FAYETTEVILLE, Ark., Jan. 23, 2020 (GLOBE NEWSWIRE) -- White River Bancshares Company (OTCQX: WRIV), (the “Company”) the holding company for Signature Bank of Arkansas (the “Bank”), today reported strong loan and deposit growth and improved asset quality contributed to net income increasing 22.0% to $1.1 million, or $1.17 per diluted share, in the fourth quarter of 2019, compared to $928,000, or $0.95 per diluted share, in the fourth quarter of 2018. In the third quarter of 2019, the Company earned $1.3 million, or $1.36 per diluted share. For the full year ended December 31, 2019, net income increased 12.5% to a record $5.1 million, or $5.28 per diluted share, compared to $4.6 million, or $4.74 per diluted share, in 2018. All financial results are unaudited.
Fourth Quarter and Full Year 2019 Financial Highlights:
- Fourth quarter net income was $1.1 million, or $1.17 per diluted share.
- Fourth quarter net interest margin (“NIM”) was 3.85%, a two basis point contraction compared to both the fourth quarter a year ago and the preceding quarter.
- Net loans increased 12.9% to $569.4 million at December 31, 2019, compared to December 31, 2018.
- Total deposits increased 12.8% to $575.3 million at December 31, 2019, compared to a year ago.
- Non-interest-bearing deposits increased 17.5% to $117.5 million at December 31, 2019, compared to $99.9 million a year ago.
- Non-performing assets decreased 55.5% to $2.6 million at December 31, 2019, compared to $5.9 million at September 30, 2019, and decreased 65.8% when compared to $7.7 million a year ago.
- Nonperforming assets (NPAs) represent 0.38% of total assets at December 31, 2019, compared to 1.26% of total assets a year ago and 0.90% of total assets three months earlier.
- Book value per diluted common share increased to $71.43 at December 31, 2019, from $64.43 a year ago.
- Total risk-based capital ratio was 13.64% and Tier 1 leverage ratio was 11.64% for the Bank at December 31, 2019.
- On December 11, 2019, the Company completed a private placement of $11 million in fixed-to-floating rate subordinated notes due December 31, 2029 to accredited institutional investors.
“We had an exceptional year delivering record earnings for 2019, highlighted by revenue growth, double digit loan and deposit growth with a solid net interest margin,” said Gary Head, President and Chief Executive Officer. “Additionally, multiple properties sold during the fourth quarter, resulting in a reduction in nonperforming assets of 55% compared to three months earlier, and bringing NPAs to their lowest level in years. With the improvements in asset quality and our growth strategy in place, we remain focused on building long-term customer relationships and creating value for our customers and shareholders.”
Income Statement
The Company’s net interest margin was 3.85% in the fourth quarter of 2019, compared to 3.87% in both the preceding quarter and the fourth quarter of 2018. For the year, the net interest margin improved 18 basis points to 3.91%, compared to 3.73% in 2018.
Fourth quarter net interest income increased by 7.9% to $6.1 million, from $5.7 million in the fourth quarter of 2018, and remained unchanged when compared to the third quarter of 2019. Total interest income increased by 13.4% to $8.3 million in the fourth quarter of 2019 from $7.3 million during the fourth quarter of 2018 and increased by 1.3% compared to $8.2 million in the preceding quarter. Total interest expense increased by 32.7% to $2.2 million in the fourth quarter of 2019, from $1.6 million during the fourth quarter of 2018, and increased 3.1% compared to $2.1 million in the preceding quarter. The year over year increase was primarily due to the increase in interest-bearing deposits. For the year, net interest income increased 9.0% to $24.1 million, compared to $22.1 million in 2018.
Non-interest income increased to $1.3 million in the fourth quarter of 2019, and included a loss on sales and write-downs of foreclosed assets of $46,977. This compares to non-interest income of $621,919 in the third quarter of 2019, with a loss on sales and write-down of foreclosed assets of $526,944, and non-interest income of ($567,806) in the fourth quarter of 2018, with a loss on sales and write-down on foreclosed assets of $2.2 million. For the year, non-interest income increased 49.4% to $3.6 million, compared to $2.4 million in 2018.
Non-interest expense totaled $5.4 million in the fourth quarter of 2019 compared to $4.6 million in the fourth quarter a year ago and $4.9 million in the prior quarter. For the year, non-interest expense was $20.3 million, compared to $19.2 million in 2018.
Balance Sheet Review
Total assets increased by 14.4% to $702.1 million at December 31, 2019, from $613.7 million at December 31, 2018, and increased 6.3% compared to $660.3 million at September 30, 2019. Cash and cash equivalents increased to $39.1 million at December 31, 2019 from $29.0 million a year ago. Investment securities increased to $56.5 million at December 31, 2019 from $53.9 million a year ago.
