FDIC report shows Arkansas bank gains, slow economic growth

Third-quarter 2013 banking and other economic data released Thursday (Dec. 12) by the Federal Deposit Insurance Corp. (FDIC) show improvements in the state’s banking sector and continued signs of muted economic growth.

The quarterly FDIC state profile shows total nonfarm employment up 1%, an improvement over a 0.1% gain for the same period in 2012. For all of 2012, non-farm employment was up just 0.6% compared to 2011, and 2011 non-farm employment was up just 0.6% compared to 2010.

The average jobless rate in Arkansas during the quarter was 7.4%. Arkansas’ jobless rate in October was 7.5%, below the national rate of 7.3% in October. Arkansas' unemployment rate was lower than the national average for five years, with the trend reversing in 2013.

In other indicators, the number of single-family home permits issued statewide during the third quarter were up 5.8% and apartment and duplex permits were down 72.8%. Permits were up 35.7% and multi-family permits were up 137.5% in the third quarter of 2012.

The home price index was 1.4% in the third quarter, compared to a 0.9% increase in the third quarter of 2012 and a 0.7% increase during all of 2012.

The number of banking institutions in Arkansas in the third quarter was 126, unchanged from the third quarter of 2012 and unchanged from all of 2012. Total assets of the 126 banks grew to $62.298 billion in the third quarter from $60.505 billion in the third quarter of 2012 and from $61.289 billion for all of 2012.

Loan quality, which has been a persistent problem for many Arkansas banks, has improved in recent years. The ratio of past due and non-accrual loans to total loans was 2.4 in the third quarter of 2013, down from 2.97 in the third quarter of 2012. In all of 2012, the ratio was 2.93, down from the 3.17 in 2011.

Arkansas banks also are performing better well on the key metric of return on assets. The ROA average all 126 banks during the quarter was 1.01, just off the 1.05 during the third quarter of 2012, but better than the 0.98 in all of 2012.

Arkansas bank execs have approved more loan activity in recent years. The net loan to assets ratio was 59.92 in the quarter, higher than the 59.71 in the 2012 quarter. For all of 2012, the ratio was 57.03.

Arkansas’ top five largest deposit markets by metro area, based on June 2013 summary of deposits are:
• Memphis Tenn.-Miss.-Ark.: $23.519 billion, 60 banks in the market
• Little Rock-North Little Rock-Conway: $14.238 billion, 37 banks in the market
• Fayetteville-Springdale-Rogers: $8.277 billion, 38 banks in the market
• Fort Smith: $4.058 billion, 22 banks in the market
• Jonesboro: $2.791 billion, 19 banks in the market