Community banks unwilling to be preyed upon by larger institutions are becoming hunters themselves.

Smaller banks are banding together to bid as a group on branch divestitures by regional banks. The method proved successful in the Midwest early this year, with 11 community banks acquiring 29 branches of Minneapolis's First Bank System Inc. in five states. It's also been used about half a dozen times since 1991 in the government's bulk branch sales through the Resolution Trust Corp.

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