White River Bancshares Co. Earns $1.93 Million, or $1.99 Per Diluted Share, in Third Quarter 2021; Results Highlighted By Double Digit Loan and Deposit Growth Year-Over-Year; Book Value Increases to $81.47 Per Common Share

Rhea-AI Summary

White River Bancshares Company (OTCQX: WRIV) reported a strong third quarter for 2021, with net income rising 67.4% to $1.93 million or $1.99 per diluted share, compared to $1.15 million in Q3 2020. Year-to-date net income more than doubled to $5.56 million. The company announced a $0.50 annual cash dividend, reflecting robust banking performance. Key metrics show a 12.5% increase in net loans and a 16.9% rise in total deposits. Nonperforming assets were minimal at 0.02% of total assets. The net interest margin expanded to 3.64%, bolstered by low-cost deposits.

Positive

• Net income increased 67.4% to $1.93 million in Q3 2021.
• Total deposits rose 16.9% to $739.7 million year-over-year.
• Noninterest bearing deposits surged 56.4% to $263.5 million.
• Net interest margin improved to 3.64%, up from 3.33% a year prior.
• Annualized return on average assets rose to 0.95% from 0.61%.

Negative

• Noninterest expense increased to $6.2 million from $5.4 million, indicating rising operational costs.

FAYETTEVILLE, Ark., Oct. 14, 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 67.4% to $1.93 million, or $1.99 per diluted share, in the third quarter of 2021, compared to $1.15 million, or $1.19 per diluted share, in the third quarter of 2020. In the prior quarter, the Company earned a record $2.08 million, or $2.14 per diluted share. In the first nine months of 2021, net income more than doubled to $5.56 million, or $5.73 per diluted share, compared to $2.56 million, or $2.64 per diluted share, in the first nine months of 2020. All financial results are unaudited.

“We achieved the highest third quarter earnings in the company’s history, fueled by strong revenue generation, double digit loan and deposit growth year-over-year and an expanding net interest margin,” said Gary Head, President and Chief Executive Officer. “Northwest Arkansas is one of the fastest growing markets in the United States, and we are taking advantage of this growth by capturing market share and expanding our balance sheet while looking for new opportunities.”

“Another highlight of the quarter was the Board’s decision to pay an annual cash dividend of $0.50 per share,” Head continued. “The dividend is a testament to the strength of our core banking activities and financial performance of our franchise. We are pleased that our earnings growth provides us the opportunity to both begin this dividend program and support future growth at the Bank.”

“Deposit balances remained at record levels at the end of September, with new customer relationships contributing to strong quarterly deposit growth,” said Scott Sandlin, Chief Strategy Officer. “Part of our success in gathering new low-cost deposits has been our enhanced marketing initiatives that emphasize full banking relationships. Our banking teams have done an excellent job of offering deposit products to compliment every lending relationship, as noninterest bearing deposits are up 56.4% year-over-year.”

“During both rounds of Federal funding, we were active with helping our customers receive PPP loans from the SBA,” 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. At quarter-end, only 90 PPP loans totaling $6.2 million remained on the books, as a majority of these loans were forgiven during the prior quarter. We have also done an excellent job of replacing PPP loans with new loan originations, with heavy demand for new home loans, and construction and land development loans.”

Third Quarter 2021 Financial Highlights:

• Third quarter net income increased 67.4% to $1.93 million, or $1.99 per diluted share, compared to $1.15 million, or $1.19 per diluted share, in the third quarter of 2020.
• Annualized return on average assets was 0.95%, compared to 0.61% in the third quarter a year ago.
• Annualized return on average equity was 9.80%, compared to 6.34% in the third quarter a year ago.
• There was no provision for loan losses in the third quarter or second quarter of 2021. This compares to a $300,000 provision in the third quarter of 2020.
• Net loans increased 12.5% to $661.7 million at September 30, 2021, compared to $588.4 million at September 30, 2020.
• Total deposits increased 16.9% to $739.7 million at September 30, 2021, compared to $632.5 million a year ago.
• Noninterest bearing deposits increased 56.4% to $263.5 million at September 30, 2021, compared to $168.5 million a year ago.
• Nonperforming assets totaled $149,000, or 0.02% of total assets at September 30, 2021, compared to $400,000, or 0.05% of total assets, at September 30, 2020.
• Book value per common share increased to $81.47 at September 30, 2021, from $75.17 a year ago.
• Total risk-based capital ratio was 12.84% and the Tier 1 leverage ratio was 10.89% for the Bank at September 30, 2021.

