The second-quarter results continued in the red at two Little Rock banks doing business under regulatory agreements.
Operational losses are a long-running quarterly event at One Bank & Trust that date back nearly five years to the ouster of its former owner and CEO, Layton “Scooter” Stuart.
The fiscal fall at Heartland Bank is more recent and more precipitous. Coinciding with that was a board shake-up and leadership turnover that included Walter Quinn, the largest Heartland shareholder, exiting as chairman and a member of the board.
Heartland recorded a $3.9 million loss for the three months ending June 30. This follows a loss of $7.8 million posted by the $199 million-asset lender in the first quarter.
The combined loss through the first six months of more than $11.7 million exceeds Heartland’s net loss during all of 2016: nearly $7.9 million, with most of that loss accounted for in the fourth quarter.
The unprofitable second quarter further cut into Heartland’s total equity capital, which fell to $8.7 million after beginning the year at $20.4 million. Twenty-four months ago, that number stood at $34.8 million.
At year-end 2016, the bank’s tier one capital ratio stood at 8.9 percent with a total capital ratio of 10.2 percent. As of June 30, its tier one capital ratio had fallen to 4.3 percent, and the total capital ratio had dropped to 6.8 percent.
Two important numbers at Heartland didn’t change much between quarters. Total nonaccrual loans remained north of $23 million, and loan loss reserves totaled $5.3 million.
At One Bank, total nonaccrual loans were nearly $5.5 million and loan loss reserves totaled $3.1 million as of June 30.
The $284 million-asset lender reported a second-quarter loss of $574,000, which pushed its combined loss for the first half of the year to $2.2 million.
Backed by total equity capital of $9.5 million, One Bank sported a tier one capital ratio of 4.9 percent and a total capital ratio of less than 6.2 percent.
Both financial institutions have talked about raising capital to improve their balance sheets.
Neither CEO at the banks, Jerry Pavlas at One Bank and Judy Lawton at Heartland, could be reached for an update on those efforts and moves to stabilize operations.