David M. Partridge, managing principal at Towers Perrin Consulting Group, expects mortgage origination volume to remain significantly below 1993-94 record levels this year.

"Combined with the downward pressure on earnings from variable-rate mortgages they've offered in the past 24 months - mortgages that can't be repriced as fast as their underlying cost of funds - some thrift institutions will be back in trouble," Mr. Partridge predicts.

"We'll see more headlines about low-priced thrift acquisitions by banks that know how to capture customer economic value," he added.

Mr. Partridge says some California thrifts could disappear. "Depressed thrift stock prices and the end of any barriers blocking interstate banking will invite acquisitions of at least two of the big California thrifts," he said.

"We'll also see a new value paradigm enter into acquisition pricing, as acquirers with high levels of marketing skills set prices based upon the prospective economic value of the target's customer base," he said. "It's a prospective 'share of wallet' value pricing game now."

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