Impact of Acquisitions on Thrift Performance

This study focuses on the risk and return performance of savings and loans that were active acquirers during the early and mid‐eighties relative to that of non‐acquirers. Acquirers took on more risks than nonacquirers, but were less profitable. Separating acquirers by the health of their acquisitions, acquirers of both healthy and troubled associations or of troubled associations only were more highly leveraged and saw their profitability erode over the post‐acquisition period. These results suggest that the problems of integration are compounded when there are multiple acquisitions over a relatively short period of time and when the acquired association is unhealthy.