IDEAS home Printed from https://ideas.repec.org/p/fip/fedcwp/9619.html
   My bibliography  Save this paper

Performance and asset management effects of bank acquisitions

Author

Abstract

An analysis of how bank acquisitions affect the performance and asset management of the acquired bank, its acquirer, and the newly formed banking organization, showing that after the acquisition, the acquired bank is transformed along a wide variety of dimensions such that it becomes a replica of the acquirer.

Suggested Citation

  • Ben R. Craig & João A. C. Santos, 1996. "Performance and asset management effects of bank acquisitions," Working Papers (Old Series) 9619, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwp:9619
    DOI: 10.26509/frbc-wp-199619
    as

    Download full text from publisher

    File URL: https://doi.org/10.26509/frbc-wp-199619
    File Function: Persistent Link
    Download Restriction: no
    File URL: https://www.clevelandfed.org/-/media/project/clevelandfedtenant/clevelandfedsite/publications/working-papers/1996/wp-9619-performance-and-asset-management-effects-of-bank-acquisitions-pdf.pdf
    File Function: Full Text
    Download Restriction: no
    File URL: https://fraser.stlouisfed.org/files/docs/historical/frbclev/wp/frbclv_wp1996-19.pdf
    File Function: Full Text
    Download Restriction: no
    File URL: https://libkey.io/10.26509/frbc-wp-199619?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Rose, Peter S., 1987. "The impact of mergers in banking : Evidence from a nationwide sample of federally chartered banks," Journal of Economics and Business, Elsevier, vol. 39(4), pages 289-312, November.
    2. Robert J. Lawrence, 1971. "Operating policies of bank holding companies: part I," Staff Studies 59, Board of Governors of the Federal Reserve System (U.S.).
    3. Jensen, Michael C. & Ruback, Richard S., 1983. "The market for corporate control : The scientific evidence," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 5-50, April.
    4. Stephen A. Rhoades, 1986. "The operating performance of acquired firms in banking before and after acquisition," Staff Studies 149, Board of Governors of the Federal Reserve System (U.S.).
    5. Donald T. Savage, 1993. "Interstate banking: a status report," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Dec, pages 1075-1089.
    6. William C. Hunter & Larry D. Wall, 1989. "Bank merger motivations: a review of the evidence and an examination of key target bank characteristics," Economic Review, Federal Reserve Bank of Atlanta, issue Sep, pages 2-19.
    7. Cornett, Marcia Millon & Tehranian, Hassan, 1992. "Changes in corporate performance associated with bank acquisitions," Journal of Financial Economics, Elsevier, vol. 31(2), pages 211-234, April.
    8. Francisco de Cossio & Kevin P. Scanlon & Jack W. Trifts, 1987. "Bank equity returns: the difference between intrastate and interstate bank mergers," Proceedings 180, Federal Reserve Bank of Chicago.
    9. Millon Cornett, Marcia & De, Sankar, 1991. "Common stock returns in corporate takeover bids: Evidence from interstate bank mergers," Journal of Banking & Finance, Elsevier, vol. 15(2), pages 273-295, April.
    10. John H. Boyd & Stanley L. Graham, 1991. "Investigating the banking consolidation trend," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 15(Spr), pages 3-15.
    11. Anand S. Desai & Roger D. Stover, 1985. "Bank Holding Company Acquisitions, Stockholder Returns, And Regulatory Uncertainty," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 8(2), pages 145-156, June.
    12. Jeffrey A. Clark, 1988. "Economies of scale and scope at depository financial institutions: a review of the literature," Economic Review, Federal Reserve Bank of Kansas City, vol. 73(Sep), pages 16-33.
    13. Jack W. Trifts & Kevin P. Scanlon, 1987. "Interstate Bank Mergers: The Early Evidence," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 10(4), pages 305-313, December.
    14. Mingo, John J., 1975. "Capital Management and Profitability of Prospective Holding Company Banks," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 10(2), pages 191-203, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chris D'Souza & Alexandra Lai, 2006. "The Effects Of Bank Consolidation On Risk Capital Allocation And Market Liquidity," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 29(2), pages 271-291, June.
    2. Ben R. Craig & João A. C. Santos, 1997. "The risk effects of bank acquisitions," Economic Review, Federal Reserve Bank of Cleveland, issue Q II, pages 25-35.
    3. Morris Knapp & Alan Gart & David Becher, 2005. "Post‐Merger Performance of Bank Holding Companies, 1987–1998," The Financial Review, Eastern Finance Association, vol. 40(4), pages 549-574, November.
    4. Rubi Ahmad & Mohamed Ariff & Michael Skully, 2007. "Factors Determining Mergers of Banks in Malaysia’s Banking Sector Reform," Multinational Finance Journal, Multinational Finance Journal, vol. 11(1-2), pages 1-31, March-Jun.
    5. Vallascas, Francesco & Hagendorff, Jens, 2011. "The impact of European bank mergers on bidder default risk," Journal of Banking & Finance, Elsevier, vol. 35(4), pages 902-915, April.
