Banking Industry Consolidation: Financial Attributes of Merging Banks
by John P. O'Keefe*
The author develops statistical models that relate the incidence of
mergers and consolidations to financial characteristics of banks.
Those models are then used to predict the likelihood of an
institution being a target bank or an acquirer in a merger or
consolidation over a two-year horizon. The study concludes with a
discussion of the merger forecasts, as well as the geographic areas
where interstate merger activity appears most likely to occur.
*John P. O'Keefe is a senior economist in the
FDIC's Division of Research and Statistics. The author
would like to thank Matthew Billett, Gary Fissel, Don Inscoe and
William Kuta of the FDIC's Division of Research and Statistics;
Drew Dahl, Utah State University; Jennifer Eccles,
Office of the Comptroller of the Currency; and Gerald Hanweck,
George Mason University, for the useful information and
comments they provided.