HONOLULU —“ Larger banks have unseated regulators as the bogeyman standing in the way of small banks’ survival.”

“Compliance remains a concern, but exemptions and last-minute changes to various rules and regulations have certainly helped to ease the sting at smaller institutions. Numerous attendees at the Independent Community Bankers of America’s annual conference here are expressing more frustration about the pressure they face from their bigger brethren.”

“Such pressure is prompting more bankers to talk about the need to gain scale — most likely through consolidation — to compete.”

“‘I think local banks need to combine,’ says Robin Cummings, chief executive at the $559 million-asset Peoples Bank of Alabama in Cullman. He believes that the oft-mentioned $1 billion-asset mark is the minimum threshold for survival.”

“‘The other day I counted the number of banks between our offices and the shopping center on the other side of town, and there were 15 banks,’ Cummings adds. ‘We’ve competed against each other for years but I think we’ve got to get these banks together.’”

“Niche banks, including those that target certain ethnic groups, are feeling pressure from big banks such as JPMorgan Chase (JPM), Bank of America (BAC) and Wells Fargo (WFC), says Alan Thian, the president and chief executive of Royal Business Bank in Los Angeles. He says that pressure is also forcing smaller Asian-American banks to sell.”

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Read full American Banker article here.