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.

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED BALANCE SHEETS
June 30, 2020, March 31, 2020 and June 30, 2019
UNAUDITED			June 30, 2020				March 31, 2020				June 30, 2019
ASSETS
Cash and due from banks			$	81,878,254			$	52,796,917			$	26,921,777
Federal funds sold				754,807				489,448				49,920
Total cash and cash equivalents				82,633,061				53,286,365				26,971,697
Investment securities				66,176,842				64,231,594				56,491,454
Loans held for sale				4,366,938				2,641,614				1,910,237
Loans, net of allowance for loan losses				567,583,991				558,187,421				535,276,253
Premises and equipment, net				24,169,607				24,530,411				19,186,933
Foreclosed assets held for sale				349,072				100				6,331,228
Accrued interest receivable				2,320,039				2,072,301				2,369,594
Deferred income taxes				1,370,935				1,575,948				2,058,613
Other investments				2,884,285				2,873,285				2,779,585
Other assets				2,379,043				2,228,236				2,567,363
			$	754,233,813			$	711,627,275			$	655,942,957
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits		- non-interest bearing	$	163,574,225			$	119,398,336			$	108,136,610
		- interest bearing		170,346,618				166,153,663				136,078,594
Savings deposits				15,984,114				14,027,963				13,569,006
Time deposits	- under $250M			160,996,541				166,663,942				163,753,062
	- $250M and over			124,392,077				125,835,712				117,425,097
Total deposits				635,293,575				592,079,616				538,962,369
Federal Home Loan Bank advances				17,266,002				19,869,137				25,173,016
Notes payable				10,760,299				10,753,991				11,793,120
Accrued interest payable				610,071				876,692				726,945
Other liabilities				18,630,457				17,963,323				12,474,372
Total liabilities				682,560,404				641,542,759				589,129,822
Stockholders' equity:
Common stock				9,763				9,763				9,763
Surplus				87,848,223				87,752,461				87,420,115
Accumulated deficit				(16,887,146	)			(17,555,735	)			(20,760,386	)
Treasury stock,  at cost				(387,022	)			(387,022	)			(50,824	)
Accumulated other comprehensive loss				1,089,591				265,049				194,467
Total stockholders' equity				71,673,409				70,084,516				66,813,135
			$	754,233,813			$	711,627,275			$	655,942,957

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended June 30, 2020, March 31, 2020 and June 30, 2019
	For the Three Months Ended
UNAUDITED	June 30, 2020			March 31, 2020				June 30, 2019
Interest income:
Loans, including fees	$	8,096,129		$	7,735,747			$	7,544,769
Investment securities		347,157			359,413				358,304
Federal funds sold and other		12,996			83,925				56,882
Total interest income		8,456,282			8,179,085				7,959,955
Interest expense:
Deposits		1,771,276			1,891,372				1,630,369
Federal Home Loan Bank advances		117,389			117,248				156,632
Notes payable		164,281			167,870				147,296
Federal funds purchased and other		-			32				2,951
Total interest expense		2,052,946			2,176,522				1,937,248
Net interest income		6,403,336			6,002,563				6,022,707
Provision for loan losses		1,415,000			677,000				-
Net interest income after provision for loan losses		4,988,336			5,325,563				6,022,707
Non-interest income:
Service charges and fees on deposits		115,774			174,174				163,127
Wealth management fee income		392,442			468,305				434,754
Secondary market fee income		532,734			288,749				250,271
Loss on sales and write-downs of foreclosed assets		-			(1,917	)			(181,382	)
Other		139,120			140,020				154,825
Total non-interest income		1,180,070			1,069,331				821,595
Non-interest expense:
Salaries and benefits		3,614,419			3,670,178				3,289,366
Occupancy and equipment		634,461			649,038				598,348
Data processing		341,067			315,592				291,728
Marketing and business development		99,267			126,936				175,625
Professional services		335,712			392,376				321,401
Other		267,962			250,563				370,760
Total non-interest expense		5,292,888			5,404,683				5,047,228
Income before income taxes		875,518			990,211				1,797,074
Income tax provision		206,929			247,736				283,154
Net income	$	668,589		$	742,475			$	1,513,920
Basic earnings per common share	$	0.69		$	0.77			$	1.55
Diluted earnings per common share	$	0.69		$	0.77			$	1.55

