White River Bancshares Co. Reports Net Income of $1.1 Million, or $1.17 Per Diluted Share, for the Fourth Quarter of 2019, and $5.1 million, or $5.28 Per Diluted Share for the Year

FAYETTEVILLE, Ark., Jan. 23, 2020 (GLOBE NEWSWIRE) -- White River Bancshares Company (OTCQX: WRIV), (the “Company”) the holding company for Signature Bank of Arkansas (the “Bank”), today reported strong loan and deposit growth and improved asset quality contributed to net income increasing 22.0% to $1.1 million, or $1.17 per diluted share, in the fourth quarter of 2019, compared to $928,000, or $0.95 per diluted share, in the fourth quarter of 2018.  In the third quarter of 2019, the Company earned $1.3 million, or $1.36 per diluted share.  For the full year ended December 31, 2019, net income increased 12.5% to a record $5.1 million, or $5.28 per diluted share, compared to $4.6 million, or $4.74 per diluted share, in 2018.  All financial results are unaudited.

Fourth Quarter and Full Year 2019 Financial Highlights:

• Fourth quarter net income was $1.1 million, or $1.17 per diluted share.
• Fourth quarter net interest margin (“NIM”) was 3.85%, a two basis point contraction compared to both the fourth quarter a year ago and the preceding quarter.
• Net loans increased 12.9% to $569.4 million at December 31, 2019, compared to December 31, 2018.
• Total deposits increased 12.8% to $575.3 million at December 31, 2019, compared to a year ago.
• Non-interest-bearing deposits increased 17.5% to $117.5 million at December 31, 2019, compared to $99.9 million a year ago.
• Non-performing assets decreased 55.5% to $2.6 million at December 31, 2019, compared to $5.9 million at September 30, 2019, and decreased 65.8% when compared to $7.7 million a year ago.
• Nonperforming assets (NPAs) represent 0.38% of total assets at December 31, 2019, compared to 1.26% of total assets a year ago and 0.90% of total assets three months earlier. 
• Book value per diluted common share increased to $71.43 at December 31, 2019, from $64.43 a year ago.
• Total risk-based capital ratio was 13.64% and Tier 1 leverage ratio was 11.64% for the Bank at December 31, 2019.
• On December 11, 2019, the Company completed a private placement of $11 million in fixed-to-floating rate subordinated notes due December 31, 2029 to accredited institutional investors.

“We had an exceptional year delivering record earnings for 2019, highlighted by revenue growth, double digit loan and deposit growth with a solid net interest margin,” said Gary Head, President and Chief Executive Officer.  “Additionally, multiple properties sold during the fourth quarter, resulting in a reduction in nonperforming assets of 55% compared to three months earlier, and bringing NPAs to their lowest level in years.  With the improvements in asset quality and our growth strategy in place, we remain focused on building long-term customer relationships and creating value for our customers and shareholders.”

Income Statement

The Company’s net interest margin was 3.85% in the fourth quarter of 2019, compared to 3.87% in both the preceding quarter and the fourth quarter of 2018.  For the year, the net interest margin improved 18 basis points to 3.91%, compared to 3.73% in 2018.

Fourth quarter net interest income increased by 7.9% to $6.1 million, from $5.7 million in the fourth quarter of 2018, and remained unchanged when compared to the third quarter of 2019.  Total interest income increased by 13.4% to $8.3 million in the fourth quarter of 2019 from $7.3 million during the fourth quarter of 2018 and increased by 1.3% compared to $8.2 million in the preceding quarter.  Total interest expense increased by 32.7% to $2.2 million in the fourth quarter of 2019, from $1.6 million during the fourth quarter of 2018, and increased 3.1% compared to $2.1 million in the preceding quarter.  The year over year increase was primarily due to the increase in interest-bearing deposits.  For the year, net interest income increased 9.0% to $24.1 million, compared to $22.1 million in 2018.

Non-interest income increased to $1.3 million in the fourth quarter of 2019, and included a loss on sales and write-downs of foreclosed assets of $46,977.  This compares to non-interest income of $621,919 in the third quarter of 2019, with a loss on sales and write-down of foreclosed assets of $526,944, and non-interest income of ($567,806) in the fourth quarter of 2018, with a loss on sales and write-down on foreclosed assets of $2.2 million.  For the year, non-interest income increased 49.4% to $3.6 million, compared to $2.4 million in 2018.

Non-interest expense totaled $5.4 million in the fourth quarter of 2019 compared to $4.6 million in the fourth quarter a year ago and $4.9 million in the prior quarter.  For the year, non-interest expense was $20.3 million, compared to $19.2 million in 2018.

Balance Sheet Review

Total assets increased by 14.4% to $702.1 million at December 31, 2019, from $613.7 million at December 31, 2018, and increased 6.3% compared to $660.3 million at September 30, 2019.  Cash and cash equivalents increased to $39.1 million at December 31, 2019 from $29.0 million a year ago.  Investment securities increased to $56.5 million at December 31, 2019 from $53.9 million a year ago.

