Bank of Rison Poised for $5.4 Million Sale

by George Waldon  on Monday, Apr. 23, 2012 12:00 am  

Texas Ratios

Two Arkansas lenders generated Texas Ratios higher than 200 based on year-end numbers: Decatur State Bank at 208 and Little Rock's Metropolitan National Bank at 201. Lest we forget: The lower-is-better ratio was originally developed to analyze the credit quality of lenders during the financial meltdown of Texas banks and S&Ls during the 1980s.

The ratio compares the amount of loans at risk and the amount of owned real estate with the amount a lender has on hand to cover any losses, in the form of equity capital and loan loss reserves.

Both banks are operating under consent orders with bank regulators. Decatur State Bank's agreement with the Federal Deposit Insurance Corp. dates back to Nov. 18.

Other real estate owned, property recovered from failed mortgages, totaled $3.6 million at Decatur State Bank at Dec. 31. Total nonaccrual loans at the $165 million-asset lender amounted to almost $21 million.

Metropolitan recently entered a new, less restrictive consent order with the Office of the Comptroller of the Currency. It replaces the order the bank has operated under since May 22, 2008.

The new order covers five articles of improvement instead of the original seven. Higher capital ratios and fewer nonperforming assets are the bank's two areas most in need of improvement.

Metropolitan carried OREO valued at nearly $108.3 million on its books at year-end. Nonaccrual loans at the $1 billion-asset lender totaled $77.3 million.



Please read our comments policy before commenting.