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PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

White River Bancshares Co. Earns Record $2.08 Million, or $2.14 Per Diluted Share, for Second ...

July 19, 2021 GMT

FAYETTEVILLE, Ark., July 19, 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 33.8% to a record $2.08 million, or $2.14 per diluted share, in the second quarter of 2021, compared to $1.55 million, or $1.60 per diluted share, in the first quarter of 2021 and increased 210.7% compared to $669,000, or $0.69 per diluted share, in the second quarter of 2020. In the first six months of 2021, net income more than doubled to $3.6 million, or $3.75 per diluted share, compared to $1.4 million, or $1.45 per diluted share, in the first six months of 2020. All financial results are unaudited.

“Our record results for both the second quarter and the first six months of 2021 were highlighted by strong revenue generation, record deposit growth and improved operating efficiencies,” said Gary Head, President and Chief Executive Officer. “We are extremely proud of all of our team, who have stepped up to meet the challenges of a new normal banking experience. Overall, these factors contributed to a return on average assets of 1.04% and a return on average equity of 10.95% for the quarter. We have been successful at keeping operating expenses in check while growing the franchise, and anticipate further growth throughout the rest of 2021.”

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“Deposit balances remained at record levels at the end of June, with new client relationships contributing to strong quarterly deposit growth,” said Scott Sandlin, Chief Strategy Officer. “As a result, noninterest bearing deposits are up 29.2% year-over-year. Part of our success in gathering new low cost deposits has been due to the investments we have made with our digital and treasury service platforms over the last few quarters. Our banking teams now have both the deposit products offerings and the digital enhancements in place to capture additional market share.”

“Since the early onset of the pandemic, we have been actively helping our customers receive PPP loans from the SBA,” said Brant Ward, Chief Operating Officer. “Over the last fifteen months, we funded 433 PPP loans totaling $29.0 million to both existing and new customers. Of this amount, 69 loans totaling $13.1 million remain on the books as of June 30, 2021. Due to the low interest rate environment, our secondary mortgage department continues to outperform expectation. The low interest rate environment also helps us manage our cost of funds down as we continue to build our deposit franchise through the acquisition of new relationships.”

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“In April 2020, we implemented additional programs to support our customers experiencing financial hardship. 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 June 30, 2021, we no longer had any loans on deferral. We continue to be extremely encouraged by our overall asset quality, including zero nonperforming assets for the second quarter in a row,” said Jeff Maland, Chief Risk Officer.

Second Quarter 2021 Financial Highlights:

  • Second quarter net income increased 210.7% to $2.08 million, or $2.14 per diluted share, compared to $669,000, or $0.69 per diluted share, in the second quarter of 2020.
  • Annualized return on average assets was 1.04%, compared to 0.37% in the second quarter a year ago.
  • Annualized return on average equity was 10.95%, compared to 3.79% in the second quarter a year ago.
  • There was no provision for loan losses in the second quarter or first quarter of 2021. This compares to a $1.4 million provision in the second quarter of 2020.
  • Net loans increased 13.4% to $643.6 million at June 30, 2021, compared to $567.6 million at June 30, 2020.
  • Total deposits increased 8.0% to $685.9 million at June 30, 2021, compared to $635.3 million a year ago.
  • Noninterest bearing deposits increased 29.2% to $211.3 million at June 30, 2021, compared to $163.6 million a year ago.
  • There were no nonperforming assets at June 30, 2021, and at March 31, 2021. This compared to nonperforming assets of $1.3 million, or 0.18% of total assets, at June 30, 2020.
  • Book value per common share increased to $79.91 at June 30, 2021, from $73.89 a year ago.
  • Total risk-based capital ratio was 13.32% and the Tier 1 leverage ratio was 10.65% for the Bank at June 30, 2021.

Income Statement

The Company’s NIM was 3.56% in the second quarter of 2021, compared to 3.65% in the second quarter of 2020, and 3.82% in the prior quarter. High levels of balance sheet liquidity and lower yields on assets continued to put pressure on the Company’s NIM. In the first six months of 2021, the net interest margin improved four basis points to 3.69%, compared to 3.65% in the first six months of 2020.

Second quarter net interest income increased 7.2% to $6.9 million, compared to $6.4 million in the second quarter of 2020. Total interest income decreased 5.0% to $8.0 million in the second quarter of 2021, from $8.5 million in the second quarter of 2020. Total interest expense decreased by 43.2% to $1.2 million in the second quarter of 2021, from $2.1 million during the second quarter of 2020.   In the first six months of 2021, net interest income increased 11.4% to $13.8 million, compared to $12.4 million in the first six months of 2020.

