Browse Tag by Risk

Financial Health of United States Banks in 2016

This study reports a k-means clustering analysis investigating patterns of the financial health of all 5,870 banks in the United States in 2016 by using five key variables: net interest margin, return on assets, net charge-offs to loans, tier 1 capital ratio, and total risk-based capital ratio. The results suggest that there are nine groups of banks in terms of their financial health. 1,224 banks are found be in the cluster that represented the most unhealthy institutions, whereas only 19 banks are in the cluster described as most healthy. The banks that failed in the first quarter of 2017 are all found in the first cluster.

Full Article: PDF

Code: GitHub

Slides: PPT