U.S. Markets open in 5 hrs

White River Bancshares Co. Earns $1.3 Million, or $1.36 Per Diluted Share, in the Third Quarter of 2019

FAYETTEVILLE, Ark., Oct. 15, 2019 (GLOBE NEWSWIRE) -- White River Bancshares Company (WRIV), (the “Company”) the holding company for Signature Bank of Arkansas (the “Bank”), today reported net income of $1.3 million, or $1.36 per diluted share, in the third quarter of 2019, compared to $1.3 million, or $1.39 per diluted share, in the third quarter of 2018.  In the second quarter of 2019, the Company earned net income of $1.5 million, or $1.55 per diluted share. 

In the first nine months of the year, net income increased 10.1% to $4.01 million, or $4.11 per diluted share, compared to $3.6 million, or $4.10 per diluted share, in the first nine months of 2018.  All financial results are unaudited.

Third Quarter 2019 Financial Highlights:

  • Third quarter net income was $1.3 million, or $1.36 per diluted share.
  • Third quarter net interest margin (“NIM”) expanded by 20 basis points to 3.87% compared to the third quarter a year ago and contracted 10 basis points compared to the preceding quarter.
  • Net loans increased 9.5% to $551.2 million at September 30, 2019, compared to September 30, 2018.
  • Total deposits increased 4.1% to $539.6 million at September 30, 2019, compared to a year ago.
  • Non-interest-bearing deposits increased 9.8% to $107.9 million at September 30, 2019, compared to $98.3 million a year ago.
  • Non-performing assets at September 30, 2019 improved to 0.90% of total assets, from 1.60% a year ago.
  • Book value per diluted common share increased to $70.13 at September 30, 2019, from $62.70 a year ago.
  • Total risk-based capital ratio was 14.37% and Tier 1 leverage ratio was 11.61% for the Bank at September 30, 2019.

“We generated solid net interest income for the third quarter, primarily driven by the expansion of our balance sheet,” said Gary Head, President and Chief Executive Officer.  “Additionally, we continued to strengthen our core funding mix with non-interest bearing deposits increasing almost 10% compared to a year ago.  While our operating results were lower compared to the prior quarter, mainly due to writedowns on foreclosed assets, we expect to generate strong revenue for the remainder of the year.

“We implemented a multi-step growth process earlier this year by promoting and hiring key talent, and expanding our presence with a new branch in Rogers, Arkansas.  This growth strategy was put in place to take advantage of the multi-billion dollar expansion projects and in-migration taking place around that market,” said Head. “Northwest Arkansas continues to be ranked one the fastest growing areas in the country, and we now have the team in place to take advantage of additional opportunities.”

Income Statement

The Company’s net interest margin was 3.87% in the third quarter of 2019, compared to 3.97% in the preceding quarter, and a 20 basis point increase when compared to 3.67% in the third quarter of 2018.  In the first nine months of 2019, the net interest margin improved 25 basis points to 3.94%, compared to 3.69% in the first nine months of 2018.

Third quarter net interest income increased by 8.9% to $6.1 million, from $5.6 million in the third quarter of 2018, and increased by 1.3% when compared to $6.0 million in the second quarter of 2019.  Total interest income increased by 12.3% to $8.2 million in the third quarter of 2019 from $7.3 million during the third quarter of 2018 and increased by 23.0% compared to $8.0 million in the preceding quarter.  Total interest expense increased by 23.4% to $2.1 million in the third quarter of 2019, from $1.7 million during the third quarter of 2018, and increased 8.0% compared to $1.9 million in the preceding quarter, primarily due to the increase in interest-bearing deposits.  In the first nine months of 2019, net interest income increased 9.4% to $18.0 million, compared to $16.4 million in the first nine months of 2018.

Non-interest income was $621,919 in the third quarter of 2019, compared to $970,639 in the third quarter a year ago and $821,595 in the preceding quarter.  The decrease during the current quarter was primarily due to losses on sales and writedowns of foreclosed assets in the amount of $526,944.  In the first nine months of the year, non-interest income was $2.3 million, compared to $3.0 million in the first nine months of 2018.

Non-interest expense was $4.9 million in the third quarter of 2019 compared to $4.8 million in the third quarter of 2018 and $5.1 million in the preceding quarter.  Year-to-date, non-interest expense was $14.9 million, compared to $14.6 million in the same period a year ago.

Balance Sheet Review

Total assets increased by 5.2% to $660.3 million at September 30, 2019, from $627.9 million at September 30, 2018, and increased nominally compared to $655.9 million at June 30, 2019.  Cash and cash equivalents decreased to $17.3 million at September 30, 2019 from $44.4 million a  year ago.  Investment securities increased to $55.9 million at September 30, 2019 from $51.3 million a year ago.