Noninterest income increased 38.5% to $1.6 million in the second quarter of 2021, compared to $1.2 million in the second 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 second quarter in the prior year. In the first six months of the year, noninterest income increased 49.8% to $3.4 million, compared to $2.2 million in the first six months of 2020.

Noninterest expense increased to $5.7 million in the first quarter of 2021, compared to $5.3 million in the first quarter of 2020. Higher professional services related to a one-time expense associated with a conversion fee for digital, core and EFT platforms contributed to the increase during the first quarter of 2021.

Balance Sheet Review

Total assets increased by 7.5% to $810.7 million at June 30, 2021, from $754.2 million at June 30, 2020, and increased modestly compared to $806.0 million at March 31, 2021. Cash and cash equivalents decreased to $40.9 million at June 30, 2021 from $82.6 million a year ago. Investment securities increased to $87.7 million at June 30, 2021 from $66.2 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 13.4% to $643.6 million at June 30, 2021, compared to $567.6 million a year ago, and increased 1.4% compared to $635.0 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 June 30, 2021, $5.2 million in PPP loans from round one, and $7.9 million in PPP loans from round two, remained on the books.

Deposit balances remained at record levels, with the second round of PPP and new customer relationships contributing to strong quarterly deposit growth. Total deposits increased 8.0% to $685.9 million at June 30, 2021, compared to $635.3 million a year ago and increased nominally compared to $682.6 million at June 30, 2020, with non-interest bearing deposits increasing 29.2% to $211.3 million at June 30, 2021, compared to $163.6 million a year ago.

FHLB advances totaled $16.8 million at June 30, 2021 from $17.3 million at June 30, 2020. Total stockholders’ equity increased 8.0% to $77.4 million at June 30, 2021, from $71.7 million at June 30, 2020 and increased 2.9% when compared to $75.2 million at March 31, 2021. Book value per common share increased to $79.91 at June 30, 2021 from $73.89 at June 30, 2020, and $77.63 at March 31, 2021.

Credit Quality

Due to excellent credit quality and a strong allowance for loan losses, the Company reported no provision for loan losses in the second quarter of 2021 nor the first quarter of 2021. This compares to a $1.4 million provision for loan losses during the second quarter of 2020. “Our credit quality remains exemplary, and we believe our current reserve level is adequate to cover any potential loan losses resulting from the pandemic,” said Head.

There were no nonperforming loans at June 30, 2021, or at March 31, 2021. This compared to $985,000 in nonperforming loans at June 30, 2020. Additionally, there were no nonperforming assets at June 30, 2021, or at March 31, 2021, compared with $1.3 million in nonperforming assets at June 30, 2020. Total nonperforming assets were 0.00% of total assets at June 30, 2021, 0.00% at March 31, 2021, and 0.18% at June 30, 2020.

The allowance for loan losses was $8.7 million, or 1.35% of total loans, at June 30, 2021, when excluding the $13.1 million of PPP loans, which are 100% guaranteed by the SBA. This compared to $8.3 million, or 1.43% of total loans, at June 30, 2020. Net loan recoveries were $3,000 in the second quarter of 2021, compared to net loan recoveries of $10,000 in the first quarter of 2021, and net loan charge-offs of $512,000 in the second quarter of 2020.

As of June 30, 2021, the Bank had zero loans within the COVID deferral process.

Capital

The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio estimate of 10.65%, Common equity Tier 1 capital ratio of 12.09%, Tier 1 risk-based capital ratio of 12.09% and Total capital ratio of 13.32%, at June 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
June 30, 2021, March 31, 2021 and June 30, 2020
               
UNAUDITED   June 30, 2021   March 31, 2021   June 30, 2020
               
ASSETS
               
Cash and due from banks $ 40,761,741     $ 60,216,957     $ 81,878,254  
Federal funds sold   140,154       573,134       754,807  
               
Total cash and cash equivalents   40,901,895       60,790,091       82,633,061  
               
Investment securities   87,703,034       68,937,591       66,176,842  
Loans held for sale   4,754,632       7,782,522       4,366,938  
Loans, net of allowance for loan losses   643,628,102       634,992,334       567,583,991  
Premises and equipment, net   24,531,056       24,669,345       24,169,607  
Foreclosed assets held for sale   100       100       349,072  
Accrued interest receivable   2,171,138       1,883,499       2,320,039  
Deferred income taxes   1,863,572       1,848,883       1,370,935  
Other investments     2,896,985       2,894,085       2,884,285  
Other assets       2,288,891       2,161,705       2,379,043  
               