Loans, net of allowance for loan losses, increased 12.9% to $569.4 million at year-end, compared to $504.2 million a year ago, and increased 3.3% compared to $551.2 million three months earlier.
Total deposits increased 12.8% to $575.3 million at December 31, 2019 compared to $510.1 million a year ago and increased 6.6% compared to $539.6 million at September 30, 2019, with non-interest bearing deposits increasing 17.5% to $117.5 million at year-end compared to $99.9 million a year ago.
FHLB advances totaled $27.5 million at December 31, 2019 from $25.4 million at December 31, 2018. Notes payable decreased to $10.7 million at December 31, 2019 from $12.1 million a year ago.
Total stockholders’ equity increased 10.3% to $69.3 million at December 31, 2019 from $62.8 million at December 31, 2018 and increased 1.4% when compared to $68.3 million at September 30, 2019. Book value per diluted common share increased to $71.43 at December 31, 2019 from $64.43 at December 31, 2018 and $70.13 at September 30, 2019.
Credit Quality
The provision for loan losses increased to $500,000 during the fourth quarter of 2019. This compares to no provision for loan losses in the preceding quarter and a credit to the provision for loan losses of $750,000 in the fourth quarter of 2018.
Nonperforming loans totaled $2.2 million at December 31, 2019, compared to $129,000 at September 30, 2019, and no nonperforming loans at December 31, 2018. Nonperforming assets decreased to $2.6 million at December 31, 2019 compared to $5.9 million at September 30, 2019 and $7.7 million at December 31, 2018. Total non-performing assets improved to 0.38% of total assets at December 31, 2019, compared to 0.90% of total assets three months earlier and 1.26% a year earlier.
The allowance for loan losses was $6.7 million, or 1.16% of total loans, at December 31, 2019 compared to $7.0 million, or 1.36% of total loans, at December 31, 2018. Net loan charge-offs were $826,800 in the fourth quarter of 2019, compared to net loan recoveries of $13,700 in the third quarter of 2019 and net loan recoveries of $408,900 in the fourth quarter a year ago.
Capital
The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio of 11.64%, Common equity tier 1 capital ratio of 12.55%, Tier 1 capital ratio of 12.55% and Total capital ratio of 13.64%, at December 31, 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 | |||||||||||||
| December 31, 2019, September 30, 2019 and December 31, 2018 | |||||||||||||
| UNAUDITED | December 31, 2019 | September 30, 2019 | December 31, 2018 | ||||||||||
| ASSETS | |||||||||||||
| Cash and due from banks | $ | 38,984,145 | $ | 17,033,866 | $ | 27,944,329 | |||||||
| Federal funds sold | 100,000 | 214,047 | 1,101,025 | ||||||||||
| Total cash and cash equivalents | 39,084,145 | 17,247,913 | 29,045,354 | ||||||||||
| Investment securities | 56,493,544 | 55,937,666 | 53,940,001 | ||||||||||
| Loans held for sale | 2,045,250 | 1,562,200 | 494,937 | ||||||||||
| Loans, net of allowance for loan losses | 569,419,374 | 551,184,762 | 504,160,307 | ||||||||||
| Premises and equipment, net | 24,860,247 | 18,821,452 | 8,532,146 | ||||||||||
| Foreclosed assets held for sale | 487,827 | 5,804,185 | 7,733,440 | ||||||||||
| Accrued interest receivable | 2,766,513 | 2,465,854 | 2,511,191 | ||||||||||
| Deferred income taxes | 1,443,805 | 2,226,003 | 2,539,052 | ||||||||||
| Other investments | 2,859,485 | 2,797,885 | 2,743,885 | ||||||||||
| Other assets | 2,636,708 | 2,210,704 | 1,992,144 | ||||||||||
| $ | 702,096,898 | $ | 660,258,624 | $ | 613,692,457 | ||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
| Deposits: | |||||||||||||
| Demand deposits | - non-interest bearing | $ | 117,450,670 | $ | 107,892,361 | $ | 99,939,633 | ||||||
| - interest bearing | 151,696,610 | 139,110,640 | 131,535,024 | ||||||||||
| Savings deposits | 13,554,400 | 13,110,144 | 11,856,239 | ||||||||||
