Arkansas Banks Reserve 2 Percent in 4Q 2012
by March 4, 2013 12:00 am 78 views
According to the most recent data available from the U.S. Federal Reserve Bank’s Eighth District, Arkansas banks had a collective loan loss ratio average of 2 percent in the fourth quarter of 2012, a 0.16 percent decline from the same quarter in 2011.
Banks carry a reserve that is adequate to offset estimated credit losses associated with their loan and lease portfolios. The ratio is a percentage of a bank’s outstanding loans.
So, on average, Arkansas banks reserved 2 percent of outstanding loan value to protect against potential losses. That ratio is just ahead of Missouri banks among the seven states in the Eighth District.
Arkansas is the only state wholly in the Eighth District. The other six states are partially in the Eighth and partially in another.
The most current data from the Federal Deposit Insurance Corp. is through the third quarter of 2012, which ended Sept. 30.
At that time, loan loss ratios were 2.58 percent at Farmers Bank of Greenwood, 2.44 percent at Simmons First Bank of Northwest Arkansas, 2.43 percent at Fayetteville-chartered Arvest Bank and 2.32 percent at Legacy National Bank of Springdale.