Investors and analysts looking for signs that merger and acquisition activity will accelerate were likely disappointed by a showcase of bank executives in New York this week.

Yet leaders of U.S. Bancorp, Toronto-Dominion Bank, PNC Financial Services Group Inc. and others argued they do not have to do deals to grow. They are still digesting revenue-boosting purchases, and they have enough heft to grab a bigger piece of an ever-shrinking banking market by opening branches and stealing customers from weaker banks.

Though the takeover market is ripening thanks to lower profits and heavier regulatory burdens, the banks worth buying are still too reluctant to sell, they said during a three-day conference hosted by Barclays Capital.

"I'll tell you what: it takes two to dance, and I don't dance by myself very well. It's ugly. So you know I haven't found any dance partners," Richard K. Davis, chairman and chief executive of the $320 billion-asset U.S. Bancorp, said when asked if the Minneapolis lender would consider buying Comerica Inc. or another large bank.

"There simply isn't any way to go forward. And I'm not a hostile kind of guy. I'm just not going to do it. Yeah?"

U.S. Bancorp has done three acquisitions in just over 12 months, buying a failed bank in New Mexico, the F.N.B. Corp.'s corporate trust business and Bank of America Corp.'s trust business, which Davis it "flawlessly converted two weekends ago."

It is the first time in his nearly five years as CEO that the company is not in the process of closing or integrating a purchase. "That doesn't mean I'm dying to get one to fill up the card," he said. "But it also means that we can handle anything that comes are way."

The head of Toronto-Dominion's $190 billion-asset U.S. bank, TD Bank, echoed Davis' comments.

"We now have adequate scale in the U.S. We don't have to acquire," Bharat Masrani, head of U.S. banking said on Wednesday. Toronto-Dominion has invested about $20 billion creating a 1,300 branch franchise from Maine to Florida, most recently agreeing to buy auto lender Chrysler Financial in December.

It would be interested in making more acquisitions, particularly in Florida, where it bought three failed banks last year. But it is not waiting on deals to grow: It will open 35 branches this year with 37 planned for next year, many of them in Florida, he said.

James Rohr, chairman and CEO of PNC Financial Services Group Inc., said that the $263 billion-asset company might pursue more "small" deals after agreeing over the summer to buy some branches from Flagstar Bancorp Inc. and RBC Bank from the Royal Bank of Canada.

But the 2,500-branch lender can get bigger in key markets without doing deals, he said. It is opening 80 branches in Chicago because the banks it looked at buying there were too expensive, he said.

"You don't have to acquire," Rohr said. "You have to be in the marketplace."

Keycorp Chairman and CEO Beth Mooney and People's United Financial Inc. CEO Jack Barnes said their companies are only likely to consider small, fill-in acquisitions in their existing markets.

To grow earnings per share, most banks appear to be focused on a combination of cross-selling, cost-cutting and stealing customers from competitors. Mooney and Webster Financial Corp. Chairman and CEO James Smith talked at length about the importance of deepening relationships with small-business and middle-market customers, while Barnes and Capital One Financial Corp. Chairman and CEO Richard Fairbank said that selling more products to existing customers — particularly those it inherited or will inherit through acquisitions — would be crucial to earnings growth.

Kelly King, chairman and chief executive of $160 billion asset BB&T Corp. in Winston-Salem, N.C., said that it is "rational" for bankers to put merger plans on hold in an uncertain environment.

"I think everybody is trying to kind of figure out where we are. Are we going to double dip? Is it going to be slow?" he said. "People have just a lot more questions than they have answers."

Christopher Carey, chief financial officer of $23 billion-asset City National Corp. of Los Angeles, said only banks with $200 million to $1 billion of assets with the most regulatory or revenue pressures are seeking to sell right now.

"If you're under no stress, your credit quality is acceptable, you got enough capital — a lot of those companies just don't seem to have any interest in selling," he said. "Pricing is bad, so they want to wait until pricing gets better if they're going to sell."

City National would like to buy something in New York, but "we find nothing available." So it is focusing on bank deals in California and looking for add-ons to its wealth management division nationally, he said.

For George Jones, the CEO at Texas Capital Inc. in Dallas, a rebound in M&A activity can't happen soon enough. Texas Capital itself does not buy banks — its strategy is to hire teams of bankers away from competitors — but Jones said that the dearth of buying opportunities for large banks has wound up hurting regional banks by creating fierce competition for loans. As Jones sees it, the only way deposit-rich large banks can deploy excess liquidity these days is by trying to beat out smaller competitors for loan business. "In our marketplace we're seeing a lot of aggressive behavior on accumulating assets, particularly from the larger institutions," Jones said.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.