White River Bancshares Co. Earns $1.07 Million, or $1.08 Per Diluted Share, in First Quarter 2022; Highlighted By Market Expansion and Strong Core Deposit Growth

Rhea-AI Summary

White River Bancshares Company (OTCQX: WRIV) reported a net income of $1.07 million in Q1 2022, down from $1.55 million a year earlier. Total deposits rose by 13.8% to $776.7 million, with non-interest bearing deposits increasing 39.9%. Net loans also increased by 7.1% year-over-year. However, operating expenses rose due to market expansion, and return on average assets decreased to 0.51% from 0.82% a year prior.

Positive

• Deposits increased 13.8% to $776.7 million.
• Non-interest bearing deposits rose 39.9% to $264.3 million.
• Net loans up 7.1% to $680.3 million.
• New market openings in Harrison and Jonesboro.

Negative

• Net income decreased to $1.07 million from $1.55 million year-over-year.
• Operating expenses increased due to market expansions.
• Return on average assets dropped to 0.51% from 0.82% year-over-year.
• Net interest margin decreased to 3.58% from 3.82% year-over-year.

FAYETTEVILLE, Ark., April 12, 2022 (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 $1.07 million, or $1.08 per diluted share, in the first quarter of 2022, compared to $1.55 million, or $1.60 per diluted share, in the first quarter of 2021. In the immediate prior quarter, the Company earned $1.50 million, or $1.50 per diluted share. All financial results are unaudited.

“Our first quarter results were highlighted by a number of new initiatives focused on creating value for our customers and shareholders,” said Gary Head, President and Chief Executive Officer. “We generated strong year-over-year growth in both loans and core deposits, due to expanded market offerings and new customer relationships. Over the last few months, we opened new markets in Harrison and Jonesboro. In addition, we announced plans to enter a new market later this year employing bilingual staff as we increase our efforts to better serve Arkansas area Latinos. Northwest Arkansas remains one of the fastest growing markets in the United States, and we are well positioned to take advantage of new opportunities as we continue to grow the Company.”

“We continue to strengthen our core funding mix with non-interest bearing deposits increasing 39.9% compared to a year ago, and representing 34.0% of total deposits at quarter end,” said Scott Sandlin, Chief Strategy Officer. “Our success in gathering new low-cost deposits is a direct result of the dedication and effort of our employees, who continue to focus on bringing in full banking relationships. Operating results were lower compared to the preceding quarter, primarily due to increased operating expenses associated with entering two new markets and the write-off of a single foreclosed property. With these expenses behind us, we expect to generate strong operating revenue for the remainder of the year.”

First Quarter 2022 Financial Highlights:

• First quarter net income was $1.07 million, or $1.08 per diluted share, compared to $1.55 million, or $1.60 per diluted share, in the first quarter of 2021.
• Annualized return on average assets was 0.51%, compared to 0.82% in the first quarter a year ago.
• Annualized return on average equity was 5.47% from 8.44% in the first quarter a year ago.
• First quarter net interest margin (“NIM”) was 3.58%, compared to 3.82% in the first quarter a year ago.
• There was no provision for loan losses in the first quarter of 2022, or for the fourth quarter of 2021 or the first quarter of 2021.
• Net loans increased 7.1% to $680.3 million at March 31, 2022, compared to $635.0 million at March 31, 2021.  
• Total deposits increased 13.8% to $776.7 million at March 31, 2022, compared to $682.6 million a year ago.
• Noninterest bearing deposits increased 39.9% to $264.3 million at March 31, 2022, compared to $189.0 million a year ago.
• Nonperforming assets totaled $664,000, or 0.07% of total assets at March 31, 2022, compared to almost nil, or 0.00% of total assets, at March 31, 2021.
• Book value per common share was $78.61 at March 31, 2022, from $77.63 a year ago.
• Total risk-based capital ratio was 12.96% and the Tier 1 leverage ratio was 10.48% for the Bank at March 31, 2022.
  

