In our cover story for this, our second issue, we place the spotlight on how community banks will fund their loans in the years ahead.

Few issues are as fundamental to the survival of community banks as how to make up for stagnant deposit growth.

When four out of five community banks recently surveyed by the American Bankers Association believe that the bulk of their loan funding in five years will come from sources other than deposits, it's clear that big changes are ahead for the industry.

In "The Hunt For Fresh Funding," we provide some insights into the funding alternatives at a bank's disposal.

We also present a Y2K story of a different sort. With almost all community banks either technically compliant or close to becoming so, the main Y2K challenge for many in the months ahead is conveying the news of their readiness. In "Fixed the Y2K Problem? So Let's Hear About It," beginning on page 4A, we showcase some banks that have devised creative ways of calming a skittish public.

Still, there is one question that will continue to vex many community bank executives long after the calendars turn to Jan. 1, 2000: should our bank even exist? In "Are You a Gobbler, a Gobblee, or a Prune?," beginning on page 8A, we introduce you to the fraternity of M&A advisers who specialize in helping small banks interested in buying others or being bought themselves.

For those who are troubled by the spirit of such a piece, we present a sort of rebuttal. In "Selling Your Bank? Think Again," on page 30A, David Shuster, a banking consultant, makes a compelling economic case for small banks to remain independent.

Feel free to offer advice on how we can improve this new publication. You can reach me by phone at 212-803-8416 or e-mail me at john.kimelman

Until then, enjoy the read.

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