“Our second quarter results are a reflection of strength in our loan growth, capital levels and credit quality metrics,” said
“We have been very deliberate in our deposit gathering strategies, and entered these new markets in 2022 with the goal of building out our deposit base to fund new loan activity,” said
Second Quarter 2023 Financial Highlights:
- Second quarter net income was
$779,000 , or$0.78 per diluted share, compared to$1.79 million , or$1.79 per diluted share, in the second quarter of 2022. - Second quarter net interest margin (“NIM”) was 3.02%, compared to 3.87% in the second quarter a year ago.
- The Company recorded a
$225,000 provision for credit losses in the second quarter of 2023, compared to no provision in the second quarter of 2022. - Net loans increased 21.7% to
$863.5 million atJune 30, 2023 , compared to$709.3 million atJune 30, 2022 . - Nonperforming assets totaled
$93,000 , or 0.01% of total assets atJune 30, 2023 , compared to$185,000 , or 0.02% of total assets, atJune 30, 2022 . - Total deposits increased 14.2% to
$888.2 million atJune 30, 2023 , compared to$778.1 million a year ago. - Core deposits (demand and non-interest-bearing, and savings and interest-bearing transaction accounts) represent 62.8% of total deposits at
June 30, 2023 . - The Bank’s uninsured deposits totaled approximately 30.4% of total deposits at
June 30, 2023 , unchanged compared toMarch 31, 2023 . - Available borrowing capacity totaled
$364.8 million atJune 30, 2023 , compared to$325.1 million atMarch 31, 2023 . - Total risk-based capital ratio was 12.74% and the Tier 1 leverage ratio was 10.03% for the Bank at
June 30, 2023 . - Tangible book value per common share was
$74.36 atJune 30, 2023 , compared to$76.40 a year ago.
Income Statement
“The rising cost of funds outpaced earning asset yields, resulting in net interest margin contraction during the second quarter,” said
Net interest income was
Noninterest income decreased 8.4% to
Noninterest expense increased 2.3% to
Balance Sheet
Total assets increased 17.7% to a record
Loans, net of allowance for credit losses, increased 21.7% to
Total deposits increased 14.2% to
FHLB advances increased to
Credit Quality
“Asset quality remains pristine, as we remain focused on adhering to conservative underwriting standards in all credit cycles,” said
Beginning
The Company recorded a
Nonperforming assets totaled
The allowance for credit losses was
Capital
The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Total risk-based capital ratio estimate of 12.74%, Common equity Tier 1 capital ratio of 11.58%, Tier 1 risk-based capital ratio of 11.58% and Tier 1 leverage ratio of 10.03%, at
Recent Developments
The Company launched a new market, Banco Sí, to focus on and serve the Hispanic and Latino community. This new market was formed as a division of
During the first quarter of 2022, the Company opened its seventh market, located at
In the second quarter of 2022, the Company held its grand opening of the sixth market,
About
About the Region
The Company has expanded into
The Company currently operates two markets in
The housing market in
Washington County’s population is projected to grow 5.96% from 2023 through 2028, and median household income is projected to increase by 11.12% during the same time frame. Benton County’s population is projected to grow 8.05% from 2023 through 2028, and median household income is projected to increase by 11.31%. Monroe County’s population is projected to decrease by 6.07% from 2023 through 2028 and median household income is projected to increase by 15.34%. Boone County’s population is projected to grow 1.66% from 2023 through 2028 and median household income is projected to increase by 13.62%. Craighead County’s population is projected to grow 4.40% from 2023 through 2028, and the median household income is projected to increase by 17.69%.
