White River Bancshares Co. Earns $1.17 Million, or $1.20 Per Diluted Share, in the First Quarter of 2019

FAYETTEVILLE, Ark., April 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 strong core deposit growth and net interest margin expansion contributed to net income increasing 6.39% to $1.17 million, or $1.20 per diluted share, in the first quarter of 2019, compared to $1.10 million, or $1.14 per diluted share, in the first quarter of 2018.  In the fourth quarter of 2018, the Company earned net income of $928,000, or $0.95 per diluted share.  All financial results are unaudited.

First Quarter 2019 Financial Highlights:

• First quarter net income was $1.17 million, or $1.20 per diluted share, compared with $1.10 million, or $1.14 per diluted share, in the first quarter of 2018.
• First quarter net interest margin (“NIM”) expanded by 23 basis points to 3.97% compared to the first quarter a year ago.
• Net loans of $527.41 million at March 31, 2019, an increase of 5.22% from March 31, 2018.
• Total deposits of $535.04 million at March 31, 2019, an increase of 5.11% from March 31, 2018.
• Non-interest-bearing deposits increased 25.09% to $110.40 million at March 31, 2019 compared to $88.26 million a year ago.
• Non-performing assets at March 31, 2019 improved to 1.18% of total assets from 1.73% a year ago.
• Book value per common share increased to $66.19 at March 31, 2019 from $61.39  a year ago.
• Total risk-based capital ratio of 14.55% and Tier 1 leverage ratio of 11.72% for the Bank at March 31, 2019.

“We delivered solid first quarter 2019 earnings, supported by strong net interest income growth, continued loan and core deposit growth, an improved net interest margin and solid asset quality metrics ,” said Gary Head, President and Chief Executive Officer.  “We are pleased to be opening our newest branch office this month, located at 3712 South Pinnacle Hills Parkway Suite 102, in Rogers Arkansas. This new branch location further expands our network and presence in Northwest Arkansas, one of the fastest growing metro areas in the country.  We are well positioned to continue growing, as we focus on building a steady, well diversified bank.”

Income Statement

The Company’s net interest margin improved 10 basis points to 3.97% in the first quarter of 2019, compared to 3.87% in the preceding quarter and improved 23 basis points when compared to 3.74% in the first quarter of 2018. 

First quarter net interest income increased by 10.47% to $5.84 million, from $5.29 million in the first quarter of 2018, and increased by 2.65% when compared to $5.69 million in the fourth quarter of 2018.  Total interest income increased by 12.47% to $7.60 million in the first quarter of 2019 from $6.76 million during the first quarter of 2018 and increased by 3.80% compared to $7.32 million in the preceding quarter.  Total interest expense increased by 19.70% to $1.75 million in the first quarter of 2019, from $1.47 million during the same period in 2018, and increased 7.84% compared to $1.63 million in the preceding quarter, largely as a result of the increase in interest-bearing deposits.

Non-interest income was $845,490 in the first quarter of 2019, compared to $1.00 million in the first quarter a year ago.  In the preceding quarter the Company reported non-interest income of ($567,806).

Non-interest expense decreased slightly to $4.88 million in the first quarter of 2019 compared to $4.93 million in the first quarter of 2018 and was up 5.45% compared to $4.62 million in the preceding quarter.  Salaries and benefits, the largest component of non-interest expense, decreased by $107,102, or 3.38%, over the year ago period.

Balance Sheet Review

Total assets increased by 4.38% to $648.70 million at March 31, 2019 from $621.48 million at March 31, 2018 and increased 5.70% compared to $613.69 million at December 31, 2018.  Cash and cash equivalents decreased to $31.92 million at March 31, 2019 from $42.30 million a  year ago. Investment securities increased to $54.13 million at March 31, 2019 from $48.08 million a year ago.

Loans, net of allowance for loan losses, increased 5.22% to $527.41 million at quarter-end, compared to $501.22 million a year ago, and increased 4.61% compared to $504.16 million three months earlier.

Total deposits increased 5.11% to $535.04 million at March 31, 2019 compared to $509.04 million a year ago and increased 4.89% compared to $510.11 million at December 31, 2018.  Non-interest-bearing deposits increased 25.09% to $110.40 million at March 31, 2019 from $88.26 million a year ago, and interest-bearing deposits increased moderately to $424.64 million at quarter-end from $420.79 million a year ago.

FHLB advances decreased to $25.27 million at March 31, 2019 from $38.16 million at March 31, 2018.  Notes payable decreased to $11.94 million in the first quarter from $12.49 million over the same period a year ago.

