Arkansas Banks Reserve 1.98 Percent in First Quarter 2013

According to the most recent data from the U.S. Federal Reserve Bank’s Eighth District, Arkansas banks had a collective loan loss ratio average of 1.98 percent in the first quarter this year, a 0.19 percent decrease from the same quarter of 2012.

Banks carry a reserve that is 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 1.98 percent of outstanding loan value to protect against potential losses. That ratio is just ahead of Mississippi banks (1.77 percent) among the seven states in the Eighth District.

Arkansas is the only state wholly in the Eighth District. The other six states are partially in the Eighth and partially in another.

According to the most current data from the Federal Deposit Insurance Corp., loan loss ratios in the first quarter this year were 2.95 percent at Signature Bank of Arkansas, 2.27 percent at Arvest Bank and 1.41 percent at The First National Bank of Fort Smith.