States Reserves Highest in Region
by October 29, 2012 12:00 am 55 views
According to the latest figures from the U.S. Federal Reserve Bank’s Eighth District, Arkansas banks collectively had a loan loss ratio average of 2.11 percent in the second quarter of 2012, down slightly from 2.16 percent for the same period in 2011.
Banks carry a reserve that is enough to offset estimated credit losses associated with their loan and lease portfolios. The ratio is a percentage of a bank’s outstanding loans.
The latest data, therefore, means Arkansas banks reserved 2.11 percent of outstanding loan value to protect against potential losses.
Arkansas and Missouris were the only banks in the Eighth District with a loan loss ratio higher than 2 percent in the second quarter of 2012.
Tennessee was second at 1.88 percent, down from 2.77 percent in the second quarter of 2011. Mississippi was third at 1.8 percent, down slightly from 1.84 percent.
Arkansas is the only state entirely in the Eighth District. The other six states are partially in the Eighth District and partially in another.
The Eighth District is composed of four zones, each of which is centered on one of four main cities — Little Rock, Louisville, Memphis and St. Louis.
As of June 30, the most current data from the Federal Deposit Insurance Corp. shows loan loss ratios were 4.35 percent at Chambers Bank of Danville, 6.99 percent at Decatur State Bank, 1.92 percent at Jonesboro-based Liberty Bank of Arkansas, and 4.89 percent at First Federal Bank, based in Harrison.