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Question
The First National Bank of Edmond had decided to purchase The First National Bank of Plano in Texas. The bank is interested in this purchase because The First National Bank of Plano is in financial distress and the First National Bank of Edmond thinks this is a cheap way to get a start in the large Texas market. The FDIC supports this acquisition because it won't have to make any insurance payouts. What motive for a merger does this most likely reflect?
A. Profit potential
B. Risk reduction
C. Rescue of failing institution
D. Tax and market positioning
E. Maximizing management welfare
Answer
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