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Home > Industry Analysis > Research & Analysis > FDIC Banking Review |
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FDIC Banking Review |
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| Table 3 Failure-Prediction Model, Hypothetical Bank |
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| Scoring Factor | Coefficient (Weight) (A) |
Financial Ratio (B) |
Scorea (C) |
|---|---|---|---|
| Intercept | –3.91 | N/A | –3.91 |
| Nonaccrual Loans / Total Assets | 35.47 | 0.002 | 0.07 |
| Loans Past Due 90+ Days / Total Assets | 37.10 | 0.010 | 0.37 |
| ORE / Total Assets | 30.46 | 0.015 | 0.45 |
| Loans Past Due 30–89 days / Total Assets | 30.45 | 0.005 | 0.15 |
| Pretax Net Operating Income / Average Assets | –15.17 | 0.030 | –0.45 |
| Noncore Funding / Total Assets | 5.20 | 0.120 | 0.62 |
| Equity & Reserves / Total Assets | –21.69 | 0.130 | –2.82 |
| Total Score | –5.52 | ||
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Note: This table demonstrates how the results of the failure-prediction model can be used to create an individual expected-failure probability for each institution. a The raw score is the product of columns A and B. Via the formula in note 7, the total score produces the expected probability of failure (Pr(default)) through the transformation.
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| Last Updated 12/16/2003 | Questions, Suggestions & Requests |
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