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the six months ended June 30, 2020 and June 30, 2019
		2020				2019
Interest income:
Loans, including fees	$	15,831,876			$	14,711,593
Investment securities		706,570				719,196
Federal funds sold and other		96,921				127,669
Total interest income		16,635,367				15,558,458
Interest expense:
Deposits		3,662,648				3,066,595
Federal Home Loan Bank advances		234,637				309,646
Note payable		332,151				294,812
Federal funds purchased and other		32				20,241
Total interest expense		4,229,468				3,691,294
Net interest income		12,405,899				11,867,164
Provision for loan losses		2,092,000				-
Net interest income after provision for loan losses		10,313,899				11,867,164
Non-interest income:
Service charges and fees on deposits		289,948				347,000
Wealth management fee income		860,747				844,213
Secondary market fee income		821,483				371,263
Loss on sales and write-downs of foreclosed assets		(1,917	)			(181,382	)
Other		279,140				285,991
Total non-interest income		2,249,401				1,667,085
Non-interest expense:
Salaries and benefits		7,284,597				6,562,203
Occupancy and equipment		1,283,499				1,126,478
Data processing		656,659				590,757
Marketing and business development		226,203				316,724
Professional services		728,088				654,255
Other		518,525				673,181
Total non-interest expense		10,697,571				9,923,598
Income before income taxes		1,865,729				3,610,651
Income tax provision		454,665				930,058
Net income	$	1,411,064			$	2,680,593
Basic earnings per common share	$	1.45			$	2.75
Diluted earnings per common share	$	1.45			$	2.75

White River Bancshares Company
Selected Financial Data		Three Months Ended
UNAUDITED		June 30, 2020				March 31, 2020				June 30, 2019
Selected Financial Condition Data: End of Period Balances
	Assets	$	754,233,813			$	711,627,275			$	655,942,957
	Investment Securities		66,176,842				64,231,594				56,491,454
	Loans, gross		580,242,507				568,217,563				544,196,098
	Allowance for Loan Losses		8,291,578				7,388,528				7,009,607
	Deposits		635,293,575				592,079,616				538,962,369
	FHLB Advances		17,266,002				19,869,137				25,173,016
	Notes Payable		10,760,299				10,753,991				11,793,120
	Common Shareholders' Equity		71,673,409				70,084,516				66,813,135
Selected Financial Condition Data: Average Balances
	Assets	$	736,035,654			$	696,324,277			$	642,050,388
	Earning Assets		705,232,474				663,389,661				609,106,052
	Investment Securities		64,885,472				58,681,569				55,549,672
	Loans, gross		576,641,043				572,011,997				540,960,725
	Deposits		614,655,399				577,553,407				524,810,894
	FHLB Advances		19,772,977				18,510,101				26,536,920
	Notes Payable		10,756,579				10,750,063				11,830,581
	Common Shareholders' Equity		71,019,775				69,760,807				65,248,213
Selected Operating Results:
	Interest Income	$	8,456,282			$	8,179,085			$	7,959,955
	Interest Expense		2,052,946				2,176,522				1,937,248
	Net Interest Income		6,403,336				6,002,563				6,022,707
	Provision for Loan Losses		1,415,000				677,000				-
	Net Interest Income After Provision for Loan Losses		4,988,336				5,325,563				6,022,707
	Noninterest Income		1,180,070				1,069,331				821,595
	Noninterest Expense		5,292,888				5,404,683				5,047,228
	Income Before Income Taxes		875,518				990,211				1,797,074
	Income Tax Provision		206,929				247,736				283,154
	Net Income	$	668,589			$	742,475			$	1,513,920
	Basic Net Income per Common Share	$	0.69			$	0.77			$	1.55
	Diluted Net Income per Common Share		0.69				0.77				1.55
	Dividends Paid per Common Share		-				-				-
	Book Value Per Common Share		73.89				72.25				68.52
	Book Value Per Common Share-Diluted		73.89				72.25				68.52
	Common Shares Outstanding		969,998				969,998				975,065
	Diluted Common Shares Outstanding		969,998				969,998				975,065
	Basic Weighted Average Common Shares Outstanding		969,998				969,998				975,070
	Diluted Weighted Average Common Shares Outstanding		969,998				969,998				975,070
Selected Ratios:
	Return on Average Assets		0.37%				0.43%				0.95%
	Return on Average Common Shareholders' Equity		3.79%				4.28%				9.31%
	Average Common Shareholders' Equity to Average Assets		9.65%				10.02%				10.16%
	Net Interest Margin		3.65%				3.64%				3.97%
	Efficiency		69.80%				76.42%				73.74%
Selected Asset Quality:
	Net (Recoveries) Charge-offs	$	511,950			$	(15,031	)		$	(37,499	)
	Classified Assets		1,257,685				1,769,453				6,613,712
	Nonperforming Loans		985,000				1,509,590				-
	Nonperforming Assets		994,550				1,509,690				6,331,228
	Total Nonperforming Loans to Total Loans		0.17%				0.27%				0.00%
	Total Nonperforming Loans to Total Assets		0.13%				0.21%				0.00%
	Total Nonperforming Assets to Total Assets		0.13%				0.21%				0.97%

Contact:
Scott Sandlin, Chief Strategy Officer
479-684-3754

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