Table 6.
Multinomial Logit Regressions of Determinants of Bank State: Merger 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 |
-4.4684 |
9.6836** |
-7.5929 |
-5.191 |
4.203 |
4.6942 |
4.5547 |
4.7692 |
11.3291 |
-5.1144 |
0.9346 |
-0.6199 |
-1.9189 |
| Capital |
| Tangible Equity for PCA |
0.5301*** |
0.8500*** |
0.7454*** |
-0.0461 |
-0.1382 |
-0.0093 |
-0.0002 |
-0.0191 |
1.4089 |
0.2249 |
-0.0238 |
-0.0080 |
-0.0014 |
| BHC Capital Injections |
2.1647 |
-0.1048 |
0.3075 |
1.0384 |
0.7004 |
0.5830 |
0.5993 |
0.5579 |
-3.1430 |
-0.8561 |
-0.5000 |
-0.7831* |
-0.5443 |
| External Capital Injections |
-0.9151 |
-0.0810 |
5.0893** |
0.8027 |
0.9729 |
1.3522 |
1.3519 |
1.3907 |
-1.6622** |
-1.2036** |
-0.5297* |
-0.4764* |
-0.4560* |
| Asset Quality |
| Loans Past Due 30 to 89 Days |
-0.6823*** |
-0.4077** |
-0.2239 |
-0.8464** |
-0.4781** |
-0.1863 |
-0.2035 |
-0.1915 |
0.6182 |
0.3477 |
0.5696 |
0.2731 |
0.2128 |
| Loans Past Due 90 Days or More |
-0.3236 |
-0.0706 |
-0.5440 |
-0.1931 |
-0.2134 |
-0.5354** |
-0.5049** |
-0.5198** |
-0.9865** |
-0.3893* |
-0.2086 |
-0.1001 |
0.0566 |
| Nonaccrual Loans and Leases |
-0.2397 |
-0.4158*** |
-0.3294** |
-0.7045 |
-0.6407*** |
-0.5988*** |
-0.6019*** |
-0.6018*** |
-2.9516** |
-0.4764* |
-0.1760 |
-0.0955 |
-0.1115 |
| Other Real Estate Owned |
-0.1902* |
-0.4054*** |
0.2594 |
0.3367 |
0.3322 |
0.2715 |
0.3054 |
0.3055 |
7.6746** |
0.5882 |
0.0078 |
-0.0945 |
-0.1525 |
| Allowance for Loan Losses |
0.3356 |
0.8715*** |
0.3666 |
2.6342** |
1.2752** |
0.9467** |
0.9844** |
0.9958* |
4.3713 |
0.5819 |
0.7722 |
0.8808 |
0.8598 |
| Management |
| Efficiency Ratio |
0.0094 |
-0.0345 |
-0.0171 |
0.0437 |
-0.0179 |
-0.0297 |
-0.0320 |
-0.0379 |
-0.0522 |
0.0580 |
0.0218 |
0.0396 |
0.0435 |
| Earnings |
| Total Interest Income |
1.1992 |
-1.5633** |
0.5040 |
2.2421 |
-0.1898 |
-0.5105 |
-0.3677 |
-0.3640 |
-3.3443 |
0.2597 |
0.5499 |
0.6946 |
0.9715 |
| Total Noninterest Income |
0.7799 |
-1.4107** |
0.2819 |
2.5038** |
0.5521 |
0.1408 |
0.1259 |
0.0759 |
-2.6277 |
0.6042 |
0.4134 |
0.6291 |
0.6470 |
| Total Interest Expense |
-0.9474 |
0.7870 |
-0.4657 |
-0.8863 |
0.7604 |
0.6581 |
0.4352 |
0.4075 |
-0.3228 |
-0.5881 |
-0.7982 |
-1.1075 |
-1.3550 |
| Loan-loss Provision |
0.1164 |
-0.1086 |
0.0177*** |
-1.0359 |
-0.6691 |
-0.5882 |
-0.6731** |
-0.7569** |
0.2790 |
-0.6447 |
-0.7495 |
-0.5020 |
-0.2115 |
| Loan Charge-offs |
-0.0145 |
0.0398 |
-0.7365** |
0.8755 |
0.3109 |
0.3865 |
0.3321 |
0.3975 |
1.0550 |
0.7349 |
0.5245 |
0.3932 |
0.1833 |
| Expenses on Premises |
-0.8320 |
1.1644 |
-1.5325 |
-1.7446 |
-0.2103 |
-0.4991 |
-0.4863 |
-0.3517 |
-1.2111 |
-1.3686 |
-1.4539 |
-2.0358 |
-2.7002 |
| Salaries |
-1.7712* |
1.4012* |
0.8435 |
-1.5131 |
-0.0220 |
0.2606 |
0.1441 |
0.1638 |
8.1622 |
-0.6658 |
-0.5979 |
-0.7600 |
-0.4629 |
| Other Noninterest Expense |
-0.2371* |
0.6104** |
-0.0030** |
-4.1409 |
-1.3090 |
-0.4806 |
-0.4177 |
-0.3441 |
0.2520 |
-0.8389 |
-0.6434 |
-0.8411 |
-1.0175 |
| Liquidity |
| Volatile Liabilities |
-0.0085 |
-0.0177 |
0.0025 |
-0.1507* |
-0.1159 |
-0.0679 |
-0.0431 |
-0.0379 |
-0.3553** |
-0.0813* |
-0.0253 |
-0.0431 |
-0.0287 |
| Loans Plus Securities >= Five years |
0.0159 |
0.0091 |
0.0927** |
0.0593 |
0.0729 |
0.0791 |
0.0805 |
0.0855* |
0.1157 |
0.0861 |
0.0125 |
0.0277 |
0.0228 |
| 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. |