Recent Developments

During the first quarter of 2022, the Company opened its seventh market, located at 111 East Jackson Avenue in Jonesboro. This facility will serve as a temporary location for the market and marks the Company’s entry into Craighead County. According to the 2020 Census, Jonesboro had a population of 78,576 and is the fifth-largest city in Arkansas.

Additionally, the Company announced plans to launch a new market later this year employing bilingual staff as it increases its efforts to better serve Arkansas area Latinos. The initial market location is planned for downtown Rogers, and its staff of six to 10 will speak English and Spanish. “The Latino community has grown to become the largest minority community in the region and the United States, and we believe it is underserved,” said Brant Ward, Chief Operating Officer. “As we look at market locations for expansion, we felt strongly that this was an area that we wanted to focus on.”

During the fourth quarter of 2021, the Company opened its sixth market, located in Harrison in the Durand Center at 303 N. Main Street, Suite 100. Harrison, located in the heart of the Ozark Mountains, is nationally recognized as one of the "Best Small Towns in America" and was previously featured in Where to Retire Magazine as one of the best retirement towns in the United States. https://www.cityofharrison.com/

Income Statement

“The changes we made in our investments and funding mix over the last several quarters continue to reduce our dependency on brokered CDs, internet CDs and Federal Home Loan Bank (“FHLB”) advances. While the interest rate environment over the past few years has been challenging for the entire financial sector, our balance sheet is well positioned to benefit from rising interest rates,” said Ward.

The Company’s NIM was 3.58% in the first quarter of 2022, compared to 3.82% in the first quarter of 2021, and 3.61% in the prior quarter.

Net interest income increased 4.9% to $7.3 million, compared to $7.0 million in the first quarter of 2021. Total interest income was unchanged at $8.2 million in both the first quarter of 2022 and in the first quarter of 2021. Total interest expense decreased by 29.8% to $896,000 in the first quarter of 2022, from $1.3 million during the first quarter of 2021.  

Noninterest income was $1.3 million in the first quarter of 2022, compared to $1.7 million in the first quarter a year ago. The increase in deposit fees and other service charges from the first quarter a year ago was primarily a result of increased transaction deposit account activity. These increases were more than offset by a loss on sales and write-downs on foreclosed assets, as well as lower secondary market fee income during the first quarter of 2022.  

Noninterest expense increased to $7.2 million in the first quarter of 2022, compared to $6.6 million in the first quarter of 2021. Higher commissions due to increased revenues in business lines, residual costs related to the core conversion and costs associated with the two new markets contributed to the increase during the first quarter of 2022 compared to the first quarter a year ago.  

Balance Sheet

Total assets increased 11.1% to $895.6 million at March 31, 2022, from $806.0 million at March 31, 2021, and increased 5.1% compared to $852.0 million at December 31, 2021. Cash and cash equivalents increased to $90.3 million at March 31, 2022 from $60.8 million a year ago and nearly doubled when compared to $45.9 million at December 31, 2021. Investment securities increased to $85.5 million at March 31, 2022, from $68.9 million a year ago, as the Company actively moved cash balances into better yielding investment securities during the quarter.

Loans, net of allowance for loan losses, increased 7.1% to $680.3 million at March 31, 2022, compared to $635.0 million a year ago, and decreased modestly compared to $685.4 million three months earlier.  

“We were active with helping our customers receive Paycheck Protection Program (“PPP”) loans from the Small Business Administration over the last two years,” said Jeff Maland, Chief Risk Officer. “Over the course of the two rounds of PPP lending, we funded 433 PPP loans totaling $29.0 million to both existing and new customers, and as of March 31, 2022, we had no PPP loans remaining on the books. Our team has done an excellent job replacing PPP loans with new loan originations, and we anticipate this trend to continue with strong demand for commercial and industrial loans and non-owner occupied commercial real estate loans.”

Total deposits increased 13.8% to $776.7 million at March 31, 2022, compared to $682.6 million a year ago and increased 7.0% compared to $726.2 million at December 31, 2021. Noninterest bearing deposits increased 39.9% to $264.3 million at March 31, 2022, compared to $189.0 million a year ago. New customer relationships, primarily with low cost checking accounts, continue to account for a majority of the deposit growth year-over-year.

