White River Bancshares Co. Earns Record $1.55 Million, or $1.60 Per Diluted Share, for First ...
FAYETTEVILLE, Ark., April 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 23.0% to $1.55 million, or $1.60 per diluted share, in the first quarter of 2021, compared to $1.26 million, or $1.30 per diluted share, in the fourth quarter of 2020 and increased 109.1% compared to $742,000, or $0.77 per diluted share, in the first quarter of 2020. All financial results are unaudited.
“We produced record results for the first quarter of 2021, with strong top and bottom-line revenue growth, double digit loan and deposit growth and an improving net interest margin, compared to the first quarter a year ago,” said Gary Head, President and Chief Executive Officer. “Despite the ongoing challenges created by the COVID-19 pandemic, and the related economic conditions, we made progress in several areas of the business, as we continued to support our customers, communities and employees. We are proud of our team and their accomplishments, as it is the investment in our people that drives our success.”
“Deposit balances ended the quarter at record levels, with a second round of Paycheck Protection Program (“PPP”) loans and two additional federal stimulus payments contributing to strong quarterly deposit growth,” said Scott Sandlin, Chief Strategy Officer. “The investment we have made in our digital platform is helping us grow new client relationships and gather low-cost deposits. Additionally, we continue to lower the cost of deposits by bringing in more business and personal checking accounts and reducing our reliance on higher-cost CDs.”
“From the beginning of the pandemic, we were active with our customers in the PPP offered through the Small Business Administration (“SBA”),” said Brant Ward, Chief Operating Officer. “After the SBA’s first round of the PPP concluded on August 8, 2020, we originated $20.7 million in PPP loans, helping 274 local businesses in our markets in Arkansas. The first round of PPP generated total PPP loan fees receivable of approximately $680,000. As of March 31, 2021, we have received payment from the SBA for 166 borrowers totaling $7.8 million.”
“On December 27, 2020, additional COVID-19 stimulus relief was signed into law that allowed for a further round of PPP lending,” Ward continued. “The program offered new PPP loans for companies that did not receive PPP funds in 2020 in addition to a second draw loan targeted at hard-hit businesses that had already used their initial PPP proceeds. We immediately began helping our customers with this second round of PPP lending during the first quarter of 2021, and, at March 31, 2021, we had originated $7.7 million in new PPP loans during this second round of funding. Approximately $402,000 of the income recognized during the first quarter of 2021 was related to origination fees from these second round PPP loans. We will continue to help our customers until the program concludes at the end of May.”
“In addition to PPP loans, we added 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 March 31, 2021, only 9 loans totaling $1.8 million were still in deferral,” said Jeff Maland, Chief Risk Officer. “We are optimistic about the underlying quality of deferred loans, as most are longtime customer relationships who carry a strong guarantor support. Additionally, we feel the loan portfolio is well positioned to handle any future economic impact from the pandemic, with less than 1% of the total portfolio in hotels, restaurants, and energy loans as of the end of the first quarter.”
The table below presents selected information on loans that remained on COVID-19 deferrals at the periods indicated.
|% of Total Loan Portfolio||Deferred Loan Balance||Number of Loans|
|June 30, 2020||14.25||%||$||79,691||120|
|September 30, 2020||2.05||12,003||28|
|December 31, 2020||0.31||1,915||12|
|March 31, 2021||0.28||1,836||9|
First Quarter 2021 Financial Highlights:
- First quarter net income increased 109.1% to $1.55 million, or $1.60 per diluted share, compared to $742,000, or $0.77 per diluted share, in the first quarter of 2020.
- There was no provision for loan losses in the first quarter. This compares to a $458,000 provision in the preceding quarter and $677,000 provision in the first quarter of 2020.
- First quarter net interest margin (“NIM”) improved to 3.82%, compared to 3.50% in the preceding quarter and 3.64% in the first quarter a year ago.
- Net loans increased 13.8% to $635.0 million at March 31, 2021, compared to $558.2 million at March 31, 2020.
- Total deposits increased 15.3% to $682.6 million at March 31, 2021, compared to $592.1 million a year ago.
- Non-interest-bearing deposits increased 58.3% to $189.0 million at March 31, 2021, compared to $119.4 million a year ago.
- Nonperforming assets were almost nil, or 0.00% of total assets, at March 31, 2021, and at December 31, 2020. This compares to nonperforming assets of $1.5 million, or 0.21% of total assets, at March 31, 2020.
- Book value per common share increased to $77.63 at March 31, 2021, from $72.25 a year ago.
- Total risk-based capital ratio was 12.95% and Tier 1 leverage ratio was 10.90% for the Bank at March 31, 2021.
The Company’s net interest margin was 3.82% in the first quarter of 2021, an 18-basis point improvement compared to 3.64% in the first quarter of 2020, and a 32 basis point improvement compared to 3.50% in the prior quarter.
