White River Bancshares Co. Earns Record $2.08 Million, or $2.14 Per Diluted Share, for Second Quarter 2021

Rhea-AI Summary

White River Bancshares Company (OTCQX: WRIV) reported a remarkable 33.8% increase in net income for Q2 2021, reaching $2.08 million, or $2.14 per diluted share, compared to Q1 2021. This reflects a staggering 210.7% year-over-year rise. Total deposits grew by 8.0% to $685.9 million, with noninterest-bearing deposits soaring by 29.2%. The bank maintains strong credit quality, reporting no nonperforming assets for two consecutive quarters. Key metrics include a return on average assets of 1.04% and a capital ratio of 13.32%. Overall, the company anticipates continued growth moving forward.

Positive

• Net income for Q2 2021 reached $2.08 million, a 33.8% increase quarter-over-quarter.
• Year-over-year net income increased by 210.7% from $669,000 in Q2 2020.
• Total deposits increased by 8.0% to $685.9 million compared to the previous year.
• Noninterest-bearing deposits rose by 29.2% year-over-year.
• Annualized return on average assets was 1.04%, compared to 0.37% a year ago.
• Zero nonperforming assets reported for two consecutive quarters.
• Book value per common share increased to $79.91 from $73.89 a year ago.

Negative

• Net interest margin decreased to 3.56% in Q2 2021 from 3.65% in Q2 2020.
• Total interest income dropped by 5.0% to $8.0 million in Q2 2021.

FAYETTEVILLE, Ark., July 19, 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 33.8% to a record $2.08 million, or $2.14 per diluted share, in the second quarter of 2021, compared to $1.55 million, or $1.60 per diluted share, in the first quarter of 2021 and increased 210.7% compared to $669,000, or $0.69 per diluted share, in the second quarter of 2020. In the first six months of 2021, net income more than doubled to $3.6 million, or $3.75 per diluted share, compared to $1.4 million, or $1.45 per diluted share, in the first six months of 2020. All financial results are unaudited.

“Our record results for both the second quarter and the first six months of 2021 were highlighted by strong revenue generation, record deposit growth and improved operating efficiencies,” said Gary Head, President and Chief Executive Officer. “We are extremely proud of all of our team, who have stepped up to meet the challenges of a new normal banking experience. Overall, these factors contributed to a return on average assets of 1.04% and a return on average equity of 10.95% for the quarter. We have been successful at keeping operating expenses in check while growing the franchise, and anticipate further growth throughout the rest of 2021.”

“Deposit balances remained at record levels at the end of June, with new client relationships contributing to strong quarterly deposit growth,” said Scott Sandlin, Chief Strategy Officer. “As a result, noninterest bearing deposits are up 29.2% year-over-year. Part of our success in gathering new low cost deposits has been due to the investments we have made with our digital and treasury service platforms over the last few quarters. Our banking teams now have both the deposit products offerings and the digital enhancements in place to capture additional market share.”

“Since the early onset of the pandemic, we have been actively helping our customers receive PPP loans from the SBA,” said Brant Ward, Chief Operating Officer. “Over the last fifteen months, we funded 433 PPP loans totaling $29.0 million to both existing and new customers. Of this amount, 69 loans totaling $13.1 million remain on the books as of June 30, 2021. Due to the low interest rate environment, our secondary mortgage department continues to outperform expectation. The low interest rate environment also helps us manage our cost of funds down as we continue to build our deposit franchise through the acquisition of new relationships.”

“In April 2020, we implemented additional programs to support our customers experiencing financial hardship. 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 June 30, 2021, we no longer had any loans on deferral. We continue to be extremely encouraged by our overall asset quality, including zero nonperforming assets for the second quarter in a row,” said Jeff Maland, Chief Risk Officer.

