States Reserve Third in Region
by January 22, 2012 3:07 pm 64 views
According to the most recent data available from the U.S. Federal Reserve Bank’s Eighth District, Arkansas banks collectively had a loan loss ratio average of 2.13 percent in the third quarter of 2011.
Banks carry a reserve that’s adequate to offset estimated credit losses associated with their loan and lease portfolios. The ratio is a percentage of a bank’s outstanding loans.
So, on average, Arkansas banks reserved 2.13 percent of outstanding loan value to protect against potential losses. That ratio is the third-highest among the seven states in the Eighth District.
As of Sept. 30, the most recent data available from the Federal Deposit Insurance Corp., loan loss ratios were 4.23 percent for Danville-chartered Chambers Bank, 2.93 percent at Legacy National Bank of Springdale, 1.84 percent for Signature Bank of Arkansas in Fayetteville and 1.81 percent at Jonesboro-chartered Liberty Bank of Arkansas.
The reserve ratio for all banks in the Eighth District was 2.04 percent. The U.S. average was 2.84 percent.
Arkansas is the only state wholly in the Eighth District. The other six states are partially in the Eighth and partially in another.