White River Bancshares Co. Earns $1.26 Million, or $1.30 Per Diluted Share, for Fourth Quarter 2020 and $3.82 Million, or $3.94 Per Diluted Share, for the Year

Rhea-AI Summary

White River Bancshares Company (OTCQX: WRIV) reported a 9.8% increase in net income to $1.26 million for Q4 2020, compared to $1.15 million in Q3 2020. For the full year, net income was $3.82 million, down from $5.14 million in 2019. The company saw 6.8% growth in net loans and 9.1% growth in deposits year-over-year. Non-performing assets dropped to zero by year-end. Despite pandemic-related challenges, the bank made significant strides, including a $458,000 provision for loan losses to bolster reserves.

Positive

• Net income increased 9.8% to $1.26 million in Q4 2020.
• Total deposits rose 9.1% to $627.8 million at year-end.
• Net loans increased 6.8% to $608.4 million year-over-year.
• Non-performing assets decreased to zero by December 31, 2020.
• Non-interest income grew 40.1% to $5.0 million for the year.

Negative

• Net income for the full year decreased to $3.82 million from $5.14 million in 2019.
• Provision for loan losses increased significantly to $2.9 million in 2020 compared to $500,000 in 2019.

FAYETTEVILLE, Ark., Feb. 01, 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 9.8% to $1.26 million, or $1.30 per diluted share, in the fourth quarter of 2020, compared to $1.15 million, or $1.19 per diluted share, in the third quarter of 2020 and increased 11.5% compared to $1.13 million, or $1.17 per diluted share, in the fourth quarter of 2019.

For the year, net income was $3.82 million, or $3.94 per diluted share, compared to record earnings of $5.14 million, or $5.28 per diluted share, in 2019. All financial results are unaudited.

“Earnings improved in the fourth quarter, compared to a year ago and the prior quarter, generated by solid loan and deposit growth and an improving net interest margin. We also drove non-performing assets down to zero by year end,” said Gary Head, President and Chief Executive Officer. “Despite the pandemic-related economic challenges creating a difficult operating environment, we made progress in several areas of the business, as we continued to support our customers, communities and employees.”

“The magnitude of the economic ramifications of the COVID-19 pandemic are still largely unknown,” Head continued. “Due to the growth in the loan portfolio, and our continuous evaluation of the Covid-19 pandemic, we added $458,000 into our loan loss reserve for the quarter, bringing the Bank to a solid position of 1.38% of total loans and 1.42% of total loans, excluding Paycheck Protection Program (“PPP”) loans that are 100% guaranteed by the SBA.” For the year, the Company booked a $2.9 million provision for loan losses, compared to a $500,000 provision for 2019.

“Core deposit gathering remains a strategic focus for the Bank,” said Scott Sandlin, Chief Strategy Officer. “The investments we have made in our digital technology platform and its ease of use is helping us gather low-cost deposits. Additionally, we continue to lower the cost of deposits by bringing in more business and personal checking accounts and repricing the cost of our CDs due to interest rates being considerably lower than the last couple of years.”

“In 2020, the health and safety of our customers, teammates and community became our primary focus,” said Brant Ward, Chief Administrative Officer. “We continue to keep lobbies open by appointment only and adhere to social distancing guidelines. While our customers were already using our digital platforms prior to the pandemic, they really embraced the platform in 2020, with online utilization meaningfully up compared to a year ago. We were also active in the SBA’s PPP loan program, and at the completion of the PPP program on August 8, we had made $20.7 million in PPP loans, helping 274 local businesses. Additionally, the Bank recently started participating in the SBA’s new round of PPP funding that began earlier this month. This next round of SBA funding offers new PPP loans for companies that did not receive a PPP loan in 2020, and also ‘second draw’ loans targeted at hard-hit businesses that have already spent their initial PPP proceeds. While we are early in the process, we are here for our customers and communities.”

“In addition to PPP loans, we implemented 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 December 31, 2020, only 12 loans totaling $1.9 million were still in deferral,” said Jeff Maland, Chief Risk Officer. “We feel optimistic about the underlying quality of deferred loans, most of which are longtime customer relationships with 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 year.”