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
Contact:
479-684-3754
CONSOLIDATED BALANCE SHEETS | |||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | 32,325,899 | $ | 87,179,713 | $ | 50,573,165 | |||||
Investment securities | 98,506,257 | 99,326,990 | 95,838,246 | ||||||||
Loans held for sale | 1,590,000 | 442,306 | 850,823 | ||||||||
Loans, net of allowance for credit losses | 863,509,798 | 838,864,382 | 709,314,619 | ||||||||
Premises and equipment, net | 29,790,308 | 28,563,926 | 28,190,083 | ||||||||
Foreclosed assets held for sale | - | - | - | ||||||||
Accrued interest receivable | 3,099,653 | 2,796,623 | 2,277,196 | ||||||||
Bank owned life insurance | 9,292,654 | 9,212,698 | 1,056,795 | ||||||||
Deferred income taxes | 4,987,791 | 4,560,952 | 3,725,608 | ||||||||
Other investments | 7,066,522 | 7,071,458 | 3,112,208 | ||||||||
Intangible assets, net | 2,121,458 | - | - | ||||||||
Other assets | 2,000,439 | 1,584,678 | 1,161,056 | ||||||||
TOTAL ASSETS | $ | 1,054,290,779 | $ | 1,079,603,726 | $ | 896,099,799 | |||||
LIABILITIES & STOCKHOLDERS' EQUITY | |||||||||||
Deposits: | |||||||||||
Demand and non-interest-bearing | $ | 243,548,686 | $ | 248,670,240 | $ | 264,120,048 | |||||
Savings and interest-bearing transaction accounts | 314,057,615 | 323,723,058 | 338,840,798 | ||||||||
Time deposits | 330,591,356 | 318,408,077 | 175,145,169 | ||||||||
Total deposits | 888,197,657 | 890,801,375 | 778,106,015 | ||||||||
38,017,682 | 64,102,204 | 10,851,757 | |||||||||
Notes payable | 26,286,079 | 25,420,217 | 10,810,660 | ||||||||
Lease right-of-use liability | 16,707,291 | 15,196,424 | 15,687,243 | ||||||||
Reserve for losses on unfunded commitments | 1,558,000 | 1,558,000 | 1,558,000 | ||||||||
Accrued interest payable | 1,936,295 | 1,605,248 | 131,828 | ||||||||
Other liabilities | 5,384,308 | 3,333,968 | 2,728,121 | ||||||||
TOTAL LIABILITIES | 978,087,312 | 1,002,017,436 | 819,873,624 | ||||||||
Stockholders' equity: | |||||||||||
Common stock | 10,084 | 10,084 | 10,039 | ||||||||
Surplus | 90,118,719 | 89,901,337 | 89,091,965 | ||||||||
Accumulated deficit | (5,051,992 | ) | (4,832,876 | ) | (6,042,971 | ) | |||||
(820,717 | ) | (711,145 | ) | (563,441 | ) | ||||||
Accumulated other comprehensive loss | (8,052,627 | ) | (6,781,110 | ) | (6,269,417 | ) | |||||
TOTAL STOCKHOLDERS' EQUITY | 76,203,467 | 77,586,290 | 76,226,175 | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,054,290,779 | $ | 1,079,603,726 | $ | 896,099,799 | |||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||
(Unaudited) | |||||||||
For the Three Months Ended | |||||||||
2023 | 2023 | 2022 | |||||||
INTEREST INCOME | |||||||||
Loans, including fees | $ | 11,302,782 | $ | 10,672,578 | $ | 8,539,519 | |||
Investment securities | 780,362 | 628,537 | 443,419 | ||||||
Federal funds sold and other | 431,607 | 276,739 | 121,771 | ||||||
Total interest income | 12,514,751 | 11,577,854 | 9,104,709 | ||||||
INTEREST EXPENSE | |||||||||
Deposits | 4,265,275 | 2,966,252 | 642,622 | ||||||
459,605 | 697,577 | 58,483 | |||||||
Notes payable | 394,464 | 396,260 | 167,874 | ||||||
Federal funds purchased and other | - | 33,425 | - | ||||||
Total interest expense | 5,119,344 | 4,093,514 | 868,979 | ||||||
NET INTERST INCOME | 7,395,407 | 7,484,340 | 8,235,730 | ||||||
