“Our results for the second quarter of 2022 were highlighted by an increase in net interest income generation and net interest margin expansion,” said
“We continue to strengthen our core funding mix with non-interest bearing deposits increasing 25.0% compared to a year ago, and representing 33.9% of total deposits at quarter end,” said
Second Quarter 2022 Financial Highlights:
- Second quarter net income was
$1.79 million , or$1.79 per diluted share, compared to$2.08 million , or$2.14 per diluted share, in the second quarter of 2021. - Annualized return on average assets was 0.81%, compared to 1.04% in the second quarter a year ago.
- Annualized return on average equity was 9.28%, from 10.95% in the second quarter a year ago.
- Second quarter net interest margin (“NIM”) expanded 31 basis points to 3.87%, compared to 3.56% in the second quarter a year ago.
- There was no provision for loan losses in the second quarter of 2022, or the second quarter of 2021.
- Net loans increased 10.2% to
$709.3 million atJune 30, 2022 , compared to$643.6 million atJune 30, 2021 . - Total deposits increased 13.4% to
$778.1 million atJune 30, 2022 , compared to$685.9 million a year ago. - Noninterest bearing deposits increased 25.0% to
$264.1 million atJune 30, 2022 , compared to$211.3 million a year ago. - Nonperforming assets totaled
$185,000 , or 0.02% of total assets atJune 30, 2022 , compared to almost nil, or 0.00% of total assets, atJune 30, 2021 . - Book value per common share was
$76.61 atJune 30, 2022 , from$79.91 a year ago. - Total risk-based capital ratio was 12.59% and the Tier 1 leverage ratio was 10.22% for the Bank at
June 30, 2022 .
Income Statement
The Company’s NIM expanded 31 basis points to 3.87% in the second quarter of 2022, compared to 3.56% in the second quarter of 2021. In the first six months of 2022, the NIM was 3.72%, compared to 3.69% in the first six months of 2021.
“The changes we made in our investments and funding mix over the last several quarters continue to reduce our dependency on brokered CDs, internet
Net interest income increased 20.0% to
Noninterest income was
Noninterest expense increased to
Balance Sheet
Total assets increased 10.5% to
Loans, net of allowance for loan losses, increased 10.2% to
“Loan growth was robust during the quarter, increasing 4.2% over the three-month period, or 16.8% annualized. Our team has done an excellent job with new loan originations, and we anticipate this trend to continue with strong demand for 1-4 family loans,” said
Total deposits increased 13.4% to
FHLB advances continue to decline, totaling
Credit Quality
“Asset quality remains strong, and we continue to focus on maintaining a moderate risk profile,” said Maland. Due to sound credit quality and a strong allowance for loan losses, the Company reported no provision for loan losses in the second quarter of 2022, the first quarter of 2022, or the second quarter of 2021.
Nonperforming loans totaled
The allowance for loan losses was
Capital
The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio estimate of 10.22%, Common equity Tier 1 capital ratio of 11.54%, Tier 1 risk-based capital ratio of 11.54% and Total capital ratio of 12.59%, at
Recent Developments
Earlier this year, the Company announced plans to launch a new market employing bilingual staff as it increases its efforts to better serve
“The Latino community has grown to become the largest minority community in the region and
During the first quarter of 2022, the Company opened its seventh market, located at
During the fourth quarter of 2021, the Company opened its sixth market, located in
About
About the Region
Recently, the Company has expanded into
The Company currently operates two markets in
The housing market in
Washington County’s population is projected to grow 4.52% from 2022 through 2027, and median household income is projected to increase by 8.35% during the same time frame. Benton County’s population is projected to grow 5.89% from 2022 through 2027, and median household income is projected to increase by 11.08%. Monroe County’s population is projected to decrease by 7.25% from 2022 through 2027 and median household income is projected to increase by 11.05%. Boone County’s population is projected to grow 0.37% from 2022 through 2027 and median household income is projected to increase by 12.48%. Craighead County’s population is projected to grow 4.13% from2022 through 2027, and the median household income is projected to increase by 4.13%.