Income Statement

“The changes we have made in investments and funding mix has reduced our dependency on internet CD’s and FHLB advances. We are now primarily funding loan growth with low-cost deposits, which helped our net interest margin expand 31 basis points during the quarter,” said Brant Ward, Chief Operating Officer.

The Company’s NIM improved to 3.64% in the third quarter of 2021, compared to 3.33% in the third quarter of 2020, and expanded eight basis points compared to 3.56% in the prior quarter. In the first nine months of 2021, the net interest margin improved 13 basis points to 3.67%, compared to 3.54% in the first nine months of 2020.

Third quarter net interest income increased 17.7% to $7.1 million, compared to $6.0 million in the third quarter of 2020. Total interest income increased 3.4% to $8.1 million in the third quarter of 2021, from $7.9 million in the third quarter of 2020. Total interest expense decreased by 42.7% to $1.1 million in the third quarter of 2021, from $1.9 million during the third quarter of 2020. In the first nine months of 2021, net interest income increased 13.5% to $20.9 million, compared to $18.4 million in the first nine months of 2020.

Noninterest income increased 36.7% to $1.7 million in the third quarter of 2021, compared to $1.2 million in the third quarter a year ago. The Company benefitted from higher wealth management fee income, steady service charges and deposit fees and substantially higher secondary market fee income compared to the third quarter in the prior year. In the first nine months of the year, noninterest income increased 45.2% to $5.1 million, compared to $3.5 million in the first nine months of 2020.

Noninterest expense increased to $6.2 million in the third quarter of 2021, compared to $5.4 million in the third quarter of 2020. Higher commissions due to increased revenues in our lines of business along with ancillary costs related to our core conversion and new branch contributed to the increase during the third quarter of 2021.

Balance Sheet

Total assets increased by 15.1% to $866.1 million at September 30, 2021, from $752.6 million at September 30, 2020, and increased 6.8% compared to $810.7 million at June 30, 2021. Cash and cash equivalents increased to $77.5 million at September 30, 2021 from $49.6 million a year ago. Investment securities increased to $84.7 million at September 30, 2021 from $70.4 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 12.5% to $661.7 million at September 30, 2021, compared to $588.4 million a year ago, and increased 2.8% compared to $643.6 million three months earlier. Through the close of the first round of the PPP program on August 8, 2020, the Bank had funded approximately 274 PPP loans totaling $20.7 million to both existing and new customers. Through the close of the second round of the PPP program on May 31, 2021, the Bank had funded approximately 159 PPP loans totaling $8.3 million. As of September 30, 2021, no PPP loans from round one, and $6.2 million in PPP loans from round two, remained on the books.

Deposit balances remained at record levels, with new customer relationships contributing to strong quarterly deposit growth. Total deposits increased 16.9% to $739.7 million at September 30, 2021, compared to $632.5 million a year ago and increased 7.8% compared to $685.9 million at June 30, 2021, with noninterest bearing deposits increasing 56.4% to $263.5 million at September 30, 2021, compared to $168.5 million a year ago.

FHLB advances totaled $16.1 million at September 30, 2021 from $17.2 million at September 30, 2020. Total stockholders’ equity increased 8.3% to $78.9 million at September 30, 2021, from $72.8 million at September 30, 2020 and increased 1.9% when compared to $77.4 million at June 30, 2021. Book value per common share increased to $81.47 at September 30, 2021 from $75.17 at September 30, 2020, and $79.91 at June 30, 2021.

Credit Quality

“We continue to be encouraged by the overall asset quality of our loan portfolio, including minimal nonperforming assets as of quarter end,” said Maland. “Additionally, we no longer have any loans on deferral at September 30, 2021 from the payment forbearance agreements we had made with some customers experiencing financial hardship at the early onset of the pandemic.”  

Due to excellent credit quality and a strong allowance for loan losses, the Company reported no provision for loan losses in both the third quarter of 2021 and the second quarter of 2021. This compares to a $300,000 provision for loan losses during the third quarter of 2020.  

Nonperforming loans totaled $149,000 at September 30, 2021. This compared to no nonperforming loans at June 30, 2021, and $200,000 in nonperforming loans at September 30, 2020. Nonperforming assets were $149,000 at September 30, 2021, compared to no nonperforming assets at June 30, 2021, and $400,000 in nonperforming assets at September 30, 2020. Total nonperforming assets were 0.02% of total assets at September 30, 2021, 0.00% at June 30, 2021, and 0.05% at September 30, 2020.

