“Our results for the fourth quarter of 2023 reflect solid growth in our loan portfolio, especially as our newer markets are becoming more established fixtures in their respective communities,” said
“Our brand of community banking is being well received in all the markets we serve, and centers on fostering new customer relationships. Whether it’s a small business account or a household account, an operating account is an integral piece to a longstanding banking relationship,” said
For the full year of 2023, net income was
Fourth Quarter 2023 Financial Highlights:
- Fourth quarter net income was
$788,000 , or$0.79 per diluted share, compared to$1.42 million , or$1.42 per diluted share, in the fourth quarter of 2022. - Fourth quarter net interest margin (“NIM”) was 3.00%, compared to 3.79% in the fourth quarter a year ago.
- The Company recorded a
$575,000 provision for credit losses in the fourth quarter of 2023, which included a$700,000 provision for credit losses on loans and a$125,000 reversal of credit loss expense for off-balance sheet exposures. This compared to a$350,000 provision in the fourth quarter of 2022. - Net loans increased
$114.5 million , or 13.9%, to$941.2 million atDecember 31, 2023 , compared to$826.7 million atDecember 31, 2022 . - Nonperforming assets totaled
$1.36 million , or 0.10% of total assets atDecember 31, 2023 , compared to$124,000 , or 0.01% of total assets, atDecember 31, 2022 . - Total deposits increased
$148.6 million , or 18.3%, to$959.2 million atDecember 31, 2023 , compared to$810.6 million a year ago. - Core deposits (demand and non-interest-bearing, and savings and interest-bearing transaction accounts) represent 59.0% of total deposits at
December 31, 2023 . - The Bank’s uninsured/unpledged deposits totaled approximately 31.5% of total deposits at
December 31, 2023 . - Available borrowing capacity totaled
$344.8 million atDecember 31, 2023 , compared to$360.0 million atSeptember 30, 2023 . - Total risk-based capital ratio was 12.02% and the Tier 1 leverage ratio was 9.56% for the Bank at
December 31, 2023 . - Tangible book value per common share was
$78.17 atDecember 31, 2023 , compared to$77.64 a year ago.
Income Statement
“While funding costs remain elevated, higher asset yields contributed to a 12 basis-point expansion in NIM during the fourth quarter, compared to the preceding quarter,” said
Net interest income was
Noninterest income increased 43.9% to
Noninterest expense increased 2.4% to
Balance Sheet
Total assets increased 15.3% to a record
Loans, net of allowance for credit losses, increased 13.9% to
Total deposits increased 18.3% to
FHLB advances increased to
Credit Quality
Beginning
The Company recorded a
Nonperforming loans increased during the quarter to
“Credit quality continues to hold up, as we focus on maintaining a moderate risk profile. While nonperforming loans increased during the quarter, we believe these to be isolated credits and not reflective of the overall loan portfolio,” said
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 12.02% and Tier 1 leverage ratio of 9.56%, at
Recent Developments
The Company launched a new initiative, Banco Sí, to focus on and serve the burgeoning Hispanic and Latino communities. 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 eastward, with new markets in
The Company currently operates out of nine locations; two 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 | $ | 17,624,468 | $ | 32,312,380 | $ | 11,835,438 | ||||||