Loans, net of allowance for loan losses, increased 9.5% to $551.2 million at quarter-end, compared to $503.5 million a year ago, and increased 3.0% compared to $535.3 million three months earlier.

Total deposits increased 4.1% to $539.6 million at September 30, 2019 compared to $518.3 million a year ago and increased modestly compared to $539.0 million at June 30, 2019.  Non-interest-bearing deposits increased 9.8% to $108.0 million at September 30, 2019 from $98.3 million a year ago, and interest-bearing deposits increased 2.8% to $431.7 million at quarter-end from $420.0 million a year ago.

FHLB advances decreased to $27.6 million at September 30, 2019 from $33.0 million at September 30, 2018.  Notes payable decreased to $11.6 million at September 30, 2019 from $12.2 million a year ago.

Total stockholders’ equity increased 11.7% to $68.3 million at September 30, 2019 from $61.1 million at September 30, 2018 and increased 2.2% when compared to $66.8 million at June 30, 2019.  Book value per diluted common share increased to $70.13 at September 30, 2019 from $62.70 at September 30, 2018 and $68.52 at June 30, 2019.

Credit Quality

Due to net recoveries and the continued health of the loan portfolio, the Company had no provision for loan losses in both the current quarter and the preceding quarter.  Net loan recoveries were $13,738 in the third quarter of 2019, compared with recoveries of $37,499 in the second quarter of 2019 and net loan charge-offs of $2,834 in the third quarter a year ago.

Nonperforming loans totaled $129,111 at September 30, 2019, compared to $128,634 at September 30, 2018.  Nonperforming assets decreased to $5.9 million at September 30, 2019 compared to $6.3 million at June 30, 2019 and $10.0 million at September 30, 2018.  Total non-performing assets improved to 0.90% of total assets at September 30, 2019, compared to 0.97% of total assets three months earlier and 1.60% a year earlier.

The allowance for loan losses was $7.0 million, or 1.25% of total loans, at September 30, 2019 compared to $7.3 million, or 1.43% of total loans, at September 30, 2018.

Capital

The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio of 11.61%, Common equity tier 1 capital ratio of 13.16%, Tier 1 capital ratio of 13.16% and Total capital ratio of 14.37%, at September 30, 2019.

About White River Bancshares Company

White River Bancshares Company is the single bank holding company for Signature Bank of Arkansas.  Both are headquartered in Fayetteville, Arkansas.  The Bank has locations in Fayetteville, Springdale, Bentonville, Rogers and Brinkley, Arkansas.  Founded in 2005, Signature Bank of Arkansas provides a full line of financial services to small businesses, families and farms.  White River Bancshares Company (OTCQX: WRIV), qualified to trade on the OTCQX® Best Market in December 2018.  

About the Region

White River Bancshares Company is located in thriving Northwest Arkansas in the Fayetteville-Springdale-Rogers MSA. The region is home to the corporate headquarters for Walmart Stores Inc, Sam’s Club, Tyson Foods, Simmons Foods, and J.B. Hunt Transport.  Hundreds of other market-leading companies including Procter & Gamble, Johnson & Johnson, Coca-Cola and Rubbermaid maintain offices in the region in order to maintain their relationships with the locally-based Fortune 500 companies.  Northwest Arkansas is also home to the state’s flagship public educational institution, The University of Arkansas and its Sam M. Walton College of Business.  The region has seen significant growth in its medical and arts infrastructures with the continued expansion of Washington Regional Medical System, Northwest Medical System, Mercy Health System of Northwest Arkansas and Arkansas Children’s Hospital Northwest.  Crystal Bridges Museum of American Art and the Walton Arts Center have led the expansion of the arts.  Northwest Arkansas has been repeatedly recognized in recent years as one of the best places to live in the country and remains one of the nation’s fastest-growing regions.

