Question

The Goldford metropolitan area is presently served by five depository institutions with total deposits as follows:
Current Deposits
Goldford National Bank....... $750 million
Goldford County Merchants Bank... 500 million
Commerce National Bank of Goldford. 325 million
Rocky Mountain Trust Company..... 250 million
Security National Bank and Trust..... 175 million

Calculate the Herfindahl-Hirschman Index (HHI) for the Goldford metropolitan area. Suppose that Rocky Mountain Trust Company and Security National Bank propose to merge. What would happen to the HHI in the metropolitan area? Would the U.S. Department of Justice be likely to approve this proposed merger? Would your conclusion change if the Goldford County Merchants Bank and the Rocky Mountain Trust Company planned to merge?



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  • CreatedOctober 31, 2014
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