Sources:
http://www.nwarealtors.org/market-statistics/
https://www.capitaliq.spglobal.com/
Forward Looking Statements
This press release contains statements about future events. These forward-looking statements, which are based on certain assumptions of management of the Company and the Bank and describe our future plans, strategies and expectations, can generally be identified by use of forward-looking terminology such as “may,” “will,” “believe,” “plan,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions or the negative of those terms. Our ability to predict results of future events and the actual effect of future plans or strategies are inherently uncertain and actual results may differ materially from those predicted in such forward-looking statements. Factors that could have a material adverse effect on our operations and future prospects or that could affect the outcome of such forward-looking statements include, but are not limited to, changes in interest rates; the economic health of the local real estate market; general economic conditions; credit deterioration in our loan portfolio that would cause us to increase our allowance for loan losses; legislative or regulatory changes; technological developments; monetary and fiscal policies of the
CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||||||||
ASSETS | ||||||||||||
Cash and cash equivalents | $ | 50,573,165 | $ | 90,266,129 | $ | 40,901,895 | ||||||
Investment securities | 95,838,246 | 85,467,563 | 87,703,034 | |||||||||
Loans held for sale | 850,823 | 1,071,950 | 4,754,632 | |||||||||
Loans, net of allowance for loan losses | 709,314,619 | 680,309,888 | 643,628,102 | |||||||||
Premises and equipment, net | 28,190,083 | 27,647,249 | 24,531,056 | |||||||||
Foreclosed assets held for sale | - | 550,100 | 100 | |||||||||
Accrued interest receivable | 2,277,196 | 2,122,175 | 2,171,138 | |||||||||
Deferred income taxes | 3,725,608 | 2,907,803 | 1,863,572 | |||||||||
Other investments | 3,112,208 | 3,201,021 | 2,896,985 | |||||||||
Other assets | 2,217,851 | 2,085,714 | 2,288,891 | |||||||||
Total Assets | $ | 896,099,799 | $ | 895,629,592 | $ | 810,739,405 | ||||||
LIABILITIES & STOCKHOLDERS' EQUITY | ||||||||||||
Deposits: | ||||||||||||
Demand and non-interest-bearing | $ | 264,120,048 | $ | 264,274,031 | $ | 211,286,665 | ||||||
Savings and interest-bearing transaction accounts | 338,840,798 | 327,938,288 | 273,230,907 | |||||||||
Time deposits | 175,145,169 | 184,455,754 | 201,376,123 | |||||||||
Total deposits | 778,106,015 | 776,668,073 | 685,893,695 | |||||||||
10,851,757 | 10,933,627 | 16,843,983 | ||||||||||
Notes payable | 10,810,660 | 10,804,347 | 10,785,412 | |||||||||
Accrued interest payable | 131,828 | 305,509 | 227,688 | |||||||||
Other liabilities | 19,973,364 | 18,917,083 | 19,555,885 | |||||||||
Total Liabilities | 819,873,624 | 817,628,639 | 733,306,663 | |||||||||
Stockholders' equity: | ||||||||||||
Common stock | 10,039 | 10,012 | 9,763 | |||||||||
Surplus | 89,091,965 | 88,767,186 | 88,115,762 | |||||||||
Accumulated deficit | (6,042,971 | ) | (6,833,041 | ) | (10,844,363 | ) | ||||||
(563,441 | ) | (563,441 | ) | (433,365 | ) | |||||||
Accumulated other comprehensive (loss) income | (6,269,417 | ) | (3,379,763 | ) | 584,945 | |||||||
Total stockholders' equity | 76,226,175 | 78,000,953 | 77,432,742 | |||||||||
Total Liabilities and Stockholders' Equity | $ | 896,099,799 | $ | 895,629,592 | $ | 810,739,405 | ||||||
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | ||||||||||
For the Three Months Ended | ||||||||||
2022 | 2022 | 2021 | ||||||||
Interest income: | ||||||||||
Loans, including fees | $ | 8,539,519 | $ | 7,782,702 | $ | 7,686,752 | ||||
