"We are in the slowest merger market since 1990," says Walter G. Moeling, IV, co-chair of the financial institutions group at Powell Goldstein LLP, Atlanta, Ga. "The few deals that are being done are very specific. By and large, historically active acquirors have gone to ground."

Attorney Moeling says that 90% of the merger picture at any given point hinges on the value of bank stocks in general.

"You can have the best bank in the world, but if bank stocks are down or you are in a difficult market overall, your value will go down," Moeling explains.

"The majority of community banks are now being run by Baby Boomers, who are near retirement age, and often there is no management succession plan in place," says Carpenter. Put these two factors together and the urgency to do some kind of deal looms large, if you buy the tax argument. Under this scenario, given regulatory steps and other built-in time constraints, Carpenter says the latest a deal could start and be reasonably assured of the superior tax treatment would be mid-2009. That leaves a year for buyers and sellers to do their mating dances.

Some players do buy the argument -- Gerrish says some deals that are teetering between "yes" and "no" could tip to the affirmative because of tax treatment.

Others scoff.

"You've been talking to investment bankers," says attorney Walt Moeling. "That's their story. We have plenty of sellers right now, but few buyers. And the buyers don't care what the capital gains tax rate is."