FAYETTEVILLE, Ark., March 15, 2019 (GLOBE NEWSWIRE) -- White River Bancshares Company (OTCQX: WRIV), (the “Company”) the holding company for Signature Bank of Arkansas (the “Bank”), today reported that growing revenues and an expanding net interest margin contributed to fourth quarter net income of $928,000, or $0.95 per diluted share.  This compares to a net loss of $132,000, or $0.16 loss per diluted share in the fourth quarter of 2017, which included an additional tax expense of $911,997 from a one-time write-down of its deferred tax assets and liabilities due to the impact of the Tax Cuts and Jobs Act of 2017.  For the full year ended December 31, 2018, net income increased to $4.6 million, or $4.74 per diluted share, compared to $3.0 million, or $3.67 per diluted share, in 2017.

Financial Highlights:

  • Annual net income of $4.6 million, or $4.74 per diluted share.
  • Quarterly net income of $928,000, or $0.95 per diluted share.
  • Quarterly net interest margin (“NIM”) expanded by seven basis points to 3.87% compared to the fourth quarter a year ago.
  • Net loans of $504.2 million at December 31, 2018, an increase of 3.28% from December 31, 2017.
  • Total deposits of $510.11 million at December 31, 2018, an increase of 6.70% from December 31, 2017.
  • Non-performing assets at December 31, 2018 improved to 1.26% of total assets from 1.94% a year ago.
  • Book value per common share of $64.43 at December 31, 2018.
  • Total risk-based capital ratio of 15.18% and Tier 1 leverage ratio of 11.86% for the Bank at December 31, 2018.

“We reported strong fourth quarter and year end operating results, delivering steady loan and deposit growth, while expanding our net interest income,” said Gary Head, President and Chief Executive Officer.  “Looking forward, we remain focused on growing low cost deposits, diversifying our loan portfolio and improving operating efficiencies across the board.  The economic fundamentals in our market are strong and we remain optimistic about the upcoming year.  At the same time, we will continue to execute upon our commitment to improve liquidity and to increase our franchise value.”

“As previously announced at the end of 2018, the Company shares qualified to trade on the OTCQX Best Markets,” added Head.  “This enables us to improve communications and tell our story through a public medium and provides new and existing shareholders with access to a public trading market for our shares.”   

Income Statement

The Company’s net interest margin improved 7 basis points to 3.87% in the fourth quarter of 2018, compared to 3.80% in fourth quarter a year ago.  For the full year 2018, the net interest margin was 3.73% compared to 3.92% in 2017.

Fourth quarter net interest income increased by 7.75% to $5.69 million, from $5.28 million in the fourth quarter of 2017.  Total interest income increased by 8.61% to $7.32 million in the fourth quarter of 2018 from $6.74 million during the like period in 2017.  Total interest expense increased by 11.69% to $1.63 million in the fourth quarter of 2018, from $1.46 million during the same period in 2017 largely as a result of the increase in interest-bearing deposits.

For the year ended December 31, 2018, net interest income increased by 7.79% to $22.12 million from $20.52 million in 2017.  Total interest income increased by 10.99% to $28.53 million in 2018, from $25.70 million in 2017; total interest expense increased by 23.66% to $6.42 million in 2018 from $5.19 million in 2017, primarily due to the increase in interest bearing deposits.

Non-interest income was ($567,806) in the fourth quarter of 2018 and $774,121 in the fourth quarter of 2017, a decrease of 173.35%.  The decrease was largely a result of a $1.94 million increase in loss on sales and write-downs of foreclosed assets during the fourth quarter of 2018 over the same period in 2017.  For the year ended December 31, 2018, non-interest income decreased 9.42% to $2.38 million compared to $2.63 million in 2017.  The decrease was mainly a result of a $1.03 million increase in loss on sales and write-downs of foreclosed assets over the same period.

Non-interest expense decreased 3.28% to $4.62 million in the fourth quarter of 2018 compared to $4.78 million in the fourth quarter of 2017.  Salaries and benefits, the largest component of non-interest expense, decreased by $117,800, or 3.78%, over the like period.  For the year ended December 31, 2018, non-interest expense was $19.17 million compared to $18.06 million in 2017, an increase of 6.14%.  Salaries and benefits increased by $640,239, or 5.45%, over the same period.

Balance Sheet Review

Total assets increased by 3.58% to $613.69 million at December 31, 2018 from $592.46 million at December 31, 2017. Cash and cash equivalents increased to $29.05 million at December 31, 2018 from $27.95 million a  year ago. Investment securities increased to $53.94 million at December 31, 2018 from $47.77 million at December 31, 2017.

