An inverted yield curve, deposit competition and a constrained retail lending environment has made for a tough environment for small- and mid-sized banks. So after years of growth that topped their bigger brethren, these banks are coming down to earth. If the yield curve remains inverted, this year could force many banks to seriously consider selling, if they are not doing so already. A good example may be Washington Mutual, which tops KBW's list of likely takeover targets. This of course is great news for the investment bankers--who ought to be working overtime. Many are expecting a rise in announced deals in 2007, amid talk that M&A expectations always seem overblown in this sector. Many are hoping this year is different in that regard.

For more,
- here's an article from Investment Dealers' Digest (For FierceFinance readers)