First quarter net interest income was $7.0 million, compared to $6.0 million in the first quarter of 2020. Total interest income remained relatively unchanged at $8.2 million in the first quarter of 2021, from the first quarter of 2020. Total interest expense decreased by 41.4% to $1.3 million in the first quarter of 2021, from $2.2 million during the first quarter of 2020.
Non-interest income increased 62.3% to $1.7 million in the first quarter of 2021, compared to $1.1 million in the first quarter a year ago. The Company benefitted from higher wealth management fee income and substantially higher secondary market fee income compared to the first quarter in the prior year.
Non-interest expense increased to $6.6 million in the first quarter of 2021, compared to $5.4 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. Higher salaries and benefits also contributed to the increase compared to a year ago.
Balance Sheet Review
Total assets increased by 13.3% to $806.0 million at March 31, 2021, from $711.6 million at March 31, 2020, and increased 7.5% compared to $749.9 million at December 31, 2020. Cash and cash equivalents increased to $60.8 million at March 31, 2021 from $53.3 million a year ago. Investment securities increased to $68.9 million at March 31, 2021 from $64.2 million a year ago.
Loans, net of allowance for loan losses, increased 13.8% to $635.0 million at March 31, 2021, compared to $558.2 million a year ago, and increased 4.4% compared to $608.4 million three months earlier. Through the close of the first round 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 March 31, 2021, $11.0 million in PPP loans from round one, and $7.7 million in new PPP loans from round two, remained on the books.
Deposit balances remained at record levels, with a second round of PPP and two additional federal stimulus payments contributing to strong quarterly deposit growth. Total deposits increased 15.3% to $682.6 million at March 31, 2021, compared to $592.1 million a year ago and increased 8.7% compared to $627.8 million at December 31, 2020, with non-interest bearing deposits increasing 58.3% to $189.0 million at March 31, 2021, compared to $119.4 million a year ago.
FHLB advances totaled $17.0 million at March 31, 2021 from $19.9 million at March 31, 2020. Total stockholders’ equity increased 7.3% to $75.2 million at March 31, 2021 from $70.1 million at March 31, 2020 and increased 1.4% when compared to $74.2 million at December 31, 2020. Book value per common share increased to $77.63 at March 31, 2021 from $72.25 at March 31, 2020, and $76.58 at December 31, 2020.
Due to excellent credit quality and a strong allowance for loan losses, the Company reported no provision for loan losses in the first quarter of 2021. This compares to a $458,000 provision for loan losses during the fourth quarter of 2020, and $677,000 in the first quarter of 2020. “Our credit quality remains exemplary, and we believe our current reserve level is adequate to cover potential loan losses,” said Head.
There were no nonperforming loans at March 31, 2021, or at December 31, 2020. This compared to $1.5 million in nonperforming loans at March 31, 2020. Additionally, there were no nonperforming assets at March 31, 2021, or at December 31, 2020, compared with $1.5 million in nonperforming assets at March 31, 2020. Total non-performing assets were 0.00% of total assets at March 31, 2021, 0.00% at December 31, 2020, and 0.21% at March 31, 2020.
The allowance for loan losses was $8.7 million, or 1.37% of total loans, at March 31, 2021, when excluding the $18.7 million of PPP loans, which are 100% guaranteed by the SBA. This compared to $7.4 million, or 1.33% of total loans, at March 31, 2020. Net loan recoveries were $10,000 in the first quarter of 2021, compared to net charge-offs of $194,000 in the fourth quarter of 2020, and net loan recoveries of $15,000 in the first quarter of 2020.
As of March 31, 2021, the Bank had 9 loans totaling $1.8 million within the deferral process.
The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio of 10.90%, Common equity tier 1 capital ratio of 11.73%, Tier 1 risk-based capital ratio of 11.73% and Total capital ratio of 12.95%, at March 31, 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.