Loans, net of allowance for loan losses, increased 3.28% to $504.16 million at December 31, 2018 from $488.13 million at December 31, 2017. 

Total deposits increased 6.70% to $510.11 million at December 31, 2018 from $478.06 million at December 31, 2017.  Non-interest-bearing deposits increased to $99.94 million at December 31, 2018 from $89.27 million a year ago, and interest-bearing deposits increased to $410.17 million at year-end from $388.78 million a year ago.

FHLB advances decreased to $25.37 million at December 31, 2018 from $38.26 million at December 31, 2017.  Notes payable decreased to $12.09 million from $14.63 million over the same period.

Total stockholders’ equity increased to $62.83 million at December 31, 2018 from $58.54 million at December 31, 2017.  Book value per common share increased to $64.43 at December 31, 2018 from $60.97 at December 31, 2017.

Credit Quality

“We had net loan recoveries during the quarter, and as a result we recorded a negative provision for loan losses of $750,000 in the fourth quarter,” added Head.  “This compares to no provision for loan losses in the fourth quarter of 2017.”  Net loan recoveries were $408,930 in the fourth quarter compared to net charge offs of $180,425 in the fourth quarter a year ago.

For the full year, the negative provision for loan losses was $750,000, compared to a negative provision of $1.35 million in 2017.  Net loan recoveries totaled $493,788 for 2018 compared to net loan recoveries of $2.25 million in 2017.

There were no non-performing loans on the books at the end of 2018, compared to $575,534 in non-performing loans at December 31, 2017.  Foreclosed assets held for sale decreased to $7.73 million at December 31, 2018 from $10.93 million at December 31, 2017.  Total non-performing assets improved to 1.26% of total assets at year-end, compared to 1.94% of total assets one year ago.

The allowance for loan losses was $6.97 million, or 1.36% of total loans, at December 31, 2018 as compared to $7.22 million, or 1.46% of total loans, at December 31, 2017.

Capital

The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio of 11.86%, Common equity tier 1 capital ratio of 13.92%, Tier 1 capital ratio of 13.92% and Total capital ratio of 15.18% at December 31, 2018.

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, and Brinkley, Arkansas, with plans to open a new location in Rogers, Arkansas in the second quarter of 2019.  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

The Company is located in Northwest Arkansas in the Fayetteville-Springdale-Rogers MSA. Our region is the corporate headquarters for Walmart Stores Inc., Tyson Foods, Simmons Foods, and J.B. Hunt Transport.  Hundreds of companies, including Procter & Gamble, Johnson & Johnson, Coca-Cola and Rubbermaid, have offices in order to manage their relationships with the locally based Fortune 500 companies.  Northwest Arkansas is also the home of the University of Arkansas, the state’s flagship public institution including the Sam M. Walton College of Business.  Northwest Arkansas has also seen significant growth in its medical and arts infrastructures with Washington Regional Medical System, Northwest Medical System, Mercy Health System of Northwest Arkansas and Arkansas Children’s Hospital Northwest expanding throughout the area in recent years.  Crystal Bridges Museum, an American art museum and the Walton Arts Center, have led the arts expansion throughout the region.  Northwest Arkansas has ranked among the nation’s fastest-growing regions in recent years.

Northwest Arkansas has an unemployment rate of 2.7% compared to the national average of 3.9%.  Northwest Arkansas has seen its job market increase by 0.7% over the last year.  Future job growth over the next ten years is predicted to be 42.2%, which is higher than the US average of 33.5%.  https://www.forbes.com/places/ar/fayetteville/

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
December 31, 2018 and December 31, 2017
     
UNAUDITED  2018   2017 
     
ASSETS
     
Cash and due from banks$  27,944,329  $  27,453,943 
Federal funds sold    1,101,025     495,867 
     
Total cash and cash equivalents   29,045,354     27,949,810 
     
Investment securities 53,940,001   47,765,626 
Loans held for sale  494,937   217,000 
Loans, net of allowance for loan losses   504,160,307     488,133,143 
Premises and equipment, net   8,532,146     8,427,051 
Foreclosed assets held for sale   7,733,440     10,929,172 
Accrued interest receivable   2,511,191     2,061,910 
Deferred income taxes   2,539,052     2,310,482 
Other investments    2,743,885     2,685,085 
Other assets    1,992,144     1,980,609 
         
         
     
  $  613,692,457  $  592,459,888 
         
         
     
LIABILITIES AND STOCKHOLDERS' EQUITY
     
Deposits:    
Demand deposits- non-interest bearing                                                                         $  99,939,633  $  89,274,500 
 - interest bearing   131,535,024     116,948,463 
Savings deposits    11,856,239     10,364,704 
Time deposits- under $250M   168,979,360     173,042,775 
 - $250M and over   97,799,817     88,428,825 
     