Total stockholders’ equity increased 9.51% to $64.54 million at March 31, 2019 from $58.94 million at March 31, 2018 and increased 2.73% when compared to $62.83 million at December 31, 2018.  Book value per common share increased to $66.19 at March 31, 2019 from $61.39 at March 31, 2018 and $64.43 million at December 31, 2018.

Credit Quality

“We had net loan recoveries during the quarter, and as a result we recorded no provision for loan losses during the first quarter,” added Head.  “This compares to a negative provision for loan losses of $750,000 in the preceding quarter and no provision for loan losses in the first quarter of 2018.”  Net loan recoveries were $6,260 in the first quarter of 2019, compared with recoveries of $408,930 in the fourth quarter of 2018 and recoveries of $34,911 in the first quarter a year ago.

There were no non-performing loans on the books at March 31, 2019 or at December 31, 2018.  At March 31, 2018, nonperforming loans totaled $145,405.  Nonperforming assets decreased to $7.66 million at March 31, 2019 compared to $7.73 million at December 31, 2018 and $10.75 million at March 31, 2018.  Total non-performing assets improved to 1.18% of total assets at March 31, 2019, compared to 1.26% of total assets three months earlier and 1.73% a year earlier.

The allowance for loan losses was $6.97 million, or 1.30% of total loans, at March 31, 2019 compared to $7.26 million, or 1.42% of total loans, at March 31, 2018.

Capital

The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio of 11.72%, Common equity tier 1 capital ratio of 13.30%, Tier 1 capital ratio of 13.30% and Total capital ratio of 14.55% at March 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, Brinkley, and Rogers, 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.

Contact: Scott Sandlin 479-684-3754 

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED BALANCE SHEETS
UNAUDITED
			March 31, 2019				December 31, 2018				March 31, 2018
ASSETS
Cash and due from banks			$	31,726,670			$	27,944,329			$	42,030,670
Federal funds sold				195,532				1,101,025				249,145
Total cash and cash equivalents				31,922,202				29,045,354				42,279,815
Investment securities				54,131,226				53,940,001				48,082,923
Loans held for sale				1,333,370				494,937				2,273,869
Loans, net of allowance for loan losses				527,408,940				504,160,307				501,223,918
Premises and equipment, net				16,874,523				8,532,146				8,340,470
Foreclosed assets held for sale				7,659,728				7,733,440				10,599,626
Accrued interest receivable				2,178,508				2,511,191				1,828,407
Deferred income taxes				2,394,267				2,539,052				2,124,142
Other investments				2,761,185				2,743,885				2,697,085
Other assets				2,039,131				1,992,144				2,024,808
			$	648,703,080			$	613,692,457			$	621,475,063
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits	- non-interest bearing		$	110,401,854			$	99,939,633			$	88,256,463
	- interest bearing			135,542,375				131,535,024				121,118,517
Savings deposits				13,223,075				11,856,239				11,289,113
Time deposits	- under $250M			166,639,935				168,979,360				182,902,779
	- $250M and over			109,234,395				97,799,817				105,478,074
Total deposits				535,041,634				510,110,073				509,044,946
Federal Home Loan Bank advances				25,272,500				25,371,095				38,161,644
Note payable				11,942,531				12,086,880				12,488,980
Accrued interest payable				614,848				587,056				565,036
Other liabilities				11,286,439				2,709,944				2,275,864
Total liabilities				584,157,952				550,865,048				562,536,470
Stockholders' equity:
Preferred stock				-				-				1,389
Common stock				9,763				9,763				8,224
Surplus				87,276,085				87,129,011				86,971,084
Accumulated deficit				(22,274,306	)			(23,440,979	)			(26,914,153	)
Treasury stock, at cost				(49,888	)			(49,888	)			(49,888	)
Accumulated other comprehensive loss				(416,526	)			(820,498	)			(1,078,063	)
Total stockholders' equity				64,545,128				62,827,409				58,938,593
			$	648,703,080			$	613,692,457			$	621,475,063

