Arkansas Banks Reserve 1.87 Percent in 3Q 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 1.87 percent in the third quarter of 2013, a 0.26 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 1.87 percent of outstanding loan value to protect against potential losses. That ratio is just behind Missouri banks (1.88 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.

The average among Eighth District banks in the third quarter of 2013 was 1.70 percent. The national average for the same period was 1.87 percent.

According to the most current data from the Federal Deposit Insurance Corp., loan loss ratios in the third quarter in 2013 were 1.25 percent at Little Rock-based Bank of the Ozarks, 2.16 percent at Arvest Bank of Fayetteville, 2.40 percent at Fayetteville-chartered Signature Bank of Arkansas and 0.79 percent at Booneville-based First Western Bank.