Money Talk: Arkansas Banks Listed In Annual Bank Director’s Ranking Of Nation’s Top Performers

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ARKANSAS BANKS LISTED IN ANNUAL BANK DIRECTOR’S RANKING OF NATION’S TOP PERFORMERS: Arkansas-based banks placed within the top ten for mid-sized banks in Bank Director’s magazine 2015 Bank Performance Scorecard, an annual ranking of the nation’s top performing banks.

Bank of the Ozarks ranked first among mid-sized banks, which have between $5 billion and $50 billion in assets. Conway-based Home BancShares ranked 9th in the same category. Among community banks, Bear State Financial of Little Rock ranked 13th among banks with $1 billion to $5 billion in assets.

Nationally, Capital One Financial Corp. placed first among the largest banks, with more than $50 billion in assets. Preferred Bank of Los Angeles finished first in the community bank category. To view the complete list, click here.

The Bank Performance Scorecard evaluates banks based on profitability, capitalization and asset quality. Banks that rank highly in the Scorecard are typically strong, well-balanced banks that are built to last: profitable and well-capitalized, with clean loan portfolios.

BANK OF FAYETTEVILLE ACQUIRED BY FARMERS AND MERCHANTS BANK OF STUTTGART: Bank of Fayetteville, Fayetteville’s oldest hometown bank, is being acquired by Farmers and Merchants Bankshares of Stuttgart to form a $1 billion financial institution with equity capital exceeding $142 million. The announcement was made in a press release issued after 10 p.m. Thursday (July 30) by Farmers and Merchants Bank President and CEO Gary Hudson and The Bank of Fayetteville President and CEO Mary Beth Brooks. Read more here.

YELLEN, FOMC CONTINUE INTEREST RATE DANCE: After stating last week following the Federal Open Market Meeting that the U.S. economy was “expanding moderately” in recent months, Fed Chairman Janet Yellen reaffirmed that the current 0 to 1/4 percent interest rate for the federal funds rate remains appropriate.

“This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments,” Yellen said in a statement. “The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.”

Following the policy meeting, the Wall Street Journal blog posted an interesting by-the-numbers infographic here on Yellen’s first 18 months running the Fed. On Saturday, the New York Times editorial board pushed out an op-ed called “Why the Economy Is Not Ready for an Interest Rate Increase.” The general consensus is now that the Fed will raise interest rates for the first time since June 2006 later this year, most likely in September.

AS WORLD WATCHES GREEK TRAGEDY, U.S. TERRITORY PUERTO RICO QUIETLY PLANS TO DEFAULT ON $72 BILLION DEBT: Puerto Rico government officials said on Friday that the U.S. commonwealth doesn’t have enough money on hand to pay the $58 million of principal and interest due on public finance bonds. The commonwealth is seeking to restructure its $72 billion debt with creditors, which would be one of the largest U.S. municipal bond restructurings since Detroit’s bankruptcy filing in 2013.

The Arkansas connection to the crisis is Home Bancshares FDIC-assisted takeover of the deposits and substantially all the assets of Doral Bank in the Florida Panhandle. Doral’s parent company, Doral Financial, was one of the first of several Puerto Rican bank failures as the island commonwealth’s economy began to shrink and the country’s debt load became unmanageable.

Home Bancshares’ Centennial subsidiary was able to pick up five Doral branch locations and other assets on the cheap for only $5.9 million. At the end of 2014, Doral had total assets of $5.9 billion, but U.S. taxpayers are now on the hook for nearly $750 million in losses the FDIC had to eat when the bank collapsed in February. To date, the Obama administration said it doesn’t plan to bailout the U.S. territory located in the northeastern Caribbean.

NATION’S ECONOMY ADVANCES BY 2.3%, THINGS RETURNING TO NORMAL, LOCAL ECONOMIST SAYS: The nation’s economy gained momentum from April through June as real gross domestic product in the U.S. rose 2.3% in the second quarter of 2015, according to the “advance” estimate released by the Bureau of Economic Analysis on Thursday. The new GDP report shows that second quarter growth is well ahead of the revised 0.6% real GDP growth in the first quarter, but slightly behind the final GDPNow model forecast of 2.4% projected by the Atlanta Fed on July 27.