WRIV - White River Bancshares Co. Earns $668600 or $0.69 Per Diluted Share in Second Quarter 2020

FAYETTEVILLE, Ark., July 21, 2020 (GLOBE NEWSWIRE) -- White River Bancshares Company (OTCQX: WRIV), (the “Company”) the holding company for Signature Bank of Arkansas (the “Bank”), today reported net income of $668,600, or $0.69 per diluted share, in the second quarter of 2020, compared to $742,500, or $0.77 per diluted share, in the first quarter of 2020 and $1.51 million, or $1.55 per diluted share, in the second quarter of 2019. 

In the first six months of the year, net income was $1.41 million, or $1.45 per diluted share, compared to $2.68 million, or $2.75 per diluted share, in the first six months of 2019.  All financial results are unaudited.

“Our second quarter results produced solid revenue growth, with increases in both net interest income and non-interest income compared to a year ago.  Additionally, credit quality metrics improved substantially, with nonperforming assets down 84.3% compared to a year ago, and our capital ratios remain strong,” said Gary Head, President and Chief Executive Officer.  “Our team has done an excellent job building new business relationships and gathering low cost deposits, resulting in a significant increase in non-interest bearing deposits during the quarter.  This change to our funding mix continues to reduce our cost of funds.  As a result of our assessment of the increased risks associated with COVID-19 pandemic’s impact on our local economy, as well as the growth in the loan portfolio, we booked a $1.4 million provision for loan losses during the second quarter, which is significantly higher than provisions taken during the last several quarters.” The Company booked a $677,000 provision for loan losses during the preceding quarter and had no provision for loan losses in the second quarter a year ago. 

“Amid ongoing concerns about the global pandemic and its impact on our local markets, our primary concern has been the health and safety and of our customers, team members and communities,” Head continued.  “We are here for our clients assisting them by maintaining service inside our branches and through digital and electronic channels, all while adhering to State and Federal guidelines which are changing rapidly.  Additionally, the Bank’s participation in the Paycheck Protection Program (“PPP”) offered through the Small Business Administration (“SBA”) helped service the needs of our customers, resulting in approximately $20.6 million in SBA PPP loans lent to 265 businesses.”

Second Quarter 2020 Financial Highlights:

• Second quarter net income was $668,600 or $0.69 per diluted share.
• Second quarter provision for loan losses increased to $1.4 million, compared to $677,000 in the preceding quarter and no provision for loan losses in the second quarter of 2019.
• Second quarter net interest margin (“NIM”) was 3.65%, compared to 3.64% in the preceding quarter and 3.97% in the second quarter a year ago.
• Net loans increased 6.0% to $567.6 million at June 30, 2020, compared to $535.3 million at June 30, 2019.
• The Bank had funded approximately 265 PPP loans totaling $20.6 million as of June 30, 2020.
• Total deposits increased 17.9% to $635.3 million at June 30, 2020, compared to $539.0 million a year ago.
• Non-interest-bearing deposits increased 51.3% to $163.6 million at June 30, 2020, compared to $108.1 million a year ago.
• Non-performing assets decreased 34.1% to $994,600 at June 30, 2020, compared to $1.5 million at March 31, 2020 and decreased 84.3% when compared to $6.3 million a year ago.
• Nonperforming assets (NPAs) represent 0.13% of total assets at June 30, 2020, compared to 0.21% of total assets three months earlier and 0.97% of total assets a year earlier. 
• Book value per diluted common share increased to $73.89 at June 30, 2020, from $68.52 a year ago.
• Total risk-based capital ratio was 13.81% and Tier 1 leverage ratio was 10.75% for the Bank at June 30, 2020.

Income Statement

The Company’s net interest margin was 3.65% in the second quarter of 2020, compared to 3.97% in the second quarter of 2019 and 3.64% in the first quarter of 2020.  In the first six months of 2020, the net interest margin was 3.65%, compared to 3.97% in the first six months of 2019.