Investment securities | 114,550,592 | 97,523,688 | 94,429,007 | |||||||||
Loans held for sale | 274,608 | 562,500 | 0 | |||||||||
Loans, net of allowance for credit losses | 941,224,131 | 897,245,750 | 826,738,234 | |||||||||
Premises and equipment, net | 29,347,939 | 29,425,104 | 28,555,250 | |||||||||
Foreclosed assets held for sale | 201,850 | - | - | |||||||||
Accrued interest receivable | 4,682,162 | 3,928,509 | 3,111,863 | |||||||||
Bank owned life insurance | 9,454,492 | 9,374,336 | 9,134,324 | |||||||||
Deferred income taxes | 4,388,415 | 5,628,076 | 4,282,651 | |||||||||
Other investments | 7,417,533 | 7,151,204 | 3,251,098 | |||||||||
Intangible assets, net | 2,015,386 | 2,068,423 | - | |||||||||
Other assets | 1,874,165 | 2,170,842 | 1,413,549 | |||||||||
TOTAL ASSETS | $ | 1,133,055,741 | $ | 1,087,390,812 | $ | 982,751,414 | ||||||
LIABILITIES & STOCKHOLDERS' EQUITY | ||||||||||||
Deposits: | ||||||||||||
Demand and non-interest-bearing | $ | 222,534,839 | $ | 233,500,987 | $ | 246,960,916 | ||||||
Savings and interest-bearing transaction accounts | 342,953,012 | 335,602,053 | 328,108,850 | |||||||||
Time deposits | 393,705,434 | 354,828,320 | 235,513,697 | |||||||||
Total deposits | 959,193,285 | 923,931,360 | 810,583,463 | |||||||||
Federal funds purchased | - | - | 18,150,000 | |||||||||
44,958,945 | 37,932,481 | 31,686,052 | ||||||||||
Notes payable | 26,320,631 | 26,303,355 | 25,402,941 | |||||||||
Lease right-of-use liability | 16,319,937 | 16,521,696 | 15,378,678 | |||||||||
Reserve for losses on unfunded commitments | 1,433,000 | 1,558,000 | - | |||||||||
Accrued interest payable | 2,444,462 | 2,062,419 | 912,615 | |||||||||
Other liabilities | 2,836,658 | 3,803,220 | 3,168,527 | |||||||||
TOTAL LIABILITIES | 1,053,506,918 | 1,012,112,531 | 905,282,276 | |||||||||
Stockholders' equity: | ||||||||||||
Common stock | 10,086 | 10,084 | 10,084 | |||||||||
Surplus | 90,460,773 | 90,335,815 | 89,665,389 | |||||||||
Accumulated deficit | (3,624,915 | ) | (4,412,565 | ) | (3,287,098 | ) | ||||||
(1,119,100 | ) | (929,517 | ) | (711,111 | ) | |||||||
Accumulated other comprehensive loss | (6,178,021 | ) | (9,725,536 | ) | (8,208,126 | ) | ||||||
TOTAL STOCKHOLDERS' EQUITY | 79,548,823 | 75,278,281 | 77,469,138 | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,133,055,741 | $ | 1,087,390,812 | $ | 982,751,414 |
CONSOLIDATED STATEMENTS OF INCOME | |||||||||
(Unaudited) | |||||||||
For the Three Months Ended | |||||||||
2023 | 2023 | 2022 | |||||||
INTEREST INCOME | |||||||||
Loans, including fees | $ | 13,656,322 | $ | 12,381,749 | $ | 10,474,093 | |||
Investment securities | 930,823 | 706,441 | 618,676 | ||||||
Federal funds sold and other | 119,794 | 175,691 | 101,035 | ||||||
Total interest income | 14,706,939 | 13,263,881 | 11,193,804 | ||||||
INTEREST EXPENSE | |||||||||
Deposits | 6,025,195 | 5,202,219 | 1,654,667 | ||||||
413,864 | 399,306 | 300,424 | |||||||
Notes payable | 398,017 | 398,017 | 394,465 | ||||||
Federal funds purchased and other | 68,756 | 14,302 | 56,193 | ||||||
Total interest expense | 6,905,832 | 6,013,844 | 2,405,749 | ||||||
NET INTEREST INCOME | 7,801,107 | 7,250,037 | 8,788,055 | ||||||
Provision for credit losses | 575,000 | 325,000 | 350,000 | ||||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 7,226,107 | 6,925,037 | 8,438,055 | ||||||
NON-INTEREST INCOME | |||||||||
Service charges and fees on deposits | 161,910 | 151,016 | 144,208 | ||||||