FHLB advances continue to decline, totaling $10.9 million at March 31, 2022, from $17.0 million at March 31, 2021. Total stockholders’ equity increased 3.7% to $78.0 million at March 31, 2022, from $75.2 million at March 31, 2021, and decreased 2.7% when compared to $80.2 million at December 31, 2021. Book value per common share was $78.61 at March 31, 2022, from $77.63 at March 31, 2021, and $80.77 at December 31, 2021.

Credit Quality

“We continue to be encouraged by the overall asset quality of our loan portfolio, and are working hard to maintain a moderate risk profile, during all credit cycles,” said Maland. Due to sound credit quality and a strong allowance for loan losses, the Company reported no provision for loan losses in the first quarter of 2022, the fourth quarter of 2021, or the first quarter of 2021.

Nonperforming loans totaled $114,000 at March 31, 2022. This compared to $221,000 in nonperforming loans at December 31, 2021, and no nonperforming loans at March 31, 2021. Nonperforming assets were $664,000 at March 31, 2022, compared to $932,000 at December 31, 2021, and no nonperforming assets at March 31, 2021. The increase year-over-year was primarily due to the addition of one single property added to Other Real Estate Owned during the fourth quarter of 2021.

Total nonperforming assets were 0.07% of total assets at March 31, 2022, 0.11% at December 31, 2021, and 0.00% at March 31, 2021.

The allowance for loan losses was $8.2 million, or 1.19% of total loans, at March 31, 2022, compared to $8.7 million, or 1.33% of total loans, at March 31, 2021. Net loan recoveries were $11,000 in the first quarter of 2022, compared to net loan charge-offs of $394,000 in the fourth quarter of 2021, and net loan recoveries of $10,000 in the first quarter of 2021.

Capital

The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio estimate of 10.48%, Common equity Tier 1 capital ratio of 11.88%, Tier 1 risk-based capital ratio of 11.88% and Total capital ratio of 12.96%, at March 31, 2022.

About White River Bancshares Company

White River Bancshares Company is the single bank holding company for Signature Bank of Arkansas, headquartered in Fayetteville, Arkansas. The Bank has locations in Fayetteville, Springdale, Bentonville, Rogers, Brinkley, Harrison and Jonesboro, 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.

Recently, the Company has expanded into Northeast Arkansas, with new markets in Jonesboro and Harrison. Jonesboro, located in Craighead County, is a city located on Crowley's Ridge in the northeastern corner of Arkansas. It is the home of Arkansas State University and the cultural and economic center of Northeast Arkansas. Jonesboro also houses the region’s hospital network. U.S. Steel Corp. announced in January 2022 that it would locate a new $3 billion steel factory in Northeast Arkansas in Osceola, a move expected to create 900 jobs with an average pay over $100,000 annually, making it the largest capital investment project in Arkansas history. Dubbed “Project Blueprint,” the steel mill will begin construction in early 2022. Harrison sits below Branson, Missouri, which is a family tourist destination and outdoor recreation, and is well known as an entertainment destination.

The Company currently operates two markets in Washington County, two markets in Benton County, two markets in Monroe County, one market in Boone County and one market in Craighead County.

The housing market in Washington and Benton counties remains robust. According to the Northwest Multiple Listing Service, the average home in Washington County sold for $348,000, up 28.2% in February 2022, compared to a year ago, with an average of 76 days on the market. For Benton County, the average house sold for $363,000, up 12.9% from a year ago with an average of 69 days on the market.

Washington County’s population is projected to grow 4.52% from 2022 through 2027, and median household income is projected to increase by 8.35% during the same time frame. Benton County’s population is projected to grow 5.89% from 2022 through 2027, and median household income is projected to increase by 11.08%. Monroe County’s population is projected to decrease by 7.25% from 2022 through 2027 and median household income is projected to increase by 11.05%. Boone County’s population is projected to grow 0.37% from 2022 through 2027 and median household income is projected to increase by 12.48%. Craighead County’s population is projected to grow 4.13% from2022 through 2027, and the median household income is projected to increase by 4.13%.

