Profits Improve for Most Area Banks

Arvest Bank in Rogers and Arvest Bank of Bentonville made the most money of locally based banks during the second quarter. Their net incomes were $2.42 and $2.4 million, respectively, according to Bauer Financial Reports Inc. and the Federal Deposit Insurance Corp. (See chart.)

Compared to their respective first quarters, Arvest Bank’s 2Q was a 43 percent increase from the first three months of the year and Arvest Bank of Bentonville’s 2Q was a 48 percent increase.

The heftiest increase among the most profitable banks was Arkansas National Bank’s 81 percent leap to $1.76 million in second-quarter net income, compared with $970,000 for 2001’s first three months. In fact, all but three local banks recently analyzed by Bauer did better in the third period than the first two combined.

“We were in a position to take advantage of the rapid lowering of rates by repricing our liabilities quicker than we repriced our assets, and our net interest margin helped our profitability out a bunch,” said Dan Dykema, president of Arkansas National Bancshares, the bank’s holding company.

Bauer — which routinely critiques the financial condition of the nation’s banks, thrifts and credit unions — released its 2Q ratings in October. We excluded banks from Madison, Sebastian and Crawford counties but included Eureka Springs from Carroll County.

A total of 19 local banks and thrifts are included in this report. Bauer rates the institutions on a 1-to-5 scale after analyzing their quarterly financial statements or “call reports” that are filed with bank regulators.

The rating system gives higher marks to banks that hold more capital than is required by federal regulators. A rating of three stars means the institution has the minimum requirements, and a rating of five means it has at least twice the capital that’s required.

First National Bank of Springdale, United Bank in Springdale, Arkansas State Bank in Siloam Springs, Bank of Eureka Springs and Arvest Bank of Gravett all received five stars. The only area bank that fell below the three-star mark was Gravette’s Sinclair National Bank.

Troubled Sinclair National was seized Sept. 7 by the FDIC and promptly sold to Delta Trust & Bank Corp. of Little Rock. Delta’s performance will be reflected in the fourth quarter.

Listed by Jan.-March net incomet

Income in millions**t

Institution — City — Jan.-March — April-June — % Change

Arvest Bank — Rogers — $1.69 — $2.42 — 43%t

Arvest Bank of Bentonville — Bentonville — $1.62 — $2.40 — 48%t

Arkansas National Bank — Bentonville — $0.97 — $1.76 — 81%t

Arvest McIlroy Bank — Fayetteville — $1.39 — $1.72 — 24%

Arvest Springdale Bank & Trust — Springdale — $0.83 — $1.06 — 28%

First National Bank of Springdale — Springdale — $0.56 — $0.82 — 46%

First Arvest Bank — Siloam Springs — $0.79 — $0.81 — 3%

United Bank — Springdale — $0.29 — $0.66 — 128%

Arvest Farmers & Merchants Bank — Prairie Grove — $0.40 — $0.61 — 53%

Arvest Bank of Gravett — Gravette — $0.65 — $0.49 — -25%

Community Bank — Fayetteville — $0.29 — $0.48 — 66%

Arkansas State Bank — Siloam Springs — $0.33 — $0.46 — 39%

Decatur State Bank — Decatur — $0.27 — $0.31 — 15%t

Bank of Rogers — Rogers — $0.23 — $0.29 — 26%t

Bank of Fayetteville — Fayetteville — $0.53 — $0.26 — -51%

Bank of Eureka Springs — Eureka Springs — $0.10 — $0.21 — 110%

Bank of Arkansas — Fayetteville — $0.10 — $0.16 — 60%t

Simmons First Bank of Northwest Arkansas — Rogers — $0.05 — $0.14 — 180%

Sinclair National Bank? — Gravette — ($0.42) — ($0.29) — (31%)

*Local net income for banks based outside Northwest Arkansas, such as Regions Bank and Bank of America, were not available. **Rounded to the nearest $10,000. ?Liquidated since the last reporting date and sold to Delta Trust & Bank Corp. of Little Rock.

Source: Bauer Financial Reports Inc. and Federal Deposit Insurance Corp.