WRIV - White River Bancshares Co. Earns $1.26 Million or $1.30 Per Diluted Share for Fourth Quarter 2020 and $3.82 Million or $3.94 Per Diluted Share for the Year

FAYETTEVILLE, Ark., Feb. 01, 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 9.8% to $1.26 million, or $1.30 per diluted share, in the fourth quarter of 2020, compared to $1.15 million, or $1.19 per diluted share, in the third quarter of 2020 and increased 11.5% compared to $1.13 million, or $1.17 per diluted share, in the fourth quarter of 2019.

For the year, net income was $3.82 million, or $3.94 per diluted share, compared to record earnings of $5.14 million, or $5.28 per diluted share, in 2019. All financial results are unaudited.

“Earnings improved in the fourth quarter, compared to a year ago and the prior quarter, generated by solid loan and deposit growth and an improving net interest margin. We also drove non-performing assets down to zero by year end,” said Gary Head, President and Chief Executive Officer. “Despite the pandemic-related economic challenges creating a difficult operating environment, we made progress in several areas of the business, as we continued to support our customers, communities and employees.”

“The magnitude of the economic ramifications of the COVID-19 pandemic are still largely unknown,” Head continued. “Due to the growth in the loan portfolio, and our continuous evaluation of the Covid-19 pandemic, we added $458,000 into our loan loss reserve for the quarter, bringing the Bank to a solid position of 1.38% of total loans and 1.42% of total loans, excluding Paycheck Protection Program (“PPP”) loans that are 100% guaranteed by the SBA.” For the year, the Company booked a $2.9 million provision for loan losses, compared to a $500,000 provision for 2019.

“Core deposit gathering remains a strategic focus for the Bank,” said Scott Sandlin, Chief Strategy Officer. “The investments we have made in our digital technology platform and its ease of use is helping us gather low-cost deposits. Additionally, we continue to lower the cost of deposits by bringing in more business and personal checking accounts and repricing the cost of our CDs due to interest rates being considerably lower than the last couple of years.”

“In 2020, the health and safety of our customers, teammates and community became our primary focus,” said Brant Ward, Chief Administrative Officer. “We continue to keep lobbies open by appointment only and adhere to social distancing guidelines. While our customers were already using our digital platforms prior to the pandemic, they really embraced the platform in 2020, with online utilization meaningfully up compared to a year ago. We were also active in the SBA’s PPP loan program, and at the completion of the PPP program on August 8, we had made $20.7 million in PPP loans, helping 274 local businesses. Additionally, the Bank recently started participating in the SBA’s new round of PPP funding that began earlier this month. This next round of SBA funding offers new PPP loans for companies that did not receive a PPP loan in 2020, and also ‘second draw’ loans targeted at hard-hit businesses that have already spent their initial PPP proceeds. While we are early in the process, we are here for our customers and communities.”

“In addition to PPP loans, we implemented additional programs to support our customers experiencing financial hardship as a result of the pandemic. These assistances included payment forbearance agreements with some customers for periods of up to six months. At the peak of our assistance, at June 30, 2020, we had deferred payment on 120 loans totaling $79.7 million. As of December 31, 2020, only 12 loans totaling $1.9 million were still in deferral,” said Jeff Maland, Chief Risk Officer. “We feel optimistic about the underlying quality of deferred loans, most of which are longtime customer relationships with strong guarantor support. Additionally, we feel the loan portfolio is well positioned to handle any future economic impact from the pandemic, with less than 1% of the total portfolio in hotels, restaurants, and energy loans as of the end of the year.”

The table below presents selected information on loans that remained on COVID-19 deferrals at the periods indicated.

Fourth Quarter 2020 Financial Highlights:

• Fourth quarter net income was $1.26 million or $1.30 per diluted share.
• Fourth quarter provision for loan losses was $458,000, compared to $300,000 in the preceding quarter and $500,000 in the fourth quarter of 2019.
• Fourth quarter net interest margin (“NIM”) was 3.50%, compared to 3.33% in the preceding quarter and 3.85% in the fourth quarter a year ago.
• Net loans increased 6.8% to $608.4 million at December 31, 2020, compared to $569.4 million at December 31, 2019.
• The Bank funded approximately 274 PPP loans totaling $20.7 million as of the close of the program on August 8, 2020. As of December 31, 2020, the Bank had $16.8 million in PPP still on the books.
• Total deposits increased 9.1% to $627.8 million at December 31, 2020, compared to $575.3 million a year ago.
• Non-interest-bearing deposits increased 46.5% to $172.0 million at December 31, 2020, compared to $117.5 million a year ago.
• Nonperforming assets were almost nil at December 31, 2020, compared to $400,100 at September 30, 2020, and $2.64 million a year ago.
• There were no nonperforming assets (NPAs) as a percentage of total assets at December 31, 2020. This compares to nonperforming assets representing 0.05% of total assets at September 30, 2020, and 0.38% of total assets a year earlier.
• As of December 31, 2020, the Bank had loans still within the deferral process of $1.9 million, which represents 0.30% of gross loans.
• Book value per common share increased to $76.58 at December 31, 2020, from $71.43 a year ago.
• Total risk-based capital ratio was 13.05% and Tier 1 leverage ratio was 11.15% for the Bank at December 31, 2020.

