Characteristics of failed U.S. commercial banks: An exploratory study

Fatima Alali, Silvia Romero

Research output: Contribution to journalArticlepeer-review

22 Scopus citations


This study uses survival analysis to determine how early the indications of bank failure can be observed. We find that banks with high loan to asset and high personal loan to assets ratios are more likely to survive. Older banks and banks with high real estate and agricultural loans, loan loss allowance, loan charges off and non-performing loans to assets ratio are more likely to fail. It is possible to predict survival functions of <50% for failed banks, 3years or less before failure. Moreover, we find that most of the variables present a behaviour that departs from Benford's Law.

Original languageEnglish
Pages (from-to)1149-1174
Number of pages26
JournalAccounting and Finance
Issue number4
StatePublished - Dec 2013


  • Bank failure prediction
  • Banks survival analysis
  • Benford's law


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