Second Quarter 2021 Financial Highlights:

• Second quarter net income increased 210.7% to $2.08 million, or $2.14 per diluted share, compared to $669,000, or $0.69 per diluted share, in the second quarter of 2020.
• Annualized return on average assets was 1.04%, compared to 0.37% in the second quarter a year ago.
• Annualized return on average equity was 10.95%, compared to 3.79% in the second quarter a year ago.
• There was no provision for loan losses in the second quarter or first quarter of 2021. This compares to a $1.4 million provision in the second quarter of 2020.
• Net loans increased 13.4% to $643.6 million at June 30, 2021, compared to $567.6 million at June 30, 2020.
• Total deposits increased 8.0% to $685.9 million at June 30, 2021, compared to $635.3 million a year ago.
• Noninterest bearing deposits increased 29.2% to $211.3 million at June 30, 2021, compared to $163.6 million a year ago.
• There were no nonperforming assets at June 30, 2021, and at March 31, 2021. This compared to nonperforming assets of $1.3 million, or 0.18% of total assets, at June 30, 2020.
• Book value per common share increased to $79.91 at June 30, 2021, from $73.89 a year ago.
• Total risk-based capital ratio was 13.32% and the Tier 1 leverage ratio was 10.65% for the Bank at June 30, 2021.

Income Statement

The Company’s NIM was 3.56% in the second quarter of 2021, compared to 3.65% in the second quarter of 2020, and 3.82% in the prior quarter. High levels of balance sheet liquidity and lower yields on assets continued to put pressure on the Company’s NIM. In the first six months of 2021, the net interest margin improved four basis points to 3.69%, compared to 3.65% in the first six months of 2020.

Second quarter net interest income increased 7.2% to $6.9 million, compared to $6.4 million in the second quarter of 2020. Total interest income decreased 5.0% to $8.0 million in the second quarter of 2021, from $8.5 million in the second quarter of 2020. Total interest expense decreased by 43.2% to $1.2 million in the second quarter of 2021, from $2.1 million during the second quarter of 2020.   In the first six months of 2021, net interest income increased 11.4% to $13.8 million, compared to $12.4 million in the first six months of 2020.

Noninterest income increased 38.5% to $1.6 million in the second quarter of 2021, compared to $1.2 million in the second 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 second quarter in the prior year. In the first six months of the year, noninterest income increased 49.8% to $3.4 million, compared to $2.2 million in the first six months of 2020.

Noninterest expense increased to $5.7 million in the first quarter of 2021, compared to $5.3 million in the first quarter of 2020. Higher professional services related to a one-time expense associated with a conversion fee for digital, core and EFT platforms contributed to the increase during the first quarter of 2021.

Balance Sheet Review

Total assets increased by 7.5% to $810.7 million at June 30, 2021, from $754.2 million at June 30, 2020, and increased modestly compared to $806.0 million at March 31, 2021. Cash and cash equivalents decreased to $40.9 million at June 30, 2021 from $82.6 million a year ago. Investment securities increased to $87.7 million at June 30, 2021 from $66.2 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 13.4% to $643.6 million at June 30, 2021, compared to $567.6 million a year ago, and increased 1.4% compared to $635.0 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 June 30, 2021, $5.2 million in PPP loans from round one, and $7.9 million in PPP loans from round two, remained on the books.

Deposit balances remained at record levels, with the second round of PPP and new customer relationships contributing to strong quarterly deposit growth. Total deposits increased 8.0% to $685.9 million at June 30, 2021, compared to $635.3 million a year ago and increased nominally compared to $682.6 million at June 30, 2020, with non-interest bearing deposits increasing 29.2% to $211.3 million at June 30, 2021, compared to $163.6 million a year ago.

FHLB advances totaled $16.8 million at June 30, 2021 from $17.3 million at June 30, 2020. Total stockholders’ equity increased 8.0% to $77.4 million at June 30, 2021, from $71.7 million at June 30, 2020 and increased 2.9% when compared to $75.2 million at March 31, 2021. Book value per common share increased to $79.91 at June 30, 2021 from $73.89 at June 30, 2020, and $77.63 at March 31, 2021.

