Banking industry experts Walt Moeling and Jim McAlpin recently conducted an informal survey asking investment bankers and industry consultants what they foresee as likely developments in the banking industry over the next few years. Here are summaries of a few responses:

• The ideal community bank will either have a dominant market share in a rural slow growth market or, if located in an urban market, it will have enough scale and product offering to compete for deposits with larger banks.

• The regulatory costs of operating a bank have increased such that, in all but rural markets, it will be difficult for banks with less than $500 million in assets to produce adequate long-term returns.

• One billion dollars in asset size will not be considered a large bank. In fact, the demands for 11 percent to 14 percent ROE will create a $1 billion minimum size threshold for surviving banks.

• Deposit mix will be the most important key to achieving consistent profitability. Maintaining core deposits and identifying consistent and reliable low-cost funding will be crucial.

• There will be significant consolidation among community banks, with as many as one-quarter of the roughly 6,000 community banks that exist today lost due to mergers, acquisitions or failure.