Progressive banks-cognizant that independence is at stake-are investing feverishly to build revenue momentum. Having the firepower to acquire is at issue. They realize that today's stock prices are driven by mid-teens earnings per share (EPS) growth that has been underpinned by sources other than top-line growth. Many of these factors are not sustainable.

Core deposit categories are flat or declining, adjusting for bank acquisitions of thrifts. Meanwhile, underlying revenue growth is languishing at three to five percent. Even worse, analysis shows that the majority of new sales are unprofitable in some core businesses, and gross revenue losses, predominately through attrition of profitable customers, are running at 20-plus percent per year, according to First Manhattan Consulting Group (FMCG). Improvements in marketing competency are obviously critical.

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