Western Bank Recovering Past Dues

We haven’t yet done a first quarter analysis of banks’ past due performances in Northwest Arkansas, but we got to wondering how some of them were handling the market.

One bank that’s hovered near the bottom of the past dues lists has been Booneville-based First Western Bank. At the end of 2008, nearly 9 percent of the bank’s loans were in the past due, nonaccrual or other real estate-owned categories and FWB had $14.1 million in OREO alone.

At the end of the first quarter, the ratio had fallen to about 8 percent and the bank’s OREO had been reduced to $12.4 million.

Chairman and CEO John Hampton said he and many of the bank’s regulators believe FWB is on the “back side” of its problems.

One thing the bank had stacked in its favor, it didn’t have much in the way of commercial loans, Hampton said. Most of its problems were directly related to homes and residential lots, the market of which seems to be recovering slowly.

Hampton said the first problems showed up two years ago come August, and that the bank has sold “40 to 50” homes in that time. Of the spec property it’s got on its books now, there are five subdivisions and four of those were active as of early July.

Hampton pointed out that FWB’s capital is strong and that close to 60 percent of its deposits come from the River Valley area, which continues to grow, albeit at a slower pace than the northwest corner of the state.