Forward Looking Statements

This press release contains statements about future events.  These forward-looking statements, which are based on certain assumptions of management of the Company and the Bank and describe our future plans, strategies and expectations, can generally be identified by use of forward-looking terminology such as “may,” “will,” “believe,” “plan,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions or the negative of those terms.  Our ability to predict results of future events and the actual effect of future plans or strategies are inherently uncertain and actual results may differ materially from those predicted in such forward-looking statements.  Factors that could have a material adverse effect on our operations and future prospects or that could affect the outcome of such forward-looking statements include, but are not limited to, changes in interest rates; the economic health of the local real estate market; general economic conditions; credit deterioration in our loan portfolio that would cause us to increase our allowance for loan losses; legislative or regulatory changes; technological developments; monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of our loan and securities portfolios; demand for loan products in our market areas; deposit flows and costs of capital; competition; retention and recruitment of qualified personnel; demand for financial services in our market areas; and changes in accounting principles, policies, and guidelines.  These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. The Company does not undertake and specifically declines any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

WHITE RIVER BANCSHARES COMPANY 
CONSOLIDATED BALANCE SHEETS 
September 30, 2019, June 30, 2019 and September 30, 2018 
               
UNAUDITED   September 30, 2019
  June 30, 2019   September 30, 2018
               
ASSETS
   
Cash and due from banks $ 17,033,866     $ 26,921,777     $ 43,084,096  
Federal funds sold   214,047       49,920       1,264,703  
               
Total cash and cash equivalents   17,247,913       26,971,697       44,348,799  
               
Investment securities   55,937,666       56,491,454       51,249,295  
Loans held for sale   1,562,200       1,910,237       1,083,004  
Loans, net of allowance for loan losses   551,184,762       535,276,253       503,506,673  
Premises and equipment, net   18,821,452       19,186,933       8,334,998  
Foreclosed assets held for sale   5,804,185       6,331,228       9,893,440  
Accrued interest receivable   2,465,854       2,369,594       2,384,546  
Deferred income taxes   2,226,003       2,058,613       2,224,063  
Other investments   2,797,885       2,779,585       2,726,885  
Other assets       2,210,704       2,567,363       2,108,783  
               
      $ 660,258,624     $ 655,942,957     $ 627,860,486  
               
LIABILITIES AND STOCKHOLDERS' EQUITY 
   
Deposits:              
Demand deposits - non-interest bearing $ 107,892,361     $ 108,136,610     $ 98,278,558  
  - interest bearing   139,110,640       136,078,594       133,232,192  
Savings deposits     13,110,144       13,569,006       11,777,521  
Time deposits - under $250M   162,730,976       163,753,062       174,667,750  
  - $250M and over   116,737,980       117,425,097       100,310,520  
               
Total deposits       539,582,101       538,962,369       518,266,541  
               
Federal Home Loan Bank advances   27,572,634       25,173,016       32,968,811  
Note payable       11,643,475       11,793,120       12,229,403  
Accrued interest payable   781,770       726,945       578,510  
Other liabilities     12,367,698       12,474,372       2,679,813  
               
Total liabilities     591,947,678       589,129,822       566,723,078  
               
Stockholders' equity:          
Common stock     9,763       9,763       9,613  
Surplus       87,562,406       87,420,115       86,971,084  
Accumulated deficit   (19,430,581 )     (20,760,386 )     (24,369,183 )
Treasury stock, at cost   (112,732 )     (50,824 )     (49,888 )
Accumulated other comprehensive loss   282,090       194,467       (1,424,218 )
               
Total stockholders' equity   68,310,946       66,813,135       61,137,408  
               
      $ 660,258,624     $ 655,942,957     $ 627,860,486  
               



WHITE RIVER BANCSHARES COMPANY 
CONSOLIDATED STATEMENTS OF INCOME 
For the three months ended September 30, 2019, June 30, 2019 and September 30, 2018 
       
  For the Three Months Ended
UNAUDITED September 30, 2019
  June 30, 2019     September 30, 2018
             
Interest income:            
Loans, including fees $ 7,768,738     $ 7,544,769       $ 6,789,483
Investment securities   347,434       358,304         305,880
Federal funds sold and other   79,507       56,882         202,888
             
Total interest income   8,195,679       7,959,955         7,298,251
             
Interest expense:            
Deposits   1,797,879       1,630,369         1,356,452
Federal Home Loan Bank advances   146,602       156,632         184,362
Note payable   147,018       147,296         154,409
Federal funds purchased and other   705       2,951         -
             
Total interest expense   2,092,204       1,937,248         1,695,223
             
Net interest income   6,103,475       6,022,707         5,603,028
Provision for loan losses   -       -         -
             
Net interest income after provision for loan losses   6,103,475       6,022,707         5,603,028
             
Non-interest income:            
Service charges and fees on deposits   184,032       163,127         207,588
Wealth management fee income   456,522       434,754         459,445
Secondary market fee income   287,084       250,271         160,608
Loss on sales and write-downs of foreclosed assets   (526,944 )     (181,382 )       -
Other   221,225       154,825         142,998
             
