Reserve ratio in Arkansas is fourth in Eighth District
by April 23, 2019 3:57 pm 150 views
In the fourth quarter of 2018, Arkansas banks collectively had a loan loss reserve ratio of 1%. That’s down from a ratio of 1.23% in the fourth quarter of 2017.
Banks maintain a reserve adequate to absorb estimated credit losses associated with their loan and lease portfolio. The ratio is the percentage of a bank’s outstanding loans.
Therefore, on average, banks in Arkansas reserved 1% of outstanding loan value as a hedge against potential losses.
As of Dec. 31, Legacy National Bank of Springdale had a loan loss ratio of 1.7%; Chambers Bank of Danville had a ratio of 1.21%; and Anstaff Bank of Green Forest had a ratio of 1.18%.
The collective reserve ratio for the U.S. Federal Reserve Bank’s Eighth District, which includes all of Arkansas and parts of six other states, was 0.99%.
Arkansas ranked as the fourth highest in reserve for the district. Missouri is the top state in the district with a ratio of 1.20%.
Arkansas is the only state wholly in the Eighth District. The other six states are partially in the Eighth and partially in another district.