Provision for credit losses | 225,000 | 150,000 | - | ||||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 7,170,407 | 7,334,340 | 8,235,730 | ||||||
NON-INTEREST INCOME | |||||||||
Service charges and fees on deposits | 146,434 | 151,043 | 123,432 | ||||||
Wealth management fee income | 638,436 | 517,514 | 632,367 | ||||||
Secondary market fee income | 140,961 | 66,773 | 397,351 | ||||||
Bank owned-life insurance income | 79,956 | 78,374 | 1,824 | ||||||
Loss on sales and write-downs of foreclosed assets | - | - | 9,520 | ||||||
Other non-interest income | 438,134 | 415,366 | 412,222 | ||||||
TOTAL NON-INTEREST INCOME | 1,443,921 | 1,229,070 | 1,576,716 | ||||||
NON-INTEREST EXPENSE | |||||||||
Salaries and benefits | 4,494,027 | 5,258,496 | 4,933,794 | ||||||
Occupancy and equipment | 950,581 | 891,980 | 815,223 | ||||||
Data processing | 745,330 | 658,111 | 517,583 | ||||||
Marketing and business development | 523,460 | 473,709 | 382,409 | ||||||
Professional services | 479,291 | 505,899 | 420,007 | ||||||
Other non-interest expense | 401,090 | 382,016 | 357,930 | ||||||
TOTAL NON-INTEREST EXPENSE | 7,593,779 | 8,170,211 | 7,426,946 | ||||||
Income before income taxes | 1,020,549 | 393,199 | 2,385,500 | ||||||
Income tax provision | 242,019 | 53,687 | 600,433 | ||||||
NET INCOME | $ | 778,530 | $ | 339,512 | $ | 1,785,067 | |||
EARNINGS PER SHARE | |||||||||
Basic | $ | 0.78 | $ | 0.34 | $ | 1.79 | |||
Diluted | $ | 0.78 | $ | 0.34 | $ | 1.79 | |||
CONSOLIDATED STATEMENTS OF INCOME | |||||||
(Unaudited) | |||||||
Six Months Ended | |||||||
2023 | 2022 | ||||||
INTEREST INCOME | |||||||
Loans, including fees | $ | 21,975,360 | $ | 16,322,221 | |||
Investment securities | 1,408,899 | 825,335 | |||||
Federal funds sold and other | 708,346 | 147,790 | |||||
Total Interest Income | 24,092,605 | 17,295,346 | |||||
INTEREST EXPENSE | |||||||
Deposits | 7,231,527 | 1,303,588 | |||||
1,157,182 | 125,388 | ||||||
Notes payable | 790,724 | 335,748 | |||||
Federal funds purchased and other | 33,425 | - | |||||
Total interest expense | 9,212,858 | 1,764,724 | |||||
NET INTERST INCOME | 14,879,747 | 15,530,622 | |||||
Provision for credit losses | 375,000 | - | |||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 14,504,747 | 15,530,622 | |||||
NON-INTEREST INCOME | |||||||
Service charges and fees on deposits | 297,477 | 253,546 | |||||
Wealth management fee income | 1,155,950 | 1,257,293 | |||||
Secondary market fee income | 207,734 | 799,600 | |||||
Bank owned life insurance income | 158,330 | 3,726 | |||||
Loss on sales and write-downs of foreclosed assets | - | (151,480 | ) | ||||
Other non-interest income | 853,500 | 754,470 | |||||
TOTAL NON-INTEREST INCOME | 2,672,991 | 2,917,155 | |||||
NON-INTEREST EXPENSE | |||||||
Salaries and benefits | 9,752,523 | 9,573,242 | |||||
Occupancy and equipment | 1,842,561 | 1,578,092 | |||||
Data processing | 1,403,441 | 1,257,596 | |||||
Marketing and business development | 997,169 | 672,102 | |||||
Professional services | 985,190 | 885,154 | |||||
Other non-interest expense | 783,106 | 669,024 | |||||
TOTAL NON-INTEREST EXPENSE | 15,763,990 | 14,635,210 | |||||
Income before income taxes | 1,413,748 | 3,812,567 | |||||
Income tax provision | 295,706 | 952,639 | |||||
NET INCOME | $ | 1,118,042 | $ | 2,859,928 | |||
EARNINGS PER SHARE | |||||||
Basic | $ | 1.12 | $ | 2.88 | |||
Diluted | $ | 1.12 | $ | 2.88 | |||