The allowance for loan losses was $8.6 million, or 1.28% of total loans, at September 30, 2021, when excluding the $6.2 million of PPP loans, which are 100% guaranteed by the SBA. This compared to $8.4 million, or 1.39% of total loans, at September 30, 2020. Net loan charge-offs were $81,000 in the third quarter of 2021, compared to net loan recoveries of $3,000 in the second quarter of 2021, and net loan charge-offs of $169,000 in the third quarter of 2020.

Capital

The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio estimate of 10.89%, Common equity Tier 1 capital ratio of 11.69%, Tier 1 risk-based capital ratio of 11.69% and Total capital ratio of 12.84%, at September 30, 2021.

About White River Bancshares Company

White River Bancshares Company is the single bank holding company for Signature Bank of Arkansas. Both are headquartered in Fayetteville, Arkansas. The Bank has locations in Fayetteville, Springdale, Bentonville, Rogers and Brinkley, Arkansas. Founded in 2005, Signature Bank of Arkansas provides a full line of financial services to small businesses, families and farms. White River Bancshares Company (OTCQX: WRIV), trades on the OTCQX® Best Market.  

About the Region

White River Bancshares Company is located in thriving Northwest Arkansas in the Fayetteville-Springdale-Rogers MSA. The region is home to the corporate headquarters for Walmart Stores Inc, Sam’s Club, Tyson Foods, Simmons Foods, and J.B. Hunt Transport. Hundreds of other market-leading companies including Procter & Gamble, Johnson & Johnson, Coca-Cola and Rubbermaid maintain offices in the region in order to maintain their relationships with the locally-based Fortune 500 companies. Northwest Arkansas is also home to the state’s flagship public educational institution, The University of Arkansas and its Sam M. Walton College of Business. The region has seen significant growth in its medical and arts infrastructures with the continued expansion of Washington Regional Medical System, Northwest Medical System, Mercy Health System of Northwest Arkansas and Arkansas Children’s Hospital Northwest. Crystal Bridges Museum of American Art and the Walton Arts Center have led the expansion of the arts. Northwest Arkansas has been repeatedly recognized in recent years as one of the best places to live in the country and remains one of the nation’s fastest-growing regions.

Forward Looking Statements

This press release contains statements about future events. These forward-looking statements, which are based on certain assumptions of management of the Company and the Bank and describe our future plans, strategies and expectations, can generally be identified by use of forward-looking terminology such as “may,” “will,” “believe,” “plan,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions or the negative of those terms. Our ability to predict results of future events and the actual effect of future plans or strategies are inherently uncertain and actual results may differ materially from those predicted in such forward-looking statements. Factors that could have a material adverse effect on our operations and future prospects or that could affect the outcome of such forward-looking statements include, but are not limited to, changes in interest rates; the economic health of the local real estate market; general economic conditions; credit deterioration in our loan portfolio that would cause us to increase our allowance for loan losses; legislative or regulatory changes; technological developments; monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of our loan and securities portfolios; demand for loan products in our market areas; deposit flows and costs of capital; competition; retention and recruitment of qualified personnel; demand for financial services in our market areas; and changes in accounting principles, policies, and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. The Company does not undertake and specifically declines any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.                                              

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

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED BALANCE SHEETS
September 30, 2021, June 30, 2021 and September 30, 2020
UNAUDITED			September 30, 2021				June 30, 2021				September 30, 2020
ASSETS
Cash and due from banks			$	77,451,337			$	40,761,741			$	49,636,364
Federal funds sold				68,441				140,154				-
Total cash and cash equivalents				77,519,778				40,901,895				49,636,364
Investment securities				84,719,875				87,703,034				70,375,655
Loans held for sale				7,300,173				4,754,632				10,689,131
Loans, net of allowance for loan losses				661,748,201				643,628,102				588,429,575
Premises and equipment, net				25,202,545				24,531,056				24,030,438
Foreclosed assets held for sale				100				100				200,100
Accrued interest receivable				2,336,515				2,171,138				2,581,457
Deferred income taxes				1,899,258				1,863,572				1,480,231
Other investments				2,899,285				2,896,985				2,888,585
Other assets				2,507,609				2,288,891				2,296,588
			$	866,133,339			$	810,739,405			$	752,608,124
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits		- non-interest bearing	$	263,531,523			$	211,286,665			$	168,518,880
		- interest bearing		254,579,040				250,458,669				179,409,301
Savings deposits				23,631,159				22,772,238				16,688,392
Time deposits		- under $250M		104,817,483				109,170,757				151,198,785
		- $250M and over		93,112,785				92,205,366				116,721,324
Total deposits				739,671,990				685,893,695				632,536,682
Federal Home Loan Bank advances				16,095,431				16,843,983				17,161,929
Notes payable				10,791,724				10,785,412				10,766,607
Accrued interest payable				352,228				227,688				689,096
Other liabilities				20,348,822				19,555,885				18,604,241
Total liabilities				787,260,195				733,306,663				679,758,555
Stockholders' equity:
Common stock				9,763				9,763				9,763
Surplus				88,181,971				88,115,762				87,940,629
Accumulated deficit				(9,403,269	)			(10,844,363	)			(15,737,036	)
Treasury stock, at cost				(504,242	)			(433,365	)			(431,614	)
Accumulated other comprehensive income				588,921				584,945				1,067,827
Total stockholders' equity				78,873,144				77,432,742				72,849,569
			$	866,133,339			$	810,739,405			$	752,608,124

