FAYETTEVILLE, Ark., March 15, 2019 (GLOBE NEWSWIRE) -- White River Bancshares Company (OTCQX: WRIV), (the “Company”) the holding company for Signature Bank of Arkansas (the “Bank”), today reported that growing revenues and an expanding net interest margin contributed to fourth quarter net income of $928,000, or $0.95 per diluted share.  This compares to a net loss of $132,000, or $0.16 loss per diluted share in the fourth quarter of 2017, which included an additional tax expense of $911,997 from a one-time write-down of its deferred tax assets and liabilities due to the impact of the Tax Cuts and Jobs Act of 2017.  For the full year ended December 31, 2018, net income increased to $4.6 million, or $4.74 per diluted share, compared to $3.0 million, or $3.67 per diluted share, in 2017.

Financial Highlights:

• Annual net income of $4.6 million, or $4.74 per diluted share.
• Quarterly net income of $928,000, or $0.95 per diluted share.
• Quarterly net interest margin (“NIM”) expanded by seven basis points to 3.87% compared to the fourth quarter a year ago.
• Net loans of $504.2 million at December 31, 2018, an increase of 3.28% from December 31, 2017.
• Total deposits of $510.11 million at December 31, 2018, an increase of 6.70% from December 31, 2017.
• Non-performing assets at December 31, 2018 improved to 1.26% of total assets from 1.94% a year ago.
• Book value per common share of $64.43 at December 31, 2018.
• Total risk-based capital ratio of 15.18% and Tier 1 leverage ratio of 11.86% for the Bank at December 31, 2018.

“We reported strong fourth quarter and year end operating results, delivering steady loan and deposit growth, while expanding our net interest income,” said Gary Head, President and Chief Executive Officer.  “Looking forward, we remain focused on growing low cost deposits, diversifying our loan portfolio and improving operating efficiencies across the board.  The economic fundamentals in our market are strong and we remain optimistic about the upcoming year.  At the same time, we will continue to execute upon our commitment to improve liquidity and to increase our franchise value.”

“As previously announced at the end of 2018, the Company shares qualified to trade on the OTCQX Best Markets,” added Head.  “This enables us to improve communications and tell our story through a public medium and provides new and existing shareholders with access to a public trading market for our shares.”   

Income Statement

The Company’s net interest margin improved 7 basis points to 3.87% in the fourth quarter of 2018, compared to 3.80% in fourth quarter a year ago.  For the full year 2018, the net interest margin was 3.73% compared to 3.92% in 2017.

Fourth quarter net interest income increased by 7.75% to $5.69 million, from $5.28 million in the fourth quarter of 2017.  Total interest income increased by 8.61% to $7.32 million in the fourth quarter of 2018 from $6.74 million during the like period in 2017.  Total interest expense increased by 11.69% to $1.63 million in the fourth quarter of 2018, from $1.46 million during the same period in 2017 largely as a result of the increase in interest-bearing deposits.

For the year ended December 31, 2018, net interest income increased by 7.79% to $22.12 million from $20.52 million in 2017.  Total interest income increased by 10.99% to $28.53 million in 2018, from $25.70 million in 2017; total interest expense increased by 23.66% to $6.42 million in 2018 from $5.19 million in 2017, primarily due to the increase in interest bearing deposits.

Non-interest income was ($567,806) in the fourth quarter of 2018 and $774,121 in the fourth quarter of 2017, a decrease of 173.35%.  The decrease was largely a result of a $1.94 million increase in loss on sales and write-downs of foreclosed assets during the fourth quarter of 2018 over the same period in 2017.  For the year ended December 31, 2018, non-interest income decreased 9.42% to $2.38 million compared to $2.63 million in 2017.  The decrease was mainly a result of a $1.03 million increase in loss on sales and write-downs of foreclosed assets over the same period.

Non-interest expense decreased 3.28% to $4.62 million in the fourth quarter of 2018 compared to $4.78 million in the fourth quarter of 2017.  Salaries and benefits, the largest component of non-interest expense, decreased by $117,800, or 3.78%, over the like period.  For the year ended December 31, 2018, non-interest expense was $19.17 million compared to $18.06 million in 2017, an increase of 6.14%.  Salaries and benefits increased by $640,239, or 5.45%, over the same period.

