FDIC to probe Arkley bank failure
The Covington, Louisiana bank owned by Eureka powerhouse Rob Arkley shut on March 12 and cost the fund $38.1 million. Investigations are required into any bank failure costing more than $25 million.
A report will be issued by the FDIC Inspector General within six months.
Sid Seymour, chief investigator with the state Office of Financial Institutions, said Statewide’s failure has caused state regulators to take note of other Louisiana banks with similar characteristics. Specifically, they are keeping an eye out for banks that experience rapid asset growth and those with significant concentrations in construction and development loans as well as commercial real estate, he said.
“If you look at the high risk assets that Statewide had … certainly we would have to look at other banks with similar portfolios,” Seymour said.