NEW YORK ( TheStreet) -- Despite a glut of banks and a shrinking capital base, industry consolidation will not happen overnight.

An uncertain economic environment and cautious buyers will mean, "we won't get there for awhile," when it comes to merger and acquisitions, said U.S. Bancorp ( USB - Get Report)'s Chairman and CEO Richard Davis.
U.S. Bancorp
U.S. Bancorp Chairman and CEO Richard Davis

Davis, and other bank CEOs, made their comments during a panel discussion at the second annual SNL Financial Bank M&A Symposium held Tuesday in New York.

Davis said that while there will be more boards having conversations over whether they should sell as compared to last year, few will take the plunge.

First Niagara Financial ( FNFG)'s CEO John Koelmel -- whose bank agreed to acquire New Alliance ( NAL) last month -- said that while "opportunities will abound" doing a deal should be first about driving shareholder value. He added that shareholder value something banks veered away from during the M&A boom earlier in the decade

Davis agreed, adding that deals should be done for earnings appreciation and sustainability as well as immediate revenue growth, not for cutting costs "and figure out the revenue growth later," he said.

Another common theme on the CEO panel was the strong emphasis on remaining disciplined despite pressure to "do a deal."

"The best day of a deal's life is the day it's announced," Davis said. "It's the discipline after the deal is done that's important."

Harris Simmons, the chairman and CEO of Zions Bancorp ( ZION - Get Report) added that many small community banks have large concentrations of commercial real estate paired with weak deposit franchises.

The CRE assets have little value and subsequently the franchises holding them have little value, he says. "That's going to be another factor that will slow things down," he says.

Simmons added that the combination of purchase accounting plus increased capital regulations will also slow things down.

First Niagara's New Alliance deal, announced in August, is the third deal the bank has embarked upon in the last several of years.

First Niagara Deal with New Alliance is Sound

Observers have been speculating that since First Niagara announced plans to acquire New Alliance in August, that the deal would be the kick off to the return of traditional M&A in the bank sector.

But Koelmel says otherwise. The industry and the environment still needs to settle and that will take time, he says.

Still the bank is ready to do more acquisitions as it builds out its franchise. "We need to do a better job of communicating our readiness," he says.

--Written by Laurie Kulikowski in New York.

To contact the writer of this article, click here: Laurie Kulikowski.

To submit a news tip, send an email to:

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.