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

Fourth Quarter 2020 Financial Highlights:

• Fourth quarter net income was $1.26 million or $1.30 per diluted share.
• Fourth quarter provision for loan losses was $458,000, compared to $300,000 in the preceding quarter and $500,000 in the fourth quarter of 2019.
• Fourth quarter net interest margin (“NIM”) was 3.50%, compared to 3.33% in the preceding quarter and 3.85% in the fourth quarter a year ago.
• Net loans increased 6.8% to $608.4 million at December 31, 2020, compared to $569.4 million at December 31, 2019.
• The Bank funded approximately 274 PPP loans totaling $20.7 million as of the close of the program on August 8, 2020. As of December 31, 2020, the Bank had $16.8 million in PPP still on the books.
• Total deposits increased 9.1% to $627.8 million at December 31, 2020, compared to $575.3 million a year ago.
• Non-interest-bearing deposits increased 46.5% to $172.0 million at December 31, 2020, compared to $117.5 million a year ago.
• Nonperforming assets were almost nil at December 31, 2020, compared to $400,100 at September 30, 2020, and $2.64 million a year ago.
• There were no nonperforming assets (NPAs) as a percentage of total assets at December 31, 2020. This compares to nonperforming assets representing 0.05% of total assets at September 30, 2020, and 0.38% of total assets a year earlier.
• As of December 31, 2020, the Bank had loans still within the deferral process of $1.9 million, which represents 0.30% of gross loans.
• Book value per common share increased to $76.58 at December 31, 2020, from $71.43 a year ago.
• Total risk-based capital ratio was 13.05% and Tier 1 leverage ratio was 11.15% for the Bank at December 31, 2020.

Income Statement
The Company’s net interest margin was 3.50% in the fourth quarter of 2020, compared to 3.85% in the fourth quarter of 2019 and 3.33% in the third quarter of 2020. For the year, the net interest margin was 3.53%, compared to 3.91% in 2019.

Fourth quarter net interest income was $6.2 million, compared to $6.1 million in the fourth quarter of 2019. Total interest income decreased by 6.0% to $7.8 million in the fourth quarter of 2020, from $8.3 million during the fourth quarter of 2019. Total interest expense decreased by 25.9% to $1.6 million in the fourth quarter of 2020, from $2.2 million during the fourth quarter of 2019. For the year, net interest income increased 2.0% to $24.6 million, compared to $24.1 million in 2019.

Non-interest income increased 18.1% to $1.5 million in the fourth quarter of 2020, compared to $1.3 million in the fourth quarter a year ago. For the year, non-interest income increased 40.1% to $5.0 million, compared to $3.6 million in 2019.  

Non-interest expense was $5.5 million in the fourth quarter of 2020, compared to $5.4 million in the fourth quarter of 2019. For the year 2020, non-interest expense was $21.6 million, compared to $20.3 million for the year 2019.

Balance Sheet Review
Total assets increased by 6.8% to $749.9 million at December 31, 2020, from $702.1 million at December 31, 2019, and decreased modestly compared to $752.6 million at September 30, 2020. Cash and cash equivalents decreased to $23.0 million at December 31, 2020 from $39.0 million a year ago. Investment securities increased to $73.1 million at December 31, 2020 from $56.5 million a year ago.

Loans, net of allowance for loan losses, increased 6.8% to $608.4 million at December 31, 2020, compared to $569.4 million a year ago, and increased 3.4% compared to $588.4 million three months earlier. Through the close 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 December 31, 2020, $16.8 million in PPP loans remained on the books.

Total deposits increased 9.1% to $627.8 million at December 31, 2020, compared to $575.3 million a year ago and decreased modestly compared to $632.5 million at September 30, 2020, with non-interest bearing deposits increasing 46.5% to $172.0 million at December 31, 2020, compared to $117.5 million a year ago.

FHLB advances totaled $17.1 million at December 31, 2020 from $27.5 million at December 31, 2019. Notes payable increased slightly to $10.8 million at December 31, 2020 from $10.7 million a year ago.

