Bank of England Leads Arkansas in Return on Equity

by George Waldon  on Monday, Apr. 1, 2013 12:00 am  

Texas Ratio

Two Arkansas banks made a recent compilation of 70 lenders laboring under a Texas ratio north of 200.

But each is in a very different position.

The ratio compares the number 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.

Pinnacle Bank of Rogers registered a 206, No. 68 on the list. The $87.4 million-asset bank recorded a $156,000 profit during 2012.

Decatur State Bank, which in November was taken over by Chambers Bank of Danville through a DPC (debt previously contracted) acquisition, had a Texas ratio of 329, No. 27 on the list.

It Could Be Worse

It’s never a good thing to generate a triple-digit Texas ratio.

Things are especially grim when the equation produces enough numbers for a quartet.

Douglas County Bank of Douglasville, Ga., holds the unenviable No. 1 position, with a Texas ratio of 2,164.

The $316 million-asset bank has $11.1 million in non-accruing loans and $76.8 million in Other Real Estate Owned.

With combined capital and reserves of only $4.2 million and a loan loss provision of $1 million, things look grim.



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