Table 7.
Multinomial Logit Regressions of Determinants of Bank State: Still a Problem versus Failure
Estimation Period in Years) |
| Explanatory Variables |
1990 |
1991 |
1992 |
1993 |
1993-94 |
1993-95 |
1993-96 |
1993-97 |
1994-98 |
1995-99 |
1996-00 |
1997-01 |
1998-02 |
| Intercept |
| Constant |
-1.7037 |
9.8229*** |
-5.7298 |
-8.1433 |
3.4994 |
1.9090 |
2.3718 |
2.9545 |
11.8183 |
-4.7010 |
2.4569 |
-0.1438 |
-1.3300 |
| Capital |
| Tangible Equity for PCA |
0.6653 |
0.9255 |
0.6366 |
-0.0180 |
-0.1213 |
0.0157 |
0.0210 |
0.0161 |
1.4656 |
0.2476 |
0.0092 |
0.0247 |
0.0209 |
| BHC Capital Injections |
1.8868 |
-0.2906 |
0.5581 |
0.8628 |
0.4019 |
0.2479 |
0.2982 |
0.3084 |
-3.3388 |
-0.8366 |
-0.3956 |
-0.6834 |
-0.6538* |
| External Capital Injections |
-0.2729 |
0.1045 |
5.0410** |
0.4656 |
0.9132 |
1.4138 |
1.4588 |
1.4872 |
-0.9185 |
-0.3014 |
-0.1564 |
-0.1621 |
-0.1645 |
| Asset Quality |
| Loans Past Due 30 to 89 Days |
-0.1508* |
-0.1852* |
-0.0386 |
-0.6301 |
-0.2901 |
-0.0618 |
-0.0480 |
-0.0389 |
0.6652* |
0.3108 |
0.5140 |
0.1504 |
0.1100 |
| Loans Past Due 90 Days or More |
-0.1451 |
-0.0449 |
-0.2691 |
-0.1211 |
0.0590 |
-0.0202 |
-0.0798 |
-0.0852 |
-0.6682 |
-0.2518 |
-0.1519 |
-0.0492 |
0.0091 |
| Nonaccrual Loans and Leases |
-0.0503 |
-0.0609 |
-0.2043 |
-0.5441 |
-0.4911*** |
-0.4661*** |
-0.5049*** |
-0.5101*** |
-2.9075*** |
-0.5721 |
-0.3620 |
-0.2440 |
-0.2381 |
| Other Real Estate Owned |
-0.1520* |
-0.0992 |
0.3269 |
0.5932 |
0.5444** |
0.5269** |
0.5422** |
0.5437** |
7.8727 |
0.7603 |
0.1889 |
0.0840 |
-0.0439 |
| Allowance for Loan Losses |
0.2190 |
0.4678** |
-0.1398 |
2.0740 |
0.6592 |
0.3662 |
0.4775 |
0.4219 |
3.8584 |
0.5901 |
0.8449 |
0.7692 |
0.8030 |
| Management |
| Efficiency Ratio |
-0.0094 |
-0.0479** |
-0.0088 |
0.0608 |
-0.0183 |
-0.0160 |
-0.0218 |
-0.0298 |
-0.0504 |
0.0616 |
0.0153 |
0.0351 |
0.0417 |
| Earnings |
| Total Interest Income |
0.5102 |
-1.4084** |
0.8538 |
2.3853 |
-0.2317 |
-0.2204 |
-0.1554 |
-0.2602 |
-3.2794 |
0.3022 |
0.3374 |
0.6819 |
0.9719 |
| Total Noninterest Income |
0.0929 |
-1.6561*** |
0.4092 |
2.3166* |
0.4836 |
0.2710 |
0.2199 |
0.1216 |
-2.5602 |
0.6202 |
0.2145 |
0.5437 |
0.6399 |
| Total Interest Expense |
-0.4149 |
0.7310 |
-0.8402 |
-1.6448 |
0.4186 |
0.0461 |
-0.0415 |
0.0889 |
-0.4817 |
-0.5840 |
-0.6594 |
-1.1102 |
-1.3588 |
| Loan-loss Provision |
-0.5443* |
-0.2876 |
0.0509 |
-0.8631 |
-0.5969 |
-0.4833 |
-0.5775* |
-0.5975* |
0.4569 |
-0.4709 |
-0.8459 |
-0.6286 |
-0.3183 |
| Loan Charge-A5offs |
0.5898* |
0.2622 |
-0.6566* |
0.8309* |
0.5432 |
0.6234 |
0.5602 |
0.5720 |
1.3316 |
0.6531 |
0.6585 |
0.5533 |
0.3056 |
| Expenses on Premises |
-0.0152 |
1.0657 |
-1.8408 |
-1.8289 |
-0.4222 |
-0.9661 |
-0.7504 |
-0.6864 |
-1.6630 |
-1.7840 |
-2.0767 |
-3.3064* |
-3.3969** |
| Salaries |
-0.4521 |
1.5279*** |
0.6316 |
-1.4041 |
0.2488 |
0.3225 |
0.2618 |
0.3786 |
8.4899 |
-0.3599 |
0.0343 |
-0.2674 |
-0.2008 |
| Other Noninterest Expense |
0.1244 |
0.8622** |
-0.4144 |
-3.9178** |
-1.0867* |
-0.6549 |
-0.5648 |
-0.4626 |
0.1029 |
-1.0150 |
-0.5520 |
-0.6832* |
-0.9796 |
| Liquidity |
| Volatile Liabilities |
-0.0006 |
0.0166 |
0.0404 |
-0.0821 |
-0.0456 |
-0.0061 |
0.0126 |
0.0192 |
-0.3160* |
-0.0456 |
-0.0169 |
-0.0090 |
-0.0073 |
| Loans Plus Securities >= Five years |
0.0273 |
0.0089 |
0.0877** |
0.0966 |
0.1024* |
0.1027** |
0.0997** |
0.1050** |
0.1040 |
0.0777 |
0.0213 |
0.0394 |
0.0348 |
| Log Likelihood |
-584.9 |
-662.5 |
-561.8 |
-328.8 |
-505.8 |
-597.7 |
-660.9 |
-708.4 |
-416.7 |
-339.3 |
-315.9 |
-348.5 |
-410.6 |
| Number of Observations |
866 |
897 |
713 |
413 |
607 |
717 |
781 |
843 |
495 |
377 |
341 |
375 |
428 |
| Akaike Information Criteria |
1289.8 |
1445.0 |
1243.6 |
777.6 |
1131.6 |
1315.4 |
1441.8 |
1536.8 |
953.4 |
798.5 |
751.7 |
816.9 |
941.3 |
| Pseudo R squared |
0.090 |
0.222 |
0.170 |
0.195 |
0.162 |
0.159 |
0.144 |
0.145 |
0.172 |
0.121 |
0.102 |
0.103 |
0.078 |
| Significance at 1%, 5% and 10% levels are indicated by ***, ** and * asterisks, repectively. |
