Bank of England Leads Arkansas in Return on Equity

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

Which lenders headquartered in Arkansas produced the biggest bang for their investors during 2012?

Bank of England led the way as measured by return on average equity. 

BOE recorded a 31.3 percent ROE in 2012, powered by a net gain of $60.3 million from the sale of loans. The $270 million-asset lender reported a profit of $8.5 million for the year.

The gain from loan sales for the year more than doubled BOE’s 2011 total of $28.5 million.

Helping generate those loans is Eng Lending, a pipeline of 59 loan production offices the $270 million-asset bank operates in 26 states.

Those offices also boost the staff count at Bank of England to 615.

That’s more than double the size of the staff at First Financial Bank of El Dorado.

That $821.5 million-asset lender tallied a staff of 262 and net income of $27.2 million.

Bigger in asset size but with less overhead, First Financial produced a profit three times as large as Bank of England and an ROE of 22.8 percent, second highest among Arkansas lenders during 2012.

The head count differential between the two lenders is reflected in how much money was spent on salaries and benefits last year: 

  • Bank of England, more than $43.3 million.
  • First Financial, more than $17.3 million.

The associated increase in manpower helped the Bank of England more than double its 2011 profit of $4.1 million.

“We’ll probably grow 50 percent this year in terms of loan volume,” said Brad Canada, president of Eng Lending. “We’ll have 80 offices in 40 states by the end of the year.”

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.

Douglas County Bank was among 21 Georgia financial institutions with a Texas ratio of 200 plus. Florida was home to 11.

Of the 7,083 banks in the nation, only 2.9 percent had a Texas ratio above 100 at year-end. 

A total of 134 registered a Texas ratio between 100 and 200, and 183 banks scored between 50 and 99. 

Returns on Average Equity, 2012

Best ROE

  • Bank of England -- 31.34
  • First Financial Bank, El Dorado -- 22.85
  • Riverside Bank, Sparkman -- 20.02
  • First Security Bank, Searcy -- 20.01
  • Simmons First Bank, Jonesboro -- 18.95
  • Evolve Bank & Trust, West Memphis -- 16.26
  • Bank of the Ozarks, Little Rock -- 15.86
  • Union Bank, Mena -- 15.02
  • Simmons First Bank, Lake Village -- 14.21
  • Priority Bank, Ozark -- 14.09

Worst ROE

  • Bank of Rison -- -27.07
  • One Bank & Trust, Little Rock -- -13.00
  • First Community Bank, Van Buren -- -12.94
  • Signature Bank, Fayetteville -- -12.41
  • Forrest City Bank -- -3.71
  • Allied Bank, Mulberry -- -3.19
  • Metropolitan National Bank, Little Rock -- -2.96
  • First National Bank, Crossett -- -0.68
  • HomeBank of Arkansas, Portland -- -0.67
  • Simmons First Bank, Rogers -- 0.05

 

 

Please read our comments policy before commenting.
Search

Latest Arkansas Business Poll

Should the alcohol amendment remain on the ballot?