Credit Quality

Due to excellent credit quality and a strong allowance for loan losses, the Company reported no provision for loan losses in the second quarter of 2021 nor the first quarter of 2021. This compares to a $1.4 million provision for loan losses during the second quarter of 2020. “Our credit quality remains exemplary, and we believe our current reserve level is adequate to cover any potential loan losses resulting from the pandemic,” said Head.

There were no nonperforming loans at June 30, 2021, or at March 31, 2021. This compared to $985,000 in nonperforming loans at June 30, 2020. Additionally, there were no nonperforming assets at June 30, 2021, or at March 31, 2021, compared with $1.3 million in nonperforming assets at June 30, 2020. Total nonperforming assets were 0.00% of total assets at June 30, 2021, 0.00% at March 31, 2021, and 0.18% at June 30, 2020.

The allowance for loan losses was $8.7 million, or 1.35% of total loans, at June 30, 2021, when excluding the $13.1 million of PPP loans, which are 100% guaranteed by the SBA. This compared to $8.3 million, or 1.43% of total loans, at June 30, 2020. Net loan recoveries were $3,000 in the second quarter of 2021, compared to net loan recoveries of $10,000 in the first quarter of 2021, and net loan charge-offs of $512,000 in the second quarter of 2020.

As of June 30, 2021, the Bank had zero loans within the COVID deferral process.

Capital

The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio estimate of 10.65%, Common equity Tier 1 capital ratio of 12.09%, Tier 1 risk-based capital ratio of 12.09% and Total capital ratio of 13.32%, at June 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
June 30, 2021, March 31, 2021 and June 30, 2020
UNAUDITED			June 30, 2021				March 31, 2021				June 30, 2020
ASSETS
Cash and due from banks			$	40,761,741			$	60,216,957			$	81,878,254
Federal funds sold				140,154				573,134				754,807
Total cash and cash equivalents				40,901,895				60,790,091				82,633,061
Investment securities				87,703,034				68,937,591				66,176,842
Loans held for sale				4,754,632				7,782,522				4,366,938
Loans, net of allowance for loan losses				643,628,102				634,992,334				567,583,991
Premises and equipment, net				24,531,056				24,669,345				24,169,607
Foreclosed assets held for sale				100				100				349,072
Accrued interest receivable				2,171,138				1,883,499				2,320,039
Deferred income taxes				1,863,572				1,848,883				1,370,935
Other investments				2,896,985				2,894,085				2,884,285
Other assets				2,288,891				2,161,705				2,379,043
			$	810,739,405			$	805,960,155			$	754,233,813
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits		- noninterest bearing	$	211,286,665			$	188,958,889			$	163,574,225
		- interest bearing		250,458,669				253,269,377				170,346,618
Savings deposits				22,772,238				22,126,159				15,984,114
Time deposits		- under $250M		109,170,757				116,989,664				160,996,541
		- $250M and over		92,205,366				101,253,092				124,392,077
Total deposits				685,893,695				682,597,181				635,293,575
Federal Home Loan Bank advances				16,843,983				16,950,930				17,266,002
Notes payable				10,785,412				10,779,101				10,760,299
Accrued interest payable				227,688				425,731				610,071
Other liabilities				19,555,885				19,982,625				18,630,457
Total liabilities				733,306,663				730,735,568				682,560,404
Stockholders' equity:
Common stock				9,763				9,763				9,763
Surplus				88,115,762				88,082,809				87,848,223
Accumulated deficit				(10,844,363	)			(12,921,378	)			(16,887,146	)
Treasury stock, at cost				(433,365	)			(431,865	)			(387,022	)
Accumulated other comprehensive income				584,945				485,258				1,089,591
Total stockholders' equity				77,432,742				75,224,587				71,673,409
			$	810,739,405			$	805,960,155			$	754,233,813

