Chambers Posts $22 Million Loss

More than $27 million in charge-offs and a boost to its loan loss provisions led to a net operating loss of $22.1 million in the second-quarter for Chambers Bank of Danville.

The bank moved $25.17 million into provisions for loan and lease losses during the quarter, ended June 30, according to its call report filed with the Federal Deposit Insurance Corp.

Almost all of the charge-offs are due to real estate loans in Northwest Arkansas that went bad, said John Ed Chambers III, chairman of Chambers Bancshares Inc.

Chambers wouldn’t discuss specific loans, but it has been previously reported that the bank has more than $10.37 million in claims tied to Fayetteville developer John David Lindsey’s Chapter 7 bankruptcy filed in February, and about $6.65 million in claims tied to Chapter 11 bankruptcies filed by Rogers developer Bill Schwyhart under the Pinnacle Point Properties LLC umbrella in April. It’s unclear if those claims are part of the bank’s second-quarter charge-offs.

“We got hammered on a few large loans,” Chambers said. “We’re still one of the strongest banks in Arkansas based on capital.”

Chambers Bank has $74.4 million in tier 1 capital with a ratio of 9.62 percent. Chambers wants to keep it close to a 10 percent ratio.

Chambers expects it will take 18 to 20 months for the bank to recover the losses. The bank has never had a year in the red, he said.

Chambers Bank has $37.3 million in loans that are in nonaccrual status, about 6 percent of its total loan portfolio. There were $7.3 million in the bank’s 30-89 day past due column, but no loan value in its 90 days past due column.

As of March 31, Chambers had 20 branches in nine counties. There are six branches in Washington County and one in Benton County. The bank’s assets were $782.1 million with deposits of $678.5 million.