Performance Changes and Shareholder Wealth Creation Associated with Mergers of Publicly Traded Banking Institutions.

The article examines whether accounting and market data yield consistent implications regarding the gains achieved in mergers of publicly traded institutions between 1982 and 1991. The study found that although both the average and cross-sectional properties of merger-related performance measures and consolidated abnormal returns show little to no change on average, cross-sectional properties differ between the two. Performance gains are related primarily to high total target and acquirer expenses, and abnormal returns are associated with the difference between the two total cost measures. While abnormal returns are related to target noninterest expenses, the relationship does not hold with total expenses.