Loans, net of allowance for loan losses, increased 12.9% to $569.4 million at year-end, compared to $504.2 million a year ago, and increased 3.3% compared to $551.2 million three months earlier.

Total deposits increased 12.8% to $575.3 million at December 31, 2019 compared to $510.1 million a year ago and increased 6.6% compared to $539.6 million at September 30, 2019, with non-interest bearing deposits increasing 17.5% to $117.5 million at year-end compared to $99.9 million a year ago.

FHLB advances totaled $27.5 million at December 31, 2019 from $25.4 million at December 31, 2018.  Notes payable decreased to $10.7 million at December 31, 2019 from $12.1 million a year ago.

Total stockholders’ equity increased 10.3% to $69.3 million at December 31, 2019 from $62.8 million at December 31, 2018 and increased 1.4% when compared to $68.3 million at September 30, 2019.  Book value per diluted common share increased to $71.43 at December 31, 2019 from $64.43 at December 31, 2018 and $70.13 at September 30, 2019.

Credit Quality

The provision for loan losses increased to $500,000 during the fourth quarter of 2019.  This compares to no provision for loan losses in the preceding quarter and a credit to the provision for loan losses of $750,000 in the fourth quarter of 2018. 

Nonperforming loans totaled $2.2 million at December 31, 2019, compared to $129,000 at September 30, 2019, and no nonperforming loans at December 31, 2018.  Nonperforming assets decreased to $2.6 million at December 31, 2019 compared to $5.9 million at September 30, 2019 and $7.7 million at December 31, 2018.  Total non-performing assets improved to 0.38% of total assets at December 31, 2019, compared to 0.90% of total assets three months earlier and 1.26% a year earlier.

The allowance for loan losses was $6.7 million, or 1.16% of total loans, at December 31, 2019 compared to $7.0 million, or 1.36% of total loans, at December 31, 2018.  Net loan charge-offs were $826,800 in the fourth quarter of 2019, compared to net loan recoveries of $13,700 in the third quarter of 2019 and net loan recoveries of $408,900 in the fourth quarter a year ago.

Capital

The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio of 11.64%, Common equity tier 1 capital ratio of 12.55%, Tier 1 capital ratio of 12.55% and Total capital ratio of 13.64%, at December 31, 2019.

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
December 31, 2019, September 30, 2019 and December 31, 2018
UNAUDITED			December 31, 2019				September 30, 2019				December 31, 2018
ASSETS
Cash and due from banks			$	38,984,145			$	17,033,866			$	27,944,329
Federal funds sold				100,000				214,047				1,101,025
Total cash and cash equivalents				39,084,145				17,247,913				29,045,354
Investment securities				56,493,544				55,937,666				53,940,001
Loans held for sale				2,045,250				1,562,200				494,937
Loans, net of allowance for loan losses				569,419,374				551,184,762				504,160,307
Premises and equipment, net				24,860,247				18,821,452				8,532,146
Foreclosed assets held for sale				487,827				5,804,185				7,733,440
Accrued interest receivable				2,766,513				2,465,854				2,511,191
Deferred income taxes				1,443,805				2,226,003				2,539,052
Other investments				2,859,485				2,797,885				2,743,885
Other assets				2,636,708				2,210,704				1,992,144
			$	702,096,898			$	660,258,624			$	613,692,457
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits		- non-interest bearing	$	117,450,670			$	107,892,361			$	99,939,633
		- interest bearing		151,696,610				139,110,640				131,535,024
Savings deposits				13,554,400				13,110,144				11,856,239
Time deposits	- under $250M			165,267,666				162,730,976				168,979,360
	- $250M and over			127,293,109				116,737,980				97,799,817
Total deposits				575,262,455				539,582,101				510,110,073
Federal Home Loan Bank advances				27,471,344				27,572,634				25,371,095
Notes payable				10,747,683				11,643,475				12,086,880
Accrued interest payable				713,397				781,770				587,056
Other liabilities				18,612,742				12,367,698				2,709,944
Total liabilities				632,807,621				591,947,678				550,865,048
Stockholders' equity:
Common stock				9,763				9,763				9,763
Surplus				87,656,698				87,562,406				87,129,011
Accumulated deficit				(18,298,210	)			(19,430,581	)			(23,440,979	)
Treasury stock, at cost				(387,022	)			(112,732	)			(49,888	)
Accumulated other comprehensive loss				308,048				282,090				(820,498	)
Total stockholders' equity				69,289,277				68,310,946				62,827,409
			$	702,096,898			$	660,258,624			$	613,692,457