Total stockholders’ equity increased 7.1% to $74.2 million at December 31, 2020 from $69.3 million at December 31, 2019 and increased 1.9% when compared to $72.8 million at September 30, 2020. Book value per common share increased to $76.58 at December 31, 2020 from $71.43 at December 31, 2019 and $75.17 at September 30, 2020.

Credit Quality
The provision for loan losses was $458,000 during the fourth quarter of 2020, compared to $300,000 provision for loan losses in the preceding quarter and $500,000 in the fourth quarter of 2019. “Although our credit quality improved substantially during the quarter, we prudently added to reserves for loan losses as we continue to face an uncertain economy due to the impact of the pandemic,” said Head. For the full year 2020, the provision for loan losses was $2.9 million, compared to $500,000 in2019.

There were no nonperforming loans at December 31, 2020, compared to $200,000 in nonperforming loans at September 30, 2020, and $2.2 million at December 31, 2019. Additionally, there were no nonperforming assets at year end, compared with $400,000 in nonperforming assets at September 30, 2020, and $2.6 million in nonperforming assets at December 31, 2019. Total non-performing assets were 0.00% of total assets at December 31, 2020, compared to 0.05% of total assets three months earlier and 0.38% of total assets at December 31, 2019.

The allowance for loan losses was $8.7 million, or 1.42% of total loans, at December 31, 2020, when excluding the $16.8 million of PPP loans, which are 100% guaranteed by the SBA. This compared to $6.7 million, or 1.16% of total loans, at December 31, 2019. Net loan charge-offs were $194,000 in the fourth quarter of 2020, compared to net charge-offs of $169,000 in the third quarter of 2020 and $827,000 in the fourth quarter of 2019.

As of December 31, 2020, the Bank had loans within the deferral process of $1.9 million, which represented 0.31% of total loans, excluding PPP balances. Within that balance, $18,000 of the loans were full P & I deferrals, while $1.9 million were principal deferrals.  

Capital
The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio of 11.15%, Common equity tier 1 capital ratio of 11.80%, Tier 1 risk-based capital ratio of 11.80% and Total capital ratio of 13.05%, at December 31, 2020.

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, 2020, September 30, 2020 and December 31, 2019
UNAUDITED			December 31, 2020				September 30, 2020				December 31, 2019
ASSETS
Cash and due from banks			$	23,004,380			$	49,636,364			$	38,984,145
Federal funds sold				-				-				100,000
Total cash and cash equivalents				23,004,380				49,636,364				39,084,145
Investment securities				73,100,506				70,375,655				56,493,544
Loans held for sale				10,871,270				10,689,131				2,045,250
Loans, net of allowance for loan losses				608,391,471				588,429,575				569,419,374
Premises and equipment, net				25,140,669				24,030,438				24,860,247
Foreclosed assets held for sale				100				200,100				487,827
Accrued interest receivable				2,705,354				2,581,457				2,766,513
Deferred income taxes				1,518,115				1,480,231				1,443,805
Other investments				2,891,285				2,888,585				2,859,485
Other assets				2,320,711				2,296,588				2,636,708
			$	749,943,861			$	752,608,124			$	702,096,898
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits		- non-interest bearing	$	172,016,886			$	168,518,880			$	117,450,670
		- interest bearing		203,407,688				179,409,301				151,696,610
Savings deposits				21,051,019				16,688,392				13,554,400
Time deposits	- under $250M			125,998,519				151,198,785				165,267,666
	- $250M and over			105,309,981				116,721,324				127,293,109
Total deposits				627,784,093				632,536,682				575,262,455
Federal Home Loan Bank advances				17,056,909				17,161,929				27,471,344
Notes payable				10,772,790				10,766,607				10,747,683
Accrued interest payable				382,474				689,096				713,397
Other liabilities				19,733,128				18,604,241				18,612,742
Total liabilities				675,729,394				679,758,555				632,807,621
Stockholders' equity:
Common stock				9,763				9,763				9,763
Surplus				88,010,761				87,940,629				87,656,698
Accumulated deficit				(14,474,203	)			(15,737,036	)			(18,298,210	)
Treasury stock, at cost				(431,865	)			(431,614	)			(387,022	)
Accumulated other comprehensive income				1,100,011				1,067,827				308,048
Total stockholders' equity				74,214,467				72,849,569				69,289,277
			$	749,943,861			$	752,608,124			$	702,096,898

