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White River Bancshares Profit Drops Sharply in Q3

2 min read

White River Bancshares Co. (OTCQX: WRIV) of Fayetteville on Tuesday reported a sharp drop in third-quarter profit as higher funding costs continued to impact the lender’s bottom line.

The holding company for Signature Bank of Arkansas posted net income of $639,000, down 52% from $1.33 million the same quarter a year ago. Earnings on a per-share basis came to 64 cents, down from $1.34 a year ago.

Deposits increased 16.7% to $923.9 million on an annual basis and loans rose by 15% to $897.2 million, but the growth came at a cost. The lender’s net interest margin fell from 3.88% to 2.88%.

Largely due to the increase in deposit costs, total interest expense increased to $6 million in the third quarter from $1.2 million in the third quarter of 2022.

Brant Ward, president of White River Bancshares, said pressure on the bank’s net interest margin could be more muted over the next few quarters if interest rates start to stabilize.

Noninterest expenses increased 2.3% in the period to $7.8 million, compared to $7.6 million a year ago. The bank said it faced higher data processing and marketing and business development fees. Those increases more than offset a decline in salaries and employee benefits in the period.

Gary Head, chair and CEO of White River Bancshares, said the lender is encouraged by the consumer response in its new markets. Since 2022, the bank has opened locations in Harrison and Jonesboro and launched Banco Sí, its bilingual bank brand, in downtown Rogers.

second Banco Sí location is planned to open in downtown Springdale in the first quarter of 2024.

“By the way,” Head said in a statement, “it’s also worth noting the substantial impact the jobs and economic development from Walmart’s new world headquarters is having on our operations. We are in phenomenal locations, and now have the infrastructure, the right leadership team, and the technology in place to get to where we want to be over the next three years.”

The bank ended the third quarter with a record $1.087 billion in total assets, up 16.3% from the third quarter of 2022.

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