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Q1 Loss Lingers For Arvest Bank

2 min read

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.

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