Bank Consolidation and Merger Activity Following the Crisis--论文代写范文精选

只要银行市场保持竞争力，提高银行服务。分析发现这些并购是一致的目标，为了实现更大的规模经济和提高效率。回顾了银行并购的理由。下面的paper代写范文进行论证。

Abstract
The number of U.S. banks has trended lower over the past 30 years, dropping from about 14,500 in the mid-1980s to 5,600 today. The number of banks declined for many reasons, such as failures during periods of crisis, consolidation spurred by the relaxation of state branching and national interstate banking restrictions, and voluntary mergers between unaffiliated banks. Since the end of the 2007-09 recession, voluntary mergers have been the primary reason for the decline. Banks merge for a number of business-related reasons. 

Mergers allow banks to achieve economies of scale, enhance revenues and cut costs through operational efficiencies, and diversify by expanding business lines or geographic reach. Bank mergers can result in more efficient banks and a sounder banking system and thus benefit the economy, as long as banking markets remain competitive and communities’ access to banking services and credit is not diminished. This article analyzes the financial characteristics of banks with assets of $1 billion or less that were acquired by an unaffiliated bank in a voluntary merger from 2011 to 2014. The analysis finds these mergers are consistent with the goals of greater economies of scale and improved efficiency. Acquired banks are generally smaller, less profitable, less efficient, and in weaker condition than their non-acquired peers. Section I reviews the reasons for bank mergers. Section II describes the data. Section III provides a qualitative assessment of acquired-bank characteristics. Section IV analyzes the mergers to determine the relative importance and significance of an acquired bank’s characteristics.

Reasons for Bank Mergers 
Bank mergers drove the long-term downward trend in the number of banks since 1985. Even in the crisis periods of the late 1980s, early 1990s, and 2007-09, the number of mergers exceeded the number of failures every year.1 Chart 1 shows the number of community banks, defined as banks with assets of $1 billion or less, along with mergers and failures from 2007-14. Community banks are the focus because mergers involving larger banks, particularly banks with assets of more than $10 billion, are rare. For example, about 90 percent of the 1,500 mergers since 2007 involved a bank with less than $1 billion in assets.2 As Chart 1 shows, the number of community banks fell by almost 1,700, or 25 percent, from 2009-11. 

Although the crisis started in 2007, the effects of the crisis and recession did not work their way through the banking system for a couple of years. As a result, mergers fell and failures rose significantly in 2009, though failures never exceeded mergers. Since 2011, the decline in the number of community banks has been mostly due to voluntary mergers between banks. Business-related reasons to merge reflect perceived opportunities to increase the total value of two or more separate banks by consolidating them into one entity (DeYoung and others).3 

Owners of banks that are less profitable, less efficient, and in weaker condition (in the sense they are more susceptible to future financial problems) may seek to exit the industry by selling their businesses, while profitable and efficient banks may look for opportunities to expand (Hannan and Piloff; Jagtiani; Wheelock and Wilson).4 In addition to quickly expanding its own business, a bank can further increase its business and revenue over time by acquiring another bank and using its resources to expand loans and other business lines. These resources may have been underused due to ineffective management or insufficient capital. For example, acquiring a bank with excess deposits provides the acquirer with a stable source of funds for expanding lending. Cyree finds that acquirers are willing to pay a larger premium over book value for a bank with a higher ratio of core deposits to assets, supporting the idea that banks with high deposit shares are attractive targets. 

Acquiring a bank in the same market or with similar products may allow the acquirer to capitalize on some particular expertise and thereby increase its business with modest expense.5 Acquiring a bank may also provide the acquirer with a broader client base to which they can cross-sell additional products and banking services. An acquisition can also boost the merged entity’s revenue by increasing market share in a given location or business line. Finally, acquiring a bank can boost revenue growth if the acquired bank is in a market with strong economic activity. 

