White River Bancshares Reports Deposit Growth, Falling Profits in Q4

(Signature Bank of Arkansas)

White River Bancshares Co. (OTCQX: WRIV) of Fayetteville on Tuesday reported mixed results in the fourth quarter, as deposits increased but profits remained under pressure from higher funding costs.

The holding company for Signature Bank of Arkansas posted net income of $788,000 in the quarter, compared to $1.42 million the same quarter the previous year.

Earnings per share came to 79 cents, down from $1.42 in the fourth quarter of 2022.

For the full year, net income was $2.55 million, down from $5.62 million in 2022. Per share, 2023 earnings came to $2.56, falling from $5.63.

The bank ended 2023 with $959.2 million in total deposits, up 18.3% from $810.6 million the previous year. On a quarterly basis, deposits grew by 3.8%.

With interest rates rising, time deposits accounted for the majority of deposit growth year-over-year. But the bank said demand and non-interest bearing accounts remained strong, accounting 23.2% of the total deposits. Savings and interest-bearing transaction accounts represented 35.8% of total deposits.

Net loans increased by $114.5 million, or 13.9%, to $941.2 million, compared to $826.7 million a year ago.

“New relationships are fueling loan and deposit growth, and we expect this trajectory to continue,” Scott Sandlin, chief strategy officer, said in a statement.

The bank set aside more money for bad loans in the period. It recorded a $575,000 provision for credit losses, compared to a $325,000 provision in the third quarter of 2023 and a $350,000 provision in the fourth quarter of 2022.

For the full year, the company recorded a $1.3 million provision for credit losses, compared to a $760,000 provision for 2022.

Nonperforming loans increased during the quarter to $1.15 million, and represented 0.12% of total loans, compared to $125,000, or 0.01%, in the third quarter, and $124,000, or 0.01% of total loans a year ago. The bank said the increase during the fourth quarter was primarily due to two relationships, both of which are secured by 1-4 family construction projects.

“Credit quality continues to hold up, as we focus on maintaining a moderate risk profile,” said Jeff Maland, chief risk officer. “While nonperforming loans increased during the quarter, we believe these to be isolated credits and not reflective of the overall loan portfolio.”

Higher asset yields helped lift net interest margin to 3% in the fourth quarter from 2.88% in the third quarter. Compared to a year ago, net interest margin was 79 basis points lower.

“We anticipate our NIM will continue to stabilize over the next few quarters if interest rates remain steady or start to decline,” Brant Ward, president of the lender, said in a statement.

Net interest income was $7.8 million in the fourth quarter of 2023, compared to $8.8 million in the fourth quarter of 2022.

The bank ended 2023 with $1.133 billion in total assets, up 15.3% from 2022.

Signature Bank  has locations in Fayetteville, Springdale, Bentonville, Rogers, Brinkley, Harrison and Jonesboro.