Fortune notes that the FDIC added 191 new banks and savings entities in 2006. That's about double the number in 2002. Of course, the big boys dominate the industry in terms of assets. But community banks still constitute about 93 percent of all domestic banks. Publicly traded community banks have fared exceedingly well; many are seen as merger candidates. Behind a lot of this activity are private equity and hedge funds that have identified the niche as a lucrative one. The key seems to be finding a niche, whether ethnic, business or other, and then exploiting it to the fullest. Collectively, these guys have emerged as real competitors for the big national and regional banks--who will have to pay up to buy them.

For more:
- here's the Fortune article