13 Lenders Produce ROE Of More Than 13 Percent

13 Lenders Produce ROE Of More Than 13 Percent

A baker’s dozen of Arkansas banks generated returns on equity that topped 13 percent during 2013. Positioned No. 1 among this profitable group is Riverside Bank, headquartered in Little Rock but chartered in Sparkman (Dallas County).

The $55.6 million-asset lender is a familiar name among the top performers.

“It was nothing special,” said Stephen Davis, Riverside’s chief executive officer. “We just happened to be at the top this time.”

Davis said Riverside enjoyed successful lending, buoyed by higher interest margins and declining cost of funds.

He pointed to the company’s “highly efficient” overhead (two locations supported by a staff of 18) as foundational to producing the nearly $1.7 million annual profit and an ROE of 21.25 percent.

“I don’t know if we can hit that number again,” Davis said. “We have good asset quality, and we focus pretty hard on that. We expect to have a good year in 2014, too.”

At the other end of the spectrum, six Arkansas banks recorded negative returns on equity and a combined $15 million loss for the year.

The six worst ROEs among Arkansas lenders in 2013 were:

• First Community Bank of Crawford County (Van Buren), -54.51 percent.

The $61.4 million-asset bank lost $2.4 million for the year and was operating under a supervisory agreement with regulators. First Community lost nearly $1.5 million during 2012 and was purchased earlier this year by First Bank of Hampton (Calhoun County).

• One Bank & Trust of Little Rock, -36.76 percent.

One Bank, which lost $6.6 million in 2013 and more than $4.2 million in 2012, is a participant in the TARP program, with $13.5 million outstanding. The disclosed financial condition of the $378 million-asset bank changed significantly after the Office of the Comptroller of the Currency ousted its CEO and 99.9 percent owner: Layton “Scooter” Stuart in 2012.

• Allied Bank of Mulberry (Crawford County), -22.22 percent.

Allied Bank, which is operating under a supervisory agreement with regulators, has recorded three successive annual losses after losing $3.1 million in 2013. Allied tallied a nearly $3.5 million loss during 2012, according to its restated year-end call report. The $138 million-asset lender lost $1.6 million in 2011.

• River Town Bank of Dardanelle, -13.92 percent.

The $156 million-asset lender, which changed its name from Bank of Dardanelle in 2006, recorded a $2.5 million loss in 2013 after producing a $245,000 profit in 2012.

• Forrest City Bank, -6.53 percent ROE.

The $54.5 million-asset bank, sanctioned twice by the OCC in 2010 and 2011, recorded a $313,000 loss during 2013 and a loss of $167,000 during 2012.

• Little River Bank of Lepanto (Poinsett County), -1.40 percent.

The $41.8 million-asset bank lost $62,000 last year and a made a $92,000 profit in 2012.