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FAYETTEVILLE, Ark., Oct. 15, 2019 (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 $1.3 million, or $1.36 per diluted share, in the third quarter of 2019, compared to $1.3 million, or $1.39 per diluted share, in the third quarter of 2018.  In the second quarter of 2019, the Company earned net income of $1.5 million, or $1.55 per diluted share. 

In the first nine months of the year, net income increased 10.1% to $4.01 million, or $4.11 per diluted share, compared to $3.6 million, or $4.10 per diluted share, in the first nine months of 2018.  All financial results are unaudited.

Third Quarter 2019 Financial Highlights:

• Third quarter net income was $1.3 million, or $1.36 per diluted share.
• Third quarter net interest margin (“NIM”) expanded by 20 basis points to 3.87% compared to the third quarter a year ago and contracted 10 basis points compared to the preceding quarter.
• Net loans increased 9.5% to $551.2 million at September 30, 2019, compared to September 30, 2018.
• Total deposits increased 4.1% to $539.6 million at September 30, 2019, compared to a year ago.
• Non-interest-bearing deposits increased 9.8% to $107.9 million at September 30, 2019, compared to $98.3 million a year ago.
• Non-performing assets at September 30, 2019 improved to 0.90% of total assets, from 1.60% a year ago.
• Book value per diluted common share increased to $70.13 at September 30, 2019, from $62.70 a year ago.
• Total risk-based capital ratio was 14.37% and Tier 1 leverage ratio was 11.61% for the Bank at September 30, 2019.

“We generated solid net interest income for the third quarter, primarily driven by the expansion of our balance sheet,” said Gary Head, President and Chief Executive Officer.  “Additionally, we continued to strengthen our core funding mix with non-interest bearing deposits increasing almost 10% compared to a year ago.  While our operating results were lower compared to the prior quarter, mainly due to writedowns on foreclosed assets, we expect to generate strong revenue for the remainder of the year.

“We implemented a multi-step growth process earlier this year by promoting and hiring key talent, and expanding our presence with a new branch in Rogers, Arkansas.  This growth strategy was put in place to take advantage of the multi-billion dollar expansion projects and in-migration taking place around that market,” said Head. “Northwest Arkansas continues to be ranked one the fastest growing areas in the country, and we now have the team in place to take advantage of additional opportunities.”

Income Statement

The Company’s net interest margin was 3.87% in the third quarter of 2019, compared to 3.97% in the preceding quarter, and a 20 basis point increase when compared to 3.67% in the third quarter of 2018.  In the first nine months of 2019, the net interest margin improved 25 basis points to 3.94%, compared to 3.69% in the first nine months of 2018.

Third quarter net interest income increased by 8.9% to $6.1 million, from $5.6 million in the third quarter of 2018, and increased by 1.3% when compared to $6.0 million in the second quarter of 2019.  Total interest income increased by 12.3% to $8.2 million in the third quarter of 2019 from $7.3 million during the third quarter of 2018 and increased by 23.0% compared to $8.0 million in the preceding quarter.  Total interest expense increased by 23.4% to $2.1 million in the third quarter of 2019, from $1.7 million during the third quarter of 2018, and increased 8.0% compared to $1.9 million in the preceding quarter, primarily due to the increase in interest-bearing deposits.  In the first nine months of 2019, net interest income increased 9.4% to $18.0 million, compared to $16.4 million in the first nine months of 2018.

Non-interest income was $621,919 in the third quarter of 2019, compared to $970,639 in the third quarter a year ago and $821,595 in the preceding quarter.  The decrease during the current quarter was primarily due to losses on sales and writedowns of foreclosed assets in the amount of $526,944.  In the first nine months of the year, non-interest income was $2.3 million, compared to $3.0 million in the first nine months of 2018.

Non-interest expense was $4.9 million in the third quarter of 2019 compared to $4.8 million in the third quarter of 2018 and $5.1 million in the preceding quarter.  Year-to-date, non-interest expense was $14.9 million, compared to $14.6 million in the same period a year ago.

Balance Sheet Review

Total assets increased by 5.2% to $660.3 million at September 30, 2019, from $627.9 million at September 30, 2018, and increased nominally compared to $655.9 million at June 30, 2019.  Cash and cash equivalents decreased to $17.3 million at September 30, 2019 from $44.4 million a  year ago.  Investment securities increased to $55.9 million at September 30, 2019 from $51.3 million a year ago.

Loans, net of allowance for loan losses, increased 9.5% to $551.2 million at quarter-end, compared to $503.5 million a year ago, and increased 3.0% compared to $535.3 million three months earlier.

Total deposits increased 4.1% to $539.6 million at September 30, 2019 compared to $518.3 million a year ago and increased modestly compared to $539.0 million at June 30, 2019.  Non-interest-bearing deposits increased 9.8% to $108.0 million at September 30, 2019 from $98.3 million a year ago, and interest-bearing deposits increased 2.8% to $431.7 million at quarter-end from $420.0 million a year ago.

FHLB advances decreased to $27.6 million at September 30, 2019 from $33.0 million at September 30, 2018.  Notes payable decreased to $11.6 million at September 30, 2019 from $12.2 million a year ago.

Total stockholders’ equity increased 11.7% to $68.3 million at September 30, 2019 from $61.1 million at September 30, 2018 and increased 2.2% when compared to $66.8 million at June 30, 2019.  Book value per diluted common share increased to $70.13 at September 30, 2019 from $62.70 at September 30, 2018 and $68.52 at June 30, 2019.

Credit Quality

Due to net recoveries and the continued health of the loan portfolio, the Company had no provision for loan losses in both the current quarter and the preceding quarter.  Net loan recoveries were $13,738 in the third quarter of 2019, compared with recoveries of $37,499 in the second quarter of 2019 and net loan charge-offs of $2,834 in the third quarter a year ago.

Nonperforming loans totaled $129,111 at September 30, 2019, compared to $128,634 at September 30, 2018.  Nonperforming assets decreased to $5.9 million at September 30, 2019 compared to $6.3 million at June 30, 2019 and $10.0 million at September 30, 2018.  Total non-performing assets improved to 0.90% of total assets at September 30, 2019, compared to 0.97% of total assets three months earlier and 1.60% a year earlier.

The allowance for loan losses was $7.0 million, or 1.25% of total loans, at September 30, 2019 compared to $7.3 million, or 1.43% of total loans, at September 30, 2018.

Capital

The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio of