There are 7 banks in Los Alamo, CA. The operation and financial data of these...
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There are 7 banks in Los Alamo, CA. The operation and financial data of these banks are shown in the following table. Alamo Commercial Bank plans to acquire Vernon Nation Bank. Bank name CNBC Bank First National Bank Alamo Commercial Bank Dimond City Bank Benton Commercial Bank Washita Commercial Bank Vernon National Bank Total assets $52 million $54 million $39 million $51 million $53 million $12 million $11 million Net income $0.89 million $1.19 million $0.99 million $0.87 million $1.04 million $0.35 million $0.04 million Number of shares 0.27 million 0.30 million 0.28 million 0.21 million 0.22 million 0.12 million 0.10 million (1) If conversion ratio is 1-to-1, what is EPS after merger? (3%) (2) Calculate HHI before merger of Vernon National Bank? (3%) (3) Calculation HHI after merger of Vernon National Bank? (3%) (4) Calculate change in HHI after merger of Vernon National Bank? (3%) (5) Will the merger case of Vernon National Bank get approval from US Justice Department based on HHI? Why? (4%) (6) Will the merger case of Vernon National Bank get approval from the Federal Reserve System based on HHI? Why? (4%)
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