Overview of the United States Banking Industry

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Introduction

Households, businesses and governments all use banking of one form or another and chances are the bank you use has been part of a consolidation. Competition in the banking industry is extremely intense and one method banks use to improve their competitive advantage, increase their market power, grow their customer base, increase revenues and hopefully achieve greater profits is through consolidations.

This report discusses consolidation in the banking industry, including an overview of the industry, explanation of mergers and acquisitions, motivation behind and factors affecting consolidations, as well as a look at some significant consolidations at well-known financial institutions and a special look at a Chicagoland banking group that has successfully grown through acquisitions, Wintrust Financial Corporation.

Overview of the United States Banking Industry

The U.S. banking industry is comprised of several thousand small and medium sized community based banks, a lesser number of medium sized regional corporations, and a handful of extremely large multinational banking organizations (Jones and Critchfield, 2005). One core business in the banking industry is commercial banking, which consists of demand and time deposit taking, secured (mortgages) and unsecured (credit cards) lending, securities and treasury activities, and other types of financing, investment and cash and asset management offerings.

Although the financial services sector is comprised of four principle businesses including commercial banking, investment banking, insurance, and asset management, this report is geared towards a discussion of commercial banking activities.

Synopsis of mergers and acquisitions

Mergers and acquisitions is the s...

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...ttp://wintrust.com/investor-relations.html on March 21, 2014

Van Doorn, Philip. “Bank Consolidation Will Center on This U.S. City.” February 25, 2013. (Accessed March 31, 2014.)

Investment banking explained pp. 223-224

Douma & Schreuder, 2013, chapter 13

“Acquired Companies Prior to Close” http://www.mergerintegration.com/acquisitions

"Top Economists and Financial Experts Say We Must Break Up the Giant Banks". The Big Picture. Ritholtz.com. Retrieved 14 March 2013.

“The 12 Biggest Mergers in American History” http://www.billshrink.com/blog/6834/the-12-biggest-mergers-in-american-history

“Bank of America to buy Countrywide for $4 billion” Reuters, January 11, 2008. Reuters.com Accessed through Wikipedia, April 20, 2014

Countrywide Financial annual report, 2007

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