Every year, companies bury the bad news deep in their annual filings. We read them all — and score how the language shifts year over year, relative to every peer filing that year. When SVB filed, 23 out of 24 analysts rated it Buy or Hold. Our score was already above the distress ceiling.
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On February 24, 2023, SVB filed its annual 10-K. The stock was trading at $267.83. FilingDrift scored that filing 53.1 — above the control ceiling of 44.0.
14 days later, the FDIC seized the bank. The stock hit $39.49.
See full analysis →Scores relative to the 95th percentile of healthy companies (ceiling = 44.0). Crisis companies have a verified collapse event.
We ingest every annual SEC filing via EDGAR — risk factors, MD&A, liquidity disclosures. The full document. No truncation. No summaries.
What phrases appeared for the first time? What escalated? We compare against every peer filing that year — so we only flag language that is genuinely unusual for that moment in time.
Our scoring algorithm detects language that has drifted toward distress — even when no specific red-flag word appears. The CFO's fingerprints, not just the obvious phrases.
The score is deterministic — run it twice on the same filing and you get the same number. No generative model, no prompt engineering. SVB's filing always scores the same. The FDIC arrived 14 days after that score was computable.
When our algorithm flagged these companies, the analyst consensus was still bullish. The language in the filings told a different story.
SVB's 10-K showed statistically abnormal language patterns — score 53.1, 1.2× the distress ceiling. The FDIC arrived 14 days later. On the day that filing was processed, analyst consensus was: 12 Buy / 11 Hold / 1 Sell. Forbes had just named SVB "#20 America's Best Banks."
BBBY's 2021 10-K scored 137.4 — 3.1× the distress ceiling — while the stock was still up 25% in the meme rally. The score flagged the filing two full years before the April 2023 bankruptcy filing. Price action hid the signal. The language didn't.
Sources: Federal Reserve OIG Material Loss Review — SVB (Sep 2023); BBBY SEC EDGAR filings.
† FactSet has quantitative sentiment tools but not cross-company phrase-level normalization in the same year. Bloomberg/FactSet pricing is approximate.
Why not just use ChatGPT? LLMs analyze one document at a time with no memory of what other companies said that year. They cannot tell you whether SVB's language is unusual relative to its peers — they have no peer data. They also produce different outputs on the same input on different runs, which makes auditability impossible. FilingDrift's score is computed once and doesn't change.
We tested the algorithm on 10 companies with documented collapse events and 30 healthy controls. Results are limited by corpus coverage — some crisis companies had too few pre-event filings in EDGAR to score.
The 5 missed cases: PCG and REVLON had no pre-event filings in our corpus; CFC, SI, and CHKAQ had 1–2 filing pairs with insufficient pre-event data. Precision is bounded by the small crisis sample; we are expanding the corpus. Full methodology at About.
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