Arkansas banks stay off FDIC’s failed bank list

Arkansas banks have managed to stay off the FDIC’s notorious "failed bank list" more than two years after the spectacular and surprising collapse of Northwest Arkansas-based ANB Financial in May 2008.

However, the state’s financial institutions are still not out of the woods yet, as 86 banks across the country have been shuttered in the first six months of the year — nearly double the number of U.S. bank closures for the same period of 2009.

Also, there are now nearly 800 financial institutions on the Federal Deposit Insurance Corporation’s anonymous "problem" bank list, up from a mere 90 in 2008. However, FDIC Chairman Sheila Blair has noted that the vast majority of "problem" institutions do not fail.

To date, Florida leads the nation with 14 bank failures in 2010, followed by 11 in Illinois, nine in Georgia, eight in Washington State, six each in California and Minnesota.

Three Arkansas regional banks have benefited from the rising bank failures by making deals with the government to snap up cheap FDIC-protected assets in Florida and Georgia. Conway-based Home Bancshares acquired both Old Southern Bank and Key West Bank of Florida at the bargain basement price of $13 million in March.

Little Rock’s Bank of the Ozarks nearly doubled its first quarter earnings after acquiring the assets of the former Unity National Bank of Cartersville, Ga., from the FDIC in March.

Pine Bluff-based Simmons First National Corp. entered into the FDIC-assisted acquisition game with a deal to buy Southwest Community Bank of Springfield, Mo., in mid-May.

Lafayette, La.-based Iberia Bank, owner of Little Rock’s Pulaski Bank and Trust, made a deal with the FDIC in November of 2009 to assume all the assets and deposits of Florida-based Orion Bank. Pulaski Bank was the first Arkansas bank to acquired assets from the FDIC’s failed bank list on May 12, 2008, following the crash of ANB Financial, which had about $2.1 billion in assets and $1.8 billion in total deposits.

Today, executives at each of the regional banks have indicated keen interest in acquiring other distressed assets from the FDIC’s failed bank list at the right price.

Overall, commercial banks and savings institutions insured by the federal government reported an aggregate profit of $18 billion in the first quarter of 2010, a $12.5 billion improvement from the $5.6 billion the industry earned in the first quarter of 2009. However, those totals are still "well below" historical norms for quarterly profits, the FDIC stated.