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CST: 21/05/2019 09:29:39   

CORRECTION: White River Bancshares Co. Earns $928,000 in the Fourth Quarter of 2018 and $4.6 Million for the Year

66 Days ago

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 

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