Performance of Ohio's Independent Banks

Economic, regulatory, and technological developments have brought commercial banking organizations under increased pressure in recent years. Recession and persistently high and volatile interest rates have increased both interest-rate and credit risk for banks. Inter-industry and intra-industry competition also are increasing. Asymmetric bank/nonbank regulations, along with technological developments and financial innovations, have stimulated the growth of a variety of powerful nonbank financial competitors. The Depository Institutions Deregulation and Monetary Control Act of 1980 has increased the powers of thrift institutions and deregulated deposit rates, resulting in more intense rivalry in the markets for retail financial services. Finally, several states have eased regulatory restrictions on bank expansion by acquisition or merger and/or de novo branching. All of these forces are making it more difficult for the banks to perform as well as they have in the past.