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended September 30, 2021, June 30, 2021 and September 30, 2020
	For the Three Months Ended
UNAUDITED	September 30, 2021			June 30, 2021			September 30, 2020
Interest income:
Loans, including fees	$	7,726,879		$	7,686,752		$	7,526,896
Investment securities		397,755			335,534			324,464
Federal funds sold and other		5,428			10,044			13,052
Total interest income		8,130,062			8,032,330			7,864,412
Interest expense:
Deposits		801,145			897,065			1,593,311
Federal Home Loan Bank advances		100,671			101,616			104,501
Notes payable		167,874			167,874			167,870
Federal funds purchased and other		133			-			-
Total interest expense		1,069,823			1,166,555			1,865,682
Net interest income		7,060,239			6,865,775			5,998,730
Provision for loan losses		-			-			300,000
Net interest income after provision for loan losses		7,060,239			6,865,775			5,698,730
Non-interest income:
Service charges and fees on deposits		131,131			126,017			116,288
Wealth management fee income		574,074			561,092			448,465
Secondary market fee income		697,477			666,363			647,069
Loss on sales and write-downs of foreclosed assets		-			-			(160,679	)
Other		288,553			280,525			186,058
Total non-interest income		1,691,235			1,633,997			1,237,201
Non-interest expense:
Salaries and benefits		4,111,369			3,831,206			3,676,489
Occupancy and equipment		702,058			583,330			663,995
Data processing		430,858			344,373			323,980
Marketing and business development		186,950			203,134			120,547
Professional services		487,428			362,274			396,508
Other		259,239			356,396			217,273
Total non-interest expense		6,177,902			5,680,713			5,398,792
Income before income taxes		2,573,572			2,819,059			1,537,139
Income tax provision		647,957			742,044			387,029
Net income	$	1,925,615		$	2,077,015		$	1,150,110
Basic earnings per common share	$	1.99		$	2.14		$	1.19
Diluted earnings per common share	$	1.99		$	2.14		$	1.19

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the nine months ended September 30, 2021 and September 30, 2020
	For the Nine Months Ended
UNAUDITED	September 30, 2021			September 30, 2020
Interest income:
Loans, including fees	$	23,272,562		$	23,358,772
Investment securities		1,099,091			1,031,034
Federal funds sold and other		20,855			109,973
Total interest income		24,392,508			24,499,779
Interest expense:
Deposits		2,701,034			5,255,959
Federal Home Loan Bank advances		306,036			339,138
Notes payable		503,622			500,021
Federal funds purchased and other		2,242			32
Total interest expense		3,512,934			6,095,150
Net interest income		20,879,574			18,404,629
Provision for loan losses		-			2,392,000
Net interest income after provision for loan losses		20,879,574			16,012,629
Non-interest income:
Service charges and fees on deposits		383,412			406,236
Wealth management fee income		1,641,205			1,309,212
Secondary market fee income		2,285,697			1,468,552
Loss on sales and write-downs of foreclosed assets		-			(162,596	)
Other		750,406			465,198
Total non-interest income		5,060,720			3,486,602
Non-interest expense:
Salaries and benefits		11,975,156			10,961,086
Occupancy and equipment		1,929,421			1,947,494
Data processing		1,361,630			980,639
Marketing and business development		459,892			346,750
Professional services		1,786,505			1,124,596
Other		959,553			735,798
Total non-interest expense		18,472,157			16,096,363
Income before income taxes		7,468,137			3,402,868
Income tax provision		1,912,682			841,694
Net income	$	5,555,455		$	2,561,174
Basic earnings per common share	$	5.73		$	2.64
Diluted earnings per common share	$	5.73		$	2.64

