Corporate Assets and Enhancing Firm Value: Evidence from the Market for Bank Branches in the US

Journal of Financial Services Research, Forthcoming

51 Pages Posted: 30 May 2019

See all articles by Karen Y. Jang

Karen Y. Jang

Florida International University

Date Written: April 29, 2019

Abstract

This study examines the purchase and sale of US bank branches. Large and unproductive banks with less capital sell branches to smaller and more efficient banks with more capital. I use an event study, and find a significant increase in value for both parties. These valuation effects are driven by slightly better operating performance, faster growth in loans, and a smooth transfer of purchased deposits for buyers and by improved operating performance and no substantial decrease in the growth of loans and deposits for sellers. Overall, the evidence shows that branch dealmakers operate efficiently by reallocating branches to better uses.

Keywords: Asset sale market, Post-deal firm performance, Commercial bank branches

JEL Classification: G21, G34

Suggested Citation

Jang, Karen Y., Corporate Assets and Enhancing Firm Value: Evidence from the Market for Bank Branches in the US (April 29, 2019). Journal of Financial Services Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3382661

Karen Y. Jang (Contact Author)

Florida International University ( email )

11200 SW 8th Street RB228A
Miami, FL 33199
United States

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