Total non-interest income   621,919       821,595         970,639
             
Non-interest expense:            
Salaries and benefits   3,431,056       3,289,366         3,091,417
Occupancy and equipment   582,957       598,348         550,629
Data processing   319,184       291,728         299,838
Marketing and business development   132,424       175,625         107,727
Professional services   182,403       321,401         373,960
Other   288,570       370,760         345,334
             
Total non-interest expense   4,936,594       5,047,228         4,768,905
             
Income before income taxes   1,788,800       1,797,074         1,804,762
             
Income tax provision   458,995       283,154         471,458
             
Net income $ 1,329,805     $ 1,513,920       $ 1,333,304
             
Basic earnings per common share $ 1.36     $ 1.55       $ 1.39
             
Diluted earnings per common share $ 1.36     $ 1.55       $ 1.39
             



White River Bancshares Company          
Selected Financial Data Three Months Ended
UNAUDITED September 30, 2019
  June 30, 2019   September 30, 2018
             
Selected Financial Condition Data: End of Period Balances        
  Assets $ 660,258,624     $ 655,942,957     $ 627,860,486  
  Investment Securities   55,937,666       56,491,454       51,249,295  
  Loans, gross   559,770,307       544,196,098       511,896,594  
  Allowance for Loan Losses   7,023,345       7,009,607       7,306,917  
  Deposits   539,582,101       538,962,369       518,266,541  
  FHLB Advances   27,572,634       25,173,016       32,968,811  
  Note Payable   11,673,475       11,793,120       12,229,403  
  Common Shareholders' Equity   68,310,946       66,813,135       61,137,408  
             
Selected Financial Condition Data: Average Balances          
  Assets $ 657,501,382     $ 642,050,388     $ 629,243,904  
  Earning Assets   625,176,901       609,106,052       605,610,938  
  Investment Securities   56,478,503       55,549,672       50,014,233  
  Loans, gross   552,356,254       540,960,725       511,624,455  
  Deposits   540,308,694       524,810,894       516,227,353  
  FHLB Advances   24,138,234       26,536,920       36,399,654  
  Note Payable   11,688,777       11,830,581       12,267,811  
  Common Shareholders' Equity   67,424,620       65,248,213       60,555,078  
             
Selected Operating Results:          
  Interest Income $ 8,195,679     $ 7,959,955     $ 7,298,251  
  Interest Expense   2,092,204       1,937,248       1,695,223  
  Net Interest Income   6,103,475       6,022,707       5,603,028  
  Provision for Loan Losses   -       -       -  
  Net Interest Income After Provision for Loan Losses   6,103,475       6,022,707       5,603,028  
  Noninterest Income   621,919       821,595       970,639  
  Noninterest Expense   4,936,594       5,047,228       4,768,905  
  Income Before Income Taxes   1,788,800       1,797,074       1,804,762  
  Income Tax Provision   458,995       283,154       471,458  
  Net Income $ 1,329,805     $ 1,513,920     $ 1,333,304  
             
  Basic Net Income per Common Share $ 1.36     $ 1.55     $ 1.39  
  Diluted Net Income per Common Share   1.36       1.55       1.39  
  Dividends Paid per Common Share   -       -       -  
  Book Value Per Common Share   70.13       68.52       62.70  
  Book Value Per Common Share-Diluted   70.13       68.52       62.70  
  Common Shares Outstanding   974,127       975,065       975,077  
  Diluted Common Shares Outstanding   974,127       975,065       975,077  
  Basic Weighted Average Common Shares Outstanding   975,014       975,070       961,870  
  Diluted Weighted Average Common Shares Outstanding   975,014       975,810       961,870  
             
Selected Ratios:          
  Return on Average Assets   0.80 %     0.95 %     0.84 %
  Return on Average Common Shareholders' Equity   7.82 %     9.31 %     8.74 %
  Average Common Shareholders' Equity to Average Assets   10.25 %     10.16 %     9.62 %
  Net Interest Margin   3.87 %     3.97 %     3.67 %
  Efficiency   73.40 %     73.74 %     72.55 %
             
Selected Asset Quality:          
  Net (Recoveries) Charge-offs $ (13,738 )   $ (37,499 )   $ 2,834  
  Classified Assets   6,194,407       6,613,712       10,199,612  
  Nonperforming Loans   129,111       -       128,634  
  Nonperforming Assets   5,933,296       6,331,228       10,022,074  
  Total Nonperforming Loans to Total Loans   0.02 %     0.00 %     0.03 %
  Total Nonperforming Loans to Total Assets   0.02 %     0.00 %     0.02 %
  Total Nonperforming Assets to Total Assets   0.90 %     0.97 %     1.60 %


Contact:      
Scott Sandlin, Chief Strategy Officer                                                                               
479-684-3754