FAYETTEVILLE, Ark., Oct. 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 $1.15 million, or $1.19 per diluted share, in the third quarter of 2020, compared to $668,600, or $0.69 per diluted share, in the second quarter of 2020 and $1.33 million, or $1.36 per diluted share, in the third quarter of 2019.

In the first nine months of the year, net income was $2.56 million, or $2.64 per diluted share, compared to $4.01 million, or $4.11 per diluted share, in the first nine months of 2019. All financial results are unaudited.

“In the third quarter, the bank had solid earnings, fueled by strong growth in low cost deposits, loans and revenue. We drove non-performing assets down 70% during the quarter and 93.3% from a year ago,” said Gary Head, President and Chief Executive Officer. “Due to the growth in the loan portfolio and our continuous evaluation of the Covid situation, we added $300,000 into our loan loss reserve for the quarter, bringing the bank to what we believe is a solid position of 1.39% of total loans and 1.44% of total loans without the government guaranteed Paycheck Protection Program (“PPP”) loans.” The Company booked a $1.4 million provision for loan losses during the preceding quarter and had no provision for loan losses in the third quarter a year ago. “We continue to lower the cost of deposits by bringing in more business and personal checking accounts and repricing the cost of our CDs due to interest rates being considerably lower than the last couple of years.”

“The health and safety of our customers, teammates and community is a primary focus, as we deal with the pandemic on a local and national level,” said Brant Ward, Chief Administrative Officer. “The Bank continues to keep lobbies open by appointment only. Our customers were already using our digital platforms prior to the pandemic, but have really embraced the platform this year, with online utilization up meaningfully compared to a year ago. At the completion of the SBA’s PPP program on August 8, we had made $20.7 million in PPP loans, helping 274 local businesses. This represents approximately 1,717 years’ worth of small businesses that we were able to help.”

“Our strategic focus remains consistent, investing in digital technology to help gather low cost deposits, ensuring we continue to diversify our loan portfolios, and focusing on improving our overall efficiencies,” said Scott Sandlin, Chief Strategy Officer.

As of June 30 2020, loan modifications represented 14.25% of total loans outstanding, excluding PPP loans. As of September 30, 2020, the percentage of deferred loans to total loans excluding PPP loans had declined to 2.05%. “Our customers have done a fantastic job navigating through a difficult past six months, as seen by our drastically reduced deferral levels and our very low non-performing asset ratio,” said Jeff Maland, Chief Risk Officer. “We feel good about the underlying quality of deferred loans, most of which are longtime customer relationships with strong guarantor support. We feel our portfolio is positioned well to handle the economic impact of the pandemic, as we had less than 1% of the total loan portfolio in hotels, restaurants, and energy loans as of the end of the third quarter.”

Third Quarter 2020 Financial Highlights:

• Third quarter net income was $1.15 million or $1.19 per diluted share.
• Third quarter provision for loan losses was $300,000, compared to $1.4 million in the preceding quarter and no provision for loan losses in the third quarter of 2019.
• Third quarter net interest margin (“NIM”) was 3.33%, compared to 3.65% in the preceding quarter and 3.87% in the third quarter a year ago.
• Net loans increased 6.8% to $588.4 million at September 30, 2020, compared to $551.2 million at September 30, 2019.
• The Bank had funded approximately 274 PPP loans totaling $20.7 million as of the close of the program on August 8, 2020.
• Total deposits increased 17.2% to $632.5 million at September 30, 2020, compared to $539.6 million a year ago.
• Non-interest-bearing deposits increased 56.2% to $168.5 million at September 30, 2020, compared to $107.9 million a year ago.
• Non-performing assets decreased 70.0% to $400,100 at September 30, 2020, compared to $1.3 million at June 30, 2020 and decreased 93.3% when compared to $5.9 million a year ago.
• Nonperforming assets (NPAs) represent 0.05% of total assets at September 30, 2020, compared to 0.18% of total assets three months earlier and 0.90% of total assets a year earlier.
• As of September 30, 2020, the bank had loans still within the deferral process of $10.8 million, which represents 1.78% of gross loans.
• Book value per diluted common share increased to $75.17 at September 30, 2020, from $70.13 a year ago.
• Total risk-based capital ratio was 13.35% and Tier 1 leverage ratio was 10.77% for the Bank at September 30, 2020.

Income Statement

The Company’s net interest margin was 3.33% in the third quarter of 2020, compared to 3.87% in the third quarter of 2019 and 3.65% in the second quarter of 2020. In the first nine months of 2020, the net interest margin was 3.54%, compared to 3.94% in the first nine months of 2019.