Balance Sheet Review

Total assets increased by 3.58% to $613.69 million at December 31, 2018 from $592.46 million at December 31, 2017. Cash and cash equivalents increased to $29.05 million at December 31, 2018 from $27.95 million a  year ago. Investment securities increased to $53.94 million at December 31, 2018 from $47.77 million at December 31, 2017.

Loans, net of allowance for loan losses, increased 3.28% to $504.16 million at December 31, 2018 from $488.13 million at December 31, 2017. 

Total deposits increased 6.70% to $510.11 million at December 31, 2018 from $478.06 million at December 31, 2017.  Non-interest-bearing deposits increased to $99.94 million at December 31, 2018 from $89.27 million a year ago, and interest-bearing deposits increased to $410.17 million at year-end from $388.78 million a year ago.

FHLB advances decreased to $25.37 million at December 31, 2018 from $38.26 million at December 31, 2017.  Notes payable decreased to $12.09 million from $14.63 million over the same period.

Total stockholders’ equity increased to $62.83 million at December 31, 2018 from $58.54 million at December 31, 2017.  Book value per common share increased to $64.43 at December 31, 2018 from $60.97 at December 31, 2017.

Credit Quality

“We had net loan recoveries during the quarter, and as a result we recorded a negative provision for loan losses of $750,000 in the fourth quarter,” added Head.  “This compares to no provision for loan losses in the fourth quarter of 2017.”  Net loan recoveries were $408,930 in the fourth quarter compared to net charge offs of $180,425 in the fourth quarter a year ago.

For the full year, the negative provision for loan losses was $750,000, compared to a negative provision of $1.35 million in 2017.  Net loan recoveries totaled $493,788 for 2018 compared to net loan recoveries of $2.25 million in 2017.

There were no non-performing loans on the books at the end of 2018, compared to $575,534 in non-performing loans at December 31, 2017.  Foreclosed assets held for sale decreased to $7.73 million at December 31, 2018 from $10.93 million at December 31, 2017.  Total non-performing assets improved to 1.26% of total assets at year-end, compared to 1.94% of total assets one year ago.

The allowance for loan losses was $6.97 million, or 1.36% of total loans, at December 31, 2018 as compared to $7.22 million, or 1.46% of total loans, at December 31, 2017.

Capital

The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio of 11.86%, Common equity tier 1 capital ratio of 13.92%, Tier 1 capital ratio of 13.92% and Total capital ratio of 15.18% at December 31, 2018.

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, and Brinkley, Arkansas, with plans to open a new location in Rogers, Arkansas in the second quarter of 2019.  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

The Company is located in Northwest Arkansas in the Fayetteville-Springdale-Rogers MSA. Our region is the corporate headquarters for Walmart Stores Inc., Tyson Foods, Simmons Foods, and J.B. Hunt Transport.  Hundreds of companies, including Procter & Gamble, Johnson & Johnson, Coca-Cola and Rubbermaid, have offices in order to manage their relationships with the locally based Fortune 500 companies.  Northwest Arkansas is also the home of the University of Arkansas, the state’s flagship public institution including the Sam M. Walton College of Business.  Northwest Arkansas has also seen significant growth in its medical and arts infrastructures with Washington Regional Medical System, Northwest Medical System, Mercy Health System of Northwest Arkansas and Arkansas Children’s Hospital Northwest expanding throughout the area in recent years.  Crystal Bridges Museum, an American art museum and the Walton Arts Center, have led the arts expansion throughout the region.  Northwest Arkansas has ranked among the nation’s fastest-growing regions in recent years.

Northwest Arkansas has an unemployment rate of 2.7% compared to the national average of 3.9%.  Northwest Arkansas has seen its job market increase by 0.7% over the last year.  Future job growth over the next ten years is predicted to be 42.2%, which is higher than the US average of 33.5%.  https://www.forbes.com/places/ar/fayetteville/

