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White River Bancshares Reports Rising Costs, Falling Profit in Q2

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White River Bancshares Co. (OTCQX: WRIV) of Fayetteville, the holding company for Signature Bank of Arkansas, on Tuesday reported lower second-quarter profit on rising costs.

The bank posted net income of $779,000, down from $1.79 million in the same period a year ago. On a per-share basis, earnings came to 78 cents, down from $1.79 a year ago.

Gary Head, chairman and CEO, said the bank is weathering an “unprecedented rise in funding costs” that impacted results in the quarter, but believes its new market locations in Harrison, Jonesboro and Rogers will provide a meaningful boost to earnings in the years ahead.

Deposits totaled $888.2 million, up 14% from a year ago but down slightly from $890.8 million on a quarterly basis. Scott Sandlin, the bank’s chief strategy officer, said rising rates have driven customers to higher yielding deposit accounts. However, Sandlin said, demand and non-interest-bearing deposits remain strong at 27.4% of total deposits and savings and interest-bearing transaction accounts represented 35.4% of deposits.

Meanwhile, the rising cost of funds outpaced earning asset yields. Net interest margin dropped to 3.02% from 3.87% a year ago, and was also lower on a quarterly basis, falling from 3.16%.

The bank said its capital ratios continued to exceed regulatory requirements.

“Asset quality remains pristine, as we remain focused on adhering to conservative underwriting standards in all credit cycles,” Jeff Maland, chief risk officer, said in statement.

Total assets increased 17.7% to $1.054 billion for the period ending June 30, up from $896.1 million in the same quarter a year ago. But on a quarterly basis, total assets shrunk by 2.3%.

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