State's reserve ratio ties for second in region.
Banks maintain a reserve adequate to absorb estimated credit losses associated with their loan and lease portfolios. The ratio is a percentage of a bank's outstanding loans.
Therefore, on average, banks in Arkansas reserved 1.47 percent of outstanding loan value as a hedge against potential losses.
As of Sept. 30, Fayetteville's Signature Bank of Arkansas had a loan-loss ratio of 1.25 percent; Springdale's Legacy National Bank had a ratio of 1.24 percent; the Bank of Rogers had a ratio of 1.02 percent; and Bentonville's Pinnacle Bank had a ratio of 1 percent.
The collective reserve ratio for the U.S. Federal Reserve Bank's 8th District, which includes all of Arkansas and parts of six other states, was 1.35 percent.
Arkansas ranked as the second highest in reserve for the district in a tie with Indiana. The two were just below Kentucky's 1.49 percent ratio and above the U.S. average of 1.35 percent.
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|Article Type:||Brief Article|
|Date:||Feb 13, 2006|
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