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
UNAUDITEDDecember 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 DataThree Months Ended
UNAUDITEDDecember 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%

Scott Sandlin, Chief Strategy Officer
                    479-684-3754