TY - JOUR
T1 - Characteristics of failed U.S. commercial banks
T2 - An exploratory study
AU - Alali, Fatima
AU - Romero, Silvia
PY - 2013/12
Y1 - 2013/12
N2 - 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.
AB - 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.
KW - Bank failure prediction
KW - Banks survival analysis
KW - Benford's law
UR - http://www.scopus.com/inward/record.url?scp=84888327196&partnerID=8YFLogxK
U2 - 10.1111/j.1467-629X.2012.00491.x
DO - 10.1111/j.1467-629X.2012.00491.x
M3 - Article
AN - SCOPUS:84888327196
SN - 0810-5391
VL - 53
SP - 1149
EP - 1174
JO - Accounting and Finance
JF - Accounting and Finance
IS - 4
ER -