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
	For The Three Months Ended
	March 31, 2019			December 31, 2018				March 31, 2018
Interest income:
Loans, including fees	$	7,166,824		$	6,882,662			$	6,435,645
Investment securities		360,892			340,926				264,214
Federal funds sold and other		70,787			96,446				56,157
Total interest income		7,598,503			7,320,034				6,756,016
Interest expense:
Deposits		1,436,226			1,350,383				1,111,216
Federal Home Loan Bank advances		153,014			123,371				188,536
Note payable		147,516			152,605				156,763
Federal funds purchased and other		17,290			225				8,879
Total interest expense		1,754,046			1,626,584				1,465,394
Net interest income		5,844,457			5,693,450				5,290,622
Provision for loan losses		-			(750,000	)			-
Net interest income after provision for loan losses		5,844,457			6,443,450				5,290,622
Non-interest income:
Service charges and fees on deposits		183,873			198,929				209,609
Wealth management fee income		409,459			494,996				418,144
Secondary market fee income		120,992			137,998				251,745
Loss on sales and write-downs of foreclosed assets		-			(2,150,000	)			(7,987	)
Other		131,166			750,271				132,531
Total non-interest income		845,490			(567,806	)			1,004,042
Non-interest expense:
Salaries and benefits		3,272,837			2,997,064				3,165,735
Occupancy and equipment		528,130			539,425				539,217
Data processing		299,029			302,157				262,803
Marketing and business development		141,099			60,411				215,726
Professional services		332,854			339,343				379,329
Other		302,421			385,946				365,387
Total non-interest expense		4,876,370			4,624,346				4,928,197
Income before income taxes		1,813,577			1,251,298				1,366,467
Income tax provision		646,904			323,094				269,897
Net income	$	1,166,673		$	928,204			$	1,096,570
Basic earnings per common share	$	1.20		$	0.95			$	1.34
Diluted earnings per common share	$	1.20		$	0.95			$	1.14

WHITE RIVER BANCSHARES COMPANY
SELECTED FINANCIAL DATA		At Or For The Three Months Ended
UNAUDITED		March 31, 2019				December 31, 2018				March 31, 2018
Selected Financial Condition Data: End of Period Balances
Assets		$	648,703,080			$	613,692,457			$	621,475,063
Investment Securities			54,131,226				53,940,001				48,082,923
Loans, gross			535,714,417				511,621,091				510,754,757
Allowance for Loan Losses			6,972,107				6,965,847				7,256,970
Deposits			535,041,634				510,110,073				509,044,946
FHLB Advances			25,272,500				25,371,095				38,161,644
Note Payable			11,942,531				12,086,880				12,488,980
Common Shareholders' Equity			64,545,128				62,827,409				50,413,916
Selected Financial Condition Data: Average Balances
Assets		$	626,343,422			$	608,170,038			$	599,969,998
Earning Assets			596,692,901				584,124,950				573,800,267
Investment Securities			55,240,637				52,899,703				47,293,983
Loans, gross			526,258,915				511,124,646				509,283,399
Deposits			509,466,943				506,647,368				484,856,900
FHLB Advances			28,854,682				23,426,724				38,193,768
Note Payable			11,977,464				12,133,390				12,653,970
Common Shareholders' Equity			63,335,288				61,605,063				49,421,183
Selected Operating Results:
Interest Income		$	7,598,503			$	7,320,034			$	6,756,016
Interest Expense			1,754,046				1,626,584				1,465,394
Net Interest Income			5,844,457				5,693,450				5,290,622
Provision for Loan Losses			-				(750,000	)			-
Net Interest Income After Provision for Loan Losses			5,844,457				6,443,450				5,290,622
Noninterest Income			845,490				(567,806	)			1,004,042
Noninterest Expense			4,876,370				4,624,346				4,928,197
Income Before Income Taxes			1,813,577				1,251,298				1,366,467
Income Tax Provision			646,904				323,094				269,897
Net Income		$	1,166,673			$	928,204			$	1,096,570
Basic Net Income per Common Share		$	1.20			$	0.95			$	1.34
Diluted Net Income per Common Share			1.20				0.95				1.14
Dividends Paid per Common Share			-				-				-
Book Value Per Common Share			66.19				64.43				61.39
Book Value Per Common Share-Diluted			66.19				64.43				61.33
Common Shares Outstanding			975,077				975,077				821,216
Diluted Common Shares Outstanding			975,216				975,079				960,077
Basic Weighted Average Common Shares Outstanding			975,077				975,077				821,216
Diluted Weighted Average Common Shares Outstanding			975,216				975,079				960,077
Selected Ratios:
Return on Average Assets			0.76	%			0.61	%			0.74	%
Return on Average Common Shareholders' Equity			7.47	%			5.98	%			9.00	%
Average Common Shareholders' Equity to Average Assets			10.11	%			10.13	%			8.24	%
Net Interest Margin			3.97	%			3.87	%			3.74	%
Efficiency			72.89	%			90.22	%			78.29	%
Selected Asset Quality:
Net (Recoveries) Charge-offs		$	(6,260	)		$	(408,930	)		$	(34,911	)
Classified Assets			7,944,129				8,021,842				11,012,889
Nonperforming Loans			-				-				145,405
Nonperforming Assets			7,659,728				7,733,440				10,745,031
Total Nonperforming Loans to Total Loans			0.00	%			0.00	%			0.03	%
Total Nonperforming Loans to Total Assets			0.00	%			0.00	%			0.02	%
Total Nonperforming Assets to Total Assets			1.18	%			1.26	%			1.73	%