Sources:

http://www.nwarealtors.org/market-statistics/
https://www.capitaliq.spglobal.com/

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, 2022, December 31, 2021 and March 31, 2021
UNAUDITED			March 31, 2022				December 31, 2021				March 31, 2021
ASSETS
Cash and due from banks			$	89,878,824			$	45,693,588			$	60,216,957
Federal funds sold				387,305				230,523				573,134
Total cash and cash equivalents				90,266,129				45,924,111				60,790,091
Investment securities				85,467,563				80,596,752				68,937,591
Loans held for sale				1,071,950				2,737,798				7,782,522
Loans, net of allowance for loan losses				680,309,888				685,383,789				634,992,334
Premises and equipment, net				27,647,249				26,902,610				24,669,345
Foreclosed assets held for sale				550,100				711,100				100
Accrued interest receivable				2,122,175				2,451,610				1,883,499
Deferred income taxes				2,907,803				1,967,775				1,848,883
Other investments				3,201,021				2,826,485				2,894,085
Other assets				2,085,714				2,453,776				2,161,705
			$	895,629,592			$	851,955,806			$	805,960,155
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits		- non-interest bearing	$	264,274,031			$	231,800,711			$	188,958,889
		- interest bearing		301,469,500				284,979,694				253,269,377
Savings deposits				26,468,788				25,556,108				22,126,159
Time deposits		- under $250M		93,163,512				96,755,986				116,989,664
		- $250M and over		91,292,242				87,093,241				101,253,092
Total deposits				776,668,073				726,185,740				682,597,181
Federal Home Loan Bank advances				10,933,627				12,264,849				16,950,930
Notes payable				10,804,347				10,798,035				10,779,101
Accrued interest payable				305,509				175,835				425,731
Other liabilities				18,917,083				22,378,553				19,982,625
Total liabilities				817,628,639				771,803,012				730,735,568
Stockholders' equity:
Common stock				10,012				10,072				9,763
Surplus				88,767,186				88,475,229				88,082,809
Accumulated deficit				(6,833,041	)			(7,907,902	)			(12,921,378	)
Treasury stock, at cost				(563,441	)			(563,128	)			(431,865	)
Accumulated other comprehensive (loss) income				(3,379,763	)			138,523				485,258
Total stockholders' equity				78,000,953				80,152,794				75,224,587
			$	895,629,592			$	851,955,806			$	805,960,155

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended March 31, 2022, December 31, 2021 and March 31, 2021
	For the Three Months Ended
UNAUDITED	March 31, 2022				December 31, 2021				March 31, 2021
Interest income:
Loans, including fees	$	7,782,702			$	7,997,979			$	7,858,931
Investment securities		381,916				365,232				365,802
Federal funds sold and other		26,019				12,300				5,383
Total interest income		8,190,637				8,375,511				8,230,116
Interest expense:
Deposits		660,966				734,370				1,002,824
Federal Home Loan Bank advances		66,905				83,504				103,749
Notes payable		167,874				167,874				167,874
Federal funds purchased and other		-				-				2,109
Total interest expense		895,745				985,748				1,276,556
Net interest income		7,294,892				7,389,763				6,953,560
Provision for loan losses		-				-				-
Net interest income after provision for loan losses		7,294,892				7,389,763				6,953,560
Non-interest income:
Service charges and fees on deposits		130,114				133,424				126,264
Wealth management fee income		624,926				584,577				506,039
Secondary market fee income		402,249				668,751				921,857
Loss on sales and write-downs of foreclosed assets		(161,000	)			(194,831	)			-
Other		344,150				335,564				181,328
Total non-interest income		1,340,439				1,527,485				1,735,488
Non-interest expense:
Salaries and benefits		4,639,448				4,684,822				4,032,581
Occupancy and equipment		762,869				708,879				644,033
Data processing		740,013				462,838				586,399
Marketing and business development		289,693				328,585				69,808
Professional services		465,147				396,947				936,803
Other		311,094				291,099				343,918
Total non-interest expense		7,208,264				6,873,170				6,613,542
Income before income taxes		1,427,067				2,044,078				2,075,506
Income tax provision		352,206				548,710				522,681
Net income	$	1,074,861			$	1,495,368			$	1,552,825
Basic earnings per common share	$	1.08			$	1.51			$	1.60
Diluted earnings per common share	$	1.08			$	1.50			$	1.60

