Agricultural bank acquisitions and postacquisition performance: An examination of the role of shared knowledge

Kim, Kevin N.; Katchova, Ani L.

doi:10.1002/agr.21751

Cited by 2 publications

(2 citation statements)

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“…, 2022; Featherstone, 2017). The decline in community banks in recent years, driven by consolidations, has raised concerns (Hakenes et al ., 2015; Scott, 2004; Regmi and Featherstone, 2021; Kim and Katchova, 2022). The addition of local weather shocks and climate change further threatens the survival of these institutions.…”

Section: Introductionmentioning

confidence: 99%

“…Community banks are more vulnerable to local weather changes and risks due to their limited geographic reach than larger national banks (Emmons et al, 2004;Fayman et al, 2022;Featherstone, 2017). The decline in community banks in recent years, driven by consolidations, has raised concerns (Hakenes et al, 2015;Scott, 2004;Regmi and Featherstone, 2021;Kim and Katchova, 2022). The addition of local weather shocks and climate change further threatens the survival of these institutions.…”

Section: Introductionmentioning

confidence: 99%

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Struggle to survive: case of flood risk on US community banks

Oh,

Kim

2023

AFR

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PurposeThe survivorship of firms under extreme weather poses an essential question about the local economy's health. Over 90% of agricultural banks are categorized as community banks, which are important financial institutions promoting local growth. While previous studies suggest that climate change and weather shocks adversely impact community banks' resiliency, studies on whether these institutions engage in risk-reducing management strategies have been limited. In this study, the authors examine strategic choices of local community banks when facing flood events which include (1) safety net increase, (2) portfolio diversification, and (3) branch opening. These strategic choices are the coping mechanisms banks can take to survive while affecting the local competitive lending market.Design/methodology/approachThe authors use panel-fixed effect regressions based on the storm data from National Oceanic and Atmospheric Administration (NOAA)'s National Weather Service (NWS) and the call reports from the Federal Deposit Insurance Corporation (FDIC). The authors focus on community banks' account variable characteristics and the number of offices to examine whether community banks take an active role in managing flood risk.FindingsResults suggest that community banks do employ the selected strategic choices to a certain degree, as it is found that there is an increase in the core capital that absorbs shocks and portfolio diversification. However, the magnitudes of these activities are rather small and not large enough to fully mitigate the climate risk. Also, the authors do not find any evidence of branch expansion associated with local floods.Originality/valueThis study contributes to the literature by examining different strategic choices of community banks in the face of natural uncertainty. Even though concerns of climate risk have been raised in the regulatory setting, a lack of guidance or assessment tools could contribute to the passive action of these community banks, even though climate risks can have a significant economic impact. Thus, the evidence documented from this study calls for further guidelines and the importance of highlighting climate risks on community banks so that they can actively engage in risk-reducing strategies.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Struggle to survive: case of flood risk on US community banks

Oh,

Kim

2023

AFR

Self Cite

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Mergers and Acquisitions in the Banking Sector: A Systematic Literature Review

Chakraborty,

Das

2024

Vision: The Journal of Business Perspective

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Mergers and acquisitions (M&A) have developed into a powerful strategic tool for consolidating banks to boost their capital bases, grow their businesses and bring about financial stability. Since the 1990s, the number of M&As has dramatically increased around the globe. This study attempts to provide a systematic review of recent M&A literature that has examined the different themes of M&As and their impact on the performance of the banking sector with an emphasis on 2013–2023. The objective of the study is to identify the important research gaps and provide direction for future research. Thus, it shows the past and recent status of M&A literature worldwide. The review has identified different themes of M&As, which include financial and operating performance, integration of technology, geographic strategies, corporate governance, cross-border M&As, size of banks, shareholders’ return, risk and loan quality, expertize and ownership. The findings indicate that research on M&As from the financial and operating performance perspective provides inconclusive results. Recently, research on cross-border M&As and integration of technology has been increasing as it provides a competitive edge to the acquirer. Results also suggest that the market considers the merger news positively for target banks, and geographic diversification and hiring financial experts in M&As improve the performance of the banks.

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Agricultural bank acquisitions and postacquisition performance: An examination of the role of shared knowledge

Cited by 2 publications

References 60 publications

Struggle to survive: case of flood risk on US community banks

Struggle to survive: case of flood risk on US community banks

Mergers and Acquisitions in the Banking Sector: A Systematic Literature Review

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