What is National Bankshares Probability of Financial Distress (%)?
Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, National Bankshares's Probability of Financial Distress (%) is 0.14%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Competitive Comparison of National Bankshares's Probability of Financial Distress (%)
For the Banks - Regional subindustry, National Bankshares's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
National Bankshares's Probability of Financial Distress (%) Distribution in the Banks Industry
For the Banks industry and Financial Services sector, National Bankshares's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where National Bankshares's Probability of Financial Distress (%) falls into.
National Bankshares Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
| LPFD | = | -20.12 * NIMTAAVG | + | 1.60 * TLMTA | - | 7.88 * EXRETAVG | + | 1.55 * SIGMA | - | 0.005 * RSIZE | - | 2.27 * CASHMTA | + | 0.070 * MB | - | 0.09 * PRICE | - | 8.87 |
| = | -6.56 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.14% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.
2. TLMTA = Total liabilities to Market Total Assets
3. CASHMTA = Cash to Market Total Assets
For banks, CASHMTA is measured as:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
6. RSIZE = Relative Size
| RSIZE | = | log (Market Cap | / | Total Market Cap of S&P 500 companies) |
7. MB = Market to Adjusted Book Equity Ratio
8. PRICE
PRICE is measured as the log of the stock price, capped at log(15).
National Bankshares (National Bankshares) Business Description
Traded in Other Exchanges
N/A
Address
101 Hubbard Street, Blacksburg, VA, USA, 24062-9002
National Bankshares Inc is a bank holding company of National Bank of Blacksburg, offering a range of financial products and services, including deposit accounts, commercial, consumer, and mortgage loans, credit cards, and trust services. The bank focuses on lending to small and mid-sized businesses and individuals. The types of loans it offers include commercial and agricultural, commercial real estate, construction for commercial and residential properties, residential real estate, home equity, and various consumer loan products. It also operates an insurance and brokerage subsidiary, National Bankshares Financial Services, Inc. The company earns its revenues from interest and fees on loans, non-interest income, and investments.
Executives
| Lawrence J Ball |
director |
1811 MOUNTAINSIDE DRIVE, BLACKSBURG VA 24060 |
| F Brad Denardo |
officer: Corporate Officer |
124 MATEER CIRCLE, BLACKSBURG VA 24060 |
| Michael E Dye |
director |
PO BOX 346, BLUEFIELD VA 24605 |
| Fitzwater Norman V Iii |
director |
113 MATEER CIRCLE, BLACKSBURG VA 24060 |
| Sanders Bobby D. Ii |
officer: SVP/Chief Credit Officer |
1735 TURNBERRY LANE, RINER VA 24149 |
| John Elliott Dooley |
director |
2131 PLANK DRIVE, BLACKSBURG VA 24060 |
| Green Charles E Iii |
director |
15519 LOOKOUT RIDGE, BRISTOL VA 24202 |
| Lara E Ramsey |
other: Corporate Secretary |
7479 BLUFF VIEW DRIVE, RADFORD VA 24141 |
| Mary G Miller |
director |
715 RICHARDS WAY, WIRTZ VA 24184 |
| Mildred R Johnson |
director |
914 WILLARD DRIVE, BLACKSBURG VA 24060 |
| Lora M. Jones |
officer: SVP/Chief Financial Officer |
301 NEIL STREET, BLACKSBURG VA 24060 |
| Glenn P Reynolds |
director |
206 MATEER CIRCLE, BLACKSBURG VA 24060 |
| Rebecca M Melton |
officer: SVP/Chief Credit Officer |
260 REVOLUTION CIRCLE, CHRISTIANSBURG VA 24073 |
| Jack M Lewis |
director |
3696 CONSERVATION TRAIL, THE VILLAGES FL 32163 |
| James Carroll Thompson |
director |
PO BOX 298, TAZEWLL VA 24651 |
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