Loan, Security, and Dividend Choices by Individual (Unconsolidated) Public and Private Commercial Banks

Posted: 26 Apr 2001

See all articles by Frederick Niswander

Frederick Niswander

East Carolina University - College of Business

Edward P. Swanson

Texas A&M University - Mays Business School; Mays Business School, Texas A&M University

Abstract

Using call report data, we consider whether the discretionary portion of loan loss provisions, loan charge-offs, securities gains and losses, and dividends are influenced by the bank's level of capital, earnings, and taxes. We studied more than 11,000 banks. We find that banks below a capital adequacy threshold often make discretionary choices that reduce earnings and capital. Banks above the threshold exhibit different discretionary outcomes, with evidence of income smoothing and tax-advantaged actions.

JEL Classification: M41, M43, G21, G38

Suggested Citation

Niswander, Frederick D. and Swanson, Edward P., Loan, Security, and Dividend Choices by Individual (Unconsolidated) Public and Private Commercial Banks. Available at SSRN: https://ssrn.com/abstract=250821

Frederick D. Niswander

East Carolina University - College of Business

Department of Accounting
Greenville, NC 27858-4353
United States

Edward P. Swanson (Contact Author)

Texas A&M University - Mays Business School ( email )

430 Wehner
College Station, TX 77843-4353
United States
979-845-8970 (Phone)
979-845-0028 (Fax)

Mays Business School, Texas A&M University ( email )

Wehner, MS 4353
College Station, TX 77843-4353
United States
979-845-5014 (Phone)
979-845-0028 (Fax)

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