Bank Mergers: Current Issues and Perspectives

1. Front Matter

   Pages i-xiii

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2. National and Regional Bank Mergers

   1. Front Matter

      Pages 1-1

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   2. Profiles of U.S. Merging Banks and the Performance Outcomes and Motivations for Recent Mergers

      • Peter S. Rose

      Pages 3-28

   3. An Empirical Investigation of Potential Competition: Evidence from the Banking Industry

      • Dean F. Amel

      Pages 29-68

   4. Regional Differences in Bank Merger Pricing

      • Benton E. Gup, David C. Cheng, Larry D. Wall, Kartono Liano

      Pages 69-86

   5. Bank Merger Pricing Premiums and Interstate Bidding

      • Robert J. Rogowski, Donald G. Simonson

      Pages 87-104

3. Do Bank Mergers Benefit Stockholders?

   1. Front Matter

      Pages 105-105

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   2. Market Valuation Effects of Bank Acquisitions

      • Larry D. Wall, Benton E. Gup

      Pages 107-120

   3. Regulatory Change and the Market for Bank Control

      • David A. Dubofsky, Donald R. Fraser

      Pages 121-139

   4. New Hampshire Bank Mergers: The Returns to Acquiring Bank Shareholders

      • Fred R. Kaen, Hassan Tehranian

      Pages 141-155

   5. Purchase Prices and Bidder Competition in FDIC Purchase and Assumption Transactions

      • S. Michael Giliberto, Nikhil P. Varaiya

      Pages 157-180

4. Regulatory Concerns

   1. Front Matter

      Pages 181-181

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   2. An Interpretation of the Use and Meaning of the Probability of Entry in Market-Extension Merger and Acquisition Cases Involving Probable Future Competition

      • Gerald A. Hanweck

      Pages 183-195

   3. Bank Holding Company Risk

      • John H. Boyd, Stanley L. Graham

      Pages 197-226

5. Back Matter

   Pages 227-235

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Historians of our financial system will record this as an age of deregulation and bank mergers. Deregulation, a cornerstone of President Reagan's Administration, resulted in federal and state legislation that contributed to increased competition for financial services and increased merger activity. During the 1981-1986 period, there were 2,139 mergers in banking and finance, accounting for 16 percent of total merger activity.l More mergers occurred in banking and finance than in any other industry. Because of these bank mergers, there are vast amounts of data avail­ able for scholarly research. This book presents some results of that research which will be of interest to academics, bankers, investors, legislators, and regulators. The book consists of ten articles, and it is divided into three parts. Part 1: National and Regional Bank Mergers gives a broad perspective of merger activity. The first article by Peter S. Rose compared the growth of bank holding companies that merged with those that did not merge. One conclusion of his study was that banks planning mergers tended to be aggressively managed and were often beset by problems, such as low profitability or declining loan quality. Mergers were one solution to their problems. But he found no solid evidence that mergers resulted in greater profitability or reduced risk. He also observed that acquiring banks did not seem to grow faster than those choosing not to merge.

• Bank
• Banking Industry
• banking
• competition
• mergers
• valuation

• The University of Alabama, USA

  Benton E. Gup

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