Archive: January 2016

IDC's Track Record as a Financial Institution Rating Agency

IDC's rating methodology and track record are the reasons IDC is considered the nation’s prime source of financial institutions quality rankings. Users of IDC’s ratings have witnessed a superior degree of success in predicting bank failure. Non-recurring or unusual circumstances can affect an institutions rating. Financial institutions or other…

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The Operating Profit Margin

Even institutions with long track records of good management and growing net worth can very quickly reverse direction, and spin out into a value-destroying mode of operation...especially during times of economic stress. And too often, much damage is done before management recognizes that it has a problem, is able to…

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NOPAT ROE and Performance Measurements

The Traditional ROE Equation The traditional ROE equation simply divides net income by average equity capital. The stockholder ROE, as a bottom-line measure of profitability, fails to reflect the true nature of asset quality in the ROE equation. Institutions with loan loss reserves in excess of 10% of equity capital overstate…

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