      $ 810,739,405     $ 805,960,155     $ 754,233,813  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Deposits:          
Demand deposits - noninterest bearing $ 211,286,665     $ 188,958,889     $ 163,574,225  
  - interest bearing   250,458,669       253,269,377       170,346,618  
Savings deposits   22,772,238       22,126,159       15,984,114  
Time deposits - under $250M   109,170,757       116,989,664       160,996,541  
    - $250M and over   92,205,366       101,253,092       124,392,077  
               
Total deposits   685,893,695       682,597,181       635,293,575  
               
Federal Home Loan Bank advances   16,843,983       16,950,930       17,266,002  
Notes payable   10,785,412       10,779,101       10,760,299  
Accrued interest payable   227,688       425,731       610,071  
Other liabilities     19,555,885       19,982,625       18,630,457  
               
Total liabilities   733,306,663       730,735,568       682,560,404  
               
Stockholders' equity:          
Common stock     9,763       9,763       9,763  
Surplus   88,115,762       88,082,809       87,848,223  
Accumulated deficit   (10,844,363 )     (12,921,378 )     (16,887,146 )
Treasury stock, at cost   (433,365 )     (431,865 )     (387,022 )
Accumulated other comprehensive income   584,945       485,258       1,089,591  
               
Total stockholders' equity   77,432,742       75,224,587       71,673,409  
               
      $ 810,739,405     $ 805,960,155     $ 754,233,813  
               
WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended June 30, 2021, March 31, 2021 and June 30, 2020
           
  For the Three Months Ended
UNAUDITED June 30, 2021   March 31, 2021   June 30, 2020
           
Interest income:          
Loans, including fees $ 7,686,752   $ 7,858,931   $ 8,096,129
Investment securities   335,534     365,802     347,157
Federal funds sold and other   10,044     5,383     12,996
           
Total interest income   8,032,330     8,230,116     8,456,282
           
Interest expense:          
Deposits   897,065     1,002,824     1,771,276
Federal Home Loan Bank advances   101,616     103,749     117,389
Notes payable   167,874     167,874     164,281
Federal funds purchased and other   -     2,109     -
           
Total interest expense   1,166,555     1,276,556     2,052,946
           
Net interest income   6,865,775     6,953,560     6,403,336
Provision for loan losses   -     -     1,415,000
           
Net interest income after provision for loan losses   6,865,775     6,953,560     4,988,336
           
Noninterest income:          
Service charges and fees on deposits   126,017     126,264     115,774
Wealth management fee income   561,092     506,039     392,442
Secondary market fee income   666,363     921,857     532,734
Loss on sales and write-downs of foreclosed assets   -     -     -
Other   280,525     181,328     139,120
           
Total noninterest income   1,633,997     1,735,488     1,180,070
           
Noninterest expense:          
Salaries and benefits   3,831,206     4,032,581     3,614,419
Occupancy and equipment   583,330     644,033     634,461
Data processing   344,373     586,399     341,067
Marketing and business development   203,134     69,808     99,267
Professional services   362,274     936,803     335,712
Other   356,396     343,918     267,962
           
Total noninterest expense   5,680,713     6,613,542     5,292,888
           
Income before income taxes   2,819,059     2,075,506     875,518
           
Income tax provision   742,044     522,681     206,929
           
Net income $ 2,077,015   $ 1,552,825   $ 668,589
           
Basic earnings per common share $ 2.14   $ 1.60   $ 0.69
           
Diluted earnings per common share $ 2.14   $ 1.60   $ 0.69
           
WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the six months ended June 30, 2021 and June 30, 2020
       
  For the Six Months Ended
UNAUDITED June 30, 2021   June 30, 2020
       
Interest income:      
Loans, including fees $ 15,545,683   $ 15,831,876  
Investment securities   701,336     706,570  
Federal funds sold and other   15,427     96,921  
       
Total interest income   16,262,446     16,635,367  
       
Interest expense:      
Deposits   1,899,889     3,662,648  
Federal Home Loan Bank advances   205,365     234,637  
Notes payable   335,748     332,151  
Federal funds purchased and other   2,109     32  
       
Total interest expense   2,443,111     4,229,468  
       
Net interest income   13,819,335     12,405,899  
Provision for loan losses   -     2,092,000  
       
