The June 30 financial results produced a bit of red ink for one of the 20 members of the billion-dollar club in Arkansas.
Fayetteville’s Arvest Bank lost nearly $1.4 million for the six months ending June 30, compared with an $81 million profit during the first half of 2022.
It was the only loss recorded among the state’s 19 banks and one credit union with total assets of more than $1 billion.
Although Arvest generated a $4.1 million profit in the second quarter, that fell short of covering the nearly $5.5 million loss posted in the first quarter.
Bank officials at the $27.2 billion-asset lender attribute the profitability slide to a mix of increased expenses and changing market conditions.
“Arvest ownership made a strategic decision in 2022 to invest heavily in multiple initiatives to position the bank for long-term success, including significant investments in new, modern core processing capabilities,” said Ron Witherspoon, president of Arvest’s Little Rock region.
Bank |
Staff |
Total Assets |
Net Income |
|---|---|---|---|
Bank OZK, Little Rock |
2,714 |
$30,761,870 |
$341,865 |
Centennial Bank, Conway |
2,849 |
$22,060,051 |
$226,879 |
Simmons Bank, Pine Bluff |
3,047 |
$27,912,266 |
$120,013 |
First Security Bank, Searcy |
874 |
$7,562,820 |
$66,960 |
First National Bank, Fort Smith |
369 |
$2,165,864 |
$15,807 |
Evolve Bank & Trust, West Memphis |
522 |
$1,498,735 |
$14,709 |
First Financial Bank, El Dorado |
337 |
$1,555,311 |
$13,620 |
First National Bank, Paragould |
314 |
$2,378,937 |
$12,661 |
Southern Bancorp Bank, Arkadelphia |
449 |
$2,468,132 |
$11,493 |
Farmers Bank & Trust, Magnolia |
379 |
$2,673,058 |
$11,394 |
First Community Bank, Batesville |
519 |
$2,618,615 |
$11,007 |
Chambers Bank, Danville |
245 |
$1,274,513 |
$9,238 |
Arkansas Federal Credit Union, Little Rock |
396 |
$2,256,171 |
$8,020 |
Relyance Bank, White Hall |
192 |
$1,250,158 |
$6,332 |
Anstaff Bank, Green Forest |
171 |
$1,002,460 |
$5,819 |
Farmers & Merchants Bank, Stuttgart |
303 |
$1,741,171 |
$5,723 |
Citizens Bank, Batesville |
211 |
$1,373,477 |
$4,540 |
Encore Bank, Little Rock |
333 |
$4,025,348 |
$3,107 |
Signature Bank of Arkansas, Fayetteville |
201 |
$1,053,980 |
$1,767 |
Arvest Bank, Fayetteville |
6,377 |
$27,261,858 |
-$1,376 |
Source: Federal Deposit Insurance Corp. and National Credit Union Administration. All dollars in thousands.
“Contributing factors to our second quarter results include an industry-wide decline in mortgage production revenue compared to 2022 and the current interest rate environment compressing net interest margins.”
On the income side of the balance sheet, a big swing was registered in the bank’s noninterest income.
Net servicing fees at June 30 fell from $134.7 million in 2022 to about $37.6 million this year.
In a June-to-June comparison, provisions for loan losses grew from more than $8.1 million last year to more than $44.4 million in 2023.
The bank is carrying more than $84.8 million in nonaccrual loans these days. That figure is ever so slightly less than it was a year ago.
Of the nonaccrual loans, $54 million is secured by real estate.
Witherspoon notes that Arvest is “well capitalized, with $1.81 billion in equity capital, a strong balance sheet and liquidity, and a diverse customer and deposit base, as 70% of our deposits are consumer and retail deposits.”
Arvest is the third-largest bank based in Arkansas in terms of total assets. But when it comes to a headcount of staffers, the bank is No. 1 with 6,377 employees.
The next closest is Pine Bluff’s Simmons Bank with a workforce of 3,047.