SUPPLEMENTAL INFORMATION | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended | ||||||||||||
2023 | 2023 | 2022 | ||||||||||
FOR THE PERIOD | ||||||||||||
Net income | $ | 778,530 | $ | 339,512 | $ | 1,785,067 | ||||||
Net income before taxes | 1,020,549 | 393,199 | 2,385,500 | |||||||||
Dividends declared per share | 1.00 | - | 1.00 | |||||||||
PERIOD END BALANCE | ||||||||||||
Total assets | $ | 1,054,290,779 | $ | 1,079,603,726 | $ | 896,099,799 | ||||||
Total investments | 98,506,257 | 99,326,990 | 95,838,246 | |||||||||
Total loans, net | 863,509,798 | 838,864,382 | 709,314,619 | |||||||||
Allowance for credit losses | (10,608,962 | ) | (10,371,551 | ) | (8,284,983 | ) | ||||||
Total deposits | 888,197,657 | 890,801,375 | 778,106,015 | |||||||||
Stockholders' equity | 76,203,467 | 77,586,290 | 76,226,175 | |||||||||
RATIO ANALYSIS | ||||||||||||
Return on average assets (annualized) | 0.30 | % | 0.13 | % | 0.81 | % | ||||||
Return on average equity (annualized) | 3.94 | % | 1.79 | % | 9.28 | % | ||||||
Net loans/Deposits | 97.22 | % | 94.17 | % | 91.16 | % | ||||||
Total Shareholders' Equity/Total assets | 7.23 | % | 7.19 | % | 8.51 | % | ||||||
Net loan losses/Total loans | 0.00 | % | -0.01 | % | -0.01 | % | ||||||
Uninsured deposits | 30.35 | % | 30.40 | % | 28.10 | % | ||||||
PER SHARE DATA | ||||||||||||
Shares outstanding | 996,196 | 997,784 | 997,784 | |||||||||
Weighted average shares outstanding | 997,567 | 997,784 | 994,996 | |||||||||
Diluted weighted average shares outstanding | 997,585 | 999,211 | 995,495 | |||||||||
Basic earnings | $ | 0.78 | $ | 0.34 | $ | 1.79 | ||||||
Diluted earnings | 0.78 | 0.34 | 1.79 | |||||||||
Book value | 76.49 | 77.76 | 76.40 | |||||||||
Tangible book value | 74.36 | 77.76 | 76.40 | |||||||||
ASSET QUALITY | ||||||||||||
Net (recoveries) charge-offs | $ | (12,410 | ) | $ | (65,926 | ) | $ | (49,997 | ) | |||
Classified assets | 1,687,091 | 1,196,170 | 484,483 | |||||||||
Nonperforming loans | 92,618 | 123,922 | 184,570 | |||||||||
Nonperforming assets | 92,618 | 123,922 | 184,570 | |||||||||
Total nonperforming loans/Total loans | 0.01 | % | 0.01 | % | 0.03 | % | ||||||
Total nonperforming loans/Total assets | 0.01 | % | 0.01 | % | 0.02 | % | ||||||
Total nonperforming assets/Total assets | 0.01 | % | 0.01 | % | 0.02 | % | ||||||
Allowance for credit losses/Total loans | 1.21 | % | 1.22 | % | 1.15 | % | ||||||
INTEREST INCOME AND EXPENSE | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||
2023 | 2023 | 2022 | ||||||||||||||||||||||
Average Balance | Interest | Average Yield/ Rate | Average Balance | Interest | Average Yield/ Rate | Average Balance | Interest | Average Yield/ Rate | ||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Federal funds sold and other | $ | 33,668,022 | $ | 431,607 | 5.14% | $ | 25,318,303 | $ | 276,739 | 4.43% | $ | 62,514,372 | $ | 121,771 | 0.78% | |||||||||
Investment securities | 98,944,071 | 780,362 | 3.16% | 99,471,281 | 628,537 | 2.56% | 94,260,851 | 443,419 | 1.89% | |||||||||||||||
Loans receivable | 850,747,374 | 11,302,782 | 5.33% | 835,070,756 | 10,672,578 | 5.18% | 697,638,767 | 8,539,519 | 4.91% | |||||||||||||||
Total interest-earning assets | 983,359,467 | $ | 12,514,751 | 5.10% | 959,860,340 | $ | 11,577,854 | 4.89% | 854,413,990 | $ | 9,104,709 | 4.27% | ||||||||||||