| Time deposits | - under $250M | 165,267,666 | 162,730,976 | 168,979,360 | |||||||||
| - $250M and over | 127,293,109 | 116,737,980 | 97,799,817 | ||||||||||
| Total deposits | 575,262,455 | 539,582,101 | 510,110,073 | ||||||||||
| Federal Home Loan Bank advances | 27,471,344 | 27,572,634 | 25,371,095 | ||||||||||
| Notes payable | 10,747,683 | 11,643,475 | 12,086,880 | ||||||||||
| Accrued interest payable | 713,397 | 781,770 | 587,056 | ||||||||||
| Other liabilities | 18,612,742 | 12,367,698 | 2,709,944 | ||||||||||
| Total liabilities | 632,807,621 | 591,947,678 | 550,865,048 | ||||||||||
| Stockholders' equity: | |||||||||||||
| Common stock | 9,763 | 9,763 | 9,763 | ||||||||||
| Surplus | 87,656,698 | 87,562,406 | 87,129,011 | ||||||||||
| Accumulated deficit | (18,298,210 | ) | (19,430,581 | ) | (23,440,979 | ) | |||||||
| Treasury stock, at cost | (387,022 | ) | (112,732 | ) | (49,888 | ) | |||||||
| Accumulated other comprehensive loss | 308,048 | 282,090 | (820,498 | ) | |||||||||
| Total stockholders' equity | 69,289,277 | 68,310,946 | 62,827,409 | ||||||||||
| $ | 702,096,898 | $ | 660,258,624 | $ | 613,692,457 | ||||||||
| WHITE RIVER BANCSHARES COMPANY | |||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||
| For the three months ended December 31, 2019, September 30, 2019 and December 31, 2018 | |||||||||||
| For the Three Months Ended | |||||||||||
| UNAUDITED | December 31, 2019 | September 30, 2019 | December 31, 2018 | ||||||||
| Interest income: | |||||||||||
| Loans, including fees | $ | 7,911,834 | $ | 7,768,738 | $ | 6,882,662 | |||||
| Investment securities | 346,122 | 347,434 | 340,926 | ||||||||
| Federal funds sold and other | 40,753 | 79,507 | 96,446 | ||||||||
| Total interest income | 8,298,709 | 8,195,679 | 7,320,034 | ||||||||
| Interest expense: | |||||||||||
| Deposits | 1,841,859 | 1,797,879 | 1,350,383 | ||||||||
| Federal Home Loan Bank advances | 130,782 | 146,602 | 123,371 | ||||||||
| Notes payable | 173,369 | 147,018 | 152,605 | ||||||||
| Federal funds purchased and other | 11,965 | 705 | 225 | ||||||||
| Total interest expense | 2,157,975 | 2,092,204 | 1,626,584 | ||||||||
| Net interest income | 6,140,734 | 6,103,475 | 5,693,450 | ||||||||
| Provision for loan losses | 500,000 | - | (750,000 | ) | |||||||
| Net interest income after provision for loan losses | 5,640,734 | 6,103,475 | 6,443,450 | ||||||||
| Non-interest income: | |||||||||||
| Service charges and fees on deposits | 168,410 | 184,032 | 198,929 | ||||||||
| Wealth management fee income | 474,168 | 456,522 | 494,996 | ||||||||
| Secondary market fee income | 259,280 | 287,084 | 137,998 | ||||||||
| Loss on sales and write-downs of foreclosed assets | (46,977 | ) | (526,944 | ) | (2,150,000 | ) | |||||
| Other | 419,335 | 221,225 | 750,271 | ||||||||
| Total non-interest income | 1,274,216 | 621,919 | (567,806 | ) | |||||||
| Non-interest expense: | |||||||||||
| Salaries and benefits | 3,452,028 | 3,431,056 | 2,997,064 | ||||||||
| Occupancy and equipment | 738,169 | 582,957 | 539,425 | ||||||||
| Data processing | 296,598 | 319,184 | 302,157 | ||||||||
| Marketing and business development | 182,312 | 132,424 | 60,411 | ||||||||
| Professional services | 392,950 | 182,403 | 339,343 | ||||||||
| Other | 327,843 | 288,570 | 385,946 | ||||||||
| Total non-interest expense | 5,389,900 | 4,936,594 | 4,624,346 | ||||||||
| Income before income taxes | 1,525,050 | 1,788,800 | 1,251,298 | ||||||||
| Income tax provision | 392,679 | 458,995 | 323,094 | ||||||||
| Net income | $ | 1,132,371 | $ | 1,329,805 | $ | 928,204 | |||||
| Basic earnings per common share | $ | 1.17 | $ | 1.36 | $ | 0.95 | |||||
| Diluted earnings per common share | $ | 1.17 | $ | 1.36 | $ | 0.95 | |||||
| White River Bancshares Company | ||||||||||||
| Selected Financial Data | Three Months Ended | |||||||||||
