First Arkansas Bank and Trust: Overview of the bank
Established in the year 1949 and with its main office located in the city of Jacksonville which is located in the state of Arkansas, First Arkansas Bank and Trust is a mid-sized bank that has been operating for 73 years. The Federal Deposit Insurance Corporation has provided insurance to the bank since 1949. The FDIC is one of two governmental agencies that provides deposit insurance to American depositary institutions – the other is the National Credit Union Administration (NCUA). The FDIC’s mandate is mainly to insure deposits, but the agency also examines and supervises financial institutions and manages receiverships. The FDIC is also serves as the primary federal regulator for the bank. Mainly because of its relative size, geographic reach and presence, the bank is considered to be a community bank, instead of a national bank. Based on our estimates, we believe its asset base of $944 million ranks it in the 80th percentile of banks in the United States. First Arkansas Bank and Trust does not currently have any offices located outside of the United States, and functionally is a domestic bank. Within the U.S., the bank currently has 23 offices. Finally, the bank currently has a total employee base of 255 people.
Overview of the Bank’s Assets and Liabilities
The bank currently has total assets of $944 million, total net loans to customers of $560 million and total deposits outstanding of $757 million as of this writing. In total, 80% of the bank’s total assets are made up of domestic deposits, and domestic deposits also represent 100% of the bank’s deposit base. Overall, 79% of the bank’s domestic deposits are insured. Loans extended to customers of the bank currently comprise 61% of the bank’s total assets. Loans extended to customers for real estate purposes represented 56% of the total loans outstanding. In addition, 100% of real estate loans were domestic. First Arkansas Bank and Trust has $98 million of outstanding 1-4 family residential loans (mortgages), which in total represents 17% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 13% and 30% of loans outstanding, respectively. Credit Card debt represents 7% of loans outstanding.
Contact Information For First Arkansas Bank and Trust
- Main Office Address: 600 W. Main St., Jacksonville, AR 72076
- Website: www.fabandt.bank
- Total Number of Branches: 23
- Total Number of International Branches: None
- Number of Employees: 255
- FDIC Certificate Number: 16849
- FDIC Community Bank: Yes
- FDIC Field Office: Little Rock
- Independent or Subsidiary Bank: Independent
- Federal Reserve ID Number: 466240
- Bank Charter Class: NM
- Primary Regulator: FDIC
First Arkansas Bank and Trust has total assets of $944 million and over the past year its asset base has increased substantially, reporting an increase of 13.5%. Moving to the other side of the balance sheet, we see net loans of $560 million which compares with $534 million in the prior year. Therefore its clear that over the past year the bank’s net loans outstanding has reported an increase of 4.8%. Taking a closer look at the bank’s loan portfolio, we see that residential mortgages comprise 17% of the bank’s loan book. The bank has $98 million of residential mortgages outstanding, which compares with $106 million in the prior year. This implies a decrease of 8.2% over the past year. In addition, the bank provides loans to commercial and industrial businesses, which represents 30.0% of its total lending and stood at $172 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 1.0% of its total loan portfolio. Credit card-related lending represents 6.7% of the banks total lending. This represents the outstanding balance of credit cards that the bank has issued to its customers. Finally, the bank also engages in the provision of auto loans. These are loans provided to customers to help finance vehicle purchases. Auto loans represent 0.2% of the bank’s total lending.
Bank Liquidity and Funding
Liquidity and funding are two important considerations when evaluating a bank. It gives us a sense of how a bank finances its activities and can help both depositors and customers better understand a banks financial positioning. A large and growing deposit base is usually a good sign for a bank’s liquidity and funding. This is because customer deposits are often a cheap source of financing as many of those accounts do not pay interest or much interest. Looking at First Arkansas Bank and Trust, they have total customer deposits of $757 million which over the past year has registered an increase of 22.7%. The average bank in the country has a loan to deposit ratio of approximately 82%. In comparison, First Arkansas Bank and Trust has a loan to deposit ratio of 74% which is below the average. A lower ratio is generally better as it indicates that the lending activities of a bank are more comfortably covered by its deposit base. Deposits, as noted earlier, are usually a cost effective source of financing. Effectively all of the bank’s deposit base is funded by domestic sources.
Bank Performance and Capital Metrics
The above chart provides a brief summary of some of the key performance metrics for First Arkansas Bank and Trust. Next to these metrics are the equivalent for the average U.S. bank. Starting with its return on assets, over the past year it has improved. Importantly, on this metric we can also see that the bank is above the average bank. Return on assets tells us how productive a bank is being with its asset base. Moving on to the bank’s return on equity, which tells us how much of a return the bank has generated for its owners, over the past year it has improved. In addition, we can also see that the bank is above the average bank on this metric. Another metric that is helpful in contextualizing a bank’s return on equity is its leverage ratio. A lower ratio means that the bank has a higher reliance on borrowing to deliver its return on equity. In this case, the total leverage ratio is currently below the average U.S. bank, and has declined over the past year. Finally, we could not find First Arkansas Bank and Trust’s risk-weighted asset information for this period and therefore had to make some assumptions and estimates. We estimate that the bank had a tier 1 capital ratio of 16.0% which is below the average U.S. bank.
Conclusion: First Arkansas Bank and Trust
After factoring in all the relevant information and data, our final rating for First Arkansas Bank and Trust is 3.9 out of 5.0, which is very good. While for example, the bank shines when it comes to its net interest margin, which is above the national average, its total leverage is a downward force on its rating. On this metric, the bank is below the national average. As a reminder, our rating is based on our proprietary scoring system which uses data from an in-depth nationwide bank study we performed. None of the work presented is intended to be investment advice or advice of any sort and is presented purely for informational purposes.