TRUTH OR DARE (probabilty of failures addition)
Truth: It feels like just yesterday I launched this blog. Dare: But several years have passed, and it’s time to face the music and reveal how our bank probability of failure predictions have held up. When we played this game as a kid, didn’t it always seem we learned a lot more about people in…
Unveiling of Bank Fraud Failures (dirty little secrets)
After about 6 months of compiling data and analyzing what variables to utilize, I made a very concerning observation. I had nailed down 12 very strong variables which I felt would properly identify those banks with the highest possibility to fail. While 96 percent of all failures come from C and D rated banks, an…
FDIC Insurance is the holy grail (Right?)
In my last article, I discussed the difference between a bank’s performance and probability of failure. Most bank rating agencies look at performance not potential for failure. As a consumer or business person, your main goal should be preservation of capital. With almost 4,000 traditional institutions in the US, you’d be surprised how many banks…
Bank Performance or Peril (what goes up may come down)
In 2007, I decided to take a bold step and sell my first business, returning to the banking world in Chattanooga. With my background as a banker and examiner, it felt like the natural move. I joined a community bank that boasted the highest Return on Equity in the country the previous year—a metric often…
My Confession (a lifelong obsession with bank safety)
When I was a young man, I had heard that how you spend you spare time determines where you will be in ten, twenty, even thirty years. This might be an indictment on my younger years, but I spent a lot of time in the library. When I think of the public library, I consider…
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