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No Deal in Pinnacle Bank’s Proposed Sale of Forrest City Financial

1 min read

Ongoing balance sheet issues at Pinnacle Bank of Rogers led to the demise of a proposed $2.75 million acquisition in East Arkansas. Cross County Bancshares Inc. of Wynne withdrew its application to purchase Forrest City Financial Corp. on Oct. 3.

The apparent sticking point was regulatory concerns by the Federal Reserve regarding Cross County’s 6 percent ownership stake in Pinnacle’s parent company.

Pinnacle Bank is carrying nearly $21.2 million of property recovered from bad real estate loans.

That OREO pushed the $90.4 million-asset lender’s first quarter Texas Ratio to 218, which ranked No. 39 among all lenders.

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.

Since 2005, Pinnacle Bank has lost more than $7 million. Its total equity capital stands at $9.2 million.

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