Where have all the mergers gone?

Slow pace belies positive underlying factors

Merger activity so far in 2005 was described by D.A. Davidson & Co. as starting with a thud."

Bringing the bank merger/acquisition near-term outlook into focus isn't easy, as divergent forces are fuzzing up the picture. On the one hand, some financial services giants are spinning off businesses they've found unprofitable or don't fit their business plans; others are still digesting recent acquisitions. And for whatever reasons, recent quarters have seen slowing activity.

On the other hand, there are companies on the prowl and attractive targets out there, and factors such as escalating regulatory costs may lead to the …