I had thought I would see fireworks at the Community Bankers of Kentucky convention in Lexington last month.
It was the last convention before legislation to allow statewide branch banking - something independent bankers had feared for years - was scheduled to take effect.
To my surprise, no one even talked about it.
Maybe it was inevitable. Independent bankers now realize that branch banks are no longer a threat, and neither is a major bank's acquisition of the independent across the street. In fact, most agree that these developments usually bring more, not less, business to the independents remaining.
So instead of lamenting about the threat of branch banking, the Kentucky independents were talking about such issues as interest rate risk, fee income - and the difficulty in finding good help these days.
One banker told me he calls local high teachers for leads to people who are good with numbers and might want to become part-time bank employees. And when he gets wind of a local person going to a nearby college, this banker jumps at the opportunity to woo them into part-time employment.
The meat-and-potatoes of the business sessions included a talk on shareholder value by Gary Young, chief executive officer of the Young & Associates consulting firm of Kent, Ohio.
Efficiency is way out of kilter at many banks, Mr. Young said. A bank may be using capital at about 60% of capacity, employees at 80%, and facilities at 30%, he explained.
The job then is to try to align the three - by changing employment practices, buying back stock, and generating more loans.
Mr. Young also pointed out that in this new world of acquisitions, both the buyer and the seller should do due diligence. The buyer obviously wants to make sure the property being bought is worth the price. But the seller has to make sure that the paper being offered will be valuable in the future.
To sell your bank for three times book only to receive stock of another bank that is selling at three times book is no great shakes. And worse, if the acquirer's stock is perceived to be overpriced, the selling bank will get far less than it expected for its property.
Over all, my visit to Lexington reinforced my belief that community banks have a bright future. All they need to stay independent are the desire to do so and the kind of profitability that will make shareholders indifferent to the siren songs of potential acquirers.
Mr. Nadler, an American Banker contributing editor, is professor of finance at Rutgers University Graduate School of Management.