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended June 30, 2021, March 31, 2021 and June 30, 2020
	For the Three Months Ended
UNAUDITED	June 30, 2021			March 31, 2021			June 30, 2020
Interest income:
Loans, including fees	$	7,686,752		$	7,858,931		$	8,096,129
Investment securities		335,534			365,802			347,157
Federal funds sold and other		10,044			5,383			12,996
Total interest income		8,032,330			8,230,116			8,456,282
Interest expense:
Deposits		897,065			1,002,824			1,771,276
Federal Home Loan Bank advances		101,616			103,749			117,389
Notes payable		167,874			167,874			164,281
Federal funds purchased and other		-			2,109			-
Total interest expense		1,166,555			1,276,556			2,052,946
Net interest income		6,865,775			6,953,560			6,403,336
Provision for loan losses		-			-			1,415,000
Net interest income after provision for loan losses		6,865,775			6,953,560			4,988,336
Noninterest income:
Service charges and fees on deposits		126,017			126,264			115,774
Wealth management fee income		561,092			506,039			392,442
Secondary market fee income		666,363			921,857			532,734
Loss on sales and write-downs of foreclosed assets		-			-			-
Other		280,525			181,328			139,120
Total noninterest income		1,633,997			1,735,488			1,180,070
Noninterest expense:
Salaries and benefits		3,831,206			4,032,581			3,614,419
Occupancy and equipment		583,330			644,033			634,461
Data processing		344,373			586,399			341,067
Marketing and business development		203,134			69,808			99,267
Professional services		362,274			936,803			335,712
Other		356,396			343,918			267,962
Total noninterest expense		5,680,713			6,613,542			5,292,888
Income before income taxes		2,819,059			2,075,506			875,518
Income tax provision		742,044			522,681			206,929
Net income	$	2,077,015		$	1,552,825		$	668,589
Basic earnings per common share	$	2.14		$	1.60		$	0.69
Diluted earnings per common share	$	2.14		$	1.60		$	0.69

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the six months ended June 30, 2021 and June 30, 2020
	For the Six Months Ended
UNAUDITED	June 30, 2021			June 30, 2020
Interest income:
Loans, including fees	$	15,545,683		$	15,831,876
Investment securities		701,336			706,570
Federal funds sold and other		15,427			96,921
Total interest income		16,262,446			16,635,367
Interest expense:
Deposits		1,899,889			3,662,648
Federal Home Loan Bank advances		205,365			234,637
Notes payable		335,748			332,151
Federal funds purchased and other		2,109			32
Total interest expense		2,443,111			4,229,468
Net interest income		13,819,335			12,405,899
Provision for loan losses		-			2,092,000
Net interest income after provision for loan losses		13,819,335			10,313,899
Noninterest income:
Service charges and fees on deposits		252,281			289,948
Wealth management fee income		1,067,131			860,747
Secondary market fee income		1,588,220			821,483
Loss on sales and write-downs of foreclosed assets		-			(1,917	)
Other		461,853			279,140
Total noninterest income		3,369,485			2,249,401
Noninterest expense:
Salaries and benefits		7,863,787			7,284,597
Occupancy and equipment		1,227,363			1,283,499
Data processing		930,772			656,659
Marketing and business development		272,942			226,203
Professional services		1,299,077			728,088
Other		700,314			518,525
Total noninterest expense		12,294,255			10,697,571
Income before income taxes		4,894,565			1,865,729
Income tax provision		1,264,725			454,665
Net income	$	3,629,840		$	1,411,064
Basic earnings per common share	$	3.75		$	1.45
Diluted earnings per common share	$	3.75		$	1.45

