Why do investment banking houses even hold conferences? After all, they already publish exhaustive research on the banks they cover.

The answer is clear. Research bulletins report on earnings, capitalization, plans for change, successes and failures. Conferences provide the opportunity to take the pulse of senior executives and find out how committed they are to carrying out their banks' plans.

This was brought home to me as I attended a recent institutional investor conference hosted by Ryan, Beck & Co., the Livingston, N.J.-based investment banking firm that concentrates on community banks.

The meetings were serious and well attended. What I found most interesting was that bank representatives stuck around and to hear other banks' presentations, so as not to miss information that could help them. Gone were the days when most attendees milled around the coffee table and the sessions themselves played to empty seats.

What were the bankers and investors looking for? Mainly, subliminal signals of what is happening in each institution. When I asked investors what they had learned, I got answers like:

"Schmidlap looks tired and worn out. I think he is ready to sell the bank."

"I get the feeling that the tide has turned in this bank. The chief operating officer is doing more of the talking; the CEO sort of sits back and listens."

"I think the management is overwhelmed by Internet banking, and fears the changes taking place in the industry."

"The CEO seems so excited at tackling the new challenges that I feel his bank will soar."

Internet banking got less attention than banks' press releases and statement stuffers might have led you to expect. But in fact, there generally seems to be less interest in the Web at these gatherings. Ryan Beck's CEO. Ben Plotkin, said that at a recent conference only three out of 100 or so bankers raised their hands when asked if they expected the Internet to play a major competitive role in the near future.

The real tone of the conference - the subject many are wrestling with - was illustrated by Lawrence J. Toal, the CEO of New York's Dime Bancorp. Mr. Toal was asked why his thrift company had chosen to enter into a merger of equals (with Hudson United Bancorp of New Jersey) instead of looking for an acquirer.

"That's the problem," Mr. Toal said. "Investors are looking for a quick profit instead of a long-term investment position. I think the shareholders will be better off, over the long run, being part of a new bank that has far greater profit potential than they would be with one fast sale and that's it."

But Mr. Toal's view seemed not to be widely shared. From what I can tell, bank investors are looking for the same quick gains as investors in other industries. That explains why CEOs and boards are emphasizing capital management, stock sales, and mergers and acquisitions, rather than steady growth in capital, earnings, and assets - the goals that used to typify the "conservative" banking industry.

It will be a while before such "value investing" will again drive those invested in the banking industry. Mr. Nadler, an American Banker contributing editor, is professor of finance at Rutgers University Graduate School of Management.

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