Wealth management fee income | 997,887 | 896,768 | 559,674 | ||||||
Secondary market fee income | 114,581 | 70,960 | 84,303 | ||||||
Bank owned-life insurance income | 80,156 | 81,682 | 75,707 | ||||||
Loss on sales and write-downs of foreclosed assets | - | - | - | ||||||
Other non-interest income | 449,724 | 425,791 | 389,814 | ||||||
TOTAL NON-INTEREST INCOME | 1,804,258 | 1,626,217 | 1,253,706 | ||||||
NON-INTEREST EXPENSE | |||||||||
Salaries and benefits | 4,427,071 | 4,507,559 | 4,877,480 | ||||||
Occupancy and equipment | 956,731 | 968,060 | 901,551 | ||||||
Data processing | 777,216 | 833,755 | 609,252 | ||||||
Marketing and business development | 429,642 | 444,957 | 380,481 | ||||||
Professional services | 739,988 | 604,962 | 517,852 | ||||||
Amortization of other intangible assets | 53,037 | 53,036 | - | ||||||
Other non-interest expense | 639,174 | 414,613 | 552,265 | ||||||
TOTAL NON-INTEREST EXPENSE | 8,022,859 | 7,826,942 | 7,838,881 | ||||||
Income before income taxes | 1,007,506 | 724,312 | 1,852,880 | ||||||
Income tax provision | 219,856 | 84,885 | 431,638 | ||||||
NET INCOME | $ | 787,650 | $ | 639,427 | $ | 1,421,242 | |||
EARNINGS PER SHARE | |||||||||
Basic | $ | 0.79 | $ | 0.64 | $ | 1.42 | |||
Diluted | $ | 0.79 | $ | 0.64 | $ | 1.42 |
CONSOLIDATED STATEMENTS OF INCOME | |||||||||
(Unaudited) | |||||||||
Twelve Months Ended | |||||||||
2023 | 2022 | ||||||||
INTEREST INCOME | |||||||||
Loans, including fees | $ | 48,013,431 | $ | 35,863,945 | |||||
Investment securities | 3,046,163 | 2,018,974 | |||||||
Federal funds sold and other | 1,003,831 | 378,268 | |||||||
Total Interest Income | 52,063,425 | 38,261,187 | |||||||
INTEREST EXPENSE | |||||||||
Deposits | 18,458,941 | 3,739,902 | |||||||
1,970,352 | 496,148 | ||||||||
Notes payable | 1,586,758 | 1,092,467 | |||||||
Federal funds purchased and other | 116,483 | 63,796 | |||||||
Total interest expense | 22,132,534 | 5,392,313 | |||||||
NET INTEREST INCOME | 29,930,891 | 32,868,874 | |||||||
Provision for credit losses | 1,275,000 | 760,000 | |||||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 28,655,891 | 32,108,874 | |||||||
NON-INTEREST INCOME | |||||||||
Service charges and fees on deposits | 610,403 | 533,910 | |||||||
Wealth management fee income | 3,050,605 | 2,376,325 | |||||||
Secondary market fee income | 393,275 | 1,114,915 | |||||||
Bank owned life insurance income | 320,168 | 81,256 | |||||||
Loss on sales and write-downs of foreclosed assets | - | (151,480 | ) | ||||||
Other non-interest income | 1,729,015 | 1,584,852 | |||||||
TOTAL NON-INTEREST INCOME | 6,103,466 | 5,539,778 | |||||||
NON-INTEREST EXPENSE | |||||||||
Salaries and benefits | 18,687,153 | 19,460,554 | |||||||
Occupancy and equipment | 3,767,352 | 3,366,093 | |||||||
Data processing | 3,014,412 | 2,444,067 | |||||||
Marketing and business development | 1,871,768 | 1,373,196 | |||||||
Professional services | 2,330,140 | 1,936,620 | |||||||
Amortization of other intangible asset | 106,073 | - | |||||||
Other non-interest expense | 1,836,893 | 1,541,468 | |||||||
TOTAL NON-INTEREST EXPENSE | 31,613,791 | 30,121,998 | |||||||
Income before income taxes | 3,145,566 | 7,526,654 | |||||||
Income tax provision | 600,447 | 1,910,853 | |||||||
NET INCOME | $ | 2,545,119 | $ | 5,615,801 | |||||
EARNINGS PER SHARE | |||||||||
Basic | $ | 2.56 | $ | 5.64 | |||||
Diluted | $ | 2.56 | $ | 5.63 |
