Banking on Change: Profit Proves Elusive For Two Out of Three Banks

Arvest is the third-largest bank based in Arkansas in terms of total assets. (Mauren Kennedy)

A trio of banks that started 2023 with a quarterly loss meandered their way to mixed results at year’s end.

After recording a profit of more than $143 million in 2022, Arvest Bank of Fayetteville tallied net income of just under $2 million last year. Two line items related to those numbers made significant dents in profitability at the $27.6 billion-asset lender.

Net servicing fees fell from $184.3 million in 2022 to $46.2 million in 2023. Interest expense rose from $57.9 million in 2022 to $373.5 million last year.

Bank of England endured a second unprofitable year as a loss of more than $3.8 million in 2022 ballooned into a loss of nearly $10 million last year.

That slide is tied to the bank’s dwindling sale of loans and leases, which totaled $244.5 million in 2021, $107.6 million in 2022 and $74.1 million in 2023.

In response, the $412.7 million-asset lender slashed its nationwide residential loan network from 1,248 staffers in 2021 to 968 in 2022 to 663 in 2023.

Bank of Little Rock reduced its loss of $2.1 million in 2022 to a loss of $687,000 last year. The bank’s sale of loans and leases of $19.3 million in 2021 plummeted to $2.3 million in 2022 and settled at nearly $2.9 million last year.

Year-end staffing at the $294.7 million-asset lender was cut from 129 in 2021 to 76 in 2022 to 65 in 2023.

Dollars in thousands and numbers are from 2023. (Source: Federal Deposit Insurance Corp.)

OZK Branching

The largest bank headquartered in Arkansas remains active on the new branch front with projects in two new markets: Asheville, North Carolina, and Round Rock, Texas.

Little Rock’s Bank OZK will become the first Arkansas bank to set up shop in the $5.8 billion-deposit market in Asheville when it opens in a former Truist Bank office at 711 Merrimon Ave.

In Round Rock, a northern suburb of Austin, the $34.2 billion-asset lender has its eye on an undeveloped site at 2100 E. Palm Valley Blvd. The $3.9 billion-deposit market hosts a competitive field of 24 banks that include Conway’s Centennial Bank.

Centennial acquired the Round Rock branch as part of its $962 million purchase of Happy State Bank on April Fool’s Day in 2022.

The office is home to deposits of $11 million, ranking No. 22 among the city’s two dozen banks.

In terms of deposit market share, the big three banks in Round Rock are JPMorgan Chase Bank, of Columbus, Ohio, $848.3 million (21.42%); Wells Fargo Bank of Sioux Falls, South Dakota, $806.2 million (20.36%); and Bank of America in Charlotte, North Carolina, $332.9 (8.41%).

Of the 17 banks on the ground in Asheville, the big three are Truist Bank of Charlotte, $1.1 billion (18.64%); Wells Fargo Bank, $954.9 million (16.26%); and Bank of America, $780.7 million (13.29%).