Total deposits   510,110,073     478,059,267 
     
Federal Home Loan Bank advances   25,371,095     38,256,778 
Note payable  12,086,880     14,630,430 
Accrued interest payable   587,056     488,276 
Other liabilities    2,709,944     2,486,227 
     
Total liabilities   550,865,048     533,920,978 
     
Stockholders' equity:   
Preferred stock    -     1,389 
Common stock    9,763     8,224 
Surplus    87,129,011     86,974,340 
Accumulated deficit   (23,440,979)    (28,010,723)
Treasury stock,  at cost   (49,888)    (49,888)
Accumulated other comprehensive loss   (820,498)    (384,432)
        
         
     
Total stockholders' equity   62,827,409     58,538,910 
     
  $  613,692,457  $  592,459,888 
        
         
     

 

 
WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended December 31, 2018 and December 31, 2017
    
UNAUDITED 2018   2017 
    
Interest income:   
Loans, including fees$  6,882,662  $  6,456,141 
Investment securities   340,926     267,748 
Federal funds sold and other   96,446     16,103 
    
Total interest income   7,320,034     6,739,992 
    
Interest expense:   
Deposits   1,350,383     1,008,970 
Federal Home Loan Bank advances   123,371     190,840 
Note payable   152,605     253,097 
Federal funds purchased and other    225     3,369 
    
Total interest expense   1,626,584     1,456,276 
    
Net interest income   5,693,450     5,283,716 
Provision for loan losses   (750,000)    - 
        
        
        
        
        
    
Net interest income after provision for loan losses   6,443,450     5,283,716 
    
Non-interest income:   
Service charges and fees on deposits   198,929     201,659 
Wealth management fee income   494,996     398,276 
Secondary market fee income   137,998     251,740 
Loss on sales and write-downs of foreclosed assets   (2,150,000)    (210,427)
Other   750,271     132,873 
    
Total non-interest income   (567,806)    774,121 
    
Non-interest expense:   
Salaries and benefits   2,997,064     3,114,864 
Occupancy and equipment   539,425     545,462 
Data processing   302,157     252,790 
Marketing and business development   60,411     145,270 
Professional services   339,343     338,272 
Other   385,946     384,725 
    
Total non-interest expense   4,624,346     4,781,383 
        
        
        
        
        
    
Income before income taxes   1,251,298     1,276,454 
    
Income tax provision   323,094     1,408,717 
    
Net income $  928,204  $  (132,263)
        
        
        
        
        
    
Basic earnings per common share$  0.95  $  (0.16)
        
        
        
        
        
    
Diluted earnings per common share$  0.95  $  (0.16)
        
        
        
        
        
    

 

 
WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the twelve months ended December 31, 2018 and December 31, 2017
    
UNAUDITED 2018   2017 
    
Interest income:   
Loans, including fees$  26,798,021  $  24,645,168 
Investment securities   1,203,636     1,016,335 
Federal funds sold and other   529,052     43,206 
    
Total interest income   28,530,709     25,704,709 
        
        
        
        
        
        
        
        
    
Interest expense:   
Deposits   5,103,493     3,488,375 
Federal Home Loan Bank advances   684,544     735,069 
Note payable   618,219     953,533 
Federal funds purchased and other    9,104     10,858 
    
Total interest expense   6,415,360     5,187,835 
    
Net interest income   22,115,349     20,516,874 
Provision for loan losses   (750,000)    (1,350,000)
        
        
        
        
        
        
        
        
    
Net interest income after provision for loan losses   22,865,349     21,866,874 
    
Non-interest income:   
Service charges and fees on deposits   815,192     778,392 
Wealth management fee income   1,817,483     1,482,963 
Secondary market fee income   844,252     1,099,284 
Loss on sales and write-downs of foreclosed assets   (2,263,067)    (1,233,531)
Other   1,170,993     505,663 
        
        
        
        
        
        
        
        
    
Total non-interest income   2,384,853     2,632,771 
        
        
        
        
        
        
        
        
    
Non-interest expense:   
Salaries and benefits   12,381,845     11,741,606 
Occupancy and equipment   2,151,760     2,167,014 
Data processing   1,141,766     1,030,690 
Marketing and business development   608,374     603,688 
Professional services   1,486,845     1,114,975 
Other   1,400,283     1,404,678 
    
Total non-interest expense   19,170,873     18,062,651 
    
Income before income taxes   6,079,329     6,436,994 
    
Income tax provision   1,509,585     3,400,210 
        
        
        
        
        
        
        
        
    
Net income $  4,569,744  $  3,036,784 
        
        
        
        
        
        
        
        
    