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended December 31, 2020, September 30, 2020 and December 31, 2019
	For the Three Months Ended
UNAUDITED	December 31, 2020				September 30, 2020				December 31, 2019
Interest income:
Loans, including fees	$	7,463,396			$	7,526,896			$	7,911,834
Investment securities		331,474				324,464				346,122
Federal funds sold and other		3,392				13,052				40,753
Total interest income		7,798,262				7,864,412				8,298,709
Interest expense:
Deposits		1,326,327				1,593,311				1,841,859
Federal Home Loan Bank advances		103,809				104,501				130,782
Notes payable		167,745				167,870				173,369
Federal funds purchased and other		1,309				-				11,965
Total interest expense		1,599,190				1,865,682				2,157,975
Net interest income		6,199,072				5,998,730				6,140,734
Provision for loan losses		458,000				300,000				500,000
Net interest income after provision for loan losses		5,741,072				5,698,730				5,640,734
Non-interest income:
Service charges and fees on deposits		130,374				116,288				168,410
Wealth management fee income		474,031				448,465				474,168
Secondary market fee income		894,411				647,069				259,280
Loss on sales and write-downs of foreclosed assets		(185,550	)			(160,679	)			(46,977	)
Other		192,133				186,058				419,335
Total non-interest income		1,505,399				1,237,201				1,274,216
Non-interest expense:
Salaries and benefits		3,641,192				3,676,489				3,452,028
Occupancy and equipment		684,502				663,995				738,169
Data processing		367,253				323,980				296,598
Marketing and business development		209,519				120,547				182,312
Professional services		433,752				396,508				392,950
Other		140,323				217,273				327,843
Total non-interest expense		5,476,541				5,398,792				5,389,900
Income before income taxes		1,769,930				1,537,139				1,525,050
Income tax provision		507,097				387,029				392,679
Net income	$	1,262,833			$	1,150,110			$	1,132,371
Basic earnings per common share	$	1.30			$	1.19			$	1.17
Diluted earnings per common share	$	1.30			$	1.19			$	1.17

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the twelve months ended December 31, 2020 and December 31, 2019
	For the Twelve Months Ended
UNAUDITED	December 31, 2020				December 31, 2019
Interest income:
Loans, including fees	$	30,822,168			$	30,392,165
Investment securities		1,362,508				1,412,752
Federal funds sold and other		113,365				247,929
Total interest income		32,298,041				32,052,846
Interest expense:
Deposits		6,582,286				6,706,333
Federal Home Loan Bank advances		442,947				587,030
Notes payable		667,766				615,199
Federal funds purchased and other		1,341				32,911
Total interest expense		7,694,340				7,941,473
Net interest income		24,603,701				24,111,373
Provision for loan losses		2,850,000				500,000
Net interest income after provision for loan losses		21,753,701				23,611,373
Non-interest income:
Service charges and fees on deposits		536,610				699,442
Wealth management fee income		1,783,243				1,774,903
Secondary market fee income		2,362,963				917,627
Loss on sales and write-downs of foreclosed assets		(348,146	)			(755,303	)
Other		657,331				926,551
Total non-interest income		4,992,001				3,563,220
Non-interest expense:
Salaries and benefits		14,602,278				13,445,287
Occupancy and equipment		2,631,996				2,447,604
Data processing		1,347,892				1,206,539
Marketing and business development		556,269				631,460
Professional services		1,558,348				1,229,608
Other		876,121				1,289,594
Total non-interest expense		21,572,904				20,250,092
Income before income taxes		5,172,798				6,924,501
Income tax provision		1,348,791				1,781,732
Net income	$	3,824,007			$	5,142,769
Basic earnings per common share	$	3.94			$	5.28
Diluted earnings per common share	$	3.94			$	5.28

