Commercial Real Estate Portfolios Slow in 2006

Click here for a chart on real estate portfolios.

Bentonville-based Arvest Bank Group Inc. had about $1.3 billion in commercial real estate loans during calendar 2006, according to the Federal Deposit Insurance Corp.
Commercial loans are typically nonresidential and nonfarm loans secured by real estate.
That number, which includes out-of-area lending activity, eclipsed all other bank lenders with operations in Benton and Washington counties by about three times its nearest privately held competitor — Jonesboro-based Liberty Bank of Arkansas, which had a commercial portfolio of $492.7 million for the same period.
The data collected in the chart “Commercial Counts” includes the top 10 private Arkansas-chartered banks by assets that had operations in the two counties as of Dec. 31.
Three of the top five banks — Liberty Bank, Metropolitan National Bank and First Security Bank — are chartered outside of the two-county area, so their portfolios may include significant activity not directly tied to Northwest Arkansas.
Total commercial real estate loans for those 10 banks were up 4.73 percent to $2.92 billion for the year. Combined, about one-third of the banks’ real estate portfolios were comprised of commercial projects.
A similar comparison to several banks’ commercial portfolios between 2004 and 2005 showed a 10 percent increase in the same set of loans, so overall, Arkansas banks have slowed the pace of their commercial lending.
However, Liberty Bank and Bentonville-chartered ANB Financial NA both had significant increases year-over-year in commercial lending activity, with 60 percent increase and a 46 percent increase, respectively.
Howard Hamilton, president of Liberty’s Northwest Arkansas operation, said part of the bank’s increase was due to the acquisition of First Arkansas Valley Bank. The deal didn’t close until calendar 2007, he said, but the FDIC required Liberty to carry some of FAV’s loans on its books during the transition period in late 2006. The deal included about 15 offices in the Arkansas River Valley.
Also, Hamilton said, Liberty had a couple of significant loans throughout the year and enjoys some participation loans with Century Bank NA of New Boston, Texas, which has offices in Dallas and the boomtown of Frisco, Texas.