White River Bancshares Co. Earns Record $1.55 Million, or $1.60 Per Diluted Share, for First Quarter 2021

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
				(In thousands)
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.
  

Income Statement

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.

Credit Quality

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.

Capital

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
ASSETS
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
Investment securities			68,937,591				73,100,506				64,231,594
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
Other investments			2,894,085				2,891,285				2,873,285
Other assets			2,161,705				2,320,711				2,228,236
		$	805,960,155			$	749,943,861			$	711,627,275
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
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
Savings deposits			22,126,159				21,051,019				14,027,963
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
Total deposits			682,597,181				627,784,093				592,079,616
Federal Home Loan Bank advances			16,950,930				17,056,909				19,869,137
Notes payable			10,779,101				10,772,790				10,753,991
Accrued interest payable			425,731				382,474				876,692
Other liabilities			19,982,625				19,733,128				17,963,323
Total liabilities			730,735,568				675,729,394				641,542,759
Stockholders' equity:
Common stock			9,763				9,763				9,763
Surplus			88,082,809				88,010,761				87,752,461
Accumulated deficit			(12,921,378	)			(14,474,203	)			(17,555,735	)
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
		$	805,960,155			$	749,943,861			$	711,627,275

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
Interest income:
Loans, including fees	$	7,858,931		$	7,463,396			$	7,735,747
Investment securities		365,802			331,474				359,413
Federal funds sold and other		5,383			3,392				83,925
Total interest income		8,230,116			7,798,262				8,179,085
Interest expense:
Deposits		1,002,824			1,326,327				1,891,372
Federal Home Loan Bank advances		103,749			103,809				117,248
Notes payable		167,874			167,745				167,870
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
Non-interest income:
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	)
Other		181,328			192,133				140,020
Total non-interest income		1,735,488			1,505,399				1,069,331
Non-interest expense:
Salaries and benefits		4,032,581			3,641,192				3,670,178
Occupancy and equipment		644,033			684,502				649,038
Data processing		586,399			367,253				315,592
Marketing and business development		69,808			209,519				126,936
Professional services		936,803			433,752				392,376
Other		343,918			140,323				250,563
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
Net income	$	1,552,825		$	1,262,833			$	742,475
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
Assets	$	805,960,155			$	749,943,861			$	711,627,275
Investment Securities		68,937,591				73,100,506				64,231,594
Loans, gross		651,470,670				627,948,824				568,217,563
Allowance for Loan Losses		8,695,814				8,686,083				7,388,528
Deposits		682,597,181				627,784,093				592,079,616
FHLB Advances		16,950,930				17,056,909				19,869,137
Notes Payable		10,779,101				10,772,790				10,753,991
Common Shareholders' Equity		75,224,587				74,214,467				70,084,516
Selected Financial Condition Data: Average Balances
Assets	$	768,712,888			$	735,449,136			$	696,324,277
Earning Assets		738,370,954				705,226,210				663,389,661
Investment Securities		70,606,315				71,221,639				58,681,569
Loans, gross		639,404,515				616,463,713				572,011,997
Deposits		639,422,194				612,098,458				577,553,407
FHLB Advances & Other Borrowings		22,992,223				18,780,682				18,510,101
Notes Payable		10,775,151				10,769,161				10,750,063
Common Shareholders' Equity		74,657,832				73,485,866				69,760,807
Selected Operating Results:
Interest Income	$	8,230,116			$	7,798,262			$	8,179,085
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
Noninterest Income		1,735,488				1,505,399				1,069,331
Noninterest 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
Net Income	$	1,552,825			$	1,262,833			$	742,475
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
Selected Ratios:
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	%
Efficiency		76.11	%			71.08	%			76.42	%
Selected Asset Quality:
Net (Recoveries) Charge-offs	$	(9,731	)		$	194,071			$	(15,031	)
Classified Assets		4,538,064				4,439,839				1,769,453
Nonperforming Loans		-				-				1,509,590
Nonperforming Assets		100				100				1,509,690
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 479-684-3754