White River Bancshares Company
Selected Financial Data		Three Months Ended
UNAUDITED		September 30, 2021				June 30, 2021				September 30, 2020
Selected Financial Condition Data: End of Period Balances
	Assets	$	866,133,339			$	810,739,405			$	752,608,124
	Investment Securities		84,719,875				87,703,034				70,375,655
	Loans, gross		677,666,588				657,081,624				607,540,859
	Allowance for Loan Losses		8,618,214				8,698,890				8,422,153
	Deposits		739,671,990				685,893,695				632,536,682
	FHLB Advances		16,095,431				16,843,983				17,161,929
	Notes Payable		10,791,724				10,785,412				10,766,607
	Common Shareholders' Equity		78,873,144				77,432,742				72,849,569
Selected Financial Condition Data: Average Balances
	Assets	$	802,375,174			$	804,426,762			$	747,393,849
	Earning Assets		770,104,265				773,649,277				717,205,947
	Investment Securities		87,309,682				75,797,411				67,423,766
	Loans, gross		664,338,877				650,413,942				588,694,448
	Deposits		677,137,238				679,831,314				627,329,431
	FHLB Advances		16,563,988				16,880,488				17,197,822
	Notes Payable		10,788,545				10,782,153				10,763,088
	Common Shareholders' Equity		77,961,111				76,082,454				72,144,578
Selected Operating Results:
	Interest Income	$	8,130,062			$	8,032,330			$	7,864,412
	Interest Expense		1,069,823				1,166,555				1,865,682
	Net Interest Income		7,060,239				6,865,775				5,998,730
	Provision for Loan Losses		-				-				300,000
	Net Interest Income After Provision for Loan Losses		7,060,239				6,865,775				5,698,730
	Noninterest Income		1,691,235				1,633,997				1,237,201
	Noninterest Expense		6,177,902				5,680,713				5,398,792
	Income Before Income Taxes		2,573,572				2,819,059				1,537,139
	Income Tax Provision		647,957				742,044				387,029
	Net Income	$	1,925,615			$	2,077,015			$	1,150,110
	Basic Net Income per Common Share	$	1.99			$	2.14			$	1.19
	Dividends Paid per Common Share		0.50				-				-
	Book Value Per Common Share		81.47				79.91				75.17
	Common Shares Outstanding		968,136				969,045				969,069
	Basic Weighted Average Common Shares Outstanding		968,946				969,060				969,907
Selected Ratios:
	Return on Average Assets		0.95	%			1.04	%			0.61	%
	Return on Average Common Shareholders' Equity		9.80	%			10.95	%			6.34	%
	Average Common Shareholders' Equity to Average Assets		9.72	%			9.46	%			9.65	%
	Net Interest Margin		3.64	%			3.56	%			3.33	%
	Efficiency		70.59	%			66.83	%			74.61	%
Selected Asset Quality:
	Net (Recoveries) Charge-offs	$	80,675			$	(3,076	)		$	169,425
	Classified Assets		4,642,205				4,339,548				661,616
	Nonperforming Loans		148,557				-				200,000
	Nonperforming Assets		148,657				100				400,100
	Total Nonperforming Loans to Total Loans		0.02	%			0.00	%			0.03	%
	Total Nonperforming Loans to Total Assets		0.02	%			0.00	%			0.03	%
	Total Nonperforming Assets to Total Assets		0.02	%			0.00	%			0.05	%

FAQ

What were White River Bancshares' net income figures for Q3 2021?

White River Bancshares reported a net income of $1.93 million for Q3 2021, a 67.4% increase compared to the same quarter in 2020.

How much did total deposits increase for WRIV in Q3 2021?

Total deposits for White River Bancshares increased 16.9% to $739.7 million in Q3 2021 compared to the previous year.

What is the current dividend announced by White River Bancshares?

White River Bancshares announced an annual cash dividend of $0.50 per share.

What is the net interest margin reported by WRIV for Q3 2021?

The net interest margin for White River Bancshares improved to 3.64% in Q3 2021.

How did the nonperforming assets change for WRIV in Q3 2021?

Nonperforming assets were minimal at $149,000, or 0.02% of total assets, as of September 30, 2021.