White River Bancshares Company
Selected Financial Data		Three Months Ended
UNAUDITED		December 31, 2020				September 30, 2020				December 31, 2019
Selected Financial Condition Data: End of Period Balances
	Assets	$	749,943,861			$	752,608,124			$	702,096,898
	Investment Securities		73,100,506				70,375,655				56,493,544
	Loans, gross		627,948,824				607,540,859				578,161,121
	Allowance for Loan Losses		8,686,083				8,422,153				6,696,497
	Deposits		627,784,093				632,536,682				575,262,455
	FHLB Advances		17,056,909				17,161,929				27,471,344
	Notes Payable		10,772,790				10,766,607				10,747,683
	Common Shareholders' Equity		74,214,467				72,849,569				69,289,277
Selected Financial Condition Data: Average Balances
	Assets	$	735,449,136			$	747,393,849			$	665,273,269
	Earning Assets		705,226,210				717,205,947				633,146,281
	Investment Securities		71,221,639				67,423,766				56,180,684
	Loans, gross		616,463,713				588,694,448				563,326,863
	Deposits		612,098,458				627,329,431				547,479,974
	FHLB Advances		18,780,682				17,197,822				22,197,663
	Notes Payable		10,769,161				10,763,088				11,365,461
	Common Shareholders' Equity		73,485,866				72,144,578				68,598,333
Selected Operating Results:
	Interest Income	$	7,798,262			$	7,864,412			$	8,298,709
	Interest Expense		1,599,190				1,865,682				2,157,975
	Net Interest Income		6,199,072				5,998,730				6,140,734
	Provision for Loan Losses		458,000				300,000				500,000
	Net Interest Income After Provision for Loan Losses		5,741,072				5,698,730				5,640,734
	Noninterest Income		1,505,399				1,237,201				1,274,216
	Noninterest Expense		5,476,541				5,398,792				5,389,900
	Income Before Income Taxes		1,769,930				1,537,139				1,525,050
	Income Tax Provision		507,097				387,029				392,679
	Net Income	$	1,262,833			$	1,150,110			$	1,132,371
	Basic Net Income per Common Share	$	1.30			$	1.19			$	1.17
	Diluted Net Income per Common Share		1.30				1.19				1.17
	Dividends Paid per Common Share		-				-				-
	Book Value Per Common Share		76.58				75.17				71.43
	Common Shares Outstanding		969,065				969,069				969,998
	Diluted Common Shares Outstanding		969,065				969,069				970,004
	Basic Weighted Average Common Shares Outstanding		969,069				969,907				971,318
	Diluted Weighted Average Common Shares Outstanding		969,069				969,907				971,322
Selected Ratios:
	Return on Average Assets		0.68	%			0.61	%			0.68	%
	Return on Average Common Shareholders' Equity		6.84	%			6.34	%			6.55	%
	Average Common Shareholders' Equity to Average Assets		9.99	%			9.65	%			10.31	%
	Net Interest Margin		3.50	%			3.33	%			3.85	%
	Efficiency		71.08	%			74.61	%			72.69	%
Selected Asset Quality:
	Net (Recoveries) Charge-offs	$	194,071			$	169,425			$	826,847
	Classified Assets		4,439,839				661,616				2,902,922
	Nonperforming Loans		-				200,000				2,153,921
	Nonperforming Assets		100				400,100				2,641,748
	Total Nonperforming Loans to Total Loans		0.00	%			0.03	%			0.37	%
	Total Nonperforming Loans to Total Assets		0.00	%			0.03	%			0.31	%
	Total Nonperforming Assets to Total Assets		0.00	%			0.05	%			0.38	%

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

FAQ

What were the Q4 2020 earnings for WRIV?

White River Bancshares reported Q4 2020 earnings of $1.26 million, or $1.30 per diluted share.

How did WRIV's net income change in 2020?

In 2020, WRIV's net income was $3.82 million, a decline from $5.14 million in 2019.

What is the growth in loans and deposits for WRIV?

WRIV saw a 6.8% increase in net loans and a 9.1% increase in deposits by year-end 2020.

What is the status of non-performing assets for WRIV?

WRIV reported zero non-performing assets by December 31, 2020.

What provision for loan losses did WRIV report for Q4 2020?

In Q4 2020, WRIV reported a provision for loan losses of $458,000.