Abstract
Financial distress prediction is an important and widely researched issue because of its potential significant influence on bank lending decisions and profitability. Since the 1970s, many mathematical and statistical researchers have proposed prediction models on such issues. Given the recent vigorous growth of artificial intelligence (AI) and data mining techniques, many researchers have begun to apply those techniques to the problem of bankruptcy prediction. Among these techniques, the support vector machine (SVM) has been applied successfully and obtained good performance with other AI and statistical method comparisons. Particle swarm optimization (PSO) has been increasingly employed in conjunction with AI techniques and has provided reliable optimization capability. However, researches addressing PSO and SVM integration are scarce, although there is great potential for useful applications in this field. This paper proposes an adaptive inertia weight (AIW) method for improving PSO performance and integrates SVM in two aspects: feature subset selection and parameter optimization. The experiments collected 54 listed companies as initial samples from American bank datasets. The proposed adaptive PSO-SVM approach could be a more suitable methodology for predicting potential financial distress. This approach also proves its capability to handle scalable and non-scalable function problems.
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Acknowledgments
The authors thank the support of National Scientific Council (NSC) of the Republic of China (ROC) to this work under Grants No. NSC-99-2410-H-025-003 and NSC-99-2410-H-025-011. The authors also gratefully acknowledge the Editor and anonymous reviewers for their valuable comments and constructive suggestions.
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Appendix: America banks lists
Appendix: America banks lists
Non-financial distress banks name | Banks abbreviation or code |
|---|---|
Access National Corp. | ANCX |
American National Bankshares Inc. | AMNB |
Ameris Bancorp | ABCB |
Annapolis Bancorp Inc. | ANNB |
Associated Banc-Corp | ASBC |
Astoria Financial Corporation | AF |
Atlantic Bancshares Inc | ATBA.OB |
Atlantic Southern Financial Group, Inc. | ASFN |
BancorpSouth, Inc. | BXS |
Bank of America Corporation | BAC |
Bank of Florida Corporation | BOFL |
Bar Harbor Bankshares | BHB |
BB & T Corp. | BBT |
Bridge Bancorp, Inc. | BDGE |
Capital One Financial Corp. | COF |
Capitol Federal Financial | CFFN |
Citigroup, Inc. | C |
Citizens Republic Bancorp, Inc | CRBC |
City National Corp. | CYN |
Comerica Incorporated | CMA |
Commerce Bancshares Inc. | CBSH |
East West Bancorp, Inc. | EWBC |
Fifth Third Bancorp | FITB |
First Bancorp | FBNC |
First Citizens Bancshares Inc. | FCNCA |
First Horizon National Corp. | FHN |
Bank of the Ozarks, Inc. | OZRK |
Webster Financial Corp. | WBS |
Wells Fargo & Company | WFC |
Whitney Holding Corp. | WTNY |
Financial distress banks name | Banks abbreviation or code |
|---|---|
American International Group, Inc | AIG |
Community Bankers Trust Corporation | BTC |
CIT Group, Inc. | CIT |
Dun & Bradstreet Corp | DNB |
Farmers Capital Bank Corp. | FFKT |
First National Bank Alaska | FNBA |
First Trust Bank | FTB |
FRANKLIN BANK CORP A | FBC |
Freddie Mac | FM |
Harford Bank | HB |
Horizon Financial Corp. | HFC |
IndyMac Bancorp Inc | IMB |
John Hancock Bank and Thrift Opportunity Fund | JBTF |
Lehman Brothers Holdings Inc | LBH |
Mechanics Bank | MB |
Michigan Heritage Bancorp Inc. | MHB |
National Bank of Greece SA | NBG |
Rainier Pacific Financial Group Inc. | RPF |
Signature Bank | SBG |
Silver State Bancorp | SSB |
Sunwest Bank | SB |
The Bank Of Nova Scotia | TBNS |
The Toronto-Dominion Bank | TTDB |
Virginia National Bank | VNB |
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Shie, F.S., Chen, MY. & Liu, YS. Prediction of corporate financial distress: an application of the America banking industry. Neural Comput & Applic 21, 1687–1696 (2012). https://doi.org/10.1007/s00521-011-0765-5
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DOI: https://doi.org/10.1007/s00521-011-0765-5