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended December 31, 2019, September 30, 2019 and December 31, 2018
	For the Three Months Ended
UNAUDITED	December 31, 2019				September 30, 2019				December 31, 2018
Interest income:
Loans, including fees	$	7,911,834			$	7,768,738			$	6,882,662
Investment securities		346,122				347,434				340,926
Federal funds sold and other		40,753				79,507				96,446
Total interest income		8,298,709				8,195,679				7,320,034
Interest expense:
Deposits		1,841,859				1,797,879				1,350,383
Federal Home Loan Bank advances		130,782				146,602				123,371
Notes payable		173,369				147,018				152,605
Federal funds purchased and other		11,965				705				225
Total interest expense		2,157,975				2,092,204				1,626,584
Net interest income		6,140,734				6,103,475				5,693,450
Provision for loan losses		500,000				-				(750,000	)
Net interest income after provision for loan losses		5,640,734				6,103,475				6,443,450
Non-interest income:
Service charges and fees on deposits		168,410				184,032				198,929
Wealth management fee income		474,168				456,522				494,996
Secondary market fee income		259,280				287,084				137,998
Loss on sales and write-downs of foreclosed assets		(46,977	)			(526,944	)			(2,150,000	)
Other		419,335				221,225				750,271
Total non-interest income		1,274,216				621,919				(567,806	)
Non-interest expense:
Salaries and benefits		3,452,028				3,431,056				2,997,064
Occupancy and equipment		738,169				582,957				539,425
Data processing		296,598				319,184				302,157
Marketing and business development		182,312				132,424				60,411
Professional services		392,950				182,403				339,343
Other		327,843				288,570				385,946
Total non-interest expense		5,389,900				4,936,594				4,624,346
Income before income taxes		1,525,050				1,788,800				1,251,298
Income tax provision		392,679				458,995				323,094
Net income	$	1,132,371			$	1,329,805			$	928,204
Basic earnings per common share	$	1.17			$	1.36			$	0.95
Diluted earnings per common share	$	1.17			$	1.36			$	0.95

White River Bancshares Company
Selected Financial Data		Three Months Ended
UNAUDITED		December 31, 2019				September 30, 2019				December 31, 2018
Selected Financial Condition Data: End of Period Balances
	Assets	$	702,096,898			$	660,258,624			$	613,692,457
	Investment Securities		56,493,544				55,937,666				53,940,001
	Loans, gross		578,161,121				559,770,307				511,621,091
	Allowance for Loan Losses		6,696,497				7,023,345				6,965,847
	Deposits		575,262,455				539,582,101				510,110,073
	FHLB Advances		27,471,344				27,572,634				25,371,095
	Notes Payable		10,747,683				11,673,475				12,086,880
	Common Shareholders' Equity		69,289,277				68,310,946				62,827,409
Selected Financial Condition Data: Average Balances
	Assets	$	665,273,269			$	657,501,382			$	608,170,038
	Earning Assets		633,146,281				625,176,901				584,124,950
	Investment Securities		56,180,684				56,478,503				52,899,703
	Loans, gross		563,326,863				552,356,254				511,124,646
	Deposits		547,479,974				540,308,694				506,647,368
	FHLB Advances		22,197,663				24,138,234				23,426,724
	Notes Payable		11,365,461				11,688,777				12,133,390
	Common Shareholders' Equity		68,598,333				67,424,620				61,605,063
Selected Operating Results:
	Interest Income	$	8,298,709			$	8,195,679			$	7,320,034
	Interest Expense		2,157,975				2,092,204				1,626,584
	Net Interest Income		6,140,734				6,103,475				5,693,450
	Provision for Loan Losses		500,000				-				(750,000	)
	Net Interest Income After Provision for Loan Losses		5,640,734				6,103,475				6,443,450
	Noninterest Income		1,274,216				621,919				(567,806	)
	Noninterest Expense		5,389,900				4,936,594				4,624,346
	Income Before Income Taxes		1,525,050				1,788,800				1,251,298
	Income Tax Provision		392,679				458,995				323,094
	Net Income	$	1,132,371			$	1,329,805			$	928,204
	Basic Net Income per Common Share	$	1.17			$	1.36			$	0.95
	Diluted Net Income per Common Share		1.17				1.36				0.95
	Dividends Paid per Common Share		-				-				-
	Book Value Per Common Share		71.43				70.13				64.43
	Book Value Per Common Share-Diluted		71.43				70.13				64.43
	Common Shares Outstanding		969,998				974,127				975,077
	Diluted Common Shares Outstanding		970,004				974,127				975,079
	Basic Weighted Average Common Shares Outstanding		971,318				975,014				975,077
	Diluted Weighted Average Common Shares Outstanding		971,322				975,014				975,079
Selected Ratios:
	Return on Average Assets		0.68	%			0.80	%			0.61	%
	Return on Average Common Shareholders' Equity		6.55	%			7.82	%			5.98	%
	Average Common Shareholders' Equity to Average Assets		10.31	%			10.25	%			10.13	%
	Net Interest Margin		3.85	%			3.87	%			3.87	%
	Efficiency		72.69	%			73.40	%			90.22	%
Selected Asset Quality:
	Net (Recoveries) Charge-offs	$	826,847			$	(13,738	)		$	(408,930	)
	Classified Assets		2,902,922				6,194,407				8,021,842
	Nonperforming Loans		2,153,921				129,111				-
	Nonperforming Assets		2,641,748				5,933,296				7,733,440
	Total Nonperforming Loans to Total Loans		0.37	%			0.02	%			0.00	%
	Total Nonperforming Loans to Total Assets		0.31	%			0.02	%			0.00	%
	Total Nonperforming Assets to Total Assets		0.38	%			0.90	%			1.26	%

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