Third quarter net interest income was $6.0 million, compared to $6.1 million in the third quarter of 2019. Total interest income decreased by 4.0% to $7.9 million in the third quarter of 2020, from $8.2 million during the third quarter of 2019. Total interest expense decreased by 10.8% to $1.9 million in the third quarter of 2020, from $2.1 million during the third quarter of 2019. In the first nine months of 2020, net interest income increased 2.4% to $18.4 million, compared to $18.0 million in the first nine months of 2019.

Non-interest income increased 98.9% to $1.2 million in the third quarter of 2020, compared to $622,000 in the third quarter a year ago. In the first nine months of the year, non-interest income increased 52.3% to $3.5 million, compared to $2.3 million in the first nine months of 2019.

Non-interest expense was $5.4 million in the third quarter of 2020, compared to $4.9 million in the third quarter of 2019. Year-to-date, non-interest expense was $16.1 million, compared to $14.9 million in the same period a year ago.

Balance Sheet Review

Total assets increased by 14.0% to $752.6 million at September 30, 2020, from $660.3 million at September 30, 2019, and decreased modestly compared to $754.2 million at June 30, 2020. Cash and cash equivalents increased to $49.6 million at September 30, 2020 from $17.2 million a year ago. Investment securities increased to $70.4 million at September 30, 2020 from $55.9 million a year ago.

Loans, net of allowance for loan losses, increased 6.8% to $588.4 million at September 30, 2020, compared to $551.2 million a year ago, and increased 3.7% compared to $567.6 million three months earlier. Through the close 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.

Total deposits increased 17.2% to $632.5 million at September 30, 2020, compared to $539.6 million a year ago and decreased modestly compared to $635.3 million at June 30, 2020, with non-interest bearing deposits increasing 56.2% to $168.5 million at September 30, 2020, compared to $107.9 million a year ago.

FHLB advances totaled $17.2 million at September 30, 2020 from $27.6 million at September 30, 2019. Notes payable decreased to $10.8 million at September 30, 2020 from $11.6 million a year ago.

Total stockholders’ equity increased 6.6% to $72.8 million at September 30, 2020 from $68.3 million at September 30, 2019 and increased 1.6% when compared to $71.7 million at June 30, 2020. Book value per diluted common share increased to $75.17 at September 30, 2020 from $70.13 at September 30, 2019 and $73.89 at June 30, 2020.

Credit Quality

The provision for loan losses was $300,000 during the third quarter of 2020. This compares to a $1.4 million provision for loan losses in the preceding quarter and no provision for loan losses in the third quarter of 2019.  

Credit quality improved with nonperforming loans declining to $200,000 at September 30, 2020, compared to $985,000 at June 30, 2020 and $129,000 at September 30, 2019. Nonperforming assets decreased 70.0% to $400,000 at September 30, 2020 compared to $1.3 million at June 30, 2020 and decreased 93.3% when compared to $5.9 million at September 30, 2019. Total non-performing assets improved to 0.05% of total assets at September 30, 2020, compared to 0.18% of total assets three months earlier and 0.90% of total assets a year earlier.

The allowance for loan losses was $8.4 million, or 1.44% of total loans, at September 30, 2020 when excluding the $20.7 million of PPP loans, which are 100% guaranteed by the SBA. This compares to $7.0 million, or 1.25% of total loans, at September 30, 2019. Net loan charge-offs were $169,000 in the third quarter of 2020. This compares to net charge-offs of $512,000 in the second quarter of 2020 and net loan recoveries of $14,000 in the third quarter of 2019.

As of September 30, 2020, the bank had loans still within the deferral process of $12.0 million, which represents 2.05% of total loans, excluding PPP balances. Within that balance, $8.2 million of the loans were full P & I deferrals, while $3.8 million were principal deferrals.

