What is Naugatuck Valley Financial 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, Naugatuck Valley Financial's Probability of Financial Distress (%) is 0.00%.
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 Naugatuck Valley Financial's Probability of Financial Distress (%)
For the Banks - Regional subindustry, Naugatuck Valley Financial'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.
Naugatuck Valley Financial's Probability of Financial Distress (%) Distribution in the Banks Industry
For the Banks industry and Financial Services sector, Naugatuck Valley Financial's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Naugatuck Valley Financial's Probability of Financial Distress (%) falls into.
Naugatuck Valley Financial 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 |
| = | 0.00 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.00% |
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).
Naugatuck Valley Financial (Naugatuck Valley Financial) Business Description
Traded in Other Exchanges
N/A
Address
Naugatuck Valley Financial Corporation was organized in 1922 as a federal Corporation, and is a holding company for Naugatuck Valley Savings and Loan. The Company operates as a community-oriented financial institution offering traditional financial services to consumers and businesses in its market area. It attracts deposits from the general public and uses those funds to originate one to four family, multi-family and commercial real estate, construction, commercial business, and consumer loans. Originations of long-term, fixed rate residential loans are sold in the secondary mortgage market. Deposits and loan repayments are the sources of its funds for lending and other investment purposes. Loan repayments are a stable source of funds, while deposit inflows and outflows and loan prepayments are influenced by general interest rates and money market conditions. The Deposits are attracted from within its market area through the offering of a broad selection of deposit instruments, including NOW accounts, checking accounts, money market accounts, regular savings accounts, club savings accounts, certificate accounts, health savings accounts and various retirement accounts. The Company borrows from the Federal Home Loan Bank of Boston to supplement its supply of lendable funds and to meet deposit withdrawal requirements. The Federal Home Loan Bank functions as a central reserve bank providing credit for member financial institutions. Its lending activities includes One to Four Family Residential Loans; Multi-Family and Commercial Real Estate Loan; Construction Loans; Commercial Business Loans; and Consumer Loans. It faces competition for loans from financial institutions, such as mortgage companies and mortgage brokers and non-depository financial service companies in the mortgage market, such as insurance companies, securities companies and specialty finance companies.
Executives
| Lawrence B Seidman |
director |
LANIDEX CORPORATE PARK, 100 LANIDEX PLAZA 1ST FL, PARSIPPANY NJ 07054 |
| James E Cotter |
officer: EVP & COO |
C/O NAUGATUCK VALLEY FINANCIAL CORP., 333 CHURCH STREET, NAUGATUCK CT 06770 |
| J Allen Kosowsky |
director |
C/O THOR INDUSTRIES, INC., 419 WEST PIKE STREET, JACKSON CENTER OH 45334-0629 |
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