| Deregulation within the banking industry has provided an opportunity for a large degree of entity consolidation. Much activity has taken place over the past two decades, and a significant level of bank mergers and acquisitions continues through the present time.; The study included measures to model premiums paid during the ten year period, 1994 through 2003. During this period tax regulations remained relatively stable with respect to business combinations, since the Omnibus Budget Reconciliation Act that changed tax accounting for goodwill went into effect during latter 1993. However, during this period major changes occurred in financial accounting. Statements of Financial Accounting Standards No. 141---Business Combinations and No. 142---Goodwill and Other Intangible Assets were issued, after lengthy debate and due process, mid-year 2001. The pooling method of accounting for business combinations, which had been popular within the banking industry, ceased to be a method allowed for business combinations announced subsequent to June 30, 2001. Post-merger accounting for goodwill and other intangible assets also changed in concert with the purchase method of accounting becoming the only method allowed.; The database contained mergers of commercial banks with deal values of {dollar}10 million and greater. The study employed stepwise regression to determine statistically significant variables in multiple regression analyses. Four samples were utilized, as follows: (1) transactions recorded under the pooling and purchase methods of accounting throughout the ten year period, (2) transactions recorded under the purchase method of accounting throughout the ten year period, (3) transactions recorded under the purchase method of accounting, January 1, 1994 though June 30, 2001, and (4) transactions recorded under the purchase method of accounting, July 1, 2001 through December 31, 2003. |
