgage and structured investment failures punched holes in their balance sheets and depleted capital, leading many industry observers to assume that the biggest would wind up on the defensive.

On one hand, that has proven true, with the likes of Wachovia Corp. and Washington Mutual Inc., beaten down by bad mortgages, disappearing in fire sales. But at the same time, four of the nation's largest remaining banking companies went on the offensive, making major deals and grabbing big swaths of share in critical markets.

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