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. Journal of Accounting and Public Policy, Vol. 19, No. 3, January 2000. 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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