Wall Street bids up the stock price of merging banks that announce plans to consolidate branches and cut employees, a recent study by the Federal Reserve Bank of Dallas said.

On average, the five mergers in 1995 that involved banks with the largest number of overlapping offices and branches resulted in price gains of 13.28% for the targeted banks and 2.8% for the acquiring institution, Dallas Fed economist Thomas F. Siems wrote in the August issue of Financial Industry Studies. Normally an acquirer's stock drops when a merger is announced, he said.

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