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
December 31, 2018 and December 31, 2017
UNAUDITED			2018				2017
ASSETS
Cash and due from banks		$	27,944,329			$	27,453,943
Federal funds sold			1,101,025				495,867
Total cash and cash equivalents			29,045,354				27,949,810
Investment securities			53,940,001				47,765,626
Loans held for sale			494,937				217,000
Loans, net of allowance for loan losses			504,160,307				488,133,143
Premises and equipment, net			8,532,146				8,427,051
Foreclosed assets held for sale			7,733,440				10,929,172
Accrued interest receivable			2,511,191				2,061,910
Deferred income taxes			2,539,052				2,310,482
Other investments			2,743,885				2,685,085
Other assets			1,992,144				1,980,609
		$	613,692,457			$	592,459,888
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits	- non-interest bearing	$	99,939,633			$	89,274,500
	- interest bearing		131,535,024				116,948,463
Savings deposits			11,856,239				10,364,704
Time deposits	- under $250M		168,979,360				173,042,775
	- $250M and over		97,799,817				88,428,825
Total deposits			510,110,073				478,059,267
Federal Home Loan Bank advances			25,371,095				38,256,778
Note payable			12,086,880				14,630,430
Accrued interest payable			587,056				488,276
Other liabilities			2,709,944				2,486,227
Total liabilities			550,865,048				533,920,978
Stockholders' equity:
Preferred stock			-				1,389
Common stock			9,763				8,224
Surplus			87,129,011				86,974,340
Accumulated deficit			(23,440,979	)			(28,010,723	)
Treasury stock,  at cost			(49,888	)			(49,888	)
Accumulated other comprehensive loss			(820,498	)			(384,432	)
Total stockholders' equity			62,827,409				58,538,910
		$	613,692,457			$	592,459,888

 

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended December 31, 2018 and December 31, 2017
UNAUDITED		2018				2017
Interest income:
Loans, including fees	$	6,882,662			$	6,456,141
Investment securities		340,926				267,748
Federal funds sold and other		96,446				16,103
Total interest income		7,320,034				6,739,992
Interest expense:
Deposits		1,350,383				1,008,970
Federal Home Loan Bank advances		123,371				190,840
Note payable		152,605				253,097
Federal funds purchased and other		225				3,369
Total interest expense		1,626,584				1,456,276
Net interest income		5,693,450				5,283,716
Provision for loan losses		(750,000	)			-
Net interest income after provision for loan losses		6,443,450				5,283,716
Non-interest income:
Service charges and fees on deposits		198,929				201,659
Wealth management fee income		494,996				398,276
Secondary market fee income		137,998				251,740
Loss on sales and write-downs of foreclosed assets		(2,150,000	)			(210,427	)
Other		750,271				132,873
Total non-interest income		(567,806	)			774,121
Non-interest expense:
Salaries and benefits		2,997,064				3,114,864
Occupancy and equipment		539,425				545,462
Data processing		302,157				252,790
Marketing and business development		60,411				145,270
Professional services		339,343				338,272
Other		385,946				384,725
Total non-interest expense		4,624,346				4,781,383
Income before income taxes		1,251,298				1,276,454
Income tax provision		323,094				1,408,717
Net income	$	928,204			$	(132,263	)
Basic earnings per common share	$	0.95			$	(0.16	)
Diluted earnings per common share	$	0.95			$	(0.16	)

 

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the twelve months ended December 31, 2018 and December 31, 2017
UNAUDITED		2018				2017
Interest income:
Loans, including fees	$	26,798,021			$	24,645,168
Investment securities		1,203,636				1,016,335
Federal funds sold and other		529,052				43,206
Total interest income		28,530,709				25,704,709
Interest expense:
Deposits		5,103,493				3,488,375
Federal Home Loan Bank advances		684,544				735,069
Note payable		618,219				953,533
Federal funds purchased and other		9,104				10,858
Total interest expense		6,415,360				5,187,835
Net interest income		22,115,349				20,516,874
Provision for loan losses		(750,000	)			(1,350,000	)
Net interest income after provision for loan losses		22,865,349				21,866,874
Non-interest income:
Service charges and fees on deposits		815,192				778,392
Wealth management fee income		1,817,483				1,482,963
Secondary market fee income		844,252				1,099,284
Loss on sales and write-downs of foreclosed assets		(2,263,067	)			(1,233,531	)
Other		1,170,993				505,663
Total non-interest income		2,384,853				2,632,771
Non-interest expense:
Salaries and benefits		12,381,845				11,741,606
Occupancy and equipment		2,151,760				2,167,014
Data processing		1,141,766				1,030,690
Marketing and business development		608,374				603,688
Professional services		1,486,845				1,114,975
Other		1,400,283				1,404,678
Total non-interest expense		19,170,873				18,062,651
Income before income taxes		6,079,329				6,436,994
Income tax provision		1,509,585				3,400,210
Net income	$	4,569,744			$	3,036,784
Basic earnings per common share	$	5.02			$	3.70
Diluted earnings per common share	$	4.74			$	3.67

 