SUPPLEMENTAL INFORMATION | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended | ||||||||||||
2023 | 2023 | 2022 | ||||||||||
FOR THE PERIOD | ||||||||||||
Net income | $ | 787,650 | $ | 639,427 | $ | 1,421,242 | ||||||
Net income before taxes | 1,007,506 | 724,312 | 1,852,880 | |||||||||
Dividends declared per share | - | - | - | |||||||||
PERIOD END BALANCE | ||||||||||||
Total assets | $ | 1,133,055,741 | $ | 1,087,390,812 | $ | 982,751,414 | ||||||
Total investments | 114,550,592 | 97,523,688 | 94,429,007 | |||||||||
Total loans, net | 941,224,131 | 897,245,750 | 826,738,234 | |||||||||
Allowance for credit losses | (11,443,905 | ) | (10,928,875 | ) | (9,193,625 | ) | ||||||
Total deposits | 959,193,285 | 923,931,360 | 810,583,463 | |||||||||
Stockholders' equity | 79,548,823 | 75,278,281 | 77,469,138 | |||||||||
RATIO ANALYSIS | ||||||||||||
Return on average assets (annualized) | 0.28 | % | 0.24 | % | 0.58 | % | ||||||
Return on average equity (annualized) | 4.03 | % | 3.25 | % | 7.49 | % | ||||||
Net loans/Deposits | 98.13 | % | 97.11 | % | 101.99 | % | ||||||
Total Shareholders' Equity/Total assets | 7.02 | % | 6.92 | % | 7.88 | % | ||||||
Net loan losses/Total loans | 0.02 | % | -0.00 | % | -0.01 | % | ||||||
Uninsured & unpledged deposits | 31.47 | % | 32.92 | % | 25.68 | % | ||||||
PER SHARE DATA | ||||||||||||
Shares oustanding | 991,815 | 994,596 | 997,785 | |||||||||
Weighted average shares outstanding | 991,645 | 995,674 | 997,686 | |||||||||
Diluted weighted average shares outstanding | 991,645 | 995,723 | 998,737 | |||||||||
Basic earnings | $ | 0.79 | $ | 0.64 | $ | 1.42 | ||||||
Diluted earnings | 0.79 | 0.64 | 1.42 | |||||||||
Book value | 80.21 | 75.69 | 77.64 | |||||||||
Tangible book value | 78.17 | 73.61 | 77.64 | |||||||||
ASSET QUALITY | ||||||||||||
Net (recoveries) charge-offs | $ | 184,970 | $ | (5,087 | ) | $ | (105,153 | ) | ||||
Classified assets | 1,623,558 | 910,428 | 393,189 | |||||||||
Nonperforming loans | 1,153,852 | 124,672 | 123,922 | |||||||||
Nonperforming assets | 1,355,702 | 124,672 | 123,922 | |||||||||
Total nonperforming loans/Total loans | 0.12 | % | 0.01 | % | 0.01 | % | ||||||
Total nonperforming loans/Total assets | 0.10 | % | 0.01 | % | 0.01 | % | ||||||
Total nonperforming assets/Total assets | 0.12 | % | 0.01 | % | 0.01 | % | ||||||
Allowance for credit losses/Total loans | 1.20 | % | 1.20 | % | 1.10 | % | ||||||
INTEREST INCOME AND EXPENSE | |||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||
2023 | 2023 | 2022 | |||||||||||||||||||||||||
Average | Average | Average | Average | Average | Average | ||||||||||||||||||||||
Balance | Interest | Yield/Rate | Balance | Interest | Yield/Rate | Balance | Interest | Yield/Rate | |||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||
Federal funds sold and other | $ | 7,843,513 | $ | 119,794 | 6.06 | % | $ | 13,590,719 | $ | 175,691 | 5.13 | % | $ | 9,543,812 | $ | 101,035 | 4.20 | % | |||||||||
Investment securities | 110,600,506 | 930,823 | 3.34 | % | 104,185,411 | 706,441 | 2.69 | % | 96,613,992 | 618,676 | 2.54 | % | |||||||||||||||
Loans receivable | 913,603,571 | 13,656,322 | 5.93 | % | 879,512,966 | 12,381,749 | 5.59 | % | 814,261,408 | 10,474,093 | 5.10 | % | |||||||||||||||
Total interest-earning assets | 1,032,047,590 | $ | 14,706,939 | 5.65 | % | 997,289,096 | $ | 13,263,881 | 5.28 | % | 920,419,212 | $ | 11,193,804 | 4.82 | % | ||||||||||||
Noninterest-earning assets | 64,692,826 | 63,042,922 | 59,692,700 | ||||||||||||||||||||||||
