- 期刊
Analyzing Changes in Bank Capital Ratios by Size Decile 2002 to 2012
並列摘要
This paper examines all of the banks that submitted Call Reports to the FDIC for quarters ended from December, 2002, to June, 2012. We stratified four variables (Tier 1 Risk Based Capital to Total Assets Ratio, Efficiency Ratio, Percentage of Insured Deposits, and Percentage of Non-Accrual and Over-90 Loans plus ORE to Total Assets) by asset size decile, finding that significant differences exist for each of the variables.We find that big banks have lower mean capital ratios than smaller banks and that big banks have increased their mean capital ratios by one-half to one percentage point since December, 2008. We also find that the smallest size decile of banks experienced a deterioration in capital ratios from September, 2007 through June, 2012. In addition, we find that while the percentage of insured deposits jumped significantly for all size groups with the increase in FDIC insurance maximums, the largest size group didn't jump as much as the other groups. We also find that bigger banks (deciles 1 and 2) have lower efficiency ratios than smaller banks. However, there has been a lot of fluctuation in efficiency ratios since the end of 2008 and the ratios appear to still be in a state of flux. Finally, we find that, until June, 2007, all bank deciles had between 0.5% to 1.0% of assets in the ”nonaccrual and over-90 loans plus ORE” category of bad assets. Then, things began to deteriorate rapidly. By December, 2010, bad assets averaged over 3.5% of total assets for the top two deciles, the worst experience of all the size deciles. It is interesting to note that the smallest two deciles, Deciles 9 and 10, weathered the ”housing crisis” much better than the bigger banks.