Capital

The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio of 10.77%, Common equity tier 1 capital ratio of 12.10%, Tier 1 capital ratio of 12.10% and Total capital ratio of 13.35%, at September 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
September 30, 2020, June 30, 2020 and September 30, 2019
UNAUDITED			September 30, 2020				June 30, 2020				September 30, 2019
ASSETS
Cash and due from banks			$	49,636,364			$	81,878,254			$	17,033,866
Federal funds sold				-				754,807				214,047
Total cash and cash equivalents				49,636,364				82,633,061				17,247,913
Investment securities				70,375,655				66,176,842				55,937,666
Loans held for sale				10,689,131				4,366,938				1,562,200
Loans, net of allowance for loan losses				588,429,575				567,583,991				551,184,762
Premises and equipment, net				24,030,438				24,169,607				18,821,452
Foreclosed assets held for sale				200,100				349,072				5,804,185
Accrued interest receivable				2,581,457				2,320,039				2,465,854
Deferred income taxes				1,480,231				1,370,935				2,226,003
Other investments				2,888,585				2,884,285				2,797,885
Other assets				2,296,588				2,379,043				2,210,704
			$	752,608,124			$	754,233,813			$	660,258,624
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits		- non-interest bearing	$	168,518,880			$	163,574,225			$	107,892,361
		- interest bearing		179,409,301				170,346,618				139,110,640
Savings deposits				16,688,392				15,984,114				13,110,144
Time deposits	- under $250M			151,198,785				160,996,541				162,730,976
	- $250M and over			116,721,324				124,392,077				116,737,980
Total deposits				632,536,682				635,293,575				539,582,101
Federal Home Loan Bank advances				17,161,929				17,266,002				27,572,634
Notes payable				10,766,607				10,760,299				11,643,475
Accrued interest payable				689,096				610,071				781,770
Other liabilities				18,604,241				18,630,457				12,367,698
Total liabilities				679,758,555				682,560,404				591,947,678
Stockholders' equity:
Common stock				9,763				9,763				9,763
Surplus				87,940,629				87,848,223				87,562,406
Accumulated deficit				(15,737,036	)			(16,887,146	)			(19,430,581	)
Treasury stock, at cost				(431,614	)			(387,022	)			(112,732	)
Accumulated other comprehensive income				1,067,827				1,089,591				282,090
Total stockholders' equity				72,849,569				71,673,409				68,310,946
			$	752,608,124			$	754,233,813			$	660,258,624

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended September 30, 2020, June 30, 2020 and September 30, 2019
	For the Three Months Ended
UNAUDITED	September 30, 2020				June 30, 2020			September 30, 2019
Interest income:
Loans, including fees	$	7,526,896			$	8,096,129		$	7,768,738
Investment securities		324,464				347,157			347,434
Federal funds sold and other		13,052				12,996			79,507
Total interest income		7,864,412				8,456,282			8,195,679
Interest expense:
Deposits		1,593,311				1,771,276			1,797,879
Federal Home Loan Bank advances		104,501				117,389			146,602
Notes payable		167,870				164,281			147,018
Federal funds purchased and other		-				-			705
Total interest expense		1,865,682				2,052,946			2,092,204
Net interest income		5,998,730				6,403,336			6,103,475
Provision for loan losses		300,000				1,415,000			-
Net interest income after provision for loan losses		5,698,730				4,988,336			6,103,475
Non-interest income:
Service charges and fees on deposits		116,288				115,774			184,032
Wealth management fee income		448,465				392,442			456,522
Secondary market fee income		647,069				532,734			287,084
Loss on sales and write-downs of foreclosed assets		(160,679	)			-			(526,944	)
Other		186,058				139,120			221,225
Total non-interest income		1,237,201				1,180,070			621,919
Non-interest expense:
Salaries and benefits		3,676,489				3,614,419			3,431,056
Occupancy and equipment		663,995				634,461			582,957
Data processing		323,980				341,067			319,184
Marketing and business development		120,547				99,267			132,424
Professional services		396,508				335,712			182,403
Other		217,273				267,962			288,570
Total non-interest expense		5,398,792				5,292,888			4,936,594
Income before income taxes		1,537,139				875,518			1,788,800
Income tax provision		387,029				206,929			458,995
Net income	$	1,150,110			$	668,589		$	1,329,805
Basic earnings per common share	$	1.19			$	0.69		$	1.36
Diluted earnings per common share	$	1.19			$	0.69		$	1.36