Investment securities | 443,419 | 381,916 | 335,534 | |||||||
Federal funds sold and other | 121,771 | 26,019 | 10,044 | |||||||
Total interest income | 9,104,709 | 8,190,637 | 8,032,330 | |||||||
Interest expense: | ||||||||||
Deposits | 642,622 | 660,966 | 897,065 | |||||||
58,483 | 66,905 | 101,616 | ||||||||
Notes payable | 167,874 | 167,874 | 167,874 | |||||||
Federal funds purchased and other | - | - | - | |||||||
Total interest expense | 868,979 | 895,745 | 1,166,555 | |||||||
Net interest income | 8,235,730 | 7,294,892 | 6,865,775 | |||||||
Provision for loan losses | - | - | - | |||||||
Net interest income after provision for loan losses | 8,235,730 | 7,294,892 | 6,865,775 | |||||||
Non-interest income: | ||||||||||
Service charges and fees on deposits | 123,432 | 130,114 | 126,017 | |||||||
Wealth management fee income | 632,367 | 624,926 | 561,092 | |||||||
Secondary market fee income | 397,351 | 402,249 | 666,363 | |||||||
Loss on sales and write-downs of foreclosed assets | 9,520 | (161,000 | ) | - | ||||||
Other non-interest income | 414,046 | 344,150 | 280,525 | |||||||
Total non-interest income | 1,576,716 | 1,340,439 | 1,633,997 | |||||||
Non-interest expense: | ||||||||||
Salaries and benefits | 4,933,794 | 4,639,448 | 3,831,206 | |||||||
Occupancy and equipment | 815,223 | 762,869 | 583,330 | |||||||
Data processing | 517,583 | 740,013 | 344,373 | |||||||
Marketing and business development | 382,409 | 289,693 | 203,134 | |||||||
Professional services | 420,007 | 465,147 | 362,274 | |||||||
Other non-interest expense | 357,930 | 311,094 | 356,396 | |||||||
Total non-interest expense | 7,426,946 | 7,208,264 | 5,680,713 | |||||||
Income before income taxes | 2,385,500 | 1,427,067 | 2,819,059 | |||||||
Income tax provision | 600,433 | 352,206 | 742,044 | |||||||
Net income | $ | 1,785,067 | $ | 1,074,861 | $ | 2,077,015 | ||||
Earnings per share: | ||||||||||
Basic | $ | 1.79 | $ | 1.08 | $ | 2.14 | ||||
Diluted | $ | 1.79 | $ | 1.08 | $ | 2.14 | ||||
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | ||||||
Six Months Ended | ||||||
2022 | 2021 | |||||
Interest income: | ||||||
Loans, including fees | $ | 16,322,221 | $ | 15,545,683 | ||
Investment securities | 825,335 | 701,336 | ||||
Federal funds sold and other | 147,790 | 15,427 | ||||
Total interest income | 17,295,346 | 16,262,446 | ||||
Interest expense: | ||||||
Deposits | 1,303,588 | 1,899,889 | ||||
125,388 | 205,365 | |||||
Notes payable | 335,748 | 335,748 | ||||
Federal funds purchased and other | - | 2,109 | ||||
Total interest expense | 1,764,724 | 2,443,111 | ||||
Net interest income | 15,530,622 | 13,819,335 | ||||
Provision for loan losses | - | - | ||||
Net interest income after provision for loan losses | 15,530,622 | 13,819,335 | ||||
Non-interest income: | ||||||
Service charges and fees on deposits | 253,546 | 252,281 | ||||
Wealth management fee income | 1,257,293 | 1,067,131 | ||||
Secondary market fee income | 799,600 | 1,588,220 | ||||
Loss on sales and write-downs of foreclosed assets | (151,480 | ) | - | |||
Other non-interest income | 758,196 | 461,853 | ||||
Total non-interest income | 2,917,155 | 3,369,485 | ||||
Non-interest expense: | ||||||
Salaries and benefits | 9,573,242 | 7,863,787 | ||||
Occupancy and equipment | 1,578,092 | 1,227,363 | ||||
Data processing | 1,257,596 | 930,772 | ||||
Marketing and business development | 672,102 | 272,942 | ||||
Professional services | 885,154 | 1,299,077 | ||||
Other non-interest expense | 669,024 | 700,314 | ||||
Total non-interest expense | 14,635,210 | 12,294,255 | ||||
Income before income taxes | 3,812,567 | 4,894,565 | ||||
Income tax provision | 952,639 | 1,264,725 | ||||
