By Roby Brock
While the “cash for clunkers” automobile program is ending Monday, a
variation is starting at the state level. As part of the previously
passed economic stimulus bill, Congress also authorized $300 million for rebates on purchases of energy-efficient appliances, such as refrigerators, dishwashers, washers and dryers, and heating and cooling units.
The state of Arkansas received $2.7 million for the program and will begin doling out the rebates by the end of this year. State officials say the types of appliances and the actual dollar amount of rebates have not been set.
The new “cash for clunkers” program is aimed at promoting purchases of new appliances that will reduce energy use. The incentive could boost consumer spending for retail outlets and manufacturing activity for companies like Whirlpool and Rheem.
Dillard’s reports big second-quarter loss
Dillard’s Inc. announced a second quarter loss of $26.7 million compared to a $38.3 million loss one year ago. Revenue for the Little Rock-based mall retailer fell to $1.43 billion during the quarter compared to $1.61 billion one year ago. Merchandise sales fell 15% during the reporting period compared to the previous year. Same-store sales slid 13 percent.
Acxiom CEO: Revenue growth top priority
Acxiom Corp. held its annual shareholders’ meeting reappointing four of its board of directors and retaining its accounting firm, KPMG.
Other than that, it was a pretty boring meeting and that’s just how Acxiom CEO John Meyer likes it.
“It’s my job to keep it nice and boring,” Meyer said before the meeting started. Meyer made a presentation to the shareholder group against the backdrop of Acxiom’s 40th year of business. He said that growing revenue was a top priority. Although Acxiom’s earnings nearly tripled last year, revenue for the database marketer fell 7.7 percent.
State banks profitable; trouble spots remain
An investment banking company based in Austin, Texas, reported Tuesday that Arkansas banks are in good shape, but noted some concern with banks in the Fort Smith and Jonesboro areas.
Sheshunoff & Co. Investment Banking said all Arkansas banks combined have a greater profitability than the national median, with three of the state’s five largest markets reporting a median return on assets – ROA, a key measurement in the banking sector – in excess of 1 percent.
“The national average is 56 basis points, and including all banks in Arkansas, the median ROA is still an astounding 91 basis points,” noted Gary Kennedy, director of mergers and acquisitions for Sheshunoff and author of the report on Arkansas banks.
The report said the state’s banks on average have reserve ratios for potential bad loans higher than the national median of 1.56 percent.
“Of concern in this area are two MSAs, Fort Smith and Jonesboro, with a median reserve of less than 1.10 percent,” the report said.
Metropolitan restructures loans
Little Rock-based Metropolitan National Bank has restructured more than $121 million in loans in the first two quarters of 2009 and 63 percent of those loans were current as of June 30, according to an updated filing with the Federal Deposit Insurance Corp. on Aug. 14.
The bank still faces more than $144 million in loans overdue by more than 90 days, which comprises about 14 percent of the bank’s total loan portfolio. While the toxic loan ratio is not as high as previously reported, analysts say it is still well above industry standards of 3 percent or lower.
This week, federal regulators revealed that Rogers Bancshares Inc., a registered holding company for Metropolitan National Bank, came under an enforcement action from the Federal Reserve Bank on Aug. 6. Rogers Bancshares has 60 days to submit an acceptable written plan to maintain sufficient capital at the holding company level, as well as the bank, which must stand on its own as a legal entity. Metropolitan National Bank reported a $32.5 million loss in its most recent quarter.
Gerber Foods settles discrimination case
Gerber Foods in Fort Smith has agreed to a $900,000 settlement in a hiring discrimination case brought by the U.S. Department of Labor.
Gerber settled findings of hiring discrimination against 1,912 rejected minority and female applicants for entry-level positions. The agreement settles the department’s allegations that Gerber engaged in hiring discrimination against minority and female applicants for one year.
Highway commission supports tolls on Bella Vista bypass
The Arkansas Highway Commission voted Wednesday to apply for federal highway stimulus money as partial funding for the Bella Vista bypass in Northwest Arkansas that also would include tolls. Under the application, which must be submitted by Sept. 15, the state will request $145.5 million of federal stimulus money. The remaining $79.5 million of the $225 million project would be paid for with toll revenue collected from motorists traveling the 15-mile stretch that would become Arkansas’ first toll road.
The amount of tolls that would be charged has not been decided, but state highway officials said it would likely be 10 cents to 15 cents a mile for a passenger car, or $1.50 to $2.25 for the full 15-mile length. Fuel-efficient cars, senior citizens and low-income travelers could qualify for discounts.
Lottery contracts awarded
Contracts for the Arkansas Lottery’s bank business and a third-party testing firm were awarded Wednesday. Little Rock-based Bank of the Ozarks received the high-profile banking contract, agreeing to charge no fees for handling the lottery’s business. The Patel Group was awarded the quality assurance testing contract and will serve as independent testers of lottery equipment to make sure devices work correctly and according to state law.
State jobless rate rises to 7.4 percent in July
Arkansas’ unemployment rose two-tenths of a percentage point in July to 7.4 percent, the state reported.
The unemployment rate last month was the highest since June 1992 when it reached 7.3 percent, state Department of Workforce Services spokeswoman Kimberly Friedman said.
The state jobless rate was 2 percentage points below the national rate, which dropped one-tenth of a percentage point to 9.4 percent last month.
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Roby Brock, a freelance journalist based in Little Rock, writes weekly for the Arkansas News Bureau. His weekly television program airs at 10 p.m. Sundays in Central and Northwest Arkansas. His e-mail address is roby@talkbusiness.net; his Web site address is www.talkbusiness.net.
