White River Bancshares Co. Earns $1.93 Million, or $1.99 Per Diluted Share, in Third Quarter 2021; Results Highlighted By Double Digit Loan and Deposit Growth Year-Over-Year; Book Value Increases to $81.47 Per Common Share

Fayetteville, Arkansas, UNITED STATES


FAYETTEVILLE, Ark., Oct. 14, 2021 (GLOBE NEWSWIRE) -- White River Bancshares Company (OTCQX: WRIV), (the “Company”) the holding company for Signature Bank of Arkansas (the “Bank”), today reported net income increased 67.4% to $1.93 million, or $1.99 per diluted share, in the third quarter of 2021, compared to $1.15 million, or $1.19 per diluted share, in the third quarter of 2020. In the prior quarter, the Company earned a record $2.08 million, or $2.14 per diluted share. In the first nine months of 2021, net income more than doubled to $5.56 million, or $5.73 per diluted share, compared to $2.56 million, or $2.64 per diluted share, in the first nine months of 2020. All financial results are unaudited.

“We achieved the highest third quarter earnings in the company’s history, fueled by strong revenue generation, double digit loan and deposit growth year-over-year and an expanding net interest margin,” said Gary Head, President and Chief Executive Officer. “Northwest Arkansas is one of the fastest growing markets in the United States, and we are taking advantage of this growth by capturing market share and expanding our balance sheet while looking for new opportunities.”

“Another highlight of the quarter was the Board’s decision to pay an annual cash dividend of $0.50 per share,” Head continued. “The dividend is a testament to the strength of our core banking activities and financial performance of our franchise. We are pleased that our earnings growth provides us the opportunity to both begin this dividend program and support future growth at the Bank.”

“Deposit balances remained at record levels at the end of September, with new customer relationships contributing to strong quarterly deposit growth,” said Scott Sandlin, Chief Strategy Officer. “Part of our success in gathering new low-cost deposits has been our enhanced marketing initiatives that emphasize full banking relationships. Our banking teams have done an excellent job of offering deposit products to compliment every lending relationship, as noninterest bearing deposits are up 56.4% year-over-year.”

“During both rounds of Federal funding, we were active with helping our customers receive PPP loans from the SBA,” said Jeff Maland, Chief Risk Officer. “Over the course of the two rounds of PPP lending, we funded 433 PPP loans totaling $29.0 million to both existing and new customers. At quarter-end, only 90 PPP loans totaling $6.2 million remained on the books, as a majority of these loans were forgiven during the prior quarter. We have also done an excellent job of replacing PPP loans with new loan originations, with heavy demand for new home loans, and construction and land development loans.”

Third Quarter 2021 Financial Highlights:

  • Third quarter net income increased 67.4% to $1.93 million, or $1.99 per diluted share, compared to $1.15 million, or $1.19 per diluted share, in the third quarter of 2020.
  • Annualized return on average assets was 0.95%, compared to 0.61% in the third quarter a year ago.
  • Annualized return on average equity was 9.80%, compared to 6.34% in the third quarter a year ago.
  • There was no provision for loan losses in the third quarter or second quarter of 2021. This compares to a $300,000 provision in the third quarter of 2020.
  • Net loans increased 12.5% to $661.7 million at September 30, 2021, compared to $588.4 million at September 30, 2020.
  • Total deposits increased 16.9% to $739.7 million at September 30, 2021, compared to $632.5 million a year ago.
  • Noninterest bearing deposits increased 56.4% to $263.5 million at September 30, 2021, compared to $168.5 million a year ago.
  • Nonperforming assets totaled $149,000, or 0.02% of total assets at September 30, 2021, compared to $400,000, or 0.05% of total assets, at September 30, 2020.
  • Book value per common share increased to $81.47 at September 30, 2021, from $75.17 a year ago.
  • Total risk-based capital ratio was 12.84% and the Tier 1 leverage ratio was 10.89% for the Bank at September 30, 2021.