White River Bancshares Company		Three months ended								Twelve months ended
Selected Financial Data		December								December
UNAUDITED			2018				2017				2018				2017
Selected Financial Condition Data: End of Period Balances
	Assets	$	613,692,457			$	592,459,888			$	613,692,457			$	592,459,888
	Investment Securities		53,940,001				47,765,626				53,940,001				47,765,626
	Loans, gross		511,621,091				495,572,202				511,621,091				495,572,202
	Allowance for Loan Losses		6,965,847				7,222,059				6,965,847				7,222,059
	Deposits		510,110,073				478,059,267				510,110,073				478,059,267
	FHLB Advances		25,371,095				38,256,778				25,371,095				38,256,778
	Note Payable		12,086,880				14,630,430				12,086,880				14,630,430
	Common Shareholders' Equity		62,827,409				50,072,555				62,827,409				50,072,555
Selected Financial Condition Data: Average Balances
	Assets	$	608,170,038			$	578,170,503			$	616,986,136			$	549,665,847
	Earning Assets		584,124,950				552,284,894				592,555,362				523,063,332
	Investment Securities		52,899,703				47,893,956				50,001,369				47,178,875
	Loans, gross		511,124,646				491,143,513				511,428,854				463,984,519
	Deposits		506,647,368				463,574,913				506,242,659				436,505,339
	FHLB Advances		23,426,724				40,890,242				34,444,699				39,883,947
	Note Payable		12,133,390				18,831,090				12,384,367				18,285,215
	Common Shareholders' Equity		61,605,063				49,963,279				55,517,056				48,887,789
Selected Operating Results:
	Interest Income	$	7,320,034			$	6,739,992			$	28,530,709			$	25,704,709
	Interest Expense		1,626,584				1,456,276				6,415,360				5,187,835
	Net Interest Income		5,693,450				5,283,716				22,115,349				20,516,874
	Provision for Loan Losses		(750,000	)			-				(750,000	)			(1,350,000	)
	Net Interest Income After Provision for Loan Losses		6,443,450				5,283,716				22,865,349				21,866,874
	Noninterest Income		(567,806	)			774,121				2,384,853				2,632,771
	Noninterest Expense		4,624,346				4,781,383				19,170,873				18,062,651
	Income Before Income Taxes		1,251,298				1,276,454				6,079,329				6,436,994
	Income Tax Provision		323,094				1,408,717				1,509,585				3,400,210
	Net Income	$	928,204			$	(132,263	)		$	4,569,744			$	3,036,784
	Basic Net Income per Common Share	$	0.95			$	(0.16	)		$	5.02			$	3.70
	Diluted Net Income per Common Share		0.95				(0.16	)			4.74				3.67
	Dividends Paid per Common Share		-				-				-				-
	Book Value Per Common Share		64.43				60.97				64.43				60.97
	Book Value Per Common Share-Diluted		64.43				60.97				64.43				60.97
	Common Shares Outstanding		975,077				821,216				975,077				821,216
	Diluted Common Shares Outstanding		975,079				960,077				975,082				960,077
	Basic Weighted Average Common Shares Outstanding		975,077				821,216				909,526				821,216
	Diluted Weighted Average Common Shares Outstanding		975,079				842,347				964,312				826,542
Selected Ratios:
	Return on Average Assets		0.61	%			-0.09	%			0.74	%			0.55	%
	Return on Average Common Shareholders' Equity		5.98	%			-1.05	%			8.23	%			5.89	%
	Average Common Shareholders' Equity to Average Assets		10.13	%			8.64	%			9.00	%			8.89	%
	Net Interest Margin		3.87	%			3.80	%			3.73	%			3.92	%
	Efficiency		90.22	%			78.93	%			78.25	%			78.03	%
Selected Asset Quality:
	Net (Recoveries) Charge-offs	$	(408,930	)		$	180,425			$	(493,788	)		$	(2,245,938	)
	Classified Assets		8,021,842				11,691,707				8,021,842				11,691,707
	Nonperforming Loans		-				575,362				-				575,362
	Nonperforming Assets		7,733,440				11,504,534				7,733,440				11,504,534
	Total Nonperforming Loans to Total Loans		0.00	%			0.12	%			0.00	%			0.12	%
	Total Nonperforming Loans to Total Assets		0.00	%			0.10	%			0.00	%			0.10	%
	Total Nonperforming Assets to Total Assets		1.26	%			1.94	%			1.26	%			1.94	%

Contact:   Scott Sandlin   479-684-3754