Basic earnings per common share$  5.02  $  3.70 
        
        
        
        
        
        
        
        
    
Diluted earnings per common share$  4.74  $  3.67 
        
        
        
        
        
        
        
        
    

 

        
White River Bancshares Company Three months ended   Twelve months ended 
Selected Financial Data December   December 
UNAUDITED 2018   2017   2018   2017 
         
Selected Financial Condition Data: End of Period Balances       
 Assets$  613,692,457  $  592,459,888  $  613,692,457  $  592,459,888 
 Investment Securities   53,940,001     47,765,626     53,940,001     47,765,626 
 Loans, gross   511,621,091     495,572,202     511,621,091     495,572,202 
 Allowance for Loan Losses   6,965,847     7,222,059     6,965,847     7,222,059 
 Deposits   510,110,073     478,059,267     510,110,073     478,059,267 
 FHLB Advances   25,371,095     38,256,778     25,371,095     38,256,778 
 Note Payable   12,086,880     14,630,430     12,086,880     14,630,430 
 Common Shareholders' Equity   62,827,409     50,072,555     62,827,409     50,072,555 
         
Selected Financial Condition Data: Average Balances       
 Assets$  608,170,038  $  578,170,503  $  616,986,136  $  549,665,847 
 Earning Assets   584,124,950     552,284,894     592,555,362     523,063,332 
 Investment Securities   52,899,703     47,893,956     50,001,369     47,178,875 
 Loans, gross   511,124,646     491,143,513     511,428,854     463,984,519 
 Deposits   506,647,368     463,574,913     506,242,659     436,505,339 
 FHLB Advances   23,426,724     40,890,242     34,444,699     39,883,947 
 Note Payable   12,133,390     18,831,090     12,384,367     18,285,215 
 Common Shareholders' Equity   61,605,063     49,963,279     55,517,056     48,887,789 
         
Selected Operating Results:       
 Interest Income$  7,320,034  $  6,739,992  $  28,530,709  $  25,704,709 
 Interest Expense   1,626,584     1,456,276     6,415,360     5,187,835 
 Net Interest Income   5,693,450     5,283,716     22,115,349     20,516,874 
 Provision for Loan Losses   (750,000)    -     (750,000)    (1,350,000)
 Net Interest Income After Provision for Loan Losses   6,443,450     5,283,716     22,865,349     21,866,874 
 Noninterest Income   (567,806)    774,121     2,384,853     2,632,771 
 Noninterest Expense   4,624,346     4,781,383     19,170,873     18,062,651 
 Income Before Income Taxes   1,251,298     1,276,454     6,079,329     6,436,994 
 Income Tax Provision   323,094     1,408,717     1,509,585     3,400,210 
 Net Income$  928,204  $  (132,263) $  4,569,744  $  3,036,784 
         
 Basic Net Income per Common Share$  0.95  $  (0.16) $  5.02  $  3.70 
 Diluted Net Income per Common Share   0.95     (0.16)    4.74     3.67 
 Dividends Paid per Common Share   -      -      -      -  
 Book Value Per Common Share   64.43     60.97     64.43     60.97 
 Book Value Per Common Share-Diluted   64.43     60.97     64.43     60.97 
 Common Shares Outstanding   975,077     821,216     975,077     821,216 
 Diluted Common Shares Outstanding    975,079     960,077     975,082     960,077 
 Basic Weighted Average Common Shares Outstanding   975,077     821,216     909,526     821,216 
 Diluted Weighted Average Common Shares Outstanding   975,079     842,347     964,312     826,542 
         
Selected Ratios:       
 Return on Average Assets 0.61%  -0.09%  0.74%  0.55%
 Return on Average Common Shareholders' Equity 5.98%  -1.05%  8.23%  5.89%
 Average Common Shareholders' Equity to Average Assets 10.13%  8.64%  9.00%  8.89%
 Net Interest Margin 3.87%  3.80%  3.73%  3.92%
 Efficiency 90.22%  78.93%  78.25%  78.03%
         
Selected Asset Quality:       
 Net (Recoveries) Charge-offs$  (408,930) $  180,425  $  (493,788) $  (2,245,938)
 Classified Assets   8,021,842     11,691,707     8,021,842     11,691,707 
 Nonperforming Loans   -     575,362     -     575,362 
 Nonperforming Assets   7,733,440     11,504,534     7,733,440     11,504,534 
 Total Nonperforming Loans to Total Loans 0.00%  0.12%  0.00%  0.12%
 Total Nonperforming Loans to Total Assets 0.00%  0.10%  0.00%  0.10%
 Total Nonperforming Assets to Total Assets 1.26%  1.94%  1.26%  1.94%
                 


Scott Sandlin   479-684-3754