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the nine months ended September 30, 2020 and September 30, 2019
	For the Nine Months Ended
UNAUDITED	September 30, 2020				September 30, 2019
Interest income:
Loans, including fees	$	23,358,772			$	22,480,331
Investment securities		1,031,034				1,066,630
Federal funds sold and other		109,973				207,176
Total interest income		24,499,779				23,754,137
Interest expense:
Deposits		5,255,959				4,864,474
Federal Home Loan Bank advances		339,138				456,248
Notes payable		500,021				441,830
Federal funds purchased and other		32				20,946
Total interest expense		6,095,150				5,783,498
Net interest income		18,404,629				17,970,639
Provision for loan losses		2,392,000				-
Net interest income after provision for loan losses		16,012,629				17,970,639
Non-interest income:
Service charges and fees on deposits		406,236				531,032
Wealth management fee income		1,309,212				1,300,735
Secondary market fee income		1,468,552				658,347
Loss on sales and write-downs of foreclosed assets		(162,596	)			(708,326	)
Other		465,198				507,216
Total non-interest income		3,486,602				2,289,004
Non-interest expense:
Salaries and benefits		10,961,086				9,993,259
Occupancy and equipment		1,947,494				1,709,435
Data processing		980,639				909,941
Marketing and business development		346,750				449,148
Professional services		1,124,596				836,658
Other		735,798				961,751
Total non-interest expense		16,096,363				14,860,192
Income before income taxes		3,402,868				5,399,451
Income tax provision		841,694				1,389,053
Net income	$	2,561,174			$	4,010,398
Basic earnings per common share	$	2.64			$	4.11
Diluted earnings per common share	$	2.64			$	4.11

White River Bancshares Company
Selected Financial Data						Three Months Ended
UNAUDITED		September 30, 2020				June 30, 2020				September 30, 2019
Selected Financial Condition Data: End of Period Balances
	Assets	$	752,608,124			$	754,233,813			$	660,258,624
	Investment Securities		70,375,655				66,176,842				55,937,666
	Loans, gross		607,540,859				580,242,507				559,770,307
	Allowance for Loan Losses		8,422,153				8,291,578				7,023,345
	Deposits		632,536,682				635,293,575				539,582,101
	FHLB Advances		17,161,929				17,266,002				27,572,634
	Notes Payable		10,766,607				10,760,299				11,673,475
	Common Shareholders' Equity		72,849,569				71,673,409				68,310,946
Selected Financial Condition Data: Average Balances
	Assets	$	747,393,849			$	736,035,654			$	657,501,382
	Earning Assets		717,205,947				705,232,474				625,176,901
	Investment Securities		67,423,766				64,885,472				56,478,503
	Loans, gross		588,694,448				576,641,043				552,356,254
	Deposits		627,329,431				614,655,399				540,308,694
	FHLB Advances		17,197,822				19,772,977				24,138,234
	Notes Payable		10,763,088				10,756,579				11,688,777
	Common Shareholders' Equity		72,144,578				71,019,775				67,424,620
Selected Operating Results:
	Interest Income	$	7,864,412			$	8,456,282			$	8,195,679
	Interest Expense		1,865,682				2,052,946				2,092,204
	Net Interest Income		5,998,730				6,403,336				6,103,475
	Provision for Loan Losses		300,000				1,415,000				-
	Net Interest Income After Provision for Loan Losses		5,698,730				4,988,336				6,103,475
	Noninterest Income		1,237,201				1,180,070				621,919
	Noninterest Expense		5,398,792				5,292,888				4,936,594
	Income Before Income Taxes		1,537,139				875,518				1,788,800
	Income Tax Provision		387,029				206,929				458,995
	Net Income	$	1,150,110			$	668,589			$	1,329,805
	Basic Net Income per Common Share	$	1.19			$	0.69			$	1.36
	Diluted Net Income per Common Share		1.19				0.69				1.36
	Dividends Paid per Common Share		-				-				-
	Book Value Per Common Share		75.17				73.89				70.13
	Book Value Per Common Share-Diluted		75.17				73.89				70.13
	Common Shares Outstanding		969,069				969,998				974,127
	Diluted Common Shares Outstanding		969,069				969,998				974,127
	Basic Weighted Average Common Shares Outstanding		969,907				969,998				975,014
	Diluted Weighted Average Common Shares Outstanding		969,907				969,998				975,014
Selected Ratios:
	Return on Average Assets		0.61	%			0.37	%			0.80	%
	Return on Average Common Shareholders' Equity		6.34	%			3.79	%			7.82	%
	Average Common Shareholders' Equity to Average Assets		9.65	%			9.65	%			10.25	%
	Net Interest Margin		3.33	%			3.65	%			3.87	%
	Efficiency		74.61	%			69.80	%			73.40	%
Selected Asset Quality:
	Net (Recoveries) Charge-offs	$	169,425			$	511,950			$	(13,738	)
	Classified Assets		661,616				1,597,207				6,194,407
	Nonperforming Loans		200,000				985,000				129,111
	Nonperforming Assets		400,100				1,334,072				5,933,296
	Total Nonperforming Loans to Total Loans		0.03	%			0.17	%			0.02	%
	Total Nonperforming Loans to Total Assets		0.03	%			0.13	%			0.02	%
	Total Nonperforming Assets to Total Assets		0.05	%			0.18	%			0.90	%

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

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