Table 5.
Multinomial Logit Regressions of Determinants of Bank State: Recovery 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 |
-0.2388 |
10.6388*** |
-2.0548 |
-2.8325 |
8.4024* |
7.0800* |
6.2905 |
6.0942 |
14.2305 |
-2.8352 |
3.9788 |
1.0819 |
-0.6638 |
| Capital |
| Tangible Equity for PCA |
0.7743*** |
1.0350*** |
0.7071*** |
-0.1248 |
-0.1827 |
-0.0345 |
-0.0198 |
-0.0262 |
1.4338 |
0.2043 |
-0.0802 |
-0.0156 |
-0.0120 |
| BHC Capital Injections |
2.0621 |
-0.3816 |
0.6065 |
0.5490 |
0.4402 |
0.3137 |
0.3806 |
0.3978 |
-3.1364 |
-0.6126 |
-0.3481 |
-0.6839* |
-0.6238 |
| External Capital Injections |
0.0021 |
0.1636 |
5.1764** |
0.8219 |
1.1397 |
1.5649 |
1.5940 |
1.6146 |
-0.9101 |
-0.3444* |
-0.2561 |
-0.2861** |
-0.2477 |
| Asset Quality |
| Loans Past Due 30 to 89 Days |
-0.4142*** |
-0.4417*** |
-0.2429 |
-0.8305** |
-0.4773** |
-0.2567 |
-0.1913 |
-0.1730 |
0.5548 |
0.3001 |
0.5276 |
0.1184 |
0.0400 |
| Loans Past Due 90 Days or More |
-0.4630*** |
-0.1805 |
-0.5600 |
-0.3232 |
-0.1968 |
-0.3677** |
-0.4260*** |
-0.4530*** |
-1.0422** |
-0.5484*** |
-0.3320 |
-0.1901 |
0.0021 |
| Nonaccrual Loans and Leases |
-0.2163** |
-0.3689*** |
-0.4007** |
-0.7762* |
-0.6210*** |
-0.5803*** |
-0.6002*** |
-0.6283*** |
-2.9354** |
-0.6012** |
-0.3506 |
-0.2224 |
-0.1628 |
| Other Real Estate Owned |
-0.3847*** |
-0.2984*** |
0.1820 |
0.3759 |
0.3007 |
0.2900 |
0.3299 |
0.3245 |
7.6096** |
0.6112 |
0.0660 |
-0.0690 |
-0.1354 |
| Allowance for Loan Losses |
0.3333 |
0.7585*** |
0.1987 |
2.5538** |
0.9456* |
0.7284 |
0.7687* |
0.7911* |
4.1672 |
0.8971 |
1.0031 |
1.0392 |
0.9083 |
| Management |
| Efficiency Ratio |
-0.0010 |
-0.0218 |
-0.0233 |
0.0277 |
-0.0398 |
-0.0406 |
-0.0328 |
-0.0341 |
-0.0417 |
0.0685 |
0.0308 |
0.0411 |
0.0498 |
| Earnings |
| Total Interest Income |
1.0295 |
-0.9335 |
0.6710 |
2.3293 |
-0.3460 |
-0.3550 |
-0.1461 |
-0.1235 |
-3.0691 |
0.4429 |
0.4718 |
0.6600 |
1.0897 |
| Total Noninterest Income |
0.6360 |
-0.6387 |
0.3575 |
2.2171* |
0.4048 |
0.1514 |
0.2814 |
0.2917 |
-2.3035 |
0.7560 |
0.4635 |
0.5670 |
0.7607 |
| Total Interest Expense |
-1.2585* |
-0.0224 |
-0.6493 |
-1.2851 |
0.7541 |
0.3780 |
0.0680 |
0.0577 |
-0.7468 |
-0.9387 |
-1.0633 |
-1.3890* |
-1.6172 |
| Loan-loss Provision |
-0.7479*** |
-0.6765*** |
-0.1868 |
-1.2186* |
-0.9301** |
-0.8185** |
-0.9011** |
-0.9159** |
0.1979 |
-0.5587 |
-0.8741 |
-0.6199 |
-0.3175 |
| Loan Charge-offs |
0.7248*** |
0.6950*** |
-0.4833 |
0.8751 |
0.6614 |
0.7422 |
0.7013* |
0.6955** |
1.5349 |
0.6323 |
0.6174 |
0.4337 |
0.2000 |
| Expenses on Premises |
-0.3109 |
-0.3120 |
-2.5638 |
-1.7553 |
-0.6163 |
-0.9336 |
-1.0243 |
-0.9938 |
-2.3193 |
-2.3415 |
-2.7488* |
-3.4456** |
-3.7522** |
| Salaries |
-1.4292** |
0.5001 |
0.9138 |
-1.6762 |
-0.0150 |
0.1143 |
-0.0836 |
-0.1369 |
7.9328 |
-0.6335 |
-0.3216 |
-0.3277 |
-0.2640 |
| Other Noninterest Expense |
-0.3044 |
0.0733 |
-0.4493 |
-3.4496** |
-0.7108 |
-0.3225 |
-0.4617 |
-0.4250 |
-0.0248 |
-1.1180 |
-0.7435* |
-0.7250 |
-1.2015 |
| Liquidity |
| Volatile Liabilities |
-0.0130 |
0.0180 |
0.0191 |
-0.0726 |
-0.0456 |
-0.0072 |
0.0087 |
0.0117 |
-0.3340* |
-0.0723* |
-0.0434 |
-0.0387 |
-0.0349 |
| Loans Plus Securities >= Five years |
0.0225 |
0.0033 |
0.0730 |
0.0743 |
0.0807 |
0.0792 |
0.0798 |
0.0856 |
0.0863 |
0.0708 |
0.0208 |
0.0473 |
0.0345 |
| 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. |