| UNAUDITED | December 31, 2019 | September 30, 2019 | December 31, 2018 | |||||||||
| Selected Financial Condition Data: End of Period Balances | ||||||||||||
| Assets | $ | 702,096,898 | $ | 660,258,624 | $ | 613,692,457 | ||||||
| Investment Securities | 56,493,544 | 55,937,666 | 53,940,001 | |||||||||
| Loans, gross | 578,161,121 | 559,770,307 | 511,621,091 | |||||||||
| Allowance for Loan Losses | 6,696,497 | 7,023,345 | 6,965,847 | |||||||||
| Deposits | 575,262,455 | 539,582,101 | 510,110,073 | |||||||||
| FHLB Advances | 27,471,344 | 27,572,634 | 25,371,095 | |||||||||
| Notes Payable | 10,747,683 | 11,673,475 | 12,086,880 | |||||||||
| Common Shareholders' Equity | 69,289,277 | 68,310,946 | 62,827,409 | |||||||||
| Selected Financial Condition Data: Average Balances | ||||||||||||
| Assets | $ | 665,273,269 | $ | 657,501,382 | $ | 608,170,038 | ||||||
| Earning Assets | 633,146,281 | 625,176,901 | 584,124,950 | |||||||||
| Investment Securities | 56,180,684 | 56,478,503 | 52,899,703 | |||||||||
| Loans, gross | 563,326,863 | 552,356,254 | 511,124,646 | |||||||||
| Deposits | 547,479,974 | 540,308,694 | 506,647,368 | |||||||||
| FHLB Advances | 22,197,663 | 24,138,234 | 23,426,724 | |||||||||
| Notes Payable | 11,365,461 | 11,688,777 | 12,133,390 | |||||||||
| Common Shareholders' Equity | 68,598,333 | 67,424,620 | 61,605,063 | |||||||||
| Selected Operating Results: | ||||||||||||
| Interest Income | $ | 8,298,709 | $ | 8,195,679 | $ | 7,320,034 | ||||||
| Interest Expense | 2,157,975 | 2,092,204 | 1,626,584 | |||||||||
| Net Interest Income | 6,140,734 | 6,103,475 | 5,693,450 | |||||||||
| Provision for Loan Losses | 500,000 | - | (750,000 | ) | ||||||||
| Net Interest Income After Provision for Loan Losses | 5,640,734 | 6,103,475 | 6,443,450 | |||||||||
| Noninterest Income | 1,274,216 | 621,919 | (567,806 | ) | ||||||||
| Noninterest Expense | 5,389,900 | 4,936,594 | 4,624,346 | |||||||||
| Income Before Income Taxes | 1,525,050 | 1,788,800 | 1,251,298 | |||||||||
| Income Tax Provision | 392,679 | 458,995 | 323,094 | |||||||||
| Net Income | $ | 1,132,371 | $ | 1,329,805 | $ | 928,204 | ||||||
| Basic Net Income per Common Share | $ | 1.17 | $ | 1.36 | $ | 0.95 | ||||||
| Diluted Net Income per Common Share | 1.17 | 1.36 | 0.95 | |||||||||
| Dividends Paid per Common Share | - | - | - | |||||||||
| Book Value Per Common Share | 71.43 | 70.13 | 64.43 | |||||||||
| Book Value Per Common Share-Diluted | 71.43 | 70.13 | 64.43 | |||||||||
| Common Shares Outstanding | 969,998 | 974,127 | 975,077 | |||||||||
| Diluted Common Shares Outstanding | 970,004 | 974,127 | 975,079 | |||||||||
| Basic Weighted Average Common Shares Outstanding | 971,318 | 975,014 | 975,077 | |||||||||
| Diluted Weighted Average Common Shares Outstanding | 971,322 | 975,014 | 975,079 | |||||||||
| Selected Ratios: | ||||||||||||
| Return on Average Assets | 0.68 | % | 0.80 | % | 0.61 | % | ||||||
| Return on Average Common Shareholders' Equity | 6.55 | % | 7.82 | % | 5.98 | % | ||||||
| Average Common Shareholders' Equity to Average Assets | 10.31 | % | 10.25 | % | 10.13 | % | ||||||
| Net Interest Margin | 3.85 | % | 3.87 | % | 3.87 | % | ||||||
| Efficiency | 72.69 | % | 73.40 | % | 90.22 | % | ||||||
| Selected Asset Quality: | ||||||||||||
| Net (Recoveries) Charge-offs | $ | 826,847 | $ | (13,738 | ) | $ | (408,930 | ) | ||||
| Classified Assets | 2,902,922 | 6,194,407 | 8,021,842 | |||||||||
| Nonperforming Loans | 2,153,921 | 129,111 | - | |||||||||
| Nonperforming Assets | 2,641,748 | 5,933,296 | 7,733,440 | |||||||||
| Total Nonperforming Loans to Total Loans | 0.37 | % | 0.02 | % | 0.00 | % | ||||||
| Total Nonperforming Loans to Total Assets | 0.31 | % | 0.02 | % | 0.00 | % | ||||||
| Total Nonperforming Assets to Total Assets | 0.38 | % | 0.90 | % | 1.26 | % | ||||||
Contact: Scott Sandlin, Chief Strategy Officer
479-684-3754