Income Statement

“The changes we have made in investments and funding mix has reduced our dependency on internet CD’s and FHLB advances. We are now primarily funding loan growth with low-cost deposits, which helped our net interest margin expand 31 basis points during the quarter,” said Brant Ward, Chief Operating Officer.

The Company’s NIM improved to 3.64% in the third quarter of 2021, compared to 3.33% in the third quarter of 2020, and expanded eight basis points compared to 3.56% in the prior quarter. In the first nine months of 2021, the net interest margin improved 13 basis points to 3.67%, compared to 3.54% in the first nine months of 2020.

Third quarter net interest income increased 17.7% to $7.1 million, compared to $6.0 million in the third quarter of 2020. Total interest income increased 3.4% to $8.1 million in the third quarter of 2021, from $7.9 million in the third quarter of 2020. Total interest expense decreased by 42.7% to $1.1 million in the third quarter of 2021, from $1.9 million during the third quarter of 2020. In the first nine months of 2021, net interest income increased 13.5% to $20.9 million, compared to $18.4 million in the first nine months of 2020.

Noninterest income increased 36.7% to $1.7 million in the third quarter of 2021, compared to $1.2 million in the third quarter a year ago. The Company benefitted from higher wealth management fee income, steady service charges and deposit fees and substantially higher secondary market fee income compared to the third quarter in the prior year. In the first nine months of the year, noninterest income increased 45.2% to $5.1 million, compared to $3.5 million in the first nine months of 2020.

Noninterest expense increased to $6.2 million in the third quarter of 2021, compared to $5.4 million in the third quarter of 2020. Higher commissions due to increased revenues in our lines of business along with ancillary costs related to our core conversion and new branch contributed to the increase during the third quarter of 2021.

Balance Sheet

Total assets increased by 15.1% to $866.1 million at September 30, 2021, from $752.6 million at September 30, 2020, and increased 6.8% compared to $810.7 million at June 30, 2021. Cash and cash equivalents increased to $77.5 million at September 30, 2021 from $49.6 million a year ago. Investment securities increased to $84.7 million at September 30, 2021 from $70.4 million a year ago, as the Company actively moved cash balances into better yielding investment securities during the quarter.

Loans, net of allowance for loan losses, increased 12.5% to $661.7 million at September 30, 2021, compared to $588.4 million a year ago, and increased 2.8% compared to $643.6 million three months earlier. Through the close of the first round of the PPP program on August 8, 2020, the Bank had funded approximately 274 PPP loans totaling $20.7 million to both existing and new customers. Through the close of the second round of the PPP program on May 31, 2021, the Bank had funded approximately 159 PPP loans totaling $8.3 million. As of September 30, 2021, no PPP loans from round one, and $6.2 million in PPP loans from round two, remained on the books.

Deposit balances remained at record levels, with new customer relationships contributing to strong quarterly deposit growth. Total deposits increased 16.9% to $739.7 million at September 30, 2021, compared to $632.5 million a year ago and increased 7.8% compared to $685.9 million at June 30, 2021, with noninterest bearing deposits increasing 56.4% to $263.5 million at September 30, 2021, compared to $168.5 million a year ago.

FHLB advances totaled $16.1 million at September 30, 2021 from $17.2 million at September 30, 2020. Total stockholders’ equity increased 8.3% to $78.9 million at September 30, 2021, from $72.8 million at September 30, 2020 and increased 1.9% when compared to $77.4 million at June 30, 2021. Book value per common share increased to $81.47 at September 30, 2021 from $75.17 at September 30, 2020, and $79.91 at June 30, 2021.

Credit Quality

“We continue to be encouraged by the overall asset quality of our loan portfolio, including minimal nonperforming assets as of quarter end,” said Maland. “Additionally, we no longer have any loans on deferral at September 30, 2021 from the payment forbearance agreements we had made with some customers experiencing financial hardship at the early onset of the pandemic.”  