In addition to potentially increasing revenue, acquiring a bank can also generate substantial efficiency gains, especially if the acquired bank is inefficient or has ineffective management. For example, an acquisition can allow banks to spread their costs over a larger asset base, reduce staff, and eliminate branches. Mergers can be especially beneficial to banks with similar business or geographical profiles as fewer resources are needed to serve their combined business purpose (Cornett and others).6 Mergers can also reduce a bank’s risk by diversifying its asset portfolio, funding sources, and fee generating activities. Acquiring a bank that operates in different markets or business lines will often increase diversification. To reduce risk, however, the acquiring bank must have a strong understanding of the new market’s characteristics and risks, along with expertise in new business lines. Otherwise, the risk of the combined institution could increase.7

Bank Merger Data 
The analysis focuses on voluntary mergers between unaffiliated banks that occurred between January 1, 2011, and December 31, 2014, in which the acquired banks had assets of $1 billion or less. Acquired banks are grouped according to the year, or cohort, in which a merger took place, since economic conditions and motives for mergers may change as a business cycle matures. Characteristics of the different cohorts can then be analyzed over time. From 2011 through 2014, the number of voluntary mergers increased each year. Mergers increased from 73 in 2011 to 162 in 2014. Table 1 divides the total number of banks into those that were acquired in each year and those that were not. 

The increase in mergers can be explained, in part, by an improvement in overall economic and banking conditions reflecting the transition from the recovery following the financial crisis to a relatively healthy expansion. Improved economic conditions make potential targets more attractive due to their healthier portfolios and the stronger markets in which they operate. Furthermore, improved economic conditions strengthen potential acquirers, giving them greater ability to acquire new banks. In addition to the number of mergers, the data include comprehensive measures on bank balance sheets and performance collected from Call Reports, change-in-control data, and confidential supervisory ratings (see the Appendix for a data description). Call Reports provide balance sheet and performance information on banks. Federal Reserve change-in-control data provide information for identifying mergers and determining whether they are voluntary and between unaffiliated banks. Confidential ratings data provide information about the safety and soundness of banks that is not available in Call Reports or other public data.

Characteristics of Acquired Banks 
Although banks are acquired for different reasons, they often share similar characteristics relative to banks that are not acquired. Comparing acquired community banks with their non-acquired peers reveals important differences in profitability, size, and condition. In general, acquired banks are often smaller, less profitable, less efficient, and in weaker condition than their non-acquired peers.

Differences in size, profitability, and efficiency 
Chart 2 compares the median total assets of acquired and nonacquired banks from 2011-14. In general, the median acquired bank is about 15 percent smaller than its peers during the sample period. Acquired banks are also less profitable. Low profitability reflects lower returns from loans and other business lines and higher expenses. Panel A of Chart 3 shows the median return on average assets (ROA), the broadest measure of profitability, for non-acquired banks and each cohort of acquired banks. For each cohort, the chart shows the median ROA from 2008, the first full year of the crisis, through the year prior to the merger. For example, the data for the 2011 cohort show the median ROA for those banks from 2008-10. Panel A shows that acquired banks in every cohort were less profitable than the median nonacquired bank. In addition, Panel A shows that banks acquired further past the end of the crisis tended to be more profitable in the year before they were acquired (the end point of each of the cohort lines), likely due to the improving economy. A bank’s ROA can be divided into three components measuring the bank’s revenue strength and cost structure. 

These three components are net interest income, which measures the profitability of making loans and investing in securities relative to the cost of deposits and other liabilities; non-interest income, which measures fees earned on non-lending services and activities; and non-interest expenses, which reflect the costs of running a bank other than interest paid on liabilities, such as the costs of personnel and maintaining buildings. Acquired banks are generally less profitable due to lower levels of both net interest income and non-interest income, as well as relatively high operating costs. Panel B of Chart 3 shows the net interest income of acquired banks was mixed across cohorts relative to non-acquired banks through 2009. Since the end of the recession, however, all cohorts of acquired banks had net interest income below the median of non-acquired banks. In terms of non-interest income, Panel C shows acquired banks consistently underperformed across all cohorts. Furthermore, acquired banks consistently had higher non-interest expenses than their peers. Panel D of Chart 3 shows that expenses—including the costs of personnel, maintaining buildings, and data processing— were relatively high as a share of average assets.

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