Journal article
Determinants of De Novo Bank Performance
Economic review (Atlanta, Ga.), Vol.75(2), pp.14-25
03/01/1990
Abstract
The focus of previous research on the performance of newly chartered banks is expanded in a study of 169 independent de novo banks chartered in 1980 and still operating as independent organizations in 1988. The methodology identifies the determinants of financial success and ranks these factors according to their relative importance. Three bank-specific internal characteristics appear to be the primary determinants of newly chartered banks' likelihood of achieving financial success: 1. the overall quality of the bank's credit policy, 2. the bank's ability to control operating costs, and 3. the bank's level of capitalization at start-up. Such factors as market structure and economic conditions in the bank's local trade area do not exert much impact on the probability of financial success when considered independently. By comparing the financial performance of sample banks with similar, established banks in the sample banks' states of charter, the analysis avoided possible biases due to regional economic differences.
Details
- Title: Subtitle
- Determinants of De Novo Bank Performance
- Creators
- William HunterAruna Srinivasan
- Resource Type
- Journal article
- Publication Details
- Economic review (Atlanta, Ga.), Vol.75(2), pp.14-25
- ISSN
- 0732-1813
- eISSN
- 2163-3258
- Publisher
- Federal Reserve Bank of Atlanta
- Language
- English
- Date published
- 03/01/1990
- Academic Unit
- Finance
- Record Identifier
- 9984963226202771
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