Total assets | $ | 1,096,740,416 | $ | 1,060,332,018 | $ | 980,111,912 | |||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||
Interest-bearing deposits | $ | 704,867,459 | $ | 6,025,195 | 3.39 | % | $ | 666,059,040 | $ | 5,202,219 | 3.10 | % | $ | 558,052,737 | $ | 1,654,667 | 1.18 | % | |||||||||
FHLB advances and federal funds purchased | 43,218,876 | 482,620 | 4.43 | % | 38,935,770 | 413,608 | 4.21 | % | 43,158,724 | 356,617 | 3.28 | % | |||||||||||||||
Notes payable | 25,472,047 | 398,017 | 6.20 | % | 26,297,283 | 398,017 | 6.00 | % | 25,395,116 | 394,465 | 6.16 | % | |||||||||||||||
Total interest-bearing liabilities | 773,558,382 | $ | 6,905,832 | 3.54 | % | 731,292,093 | $ | 6,013,844 | 3.26 | % | 626,606,577 | $ | 2,405,749 | 1.52 | % | ||||||||||||
Noninterest-bearing liabilities | 245,689,756 | 250,898,403 | 278,184,515 | ||||||||||||||||||||||||
Total liabilities | 1,019,248,138 | 982,190,496 | 904,791,092 | ||||||||||||||||||||||||
Stockholders' equity | 77,492,278 | 78,141,522 | 75,320,820 | ||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 1,096,740,416 | $ | 1,060,332,018 | $ | 980,111,912 | |||||||||||||||||||||
Net interest-earning assets | $ | 258,489,208 | $ | 265,997,003 | $ | 293,812,635 | |||||||||||||||||||||
Net interest spread | $ | 7,801,107 | 2.11 | % | $ | 7,250,037 | 2.01 | % | $ | 8,788,055 | 3.30 | % | |||||||||||||||
Net interest margin | 3.00 | % | 2.88 | % | 3.79 | % |
INTEREST INCOME AND EXPENSE | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Twelve Months Ended | ||||||||||||||||||
2023 | 2022 | |||||||||||||||||
Average | Average | Average | Average | |||||||||||||||
Balance | Interest | Yield/Rate | Balance | Interest | Yield/Rate | |||||||||||||
Interest-earning assets: | ||||||||||||||||||
Federal funds sold and other | $ | 20,039,416 | $ | 1,003,831 | 5.01 | % | $ | 36,557,767 | $ | 378,268 | 1.03 | % | ||||||
Investment securities | 104,978,850 | 3,046,163 | 2.90 | % | 92,326,033 | 2,018,974 | 2.19 | % | ||||||||||
Loans receivable | 869,975,590 | 48,013,431 | 5.52 | % | 732,179,484 | 35,863,945 | 4.90 | % | ||||||||||
Total interest-earning assets | 994,993,856 | $ | 52,063,425 | 5.23 | % | 861,063,284 | $ | 38,261,187 | 4.44 | % | ||||||||
Noninterest-earning assets | 61,681,863 | 50,087,853 | ||||||||||||||||
Total assets | $ | 1,056,675,719 | $ | 911,151,137 | ||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||
Interest-bearing deposits | $ | 653,647,145 | $ | 18,458,941 | 2.82 | % | $ | 522,249,813 | $ | 3,739,902 | 0.72 | % | ||||||
FHLB advances and federal funds purchased | 47,087,877 | 2,086,835 | 4.43 | % | 19,943,714 | 559,944 | 2.81 | % | ||||||||||
Notes payable | 25,466,038 | 1,586,758 | 6.23 | % | 17,199,936 | 1,092,467 | 6.35 | % | ||||||||||
Total interest-bearing liabilities | 726,201,060 | $ | 22,132,534 | 3.05 | % | 559,393,463 | $ | 5,392,313 | 0.96 | % | ||||||||
Noninterest-bearing liabilities | 252,120,124 | 274,438,527 | ||||||||||||||||
Total liabilities | 978,321,184 | 833,831,990 | ||||||||||||||||
Stockholders' equity | 78,354,535 | 77,319,147 | ||||||||||||||||
Total liabilities and stockholders' equity | $ | 1,056,675,719 | $ | 911,151,137 | ||||||||||||||
Net interest-earning assets | $ | 268,792,796 | $ | 301,669,821 | ||||||||||||||
Net interest spread | $ | 29,930,891 | 2.18 | % | $ | 32,868,874 | 3.48 | % | ||||||||||
Net interest margin | 3.01 | % | 3.82 | % |
Source:
2024 GlobeNewswire, Inc., source