This thesis compares the market response to bidding banks of a merger in an expansionary period and a recessionary period upon the announcement of that merger. Bidding banks tend to see negative gains upon announcement of a merger. With the recent financial crisis, this thesis hypothesizes that in a recessionary period bidding banks will experience more negative gains than in an expansionary period due to the market's risk aversion during an economic recession and the lack of shareholder wealth maximization by management. Twenty-three bidding banks are examined to gauge the market's response to the bidding banks upon the announcement of a merger. To conduct this study, two methodologies are applied: Tobin's q and the Capital Asset Pricing Model. The results do not uphold the hypothesis showing no enhanced losses to bidding banks in the recession period. This thesis attempts to see if a recessionary period affects the way the market responds to bank mergers.