    6. Pablo Alonso González & Irene Albarrán Lozano & Andrea Giuliodori Khalil, 2006. "El Impacto del descenso en los Tipos de Interés sobre el margen financiero de las Cajas de Ahorros españolas," Revista de Economía y Estadística, Universidad Nacional de Córdoba, Facultad de Ciencias Económicas, Instituto de Economía y Finanzas, vol. 44(1), pages 98-136, Junio.
    7. Brook, Yaron & Hendershott, Robert J. & Lee, Darrell, 2000. "Corporate governance and recent consolidation in the banking industry," Journal of Corporate Finance, Elsevier, vol. 6(2), pages 141-164, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elijah Brewer & William E. Jackson & Julapa Jagtiani, 2000. "Impact of independent directors and the regulatory environment on bank merger prices: evidence from takeover activity in the 1990s," Working Paper Series WP-00-31, Federal Reserve Bank of Chicago.
    2. repec:aly:journl:201831 is not listed on IDEAS
    3. Asimakopoulos, Ioannis & Athanasoglou, Panayiotis P., 2013. "Revisiting the merger and acquisition performance of European banks," International Review of Financial Analysis, Elsevier, vol. 29(C), pages 237-249.
    4. Al-Khasawneh, Jamal Ali & Essaddam, Naceur, 2012. "Market reaction to the merger announcements of US banks: A non-parametric X-efficiency framework," Global Finance Journal, Elsevier, vol. 23(3), pages 167-183.
    5. John H. Boyd & Stanley L. Graham, 1996. "Consolidation in U.S. banking: implications for efficiency and risk," Working Papers 572, Federal Reserve Bank of Minneapolis.
    6. Cochran, Bruce & Rose, Lawrence C. & Fraser, Donald R., 1995. "A market evaluation of FDIC assisted transactions," Journal of Banking & Finance, Elsevier, vol. 19(2), pages 261-279, May.
    7. Vennet, Rudi Vander, 1996. "The effect of mergers and acquisitions on the efficiency and profitability of EC credit institutions," Journal of Banking & Finance, Elsevier, vol. 20(9), pages 1531-1558, November.
    8. Leledakis, George N. & Pyrgiotakis, Emmanouil G., 2022. "U.S. bank M&As in the post-Dodd–Frank Act era: Do they create value?," Journal of Banking & Finance, Elsevier, vol. 135(C).
    9. Gayle DeLong & Robert DeYoung, 2004. "Learning by observing: information spillovers in the execution and valuation of commercial bank M&As," Working Paper Series WP-04-17, Federal Reserve Bank of Chicago.
    10. Carow, Kenneth A. & Heron, Randall A., 1998. "The interstate banking and branching efficiency act of 1994: A wealth event for acquisition targets," Journal of Banking & Finance, Elsevier, vol. 22(2), pages 175-196, February.
    11. Allen Berger & David Humphrey, 1994. "Bank Scale Economies, Mergers, Concentration, and Efficiency: The U.S. Experience," Center for Financial Institutions Working Papers 94-25, Wharton School Center for Financial Institutions, University of Pennsylvania.
    12. Becher, David A., 2000. "The valuation effects of bank mergers," Journal of Corporate Finance, Elsevier, vol. 6(2), pages 189-214, July.
    13. Ely, David P. & Song, Moon H., 2000. "Acquisition activity of large depository institutions in the 1990s:: An empirical analysis of motives," The Quarterly Review of Economics and Finance, Elsevier, vol. 40(4), pages 467-484.
    14. Zhang, Hao, 1997. "Repeated acquirers in FDIC assisted acquisitions," Journal of Banking & Finance, Elsevier, vol. 21(10), pages 1419-1430, October.
    15. Ben R. Craig & João A. C. Santos, 1997. "The risk effects of bank acquisitions," Economic Review, Federal Reserve Bank of Cleveland, issue Q II, pages 25-35.
    16. DeLong, Gayle L., 2001. "Stockholder gains from focusing versus diversifying bank mergers," Journal of Financial Economics, Elsevier, vol. 59(2), pages 221-252, February.
    17. Chong, Beng-Soon & Liu, Ming-Hua & Tan, Kok-Hui, 2006. "The wealth effect of forced bank mergers and cronyism," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 3215-3233, November.
    18. Leledakis, George & Mamatzakis, Emmanuel & Pirgiotakis, Manos & Travlos, Nikolaos, 2017. "What twenty years of regulations have to say about M&As of U.S. banks?," MPRA Paper 82977, University Library of Munich, Germany.
    19. Gleason, Kimberly & McNulty, James E. & Pennathur, Anita K., 2005. "Returns to acquirers of privatizing financial services firms: An international examination," Journal of Banking & Finance, Elsevier, vol. 29(8-9), pages 2043-2065, August.
    20. Carow, Kenneth A. & Lee, Winson B., 1997. "State passage of interstate banking legislation: An analysis of firm, legislative, and economic characteristics," Journal of Banking & Finance, Elsevier, vol. 21(7), pages 1017-1043, July.
    21. Harold A. Black & Raphael W. Bostic & Breck L. Robinson & Robert L. Schweitzer, 2005. "Do CRA‐Related Events Affect Shareholder Wealth? The Case of Bank Mergers," The Financial Review, Eastern Finance Association, vol. 40(4), pages 575-586, November.

    More about this item

    Keywords

    Asset-liability management; Bank mergers;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedcwp:9619. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: 4D Library (email available below). General contact details of provider: https://edirc.repec.org/data/frbclus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.