TD Banknorth admit they will close some of their considerable 600 branches due to profitability issues.  But I have to call them on this quote that to me is standard operating procedure for a bank in trouble. 

“We are still being negatively impacted by the inverted yield curve (as) deposit customers continue to strive for higher levels of interest rates, but also by the increased competition (as) banks fight to maintain their piece of a shrinking deposit and loan base,” Verrill said.

Source: Canadian Banks & Insurance

Last time I looked banks make money on spread, and the reality of spread compression is not a new one.  If you can’t stand the heat, get out of the kitchen.  There are several ways to positively move a bank forward, but to blame the market is not one.