Evolve Bank & Trust in West Memphis, Ark., which has been dealing with fallout from its fintech partnerships, lost $4.3 million in the first quarter.
The $1.6 billion-asset bank disclosed the loss in its call report with the Federal Deposit Insurance Corp. It earned nearly $3 million a year earlier.
The loss stemmed largely from a decline in noninterest income and higher legal and compliance costs, offsetting a modest improvement in net interest income.
Total noninterest income fell by 12% from a year earlier, to $22.1 million, as revenue from card issuance and referral fees—key drivers of the bank’s fintech-focused model—dropped by about 19%.
Legal fees and expenses totaled $5.8 million, nearly quadrupling from the $1.5 million from a year earlier, a spike that underscores the growing financial burden of legal and compliance matters. Consulting and advisory fees surged by more than 160% from a year earlier, reaching to $6.4 million.
These elevated costs were a key contributor to the broader spike in other noninterest expenses, and they materially affected the bank’s bottom line.