¹ See, for example, Gilbert (1974) and Hanweck (1971).

² Similar studies of the performance of de novo savings and loans were done by Hunter, Verbrugge, and Whidbee (1996) and Lindley, Verbrugge, McNulty, and Gup (1992).

⁴ Hanweck (1971), 168.

⁶Ibid., 159.

⁷To arrive at his definition of secondary market, he excludes Dallas, Fort Worth, Houston, and San Antonio. The Midland and Odessa SMSAs are also treated as one banking market.

⁸ Since Texas was a unit banking state, it is uncertain as to how much the inability of banks to merge, outside of holding company acquisitions, biased the sample used.

¹⁰ Since economic profits are not readily available, accounting profits are used as a proxy. The use of accounting profits may bias the results because they will understate economic profits, since accounting profits are short-run measures and are managed so as to minimize tax liabilities.

¹¹ As an alternative to ROA we also tested lagged return on equity (ROE) for all specifications and found the variable to be insignificant.