Net income for the fourth quarter of 2007 was the lowest reported by the banking industry in over 15 years. The average margins are the lowest in almost 20 years. While the banks deal with the tremendous amount of defaulted loans, it seems likely that M&A activity will slow down. We have also seen a few agency divestitures by the big banks.

This might not be so for the smaller and mid-sized banks though. A majority of them were much less affected then the big boys and this may be a great time for them to step up and make some acquisitions in the insurance arena. You may see a small and mid cap buying trend over the next few years as the big competitors sit on the side line.