This study applies a modification of the Schwartz and Moon (Financial Analysts Journal 56:62–75, 2000) model to the evaluation of bank consolidation. From our examination of a bank merger case study (the first example of such a bank merger in Taiwan), we find that, from an ex-ante viewpoint, the consolidation value is, on average, about 30% of the original total value of the independent banks. We also find that the probability of bankruptcy was considerably lower following the merger than it would have been prior to the merger. Our case study therefore indicates that the merger was indeed a worthwhile venture for both banks involved. Furthermore, on completion of the merger, we are also able to determine that, in terms of the magnitude of the increased consolidation value, the most crucial roles are played by the resultant changes in the growth rates of the integrated loans and integrated deposits, as well as the cost-saving factors within the cost functions.