Second quarter net interest income increased to $6.4 million, from $6.0 million in the second quarter of 2019.  Total interest income increased by 6.2% to $8.5 million in the second quarter of 2020, from $8.0 million during the second quarter of 2019.  Total interest expense increased by 6.0% to $2.1 million in the second quarter of 2020, from $1.9 million during the second quarter of 2019.  The year over year increase was primarily due to the increase in interest-bearing deposits.  In the first six months of 2020, net interest income increased 4.5% to $12.4 million, compared to $11.9 million in the first six months of 2019.

Non-interest income increased 43.6% to $1.2 million in the second quarter of 2020, compared to $821,600 in the second quarter a year ago.  In the first six months of the year, non-interest income increased 34.9% to $2.2 million, compared to $1.7 million in the first six months of 2019.

Non-interest expense was $5.3 million in the second quarter of 2020, compared to $5.0 million in the second quarter of 2019.  Year-to-date, non-interest expense was $10.7 million, compared to $9.9 million in the same period a year ago.

Balance Sheet Review

Total assets increased by 15.0% to $754.2 million at June 30, 2020, from $655.9 million at June 30, 2019, and increased 6.0% compared to $711.6 million at March 31, 2020.  Cash and cash equivalents increased to $82.6 million at June 30, 2020 from $27.0 million a year ago.  Investment securities increased to $66.2 million at June 30, 2020 from $56.5 million a year ago.

Loans, net of allowance for loan losses, increased 6.0% to $567.6 million at June 30, 2020, compared to $535.3 million a year ago, and increased 1.7% compared to $558.2 million three months earlier.  Through June 30, 2020, the Bank had funded approximately 265 PPP loans totaling $20.6 million to both existing and new customers.

Total deposits increased 17.9% to $635.3 million at June 30, 2020, compared to $539.0 million a year ago and increased 7.3% compared to $592.1 million at March 31, 2020, with non-interest bearing deposits increasing 51.3% to $163.6 million at June 30, 2020, compared to $108.1 million a year ago.

FHLB advances totaled $17.3 million at June 30, 2020 from $25.2 million at June 30, 2019.  Notes payable decreased to $10.8 million at June 30, 2020 from $11.8 million a year ago.

Total stockholders’ equity increased 7.3% to $71.7 million at June 30, 2020 from $66.8 million at June 30, 2019 and increased 2.3% when compared to $70.1 million at March 31, 2020.  Book value per diluted common share increased to $73.89 at June 30, 2020 from $68.52 at June 30, 2019 and $72.25 at March 31, 2020.

Credit Quality

The provision for loan losses increased to $1.4 million during the second quarter of 2020.  This compares to a $677,000 provision for loan losses in the preceding quarter and no provision for loan losses in the second quarter of 2019. 

Nonperforming loans were $985,000 at June 30, 2020, compared to $1.5 million at March 31, 2020 and no nonperforming loans at June 30, 2019.  Nonperforming assets decreased 34.1% to $995,000 at June 30, 2020 compared to $1.5 million at March 31, 2020 and decreased 84.3% when compared to $6.3 million at June 30, 2019.  Total non-performing assets improved to 0.13% of total assets at June 30, 2020, compared to 0.21% of total assets three months earlier and 0.97% of total assets a year earlier.

The allowance for loan losses was $8.3 million, or 1.43% of total loans, at June 30, 2020 compared to $7.0 million, or 1.29% of total loans, at June 30, 2019.  Net loan charge-offs were $512,000 in the second quarter of 2020.  This compares to net loan recoveries of $15,000 in the first quarter of 2020 and net loan recoveries of $37,500 in the second quarter of 2019. 

Capital

The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio of 10.75%, Common equity tier 1 capital ratio of 12.56%, Tier 1 capital ratio of 12.56% and Total capital ratio of 13.81%, at June 30, 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