Net interest income after provision for loan losses   13,819,335     10,313,899  
       
Noninterest income:      
Service charges and fees on deposits   252,281     289,948  
Wealth management fee income   1,067,131     860,747  
Secondary market fee income   1,588,220     821,483  
Loss on sales and write-downs of foreclosed assets   -     (1,917 )
Other   461,853     279,140  
       
Total noninterest income   3,369,485     2,249,401  
       
Noninterest expense:      
Salaries and benefits   7,863,787     7,284,597  
Occupancy and equipment   1,227,363     1,283,499  
Data processing   930,772     656,659  
Marketing and business development   272,942     226,203  
Professional services   1,299,077     728,088  
Other   700,314     518,525  
       
Total noninterest expense   12,294,255     10,697,571  
       
Income before income taxes   4,894,565     1,865,729  
       
Income tax provision   1,264,725     454,665  
       
Net income $ 3,629,840   $ 1,411,064  
       
Basic earnings per common share $ 3.75   $ 1.45  
       
Diluted earnings per common share $ 3.75   $ 1.45  
       
White River Bancshares Company          
Selected Financial Data Three Months Ended
UNAUDITED June 30, 2021   March 31, 2021   June 30, 2020
           
Selected Financial Condition Data: End of Period Balances        
Assets $ 810,739,405     $ 805,960,155     $ 754,233,813  
Investment Securities   87,703,034       68,937,591       66,176,842  
Loans, gross   657,081,624       651,470,670       580,242,507  
Allowance for Loan Losses   8,698,890       8,695,814       8,291,578  
Deposits   685,893,695       682,597,181       635,293,575  
FHLB Advances   16,843,983       16,950,930       17,266,002  
Notes Payable   10,785,412       10,779,101       10,760,299  
Common Shareholders' Equity   77,432,742       75,224,587       71,673,409  
           
Selected Financial Condition Data: Average Balances          
Assets $ 804,426,762     $ 768,712,888     $ 736,035,654  
Earning Assets   773,649,277       738,370,954       705,232,474  
Investment Securities   75,797,411       70,606,315       64,885,472  
Loans, gross   650,413,942       639,404,515       576,641,043  
Deposits   679,831,314       639,422,194       614,655,399  
FHLB Advances   16,880,488       22,992,223       19,772,977  
Notes Payable   10,782,153       10,775,151       10,756,579  
Common Shareholders' Equity   76,082,454       74,657,832       71,019,775  
           
Selected Operating Results:          
Interest Income $ 8,032,330     $ 8,230,116     $ 8,456,282  
Interest Expense   1,166,555       1,276,556       2,052,946  
Net Interest Income   6,865,775       6,953,560       6,403,336  
Provision for Loan Losses   -       -       1,415,000  
Net Interest Income After Provision for Loan Losses   6,865,775       6,953,560       4,988,336  
Noninterest Income   1,633,997       1,735,488       1,180,070  
Noninterest Expense   5,680,713       6,613,542       5,292,888  
Income Before Income Taxes   2,819,059       2,075,506       875,518  
Income Tax Provision   742,044       522,681       206,929  
Net Income $ 2,077,015     $ 1,552,825     $ 668,589  
           
Basic Net Income per Common Share $ 2.14     $ 1.60     $ 0.69  
Diluted Net Income per Common Share   2.14       1.60       0.69  
Dividends Paid per Common Share   -       -       -  
Book Value Per Common Share   79.91       77.63       73.89  
Common Shares Outstanding   969,045       969,065       969,998  
Basic Weighted Average Common Shares Outstanding   969,060       969,065       969,998  
Diluted Weighted Average Common Shares Outstanding   969,060       969,065       969,998  
           
Selected Ratios:          
Return on Average Assets   1.04 %     0.82 %     0.37 %
Return on Average Common Shareholders' Equity   10.95 %     8.44 %     3.79 %
Average Common Shareholders' Equity to Average Assets   9.46 %     9.71 %     9.65 %
Net Interest Margin   3.56 %     3.82 %     3.65 %
Efficiency   66.83 %     76.11 %     69.80 %
           
Selected Asset Quality:          
Net (Recoveries) Charge-offs $ (3,076 )   $ (9,731 )   $ 511,950  
Classified Assets   4,339,548       4,538,064       1,597,207  
Nonperforming Loans   -       -       985,000  
Nonperforming Assets   100       100       1,334,072  
Total Nonperforming Loans to Total Loans   0.00 %     0.00 %     0.17 %
Total Nonperforming Loans to Total Assets   0.00 %     0.00 %     0.13 %
Total Nonperforming Assets to Total Assets   0.00 %     0.00 %     0.18 %