Efficiency Ratios and Community Bank （效率比率和社区银行）.pdfVIP

Journal of Finance and Accountancy Efficiency Ratios and Community Bank Performance Fred H. Hays University of Missouri—Kansas City Stephen A. De Lurgio University of Missouri—Kansas City Arthur H. Gilbert, Jr. University of West Florida Abstract This study develops a multivariate discriminant model to differentiate between low efficiency and high efficiency community banks (less than $1 billion in total assets) based upon the efficiency ratio, a commonly used financial performance measure that relates non-interest expenses to total operating income. The model includes proxies for the banking regulatory CAMELS rating variables including: the equity capital to total asset ratio, net charge-offs to loans, salaries to average assets, return on average assets, the liquidity ratio and the one year GAP ratio. The discriminant model is tested using data for 2006, 2007 and 2008. This includes periods of high performance as well as deteriorating industry conditions associated with the current financial crisis. The model’s classification accuracy ranges from approximately 88% to 96% for both original and cross-validation datasets. Keywords: Efficiency ratio; community bank; CAMELS; discriminant analysis; financial crisis Efficiency Ratios, Page 1 Journal of Finance and Accountancy Introduction The global economic and financial crisis initially affected large financial institutions like Citibank, Bank of America and Wachovia. As the effects spread throughout the U.S. economy, especially during the latter part of 2008, smaller institutions, including about 7,000 communi