White River Bancshares Co. of Fayetteville (OTCQX: WRIV) reported falling profit for the fourth quarter and the full year as it expanded to new markets.
The holding company for Signature Bank posted quarterly net income of $1.42 million, down 5.3% from $1.5 million in the same period a year ago. On a per-share basis, earnings came to $1.42, down from $1.50.
For the full year, White River reported $5.62 million in net income, down more than 20% from $7.05 million in 2021.
Profit fell in 2022 as noninterest expenses increased nearly 19% to $30.1 million. The bank spent more on employee wages and benefits due to a competitive labor market, and higher commissions due to increased revenues in business lines.
Higher expenses also came from the bank's expansion to Harrison and Jonesboro, two new markets. It also opened Banco Sí in downtown Rogers, a new division dedicated to serving the Hispanic and Latino population with a fully bilingual staff.
"While these investments in market expansions impacted net income for the year, we were still able to achieve the second highest annual earnings in our Company’s history," Gary Head, the bank's president and CEO, said in a statement. "Looking ahead, our plans for 2023 are to focus on expanding our presence in the markets we opened last year and improving our performance metrics."
Expansion expenses hit income, but they also contributed to double-digit percentage gains in loans and deposits. The bank finished 2022 with $826.7 million in loans, up 20.6% from a year ago. As loans increased, the bank set aside $760,000 in provisions for credit losses, compared to no provisions in 2021.
New customers fueled an 11.6% increase in deposits, pushing the total to $810.6 million.
The company finished 2022 with total assets of $982.7 million, up 15.4% from the previous year.
The bank has locations in Fayetteville, Springdale, Bentonville, Rogers, Brinkley, Harrison and Jonesboro.