Net income | $ | 2,859,928 | $ | 3,629,840 | ||
Earnings per share: | ||||||
Basic | $ | 2.88 | $ | 3.75 | ||
Diluted | $ | 2.88 | $ | 3.75 | ||
SUPPLEMENTAL INFORMATION | ||||||||||||||||
(Unaudited) | (Audited) | |||||||||||||||
Three Months Ended | Year ended | |||||||||||||||
2022 | 2022 | 2021 | 2021 | |||||||||||||
Earnings per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Net income available to common shareholders' | $ | 1,785,067 | $ | 1,074,861 | $ | 2,077,015 | $ | 7,050,823 | ||||||||
Denominator: | ||||||||||||||||
Weighted average common shares outstanding | 994,996 | 992,299 | 969,060 | 975,058 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Stock options | 499 | 470 | - | - | ||||||||||||
Weighted average common shares | ||||||||||||||||
outstanding - assuming dilution | $ | 995,495 | $ | 992,769 | $ | 969,060 | $ | 975,058 | ||||||||
Basic earnings per common share | $ | 1.79 | $ | 1.08 | $ | 2.14 | $ | 7.23 | ||||||||
Diluted earnings per common share | $ | 1.79 | $ | 1.08 | $ | 2.14 | $ | 7.23 | ||||||||
Profitability: | ||||||||||||||||
Numerator: | ||||||||||||||||
Net income | $ | 1,785,067 | $ | 1,074,861 | $ | 2,077,015 | $ | 7,050,823 | ||||||||
Denominator: | ||||||||||||||||
Average total assets for period | 887,698,554 | 861,905,507 | 804,426,762 | 806,437,028 | ||||||||||||
Average total equity for period | 77,135,728 | 79,758,478 | 76,082,454 | 77,002,249 | ||||||||||||
Return on average assets | 0.81 | % | 0.51 | % | 1.04 | % | 0.87 | % | ||||||||
Return on average equity | 9.28 | % | 5.47 | % | 10.95 | % | 9.16 | % | ||||||||
Efficiency Ratio: | ||||||||||||||||
Numerator: | ||||||||||||||||
Net interest income | $ | 8,235,730 | $ | 7,294,892 | $ | 6,865,775 | $ | 28,269,337 | ||||||||
Non-interest income | 1,576,716 | 1,340,439 | 1,633,997 | 6,588,205 | ||||||||||||
Total Income | $ | 9,812,446 | $ | 8,635,331 | $ | 8,499,772 | $ | 34,857,542 | ||||||||
Denominator: | ||||||||||||||||
Non-interest expense | $ | 7,426,946 | $ | 7,208,264 | $ | 5,680,713 | $ | 25,345,327 | ||||||||
Efficiency ratio | 75.69 | % | 83.47 | % | 66.83 | % | 72.71 | % | ||||||||
(Unaudited) | (Audited) | |||||||||||||||
2022 | 2022 | 2021 | 2021 | |||||||||||||
Asset Quality: | ||||||||||||||||
Net (recoveries) charge-offs | $ | (49,997 | ) | $ | (10,567 | ) | $ | (3,076 | ) | $ | 461,663 | |||||
Classified assets | 484,483 | 1,080,354 | 4,339,548 | 5,434,111 | ||||||||||||
Nonperforming loans | 184,570 | 113,616 | - | 220,616 | ||||||||||||
Nonperforming assets | 184,570 | 663,716 | 100 | 932,326 | ||||||||||||
Total nonperforming loans to total loans | 0.03 | % | 0.02 | % | 0.00 | % | 0.03 | % | ||||||||
Total nonperforming loans to total assets | 0.02 | % | 0.01 | % | 0.00 | % | 0.03 | % | ||||||||
Total nonperforming assets to total assets | 0.02 | % | 0.07 | % | 0.00 | % | 0.11 | % | ||||||||
INTEREST INCOME AND EXPENSE (Unaudited) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
2022 | 2021 | ||||||||||||||||||
Average | Average | Average | Average | ||||||||||||||||
Balance | Interest | Yield/Rate | Balance | Interest | Yield/Rate | ||||||||||||||
Interest-earning assets: | |||||||||||||||||||
Federal funds sold and other | $ | 62,514,372 | $ | 121,771 | 0.78 | % | $ | 47,437,924 | $ | 10,044 | 0.08 | % | |||||||
Investment securities | 94,260,851 | 443,419 | 1.89 | % | 75,797,411 | 335,534 | 1.78 | % | |||||||||||
Loan receivable (1) | 697,638,767 | 8,539,519 | 4.91 | % | 650,413,942 | 7,686,752 | 4.74 | % | |||||||||||
Total interest-earning assets | 854,413,990 | $ | 9,104,709 | 4.27 | % | 773,649,277 | $ | 8,032,330 | 4.16 | % | |||||||||
Noninterest-earning assets | 33,284,564 | 30,777,485 | |||||||||||||||||