Income Statement
The Company’s net interest margin was 3.50% in the fourth quarter of 2020, compared to 3.85% in the fourth quarter of 2019 and 3.33% in the third quarter of 2020. For the year, the net interest margin was 3.53%, compared to 3.91% in 2019.

Fourth quarter net interest income was $6.2 million, compared to $6.1 million in the fourth quarter of 2019. Total interest income decreased by 6.0% to $7.8 million in the fourth quarter of 2020, from $8.3 million during the fourth quarter of 2019. Total interest expense decreased by 25.9% to $1.6 million in the fourth quarter of 2020, from $2.2 million during the fourth quarter of 2019. For the year, net interest income increased 2.0% to $24.6 million, compared to $24.1 million in 2019.

Non-interest income increased 18.1% to $1.5 million in the fourth quarter of 2020, compared to $1.3 million in the fourth quarter a year ago. For the year, non-interest income increased 40.1% to $5.0 million, compared to $3.6 million in 2019.

Non-interest expense was $5.5 million in the fourth quarter of 2020, compared to $5.4 million in the fourth quarter of 2019. For the year 2020, non-interest expense was $21.6 million, compared to $20.3 million for the year 2019.

Balance Sheet Review
Total assets increased by 6.8% to $749.9 million at December 31, 2020, from $702.1 million at December 31, 2019, and decreased modestly compared to $752.6 million at September 30, 2020. Cash and cash equivalents decreased to $23.0 million at December 31, 2020 from $39.0 million a year ago. Investment securities increased to $73.1 million at December 31, 2020 from $56.5 million a year ago.

Loans, net of allowance for loan losses, increased 6.8% to $608.4 million at December 31, 2020, compared to $569.4 million a year ago, and increased 3.4% compared to $588.4 million three months earlier. Through the close of the program on August 8, 2020, the Bank had funded approximately 274 PPP loans totaling $20.7 million to both existing and new customers. As of December 31, 2020, $16.8 million in PPP loans remained on the books.

Total deposits increased 9.1% to $627.8 million at December 31, 2020, compared to $575.3 million a year ago and decreased modestly compared to $632.5 million at September 30, 2020, with non-interest bearing deposits increasing 46.5% to $172.0 million at December 31, 2020, compared to $117.5 million a year ago.

FHLB advances totaled $17.1 million at December 31, 2020 from $27.5 million at December 31, 2019. Notes payable increased slightly to $10.8 million at December 31, 2020 from $10.7 million a year ago.

Total stockholders’ equity increased 7.1% to $74.2 million at December 31, 2020 from $69.3 million at December 31, 2019 and increased 1.9% when compared to $72.8 million at September 30, 2020. Book value per common share increased to $76.58 at December 31, 2020 from $71.43 at December 31, 2019 and $75.17 at September 30, 2020.

Credit Quality
The provision for loan losses was $458,000 during the fourth quarter of 2020, compared to $300,000 provision for loan losses in the preceding quarter and $500,000 in the fourth quarter of 2019. “Although our credit quality improved substantially during the quarter, we prudently added to reserves for loan losses as we continue to face an uncertain economy due to the impact of the pandemic,” said Head. For the full year 2020, the provision for loan losses was $2.9 million, compared to $500,000 in2019.

There were no nonperforming loans at December 31, 2020, compared to $200,000 in nonperforming loans at September 30, 2020, and $2.2 million at December 31, 2019. Additionally, there were no nonperforming assets at year end, compared with $400,000 in nonperforming assets at September 30, 2020, and $2.6 million in nonperforming assets at December 31, 2019. Total non-performing assets were 0.00% of total assets at December 31, 2020, compared to 0.05% of total assets three months earlier and 0.38% of total assets at December 31, 2019.

The allowance for loan losses was $8.7 million, or 1.42% of total loans, at December 31, 2020, when excluding the $16.8 million of PPP loans, which are 100% guaranteed by the SBA. This compared to $6.7 million, or 1.16% of total loans, at December 31, 2019. Net loan charge-offs were $194,000 in the fourth quarter of 2020, compared to net charge-offs of $169,000 in the third quarter of 2020 and $827,000 in the fourth quarter of 2019.

As of December 31, 2020, the Bank had loans within the deferral process of $1.9 million, which represented 0.31% of total loans, excluding PPP balances. Within that balance, $18,000 of the loans were full P & I deferrals, while $1.9 million were principal deferrals.

Capital
The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio of 11.15%, Common equity tier 1 capital ratio of 11.80%, Tier 1 risk-based capital ratio of 11.80% and Total capital ratio of 13.05%, at December 31, 2020.

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.

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