State?s Reserve Fourth in Region
by December 28, 2009 12:00 am 46 views
In the third quarter of 2009, Arkansas banks collectively had a loan-loss-reserve ratio of 1.80 percent, up from 1.40 percent in third quarter a year prior.
Banks maintain a reserve adequate to absorb estimated credit losses associated with their loan and lease portfolios. The ratio is a percentage of a bank’s outstanding loans.
Therefore, on average, banks in Arkansas reserved 1.80 percent of outstanding loan value as a hedge against potential losses, and was the fourth-highest in the U.S. Federal Reserve Bank’s Eighth District.
As of Sept. 30, the most recent data available from the Federal Deposit Insurance Corp., loan-loss ratios were 4.06 percent for Metropolitan National Bank of Little Rock, 1.51 percent at Jonesboro-chartered Liberty Bank of Arkansas, 1.58 percent at Searcy-based, First Security Bank and 2.04 percent at Bank of the Ozarks of Little Rock.
The collective reserve ratio for the Eighth District, which includes all of Arkansas and parts of six other states, was 2.11 percent. The U.S. average was 3.15 percent.