White River Bancshares Company
Selected Financial Data	Three Months Ended
UNAUDITED	June 30, 2021				March 31, 2021				June 30, 2020
Selected Financial Condition Data: End of Period Balances
Assets	$	810,739,405			$	805,960,155			$	754,233,813
Investment Securities		87,703,034				68,937,591				66,176,842
Loans, gross		657,081,624				651,470,670				580,242,507
Allowance for Loan Losses		8,698,890				8,695,814				8,291,578
Deposits		685,893,695				682,597,181				635,293,575
FHLB Advances		16,843,983				16,950,930				17,266,002
Notes Payable		10,785,412				10,779,101				10,760,299
Common Shareholders' Equity		77,432,742				75,224,587				71,673,409
Selected Financial Condition Data: Average Balances
Assets	$	804,426,762			$	768,712,888			$	736,035,654
Earning Assets		773,649,277				738,370,954				705,232,474
Investment Securities		75,797,411				70,606,315				64,885,472
Loans, gross		650,413,942				639,404,515				576,641,043
Deposits		679,831,314				639,422,194				614,655,399
FHLB Advances		16,880,488				22,992,223				19,772,977
Notes Payable		10,782,153				10,775,151				10,756,579
Common Shareholders' Equity		76,082,454				74,657,832				71,019,775
Selected Operating Results:
Interest Income	$	8,032,330			$	8,230,116			$	8,456,282
Interest Expense		1,166,555				1,276,556				2,052,946
Net Interest Income		6,865,775				6,953,560				6,403,336
Provision for Loan Losses		-				-				1,415,000
Net Interest Income After Provision for Loan Losses		6,865,775				6,953,560				4,988,336
Noninterest Income		1,633,997				1,735,488				1,180,070
Noninterest Expense		5,680,713				6,613,542				5,292,888
Income Before Income Taxes		2,819,059				2,075,506				875,518
Income Tax Provision		742,044				522,681				206,929
Net Income	$	2,077,015			$	1,552,825			$	668,589
Basic Net Income per Common Share	$	2.14			$	1.60			$	0.69
Diluted Net Income per Common Share		2.14				1.60				0.69
Dividends Paid per Common Share		-				-				-
Book Value Per Common Share		79.91				77.63				73.89
Common Shares Outstanding		969,045				969,065				969,998
Basic Weighted Average Common Shares Outstanding		969,060				969,065				969,998
Diluted Weighted Average Common Shares Outstanding		969,060				969,065				969,998
Selected Ratios:
Return on Average Assets		1.04	%			0.82	%			0.37	%
Return on Average Common Shareholders' Equity		10.95	%			8.44	%			3.79	%
Average Common Shareholders' Equity to Average Assets		9.46	%			9.71	%			9.65	%
Net Interest Margin		3.56	%			3.82	%			3.65	%
Efficiency		66.83	%			76.11	%			69.80	%
Selected Asset Quality:
Net (Recoveries) Charge-offs	$	(3,076	)		$	(9,731	)		$	511,950
Classified Assets		4,339,548				4,538,064				1,597,207
Nonperforming Loans		-				-				985,000
Nonperforming Assets		100				100				1,334,072
Total Nonperforming Loans to Total Loans		0.00	%			0.00	%			0.17	%
Total Nonperforming Loans to Total Assets		0.00	%			0.00	%			0.13	%
Total Nonperforming Assets to Total Assets		0.00	%			0.00	%			0.18	%

FAQ

What was the net income for White River Bancshares Company (WRIV) in Q2 2021?

The net income for Q2 2021 was $2.08 million, representing a 33.8% increase from Q1 2021.

How much did total deposits grow for WRIV in the second quarter of 2021?

Total deposits grew by 8.0% to $685.9 million compared to the previous year.

What is the return on average assets for WRIV in Q2 2021?

The return on average assets was 1.04% for Q2 2021.

Did WRIV report any nonperforming assets in Q2 2021?

No, WRIV reported zero nonperforming assets for the second consecutive quarter.

What was the book value per common share for WRIV at the end of June 2021?

The book value per common share increased to $79.91 at the end of June 2021.