|WHITE RIVER BANCSHARES COMPANY|
|CONSOLIDATED BALANCE SHEETS|
|March 31, 2021, December 31, 2020 and March 31, 2020|
|UNAUDITED||March 31, 2021||December 31, 2020||March 31, 2020|
|Cash and due from banks||$||60,216,957||$||22,904,291||$||52,796,917|
|Federal funds sold||573,134||100,089||489,448|
|Total cash and cash equivalents||60,790,091||23,004,380||53,286,365|
|Loans held for sale||7,782,522||10,871,270||2,641,614|
|Loans, net of allowance for loan losses||634,992,334||608,391,471||558,187,421|
|Premises and equipment, net||24,669,345||25,140,669||24,530,411|
|Foreclosed assets held for sale||100||100||100|
|Accrued interest receivable||1,883,499||2,705,354||2,072,301|
|Deferred income taxes||1,848,883||1,518,115||1,575,948|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Demand deposits||- non-interest bearing||$||188,958,889||$||172,016,886||$||119,398,336|
|- interest bearing||253,269,377||203,407,688||166,153,663|
|Time deposits||- under $250M||116,989,664||125,998,519||166,663,942|
|- $250M and over||101,253,092||105,309,981||125,835,712|
|Federal Home Loan Bank advances||16,950,930||17,056,909||19,869,137|
|Accrued interest payable||425,731||382,474||876,692|
|Treasury stock, at cost||(431,865||)||(431,865||)||(387,022||)|
|Accumulated other comprehensive income||485,258||1,100,011||265,049|
|Total stockholders' equity||75,224,587||74,214,467||70,084,516|
|WHITE RIVER BANCSHARES COMPANY|
|CONSOLIDATED STATEMENTS OF INCOME|
|For the three months ended March 31, 2021, December 31, 2020 and March 31, 2020|
|For the Three Months Ended|
|UNAUDITED||March 31, 2021||December 31, 2020||March 31, 2020|
|Loans, including fees||$||7,858,931||$||7,463,396||$||7,735,747|
|Federal funds sold and other||5,383||3,392||83,925|
|Total interest income||8,230,116||7,798,262||8,179,085|
|Federal Home Loan Bank advances||103,749||103,809||117,248|
|Federal funds purchased and other||2,109||1,309||32|
|Total interest expense||1,276,556||1,599,190||2,176,522|
|Net interest income||6,953,560||6,199,072||6,002,563|
|Provision for loan losses||-||458,000||677,000|
|Net interest income after provision for loan losses||6,953,560||5,741,072||5,325,563|
|Service charges and fees on deposits||126,264||130,374||174,174|
|Wealth management fee income||506,039||474,031||468,305|
|Secondary market fee income||921,857||894,411||288,749|
|Loss on sales and write-downs of foreclosed assets||-||(185,550||)||(1,917||)|
|Total non-interest income||1,735,488||1,505,399||1,069,331|
|Salaries and benefits||4,032,581||3,641,192||3,670,178|
|Occupancy and equipment||644,033||684,502||649,038|
|Marketing and business development||69,808||209,519||126,936|
|Total non-interest expense||6,613,542||5,476,541||5,404,683|
|Income before income taxes||2,075,506||1,769,930||990,211|
|Income tax provision||522,681||507,097||247,736|
|Basic earnings per common share||$||1.60||$||1.30||$||0.77|
|Diluted earnings per common share||$||1.60||$||1.30||$||0.77|
|White River Bancshares Company|
|Selected Financial Data||Three Months Ended|
|UNAUDITED||March 31, 2021||December 31, 2020||March 31, 2020|
|Selected Financial Condition Data: End of Period Balances|
|Allowance for Loan Losses||8,695,814||8,686,083||7,388,528|
|Common Shareholders' Equity||75,224,587||74,214,467||70,084,516|
|Selected Financial Condition Data: Average Balances|
|FHLB Advances & Other Borrowings||22,992,223||18,780,682||18,510,101|
|Common Shareholders' Equity||74,657,832||73,485,866||69,760,807|
|Selected Operating Results:|
|Net Interest Income||6,953,560||6,199,072||6,002,563|
|Provision for Loan Losses||-||458,000||677,000|
|Net Interest Income After Provision for Loan Losses||6,953,560||5,741,072||5,325,563|
|Income Before Income Taxes||2,075,506||1,769,930||990,211|
|Income Tax Provision||522,681||507,097||247,736|
|Basic Net Income per Common Share||$||1.60||$||1.30||$||0.77|
|Diluted Net Income per Common Share||1.60||1.30||0.77|
|Dividends Paid per Common Share||-||-||-|
|Book Value Per Common Share||77.63||76.58||72.25|
|Common Shares Outstanding||969,065||969,065||969,998|
|Diluted Common Shares Outstanding||969,065||969,065||969,998|
|Basic Weighted Average Common Shares Outstanding||969,065||969,069||969,998|
|Diluted Weighted Average Common Shares Outstanding||969,065||969,069||969,998|
|Return on Average Assets||0.82||%||0.68||%||0.43||%|
|Return on Average Common Shareholders' Equity||8.44||%||6.84||%||4.28||%|
|Average Common Shareholders' Equity to Average Assets||9.71||%||9.99||%||10.02||%|
|Net Interest Margin||3.82||%||3.50||%||3.64||%|
|Selected Asset Quality:|
|Net (Recoveries) Charge-offs||$||(9,731||)||$||194,071||$||(15,031||)|
|Total Nonperforming Loans to Total Loans||0.00||%||0.00||%||0.27||%|
|Total Nonperforming Loans to Total Assets||0.00||%||0.00||%||0.21||%|
|Total Nonperforming Assets to Total Assets||0.00||%||0.00||%||0.21||%|
|Contact:|| Scott Sandlin, Chief Strategy Officer |