WRIV - White River Bancshares Co. Earns $742500 or $0.77 Per Diluted Share in First Quarter 2020

FAYETTEVILLE, Ark., May 06, 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 $742,500, or $0.77 per diluted share, in the first quarter of 2020, compared to $1.13 million, or $1.17 per diluted share, in the fourth quarter of 2019 and $1.17 million, or $1.20 per diluted share, in the first quarter of 2019. 

“Our first quarter results were highlighted by the sale of multiple properties, reducing nonperforming assets by 43% compared to three months earlier and bringing NPAs to their lowest levels in years,” said Gary Head, President and Chief Executive Officer.  “However, we are being proactive in our approach to COVID-19’s impact on our local economy, and as a result booked a $677,000 provision during the first quarter, which compares to a $500,000 provision during the preceding quarter and no provision in the first quarter a year ago.

“Amid ongoing concerns about COVID-19, we are closely monitoring the latest reports from the Centers for Disease Control (CDC) and have taken a number of precautionary measures for the health and safety of our customers and colleagues,” Head continued.  “In mid-March, we were the first bank in Arkansas to begin limiting lobby access at branches to help reduce the spread of COVID-19.  As the month progressed, we implemented measures to mobilize our bankers to work from home as much as possible.  We began taking applications for the Small Business Administration’s Paycheck Protection Program (PPP), marking the Bank’s first foray into SBA lending. The result was approximately $20 million dollars lent to 232 businesses, preserving roughly 2,389 jobs for Arkansans.  We also have seen a significant increase in use of our treasury services, empowering our customer through the use of our digital and mobile banking products.  We continue to closely monitor the situation and evaluate additional measures to support our customers and communities as needs arise.” 

First Quarter 2020 Financial Highlights:

• First quarter net income was $742,500 or $0.77 per diluted share.
• First quarter provision for loan losses was $677,000, compared to $500,000 in the preceding quarter and no provision for loan losses in the first quarter of 2019.
• First quarter net interest margin (“NIM”) was 3.64%, compared to 3.85% in the preceding quarter and 3.97% in the first quarter a year ago.
• Net loans increased 5.8% to $558.2 million at March 31, 2020, compared to $527.4 million at March 31, 2019.
• Total deposits increased 10.7% to $592.1 million at March 31, 2020, compared to $535.0 million a year ago.
• Non-interest-bearing deposits increased 8.1% to $119.4 million at March 31, 2020, compared to $110.4 million a year ago.
• Non-performing assets decreased 42.9% to $1.5 million at March 31, 2020, compared to $2.6 million at December 31, 2019 and decreased 80.2% when compared to $7.7 million a year ago.
• Nonperforming assets (NPAs) represent 0.21% of total assets at March 31, 2020, compared to 1.18% of total assets a year ago and 0.38% of total assets three months earlier. 
• Book value per diluted common share increased to $72.25 at March 31, 2020, from $66.19 a year ago.
• Total risk-based capital ratio was 14.24% and Tier 1 leverage ratio was 11.27% for the Bank at March 31, 2020.
• 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.

Income Statement

The Company’s net interest margin was 3.64% in the first quarter of 2020, compared to 3.85% in both the preceding quarter and 3.97% in the first quarter of 2019. 

First quarter net interest income increased by 2.7% to $6.0 million, from $5.8 million in the first quarter of 2019, and decreased 2.2% when compared to $6.1 million in the fourth quarter of 2019.  Total interest income increased by 7.6% to $8.2 million in the first quarter of 2020 from $7.6 million during the first quarter of 2019 and decreased by 1.4% compared to $8.3 million in the preceding quarter.  Total interest expense increased by 24.1% to $2.2 million in the first quarter of 2020, from $1.8 million during the first quarter of 2019, and remain unchanged compared to the preceding quarter.  The year over year increase was primarily due to the increase in interest-bearing deposits. 

Non-interest income totaled $1.1 million in the first quarter of 2020, compared to $1.3 million in the fourth quarter of 2019, and $845,500 in the first quarter of 2019. 

Non-interest expense was $5.4 million in the first quarter of 2020, which was unchanged compared to the fourth quarter of 2019.  In the first quarter of 2019, non-interest expense was $4.9 million.  

Balance Sheet Review

Total assets increased by 9.7% to $711.6 million at March 31, 2020, from $648.7 million at March 31, 2019, and increased 1.4% compared to $702.1 million at December 31, 2019.  Cash and cash equivalents increased to $53.3 million at March 31, 2020 from $31.9 million a year ago.  Investment securities increased to $64.2 million at March 31, 2020 from $54.1 million a year ago.

Loans, net of allowance for loan losses, increased 5.8% to $558.2 million at March 31, 2020, compared to $527.4 million a year ago, and decreased 2.0% compared to $569.4 million three months earlier.

Total deposits increased 10.7% to $592.1 million at March 31, 2020, compared to $535.0 million a year ago and increased 2.9% compared to $575.3 million at December 31, 2019, with non-interest bearing deposits increasing 8.1% to $119.4 million at March 31, 2020, compared to $110.4 million a year ago.

FHLB advances totaled $19.9 million at March 31, 2020 from $25.3 million at March 31, 2019.  Notes payable decreased to $10.7 million at March 31, 2020 from $11.9 million a year ago.

Total stockholders’ equity increased 8.6% to $70.1 million at March 31, 2020 from $64.5 million at March 31, 2019 and increased 1.1% when compared to $69.3 million at December 31, 2019.  Book value per diluted common share increased to $72.25 at March 31, 2020 from $66.19 at March 31, 2019 and $71.43 at December 31, 2019.

Credit Quality

The provision for loan losses increased to $677,000 during the first quarter of 2020.  This compares to a $500,000 provision for loan losses in the preceding quarter and no provision for loan losses in the first quarter of 2019. 

Nonperforming loans totaled $1.5 million at March 31, 2020, compared to $2.2 million at December 31, 2019 and no nonperforming loans at March 31, 2019.  Nonperforming assets decreased 42.9% to $1.5 million at March 31, 2020 compared to $2.6 million at December 31, 2019 and decreased 80.3% when compared to $7.7 million at March 31, 2019.  Total non-performing assets improved to 0.21% of total assets at March 31, 2020, compared to 0.38% of total assets three months earlier and 1.18% of total assets a year earlier.

The allowance for loan losses was $7.4 million, or 1.30% of total loans, at March 31, 2020 compared to $7.0 million, or 1.30% of total loans, at March 31, 2019.  Net loan recoveries were $15,000 in the first quarter of 2020.  This compares to net loan charge-offs of $826,800 in the fourth quarter of 2019 and net loan recoveries of $6,000 in the first quarter of 2019. 

Capital

The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio of 11.27%, Common equity tier 1 capital ratio of 13.01%, Tier 1 capital ratio of 13.01% and Total capital ratio of 14.24%, at March 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.