Wednesday, May 14, 2008

ANB Financial is Gone

ANB Financial, a bank out of Arkansas, was taken over by the Federal Deposit Insurance Corporation (FDIC), on May 9. The failure cost the FDIC $214 million.

An astounding 19.37% of assets were in nonaccrual status, as of 12/31/2007, with most of the problem loans in construction and land development. Another 3.1% were more than 30 days past due. By the end of March 2008, non accruals were at 35%.

Here are the capital ratios as of 03/31/2008.

Core capital (leverage) ratio - 1.89%
Tier 1 risk-based capital ratio - 2.1%
Total risk-based capital ratio - 3.5%

Just to demonstrate how quickly things can turn at financial institutions, here were the ratios just six months earlier.

Core capital (leverage) ratio -9.17%
Tier 1 risk-based capital ratio- 9.70%
Total risk-based capital ratio -10.97%

One item of note is that the bank actually reported a positive net income on its Schedule RI - Income Statement form that it files for the March quarter.

Another interesting item is that ANB Financial paid dividends right up until the end. In the year ending 12/31/2007, it paid $13.3 million in cash dividends.

The bank also received a capital infusion from the parent holding company during 2007, sometime before June in the amount of $29.5 million. It didn't help.

The press release is here at the FDIC site.

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