Noninterest-earning assets | 67,618,864 | 60,146,467 | 33,284,564 | |||||||||||||||||||||
Total assets | $ | 1,050,978,331 | $ | 1,020,006,807 | $ | 887,698,554 | ||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits | $ | 648,067,147 | $ | 4,265,275 | 2.64% | $ | 594,897,383 | $ | 2,966,252 | 2.02% | $ | 506,565,372 | $ | 642,622 | 0.51% | |||||||||
FHLB advances and federal funds purchased | 40,650,920 | 459,605 | 4.53% | 65,884,599 | 731,002 | 4.50% | 10,879,395 | 58,483 | 2.16% | |||||||||||||||
Notes payable | 25,459,394 | 394,464 | 6.21% | 25,414,074 | 396,260 | 6.32% | 10,807,745 | 167,874 | 6.23% | |||||||||||||||
Total interest-bearing liabilities | 714,177,461 | $ | 5,119,344 | 2.88% | 686,196,056 | $ | 4,093,514 | 2.42% | 528,252,512 | $ | 868,979 | 0.66% | ||||||||||||
Noninterest-bearing liabilities | 257,452,327 | 256,966,055 | 282,310,314 | |||||||||||||||||||||
Total liabilities | 971,629,788 | 943,162,111 | 810,562,826 | |||||||||||||||||||||
Stockholders' equity | 79,348,543 | 76,844,696 | 77,135,728 | |||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 1,050,978,331 | $ | 1,020,006,807 | $ | 887,698,554 | ||||||||||||||||||
Net interest-earning assets | $ | 269,182,006 | $ | 273,664,284 | $ | 326,161,478 | ||||||||||||||||||
Net interest spread | $ | 7,395,407 | 2.23% | $ | 7,484,340 | 2.47% | $ | 8,235,730 | 3.61% | |||||||||||||||
Net interest margin | 3.02% | 3.16% | 3.87% | |||||||||||||||||||||
INTEREST INCOME AND EXPENSE | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Six Months Ended | ||||||||||||||||
2023 | 2022 | |||||||||||||||
Average | Average | Average | Average | |||||||||||||
Balance | Interest | Yield/Rate | Balance | Interest | Yield/Rate | |||||||||||
Interest-earning assets: | ||||||||||||||||
Federal funds sold and other | $ | 29,516,229 | $ | 708,346 | 4.84% | $ | 56,691,768 | $ | 147,790 | 0.53% | ||||||
Investment securities | 96,991,956 | 1,408,899 | 2.93% | 90,422,018 | 825,335 | 1.84% | ||||||||||
Loans receivable | 842,952,320 | 21,975,360 | 5.26% | 693,829,458 | 16,322,221 | 4.74% | ||||||||||
Total interest-earning assets | 969,460,505 | $ | 24,092,605 | 5.01% | 840,943,244 | $ | 17,295,346 | 4.15% | ||||||||
Noninterest-earning assets | 65,221,029 | 33,687,594 | ||||||||||||||
Total assets | $ | 1,034,681,534 | $ | 874,630,838 | ||||||||||||
Interest-bearing liabilities: | ||||||||||||||||
Interest-bearing deposits | $ | 621,531,238 | $ | 7,231,527 | 2.35% | $ | 504,926,819 | $ | 1,303,588 | 0.52% | ||||||
FHLB advances and federal funds purchased | 52,059,517 | 1,157,182 | 4.48% | 11,527,880 | 125,388 | 2.19% | ||||||||||
Notes payable | 25,436,859 | 790,724 | 6.27% | 10,804,509 | 335,748 | 6.27% | ||||||||||
Total interest-bearing liabilities | 699,027,614 | $ | 9,179,433 | 2.65% | 527,259,208 | $ | 1,764,724 | 0.67% | ||||||||
Noninterest-bearing liabilities | 256,505,906 | 268,931,772 | ||||||||||||||
Total liabilities | 955,533,520 | 796,190,980 | ||||||||||||||
Stockholders' equity | 79,148,014 | 78,439,858 | ||||||||||||||
Total liabilities and stockholders' equity | $ | 1,034,681,534 | $ | 874,630,838 | ||||||||||||
Net interest-earning assets | $ | 270,432,891 | $ | 313,684,036 | ||||||||||||
Net interest spread | $ | 14,913,172 | 2.36% | $ | 15,530,622 | 3.47% | ||||||||||
Net interest margin | 3.10% | 3.72% | ||||||||||||||
Source:
2023 GlobeNewswire, Inc., source