Search

Matched samples of merged and nonmerged firms were studied to determine factors which contribute to mergers of rural electric cooperatives. Differences between groups were examined by using univariate t-tests and logit analysis. Merged firms showed lower profitability, efficiency, debt service, liquidity and activity during periods prior to the merger. Analysis revealed specific variables which distinguish merged from nonmerged firms. While merged firms had decreased capacities for cost control, nonmerged firms had higher overhead and maintenance costs.

The article examines the demand for New York State Mutual Savings Bank deposits during the period 1960-1969. Monthly and quarterly levels and changes in savings deposits are regressed against personal income, the rate paid on savings accounts, and the rate available form AAA-rated bonds. The authors discuss their results, and use the regression coefficients to compare actual savings for the first quarter of 1970 with those predicted by their model. In this instance, the "level" equations performed better than the "change" equations.

Equity-for-debt exchanges involve the retiring of a bank's outstanding debt by issuing new equity. Although banks using equity-for-debt exchange claim a resulting improvement in capital position and improved earnings, an analysis of capital markets shows that such transactions can be tied to negative abnormal returns to shareholders. The equity market realizes that such enhancement of bank figures does not constitute genuine improvement, and it is recommended that regulators carefully analyze bank methods of enhancing capital ratios.

Technological change and deregulation have resulted in a radical change in the banking industry and caused significant financial innovation. The process of 'adoption' helps financial service firms to decide what services can be successful and what regulatory actions will improve the effectiveness of the financial intermediary system. The article examines various new financial services and products, with the focal point being the process of adoption. The life-cycle technique for financial service use by consumers represents the framework used for the empirical analysis. It is discovered that financial services are used in a manner that supports the life-cycle technique.

The abstract is for "Returns to Scale for Commercial Banking Products," by Frederick W. Bell and Neil B. Murphy of Clark University and Federal Deposit Insurance Corporation.

There have been numerous studies using different procedures to assess the impact of branching on the cost structure in banking. These studies were primarily concerned with the cost impact of branching in the context of a desirable banking structure. The effect of any combination of branching law, entry policy, and merger policy depends upon the cost structure in general, and the relative efficiency of various branching configurations (including, of course, none). However, these studies have not provided either results or a methodology that may be directly utilized in the important task of managing and evaluating the performance of a system of branches. The purpose of this paper is to develop and test (with a large multi-branch system), a model of branch operating costs that may be adapted and utilized by banks in estimating marginal and average costs, evaluating the performance of an existing branching system, and determining the minimal size necessary to justify the establishment of a branch in any specific location. In Section I, there is a discussion of previous studies. Section II contains the model and the data sources. A discussion and interpretation of the results are considered in Section III. Section IV provides the summary and conclusions.

Provides estimates of the cost structure of all commercial banking firms in the Northeastern United States. Effect of bank regulation on the inter- and intraregional cost structure of commercial banks; Relation between market structure and price for commercial banks; Variation of cost between market areas.

The author comments on the article "Costs of Banking Activities: Interactions Between Risk and Operating Costs," by Ernst Baltensperger. The author offers criticism towards Baltensperger's article. An overview of Baltnesperger's article is presented. It is the author's belief that in commercial banking there are many difficulties in trying to construct an integrated theory of the banking firm that treats liquidity management, portfolio selection, pricing policy, and physical production processes simultaneously.