FDIC report positive on Arkansas banks

BusinessFort SmithNews on the Wire

by The City Wire staff ([email protected]) September 8, 2011 2:59 pm 57 views 

Arkansas’ 127 bank institutions collectively improved their asset base and loan portfolios during the second quarter of 2011, according to a federal bank report released Thursday (Sept. 8).

The Federal Deposit Insurance Corporation (FDIC) reported that total assets among commercial banks and saving institutions it insures in Arkansas had total assets of $57.397 billion, up from the $56.176 billion in the first quarter and also ahead of the $56.365 billion during the second quarter of 2010. However, the asset total was lower than the 2010 total average of $58.206 billion.

Also, the state had 132 FDIC-backed institutions during the second quarter of 2010, compared to the 127 in the 2011 second quarter.

Asset quality among the Arkansas banks improved, with past-due and non-accrual loans representing 3.45% of the total loan portfolio. In the 2010 second quarter the percentage was 3.66%, and 3.83% in all of 2010.

Bank performance has also improved. Return on assets was 0.99% in the second quarter, up over 0.96% during the second quarter of 2010 and well above the 0.86% during the 2010 period.

Bank performance nationally has improved. The FDIC reported Aug. 24 that all U.S. commercial banks and savings institutions insured reported an aggregate profit of $28.8 billion in the second quarter of 2011, a $7.9 billion improvement from the $20.9 billion in net income the industry reported in the second quarter of 2010.

It marked the eighth consecutive quarter that earnings registered a year-over-year increase. Also, the number of institutions on the FDIC’s "Problem List" fell for the first time in 19 quarters. The number of "problem" institutions declined from 888 to 865. It was the first time since the third quarter of 2006 that the number of "problem" banks fell.

The FDIC shows a somewhat less rosy picture of the Arkansas economy. Single-family home permits issued during the second quarter of 2011 fell 19% compared to the 2010 period, and the home price index fell 2.5%. Multifamily permits fell 33.2% in the second quarter of 2011 compared to the 2010 period.