Journal Article

Performance of banks acquired on an interstate basis

Abstract: Interstate banking expanded rapidly over the last decade as all but a few states adopted laws allowing entry by outside organizations. The resulting changes are now raising many questions regarding the performance of interstate acquisitions and their effects on the banking system and its customers. ; This study examines a number of these questions by following the performance of banks that were acquired on an interstate basis during 1985, 1986, and 1987. Overall, banks acquired in these years appear to have successfully handled the shift to interstate ownership. Some acquired banks were able to make improvements on the cost side and many became more active lenders. For the most part, though, the banks performed in a manner similar to banks not under interstate ownership and did not appear to have any substantial competitive advantages or disadvantages. This performance suggests that interstate expansion will continue to occur as banking organizations seek to enter new markets, but this expansion need not be of serious concern to local banks.

Keywords: Interstate banking; Banks and banking;

Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Financial Industry Perspectives

Publication Date: 1992

Issue: Dec

Pages: 15-32