Market Definitions

The Federal Reserve Bank of Philadelphia has delineated the following banking markets for the Third Federal Reserve District. These market definitions are used by the staff of the Federal Reserve Bank when analyzing the competitive effects of proposed bank and bank holding company mergers and acquisitions for the Board of Governors of the Federal Reserve System. The Federal Reserve Bank of Philadelphia will consider modifying its market definitions when an applicant for merger or acquisition presents sufficient evidence to warrant a change in the Reserve Bank's definitions.

These definitions were constructed using MSA definitions, U.S. Census journey-to-work data, and geographic facts.

The Federal Reserve Bank of Philadelphia analyzes the competitive effects of applications for mergers or acquisitions by quantifying the concentration of banking deposits in a banking market using FDIC Summary of Deposits data to compute the Herfindahl-Hirschman Index.

For additional information concerning these banking market definitions, market tables, or questions about competitive analysis of bank and bank holding company mergers and acquisitions, contact James DiSalvo by e-mail or phone (215) 574-3820.

General Definitions

Please Note: The following definitions are general in nature. For actual regulatory applications, contact the examiner handling the application.

Market: For the purposes of banking mergers, the product market is the cluster of products and services defined in U.S. v. Philadelphia National Bank (374US321). These products and services include: personal loans, business loans, mortgages, loans secured by securities or accounts receivable, automobile loans, tuition financing, credit cards, revolving credit accounts, demand deposits, time and savings deposits, estate and trust planning and trusteeship services, lock boxes and safety-deposit boxes, account reconciliation services, bankers' acceptances and letters of credit, correspondent services, and investment advice. A proxy for the cluster is total deposits in the market. The geographic market is the minimum area over which supply and demand for these products and services determine prices.
Herfindahl-Hirschman Index (HHI): a measure of competition in a market computed by summing the square of each competitor's market share. Amarket with an HHI below 1,000 is considered unconcentrated; one with an HHI between 1,000 and 1,800 is considered to be moderately concentrated; and a market with an HHI above 1,800 is considered to be concentrated. Department of Justice guidelines state that a banking merger is unlikely to be challenged unless the post-merger HHI exceeds 1800 and the increase in the HHI is at least 200. For mergers that exceed these guidelines, applicants may present mitigating factors which will be reviewed based on relevancy of the economic analysis and data.
CR-4: Concentration ratio comprises the sum of the four largest competitors' shares.
Shaded Market Share: To account for the effect of competition from thrifts, thrift deposits are shaded by an amount that reflects their influence in the market. All the market tables shade thrift deposits at 50 percent.

Markets

Philadelphia

PA - Bucks, Chester, Delaware, Montgomery, and Philadelphia counties
NJ - Burlington, Camden, Gloucester, and Salem counties, and the City of Trenton, and Ewing, Hamilton, and Lawrence townships in Mercer County

Reading

PA - Berks County

Lehigh Valley

PA - Carbon, Lehigh, and Northampton counties

Scranton/Wilkes-Barre

PA - Columbia, Lackawanna, Luzerne, Wayne, and Wyoming counties, Auburn, Ararat, Brooklyn, Clifford, Dimock, Gibson, Harford, Herrick, Lathrop, Lenox, and Springville townships in Susquehanna County

Binghamton

NY - Broome and Tioga counties
PA - Apolacon, Bridgewater, Bush, Choconut, Franklin, Forest, Friendsville, Great Bend, Harmony, Jackson, Jessup, Liberty, Middletown, Milford, Oakland, Silver Lake, and Thompson townships in Susquehanna County

Monroe County

PA - Monroe County

Susquehanna Valley

PA – Columbia, Montour, Northumberland, Snyder, and Union counties

Lancaster

PA - Lancaster County

York

PA - Adams and York counties

Harrisburg

PA - Cumberland, Dauphin, Juniata, Lebanon, and Perry counties

Schuylkill County

PA - Schuylkill County

Williamsport

PA - Lycoming and Clinton counties

Bradford County

PA - Bradford County

Sullivan County

PA - Sullivan County

Tioga County

PA - Tioga County

Potter County

PA - Potter County

State College

PA - Centre County

Mifflin County

PA - Mifflin County

Huntingdon County

PA - Huntingdon County

Hagerstown

MD - Washington County
PA - Fulton County

Franklin County

PA - Franklin County

Bedford County

PA - Bedford County

Altoona

PA - Blair County

Clearfield/Jefferson

PA - Clearfield and Jefferson counties; and Banks, Canoe, and North Mahoning Townships in Indiana County

Cameron County

PA - Cameron County

Elk County

PA - Elk County

McKean County

PA - McKean County

Johnstown

PA - Cambria and Somerset counties; East Whitfield Township in Indiana County; and St. Clair Township in Westmoreland County

Atlantic City

NJ - Atlantic and Cape May counties

Wilmington

DE - New Castle County
MD - Cecil County

Dover

DE - Kent County

Sussex County

DE - Sussex County

Metropolitan New York/New Jersey

NJ - Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union, and Warren counties; part of Mercer County not in Philadelphia market
NY - Bronx, Dutchess, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, Sullivan, Ulster, and Westchester counties
PA - Pike County

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