White River Bancshares Company
Selected Financial Data		Three Months Ended
UNAUDITED		March 31, 2022				December 31, 2021				March 31, 2021
Selected Financial Condition Data: End of Period Balances
	Assets	$	895,629,592			$	851,955,806			$	805,960,155
	Investment Securities		85,467,563				80,596,752				68,937,591
	Loans, gross		689,616,825				696,346,007				651,470,670
	Allowance for Loan Losses		8,234,987				8,224,420				8,695,814
	Deposits		776,668,073				726,185,740				682,597,181
	FHLB Advances		10,933,627				12,264,849				16,950,930
	Notes Payable		10,804,347				10,798,035				10,779,101
	Common Shareholders' Equity		78,000,953				80,152,794				75,224,587
Selected Financial Condition Data: Average Balances
	Assets	$	861,905,507			$	849,391,347			$	768,712,888
	Earning Assets		826,588,630				812,165,799				738,370,954
	Investment Securities		82,616,501				83,364,483				70,606,315
	Loans, gross		689,976,579				690,968,859				639,404,515
	Deposits		737,887,705				719,642,908				639,422,194
	FHLB Advances & Other Borrowings		12,183,570				15,674,909				22,992,223
	Notes Payable		10,801,238				10,795,497				10,775,151
	Common Shareholders' Equity		79,758,478				79,246,636				74,657,832
Selected Operating Results:
	Interest Income	$	8,190,637			$	8,375,511			$	8,230,116
	Interest Expense		895,745				985,748				1,276,556
	Net Interest Income		7,294,892				7,389,763				6,953,560
	Provision for Loan Losses		-				-				-
	Net Interest Income After Provision for Loan Losses		7,294,892				7,389,763				6,953,560
	Noninterest Income		1,340,439				1,527,485				1,735,488
	Noninterest Expense		7,208,264				6,873,170				6,613,542
	Income Before Income Taxes		1,427,067				2,044,078				2,075,506
	Income Tax Provision		352,206				548,710				522,681
	Net Income	$	1,074,861			$	1,495,368			$	1,552,825
	Basic Net Income per Common Share	$	1.08			$	1.51			$	1.60
	Dividends Paid per Common Share		-				-				-
	Book Value Per Common Share		78.61				80.77				77.63
	Common Shares Outstanding		992,297				992,300				969,065
	Basic Weighted Average Common Shares Outstanding		992,299				992,965				969,065
Selected Ratios:
	Return on Average Assets		0.51	%			0.70	%			0.82	%
	Return on Average Common Shareholders' Equity		5.47	%			7.49	%			8.44	%
	Average Common Shareholders' Equity to Average Assets		9.25	%			9.33	%			9.71	%
	Net Interest Margin		3.58	%			3.61	%			3.82	%
	Efficiency		83.47	%			77.08	%			76.11	%
Selected Asset Quality:
	Net (Recoveries) Charge-offs	$	(10,567	)		$	393,795			$	(9,731	)
	Classified Assets		1,080,354				5,434,111				4,538,064
	Nonperforming Loans		113,616				220,616				-
	Nonperforming Assets		663,716				932,326				100
	Total Nonperforming Loans to Total Loans		0.02	%			0.03	%			0.00	%
	Total Nonperforming Loans to Total Assets		0.01	%			0.03	%			0.00	%
	Total Nonperforming Assets to Total Assets		0.07	%			0.11	%			0.00	%

 

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

FAQ

What was the net income for White River Bancshares in Q1 2022?

The net income for Q1 2022 was $1.07 million.

How much did total deposits increase for WRIV in Q1 2022?

Total deposits increased by 13.8% to $776.7 million.

What are the key highlights from White River Bancshares' Q1 2022 results?

Key highlights include a decrease in net income and an increase in non-interest bearing deposits by 39.9%.

How did the operating expenses change for WRIV in Q1 2022?

Operating expenses increased due to entering new markets.