In this slow economy, even banks are feeling the pinch. The FDIC shut down one northwest Arkansas bank system.
Arkansas National Bank, that had nine branches in the Bentonville area was shut down Friday.
The bank branches sat quiet and empty after the shut down. Arkansas National Bank had a loan loss of more than $100 million last year, making it a prime candidate for Federal take over.
Arkansas Business publisher Jeff Hankins says ANB was already on notice that the Feds weren't happy with their numbers. The northwest Arkansas market had slowed tremendously and ANB had just given too many loans.
Hankins says, "We knew ANB was in trouble. Last year out of 17 banking entities that were losing money ANB was one of them, the combined losses was $90-million, ANB was $80-million of that total."
Customers faced closed ATM’s over the weekend, but Monday morning were finally greeted with open doors, as another bank took over for the failed ANB.
Little Rock's own Pulaski Bank was already working on a private deal with the FDIC to take over ANB Financial; and have successfully done that. Monday morning they hired many of ANB's employees as their own.
Jerry Vascocu is Pulaski Bank's Little Rock market president. He says, "One of the things we've heard is relief from customers to see familiar faces in their banks this morning."
State Bank Commissioner Candace Franks put out an email to all bank presidents across the state today saying the "closing of ANB Financial in no way reflects a weakened condition of the Arkansas banking system. Most commercial banks in Arkansas remain well managed and in a strong position to withstand a downturn in the business cycle."
We interviewed the president of Metropolitan National Bank to ask him about banking security in Arkansas. Lunsford Bridges says it is very strong, in fact stronger than it's been in years. He says consumers should not worry about their money, but admits in his words 'they are weathering the storm of a slow economy.'
Bridges offered some tips for researching your own bank. He says there are three things they must have good numbers on those are: the strength of the bank’s capital, their earnings, and how deep their loan loss reserves are.
To see federal agency press releases and a statement from the Arkansas Bank Commissioner click on the links beneath the pictures.