Total assets | $ | 887,698,554 | $ | 804,426,762 | |||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||
Interest-bearing deposits | $ | 506,565,372 | $ | 642,622 | 0.51 | % | $ | 483,238,851 | $ | 897,065 | 0.74 | % | |||||||
FHLB advances & Fed Funds Purchased | 10,879,395 | 58,483 | 2.16 | % | 16,880,488 | 101,616 | 2.41 | % | |||||||||||
Notes payable | 10,807,745 | 167,874 | 6.23 | % | 10,782,153 | 167,874 | 6.24 | % | |||||||||||
Total interest-bearing liabilities | 528,252,512 | $ | 868,979 | 0.66 | % | 510,901,492 | $ | 1,166,555 | 0.92 | % | |||||||||
Noninterest-bearing liabilities | 282,310,314 | 217,442,816 | |||||||||||||||||
Total liabilities | 810,562,826 | 728,344,308 | |||||||||||||||||
Stockholders' equity | 77,135,728 | 76,082,454 | |||||||||||||||||
Total liabilities and stockholders' equity | $ | 887,698,554 | $ | 804,426,762 | |||||||||||||||
Net interest-earning assets | $ | 326,161,478 | $ | 262,747,785 | |||||||||||||||
Net interest spread | $ | 8,235,730 | 3.61 | % | $ | 6,865,775 | 3.25 | % | |||||||||||
Net interest margin | 3.87 | % | 3.56 | % | |||||||||||||||
(1) | Origination fee income and costs are generally recognized in earnings when incurred which, in our opinion does not produce results that differ materially from recognizing the fees and costs over the life of the loan as required by GAAP. | ||||||||||||||||||
INTEREST INCOME AND EXPENSE (Unaudited) | |||||||||||||||||||
Six Months Ended | |||||||||||||||||||
2022 | 2021 | ||||||||||||||||||
Average | Average | Average | Average | ||||||||||||||||
Balance | Interest | Yield/Rate | Balance | Interest | Yield/Rate | ||||||||||||||
Interest-earning assets: | |||||||||||||||||||
Federal funds sold and other | $ | 56,691,768 | $ | 147,790 | 0.53 | % | $ | 37,951,724 | $ | 15,427 | 0.08 | % | |||||||
Investment securities | 90,422,018 | 825,335 | 1.84 | % | 73,216,203 | 701,336 | 1.93 | % | |||||||||||
Loan receivable (1) | 693,829,458 | 16,322,221 | 4.74 | % | 644,939,642 | 15,545,683 | 4.86 | % | |||||||||||
Total interest-earning assets | 840,943,244 | $ | 17,295,346 | 4.15 | % | 756,107,569 | $ | 16,262,446 | 4.34 | % | |||||||||
Noninterest-earning assets | 33,687,594 | 30,560,913 | |||||||||||||||||
Total assets | $ | 874,630,838 | $ | 786,668,482 | |||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||
Interest-bearing deposits | $ | 504,926,819 | $ | 1,303,588 | 0.52 | % | $ | 476,269,326 | $ | 1,899,889 | 0.80 | % | |||||||
FHLB advances & Fed Funds Purchased | 11,527,880 | 125,388 | 2.19 | % | 19,919,473 | 207,474 | 2.10 | % | |||||||||||
Notes payable | 10,804,509 | 335,748 | 6.27 | % | 10,778,671 | 335,748 | 6.28 | % | |||||||||||
Total interest-bearing liabilities | 527,259,208 | $ | 1,764,724 | 0.67 | % | 506,967,470 | $ | 2,443,111 | 0.97 | % | |||||||||
Noninterest-bearing liabilities | 268,931,772 | 204,326,933 | |||||||||||||||||
Total liabilities | 796,190,980 | 711,294,403 | |||||||||||||||||
Stockholders' equity | 78,439,858 | 75,374,079 | |||||||||||||||||
Total liabilities and stockholders' equity | $ | 874,630,838 | $ | 786,668,482 | |||||||||||||||
Net interest-earning assets | $ | 313,684,036 | $ | 249,140,099 | |||||||||||||||
Net interest spread | $ | 15,530,622 | 3.47 | % | $ | 13,819,335 | 3.37 | % | |||||||||||
Net interest margin | 3.72 | % | 3.69 | % | |||||||||||||||
(1) | Origination fee income and costs are generally recognized in earnings when incurred which, in our opinion does not produce results that differ materially from recognizing the fees and costs over the life of the loan as required by GAAP. |
Contact: | 479-684-3754 |
Source:
2022 GlobeNewswire, Inc., source