Think way back — well, a few months ago — to all the hype about how private-equity firms were poised to swoop in and buy struggling banks left and right.

As with a lot of ballyhooed threats to banking's status quo — remember Sears? Microsoft? Wal-Mart? — it hasn't exactly turned out as predicted.

Though executives at many private-equity firms continue to raise capital and scout opportunities, few have emerged victorious in the bidding for failed institutions in recent months.

The reasons are many. The pace of failures has been slower than dealmakers expected. Methodical due diligence is slowing deals for banks that are still open, in which government loss-sharing is not available to protect buyers. And regulators remain reluctant to quickly sign off on deals that do not involve traditional bank buyers.

"You're not going to see floodgates opening up soon in terms of a plethora of deals," said Mark Graf, an investment professional at Aquiline Capital Partners LLC, a New York private-equity firm. "The challenge is finding the right confluence of events with the right return on investment, and you have to meet the regulators' guidelines."

The overall tone from private-equity executives appears calm despite an eagerness to put billions of dollars in capital to work. Most agree that as failures accelerate and traditional buyers prove scarce, private equity will be in the thick of things, ready to pursue an aggressive consolidation strategy.

There have been notable deals, some point out, including one that closed last week where Aquiline bought common stock and convertible preferred shares that would give it a 24.9% of BNC Bancorp in High Point, N.C. BNC expects to use the funding for traditional and government-assisted acquisitions.

Still, it took time for Aquiline to green-light its first direct U.S. bank investment. Graf, who will join BNC's board, has been with the private equity firm since late 2008 and former Wachovia Corp. CEO G. Kennedy Thompson came on board more than a year ago.

Graf said, however, that Aquiline is looking at similar deals in other parts of the country.

Public relations will be as much the name of the game as business dealings, in some eyes.

"Regulators prefer capital first from banks and groups that don't have PE investors," said Jonathan Hornaday, director of strategy and corporate development at Piedmont Community Bank Holdings Inc., a North Carolina venture backed by Lightyear Capital LLC and Stone Point Capital LLC.

"The challenge for us is that 'private equity' is still a dirty word in some regulatory circles," Hornaday added, though he said Piedmont has maintained a "good working relationship" with such overseers. "Regulators and politicians must come to recognize that not everyone is looking to turn a quick buck."

Graf said he understands why regulators are nervous.

"They're in a difficult position, where they are charged with the safety and soundness of the industry. So they have a predisposition to work with experienced bankers." This helps explain why so many would-be private-equity buyers are now stacked with familiar faces from the banking industry.

Overshadowing such gains are high-profile setbacks, such as the news that David Moffett, the former U.S. Bancorp vice chairman, had opted against being the CEO of BSE Management LLC, a group that was formed to buy struggling banks in Florida. The BSE team includes John Ryan, a former Office of Thrift Supervision regional director, and Ray Christman, a former head of the Federal Home Loan Bank of Atlanta.

William Isaac, who was tied to BSE but last month agreed to chair Fifth Third Bancorp, gave a less-than-optimistic prognosis for the venture. "I'm not sure there is even going to be a venture in Florida," he said. He and others have not elaborated on the reasons, but the remark fueled speculation that deals were starting to get more expensive.

Another high-profile team that has been relatively silent is North American Financial Holdings Inc., led by former Bank of America Corp. executive Eugene Taylor and backed financially by Crestview Partners. It took the group less than 90 days to get a shelf charter in March, but it has yet to pull the trigger on a bank acquisition.

Christopher Marshall, a partner at North American, said the time it takes to move from concept to consolidator should not catch seasoned executives by surprise.

"Banking is a regulated industry for good reason," Marshall said. "As long as you understand and respect that, then the regulatory process is fairly smooth and predictable."

Herb Boydstun, a former Hibernia Corp. CEO who is leading a group that wants to buy banks in Florida, sought to shoot down rumors that his group is struggling with regulatory relationships.

"We don't think we've had any issues with the local regulators in Florida," he said. Boydstun would not say if his group, which raised $400 million in January from hedge funds and mutual funds and used some of the cash to acquire First Southern Bancorp Inc. in Boca Raton, had more deals lined up.

In recent months more private-equity groups have been leading recapitalizations of existing banks rather than bidding on failed institutions. Private-equity executives have mixed views on the crowding of this field.

"It is always good to feel like you're not the only one pursuing a certain strategy," Hornaday said. "It gives you some credence."

But Wilbur L. Ross Jr. said many firms are engaging in a "dangerous exercise." His W.L. Ross & Co. was among eight investment firms that successfully bid on BankUnited of Coral Gables, Fla., earlier this year.

"If you are going to do a nonassisted transaction, you have to be a lot more certain that your numbers are right" given the lack of loss-sharing agreements, Ross said. "You have to be sure that the troubles aren't so severe that the equity you invest will be wiped only a few months later."

For that reason, Ross said his firm is not dedicated solely to pouring capital into banks.

"We are not pigeonholed," he said. "That's what makes us different. We like banks now and see them as a decent opportunity. When that is no longer the case we will go on to something else."

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