Due to excellent credit quality and a strong allowance for loan losses, the Company reported no provision for loan losses in both the third quarter of 2021 and the second quarter of 2021. This compares to a $300,000 provision for loan losses during the third quarter of 2020.  

Nonperforming loans totaled $149,000 at September 30, 2021. This compared to no nonperforming loans at June 30, 2021, and $200,000 in nonperforming loans at September 30, 2020. Nonperforming assets were $149,000 at September 30, 2021, compared to no nonperforming assets at June 30, 2021, and $400,000 in nonperforming assets at September 30, 2020. Total nonperforming assets were 0.02% of total assets at September 30, 2021, 0.00% at June 30, 2021, and 0.05% at September 30, 2020.

The allowance for loan losses was $8.6 million, or 1.28% of total loans, at September 30, 2021, when excluding the $6.2 million of PPP loans, which are 100% guaranteed by the SBA. This compared to $8.4 million, or 1.39% of total loans, at September 30, 2020. Net loan charge-offs were $81,000 in the third quarter of 2021, compared to net loan recoveries of $3,000 in the second quarter of 2021, and net loan charge-offs of $169,000 in the third quarter of 2020.

Capital

The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio estimate of 10.89%, Common equity Tier 1 capital ratio of 11.69%, Tier 1 risk-based capital ratio of 11.69% and Total capital ratio of 12.84%, at September 30, 2021.

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), trades on the OTCQX® Best Market.  

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.                                              

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


WHITE RIVER BANCSHARES COMPANY 
CONSOLIDATED BALANCE SHEETS 
September 30, 2021, June 30, 2021 and September 30, 2020 
         
UNAUDITED September 30, 2021
  June 30, 2021 September 30, 2020
         
ASSETS 
         
Cash and due from banks$77,451,337  $40,761,741  $49,636,364  
Federal funds sold  68,441   140,154   -  
         
Total cash and cash equivalents 77,519,778   40,901,895   49,636,364  
         
Investment securities 84,719,875   87,703,034   70,375,655  
Loans held for sale 7,300,173   4,754,632   10,689,131  
Loans, net of allowance for loan losses 661,748,201   643,628,102   588,429,575  
Premises and equipment, net 25,202,545   24,531,056   24,030,438  
Foreclosed assets held for sale 100   100   200,100  
Accrued interest receivable 2,336,515   2,171,138   2,581,457  
Deferred income taxes 1,899,258   1,863,572   1,480,231  
Other investments  2,899,285   2,896,985   2,888,585  
Other assets   2,507,609   2,288,891   2,296,588  
         
   $866,133,339  $810,739,405  $752,608,124  
         
LIABILITIES AND STOCKHOLDERS' EQUITY 
         
Deposits:        
Demand deposits- non-interest bearing$263,531,523  $211,286,665  $168,518,880  
 - interest bearing 254,579,040   250,458,669   179,409,301  
Savings deposits  23,631,159   22,772,238   16,688,392  
Time deposits- under $250M 104,817,483   109,170,757   151,198,785  
  - $250M and over 93,112,785   92,205,366   116,721,324  
         
Total deposits 739,671,990   685,893,695   632,536,682  
         
Federal Home Loan Bank advances 16,095,431   16,843,983   17,161,929  
Notes payable   10,791,724   10,785,412   10,766,607  
Accrued interest payable 352,228   227,688   689,096  
Other liabilities  20,348,822   19,555,885   18,604,241  
         
Total liabilities 787,260,195   733,306,663   679,758,555  
         
Stockholders' equity:      
Common stock  9,763   9,763   9,763  
Surplus   88,181,971   88,115,762   87,940,629  
Accumulated deficit (9,403,269)  (10,844,363)  (15,737,036) 
Treasury stock, at cost (504,242)  (433,365)  (431,614) 
Accumulated other comprehensive income 588,921   584,945   1,067,827  
         
Total stockholders' equity 78,873,144   77,432,742   72,849,569  
         
   $866,133,339  $810,739,405  $752,608,124  
         



WHITE RIVER BANCSHARES COMPANY 
CONSOLIDATED STATEMENTS OF INCOME 
For the three months ended September 30, 2021, June 30, 2021 and September 30, 2020 
       
 For the Three Months Ended  
UNAUDITEDSeptember 30, 2021 June 30, 2021 September 30, 2020 
       
Interest income:      
Loans, including fees$7,726,879 $7,686,752 $7,526,896  
Investment securities 397,755  335,534  324,464  
Federal funds sold and other 5,428  10,044  13,052  
       
Total interest income 8,130,062  8,032,330  7,864,412  
       
Interest expense:      
Deposits 801,145  897,065  1,593,311  
Federal Home Loan Bank advances 100,671  101,616  104,501  
Notes payable 167,874  167,874  167,870  
Federal funds purchased and other 133  -  -  
       
Total interest expense 1,069,823  1,166,555  1,865,682  
       
Net interest income 7,060,239  6,865,775  5,998,730  
Provision for loan losses -  -  300,000  
       
Net interest income after provision for loan losses 7,060,239  6,865,775  5,698,730  
       
Non-interest income:      
Service charges and fees on deposits 131,131  126,017  116,288  
Wealth management fee income 574,074  561,092  448,465  
Secondary market fee income 697,477  666,363  647,069  
Loss on sales and write-downs of foreclosed assets -  -  (160,679) 
Other 288,553  280,525  186,058  
       
Total non-interest income 1,691,235  1,633,997  1,237,201  
       
Non-interest expense:      
Salaries and benefits 4,111,369  3,831,206  3,676,489  
Occupancy and equipment 702,058  583,330  663,995  
Data processing 430,858  344,373  323,980  
Marketing and business development 186,950  203,134  120,547  
Professional services 487,428  362,274  396,508  
Other 259,239  356,396  217,273  
       
Total non-interest expense 6,177,902  5,680,713  5,398,792  
       
Income before income taxes 2,573,572  2,819,059  1,537,139  
       
Income tax provision 647,957  742,044  387,029  
       
Net income$1,925,615 $2,077,015 $1,150,110  
       
Basic earnings per common share$1.99 $2.14 $1.19  
       
Diluted earnings per common share$1.99 $2.14 $1.19  
       



WHITE RIVER BANCSHARES COMPANY 
CONSOLIDATED STATEMENTS OF INCOME 
For the nine months ended September 30, 2021 and September 30, 2020 
     
 For the Nine Months Ended  
UNAUDITEDSeptember 30, 2021 September 30, 2020 
     
Interest income:    
Loans, including fees$23,272,562 $23,358,772  
Investment securities 1,099,091  1,031,034  
Federal funds sold and other 20,855  109,973  
     
Total interest income 24,392,508  24,499,779  
     
Interest expense:    
Deposits 2,701,034  5,255,959  
Federal Home Loan Bank advances 306,036  339,138  
Notes payable 503,622  500,021  
Federal funds purchased and other 2,242  32  
     
Total interest expense 3,512,934  6,095,150  
     
Net interest income 20,879,574  18,404,629  
Provision for loan losses -  2,392,000  
     
Net interest income after provision for loan losses 20,879,574  16,012,629  
     
Non-interest income:    
Service charges and fees on deposits 383,412  406,236  
Wealth management fee income 1,641,205  1,309,212  
Secondary market fee income 2,285,697  1,468,552  
Loss on sales and write-downs of foreclosed assets -  (162,596) 
Other 750,406  465,198  
     
Total non-interest income 5,060,720  3,486,602  
     
Non-interest expense:    
Salaries and benefits 11,975,156  10,961,086  
Occupancy and equipment 1,929,421  1,947,494  
Data processing 1,361,630  980,639  
Marketing and business development 459,892  346,750  
Professional services 1,786,505  1,124,596  
Other 959,553  735,798  
     
Total non-interest expense 18,472,157  16,096,363  
     
Income before income taxes 7,468,137  3,402,868  
     
Income tax provision 1,912,682  841,694  
     
Net income$5,555,455 $2,561,174  
     
Basic earnings per common share$5.73 $2.64  
     
Diluted earnings per common share$5.73 $2.64  
     



White River Bancshares Company      
Selected Financial Data  Three Months Ended  
UNAUDITEDSeptember 30, 2021 June 30, 2021 September 30, 2020 
        
Selected Financial Condition Data: End of Period Balances     
 Assets$866,133,339  $810,739,405  $752,608,124  
 Investment Securities 84,719,875   87,703,034   70,375,655  
 Loans, gross 677,666,588   657,081,624   607,540,859  
 Allowance for Loan Losses 8,618,214   8,698,890   8,422,153  
 Deposits 739,671,990   685,893,695   632,536,682  
 FHLB Advances 16,095,431   16,843,983   17,161,929  
 Notes Payable 10,791,724   10,785,412   10,766,607  
 Common Shareholders' Equity 78,873,144   77,432,742   72,849,569  
        
Selected Financial Condition Data: Average Balances      
 Assets$802,375,174  $804,426,762  $747,393,849  
 Earning Assets 770,104,265   773,649,277   717,205,947  
 Investment Securities 87,309,682   75,797,411   67,423,766  
 Loans, gross 664,338,877   650,413,942   588,694,448  
 Deposits 677,137,238   679,831,314   627,329,431  
 FHLB Advances 16,563,988   16,880,488   17,197,822  
 Notes Payable 10,788,545   10,782,153   10,763,088  
 Common Shareholders' Equity 77,961,111   76,082,454   72,144,578  
        
Selected Operating Results:      
 Interest Income$8,130,062  $8,032,330  $7,864,412  
 Interest Expense 1,069,823   1,166,555   1,865,682  
 Net Interest Income 7,060,239   6,865,775   5,998,730  
 Provision for Loan Losses -   -   300,000  
 Net Interest Income After Provision for Loan Losses 7,060,239   6,865,775   5,698,730  
 Noninterest Income 1,691,235   1,633,997   1,237,201  
 Noninterest Expense 6,177,902   5,680,713   5,398,792  
 Income Before Income Taxes 2,573,572   2,819,059   1,537,139  
 Income Tax Provision 647,957   742,044   387,029  
 Net Income$1,925,615  $2,077,015  $1,150,110  
        
 Basic Net Income per Common Share$1.99  $2.14  $1.19  
 Dividends Paid per Common Share 0.50   -   -  
 Book Value Per Common Share 81.47   79.91   75.17  
 Common Shares Outstanding 968,136   969,045   969,069  
 Basic Weighted Average Common Shares Outstanding 968,946   969,060   969,907  
        
Selected Ratios:      
 Return on Average Assets 0.95%  1.04%  0.61% 
 Return on Average Common Shareholders' Equity 9.80%  10.95%  6.34% 
 Average Common Shareholders' Equity to Average Assets 9.72%  9.46%  9.65% 
 Net Interest Margin 3.64%  3.56%  3.33% 
 Efficiency 70.59%  66.83%  74.61% 
        
Selected Asset Quality:      
 Net (Recoveries) Charge-offs$80,675  $(3,076) $169,425  
 Classified Assets 4,642,205   4,339,548   661,616  
 Nonperforming Loans 148,557   -   200,000  
 Nonperforming Assets 148,657   100   400,100  
 Total Nonperforming Loans to Total Loans 0.02%  0.00%  0.03% 
 Total Nonperforming Loans to Total Assets 0.02%  0.00%  0.03% 
 Total Nonperforming Assets to Total Assets 0.02%  0.00%  0.05%