Arkansas banks boost assets in third quarter report

Arkansas’ 127 bank institutions during the third quarter of 2011 collectively improved their total assets to $58.35 billion, up 1.28% compared to the 2010 period and up 1.65% compared to the second quarter of 2011.

The Federal Deposit Insurance Corporation (FDIC) report released Thursday (Dec. 8) also showed the state had 131 FDIC-backed institutions during the third quarter of 2010, compared to the 127 in the 2011 third quarter.

Asset quality among the Arkansas banks improved, with past-due and non-accrual loans representing 3.32% of the total loan portfolio. In the 2010 third quarter the percentage was 3.57%, and 3.83% in all of 2010.

Bank performance has also improved, with return on assets reaching 1.1% in the third quarter, up over 0.98% during the third quarter of 2010 and above the 0.86% during the 2010 period.

The FDIC data also puts a number on the anecdotal reports of declining loan volume among Arkansas banks. The net loans to assets number percentage was 61.51% in the third quarter, down from 62.96% in the third quarter of 2010 and down from 62.24% in all of 2010 and down from 63.92% in 2009.

The FDIC also showed some unflattering numbers in key economic sectors for Arkansas. Single-family home permits issued during the third quarter of 2011 fell 3.4% compared to the 2010 period, and the home price index fell 1.8%. Multifamily permits fell 45.2% in the third quarter of 2011 compared to the 2010 period.

Arkansas’ unemployment rate during the third quarter average 8.3%, up from 7.8% during the third quarter of 2010. Manufacturing employment in Arkansas fell 3.2% during the quarter compared to a 0.2% gain during the third quarter of 2010.

NATIONWIDE FINANCIALS
Nationally, FDIC-insured institutions reported net income of $35.3 billion in third quarter 2011, up 48.6% compared with third quarter 2010. This is the highest level for industry profits since second quarter 2007, and marked the ninth consecutive quarter of earnings growth.

Almost two-thirds of all institutions (63%) reported improved earnings compared with a year ago. Only 14.3% of banks reported a net loss for the quarter, the smallest proportion since first quarter 2008. The average return on assets rose to 1.03% compared to 0.72% in the third quarter of 2010.

The number of insured institutions reporting financial results declined to 7,436 at the end of the quarter, from 7,513 in the second quarter. Mergers absorbed 49 institutions during the quarter, and 26 institutions failed.

The number of institutions on the FDIC’s “problem list” declined from 865 to 844 during the quarter. Total assets of “problem” institutions fell from $372 billion to $339 billion. The number of full-time equivalent employees at FDIC-insured commercial banks and savings institutions increased by 5,012 (0.2%) during the quarter, to 2,109,911.

For only the second time in the 39 years for which data are available, no new charters were added during the quarter (the other occasion was second quarter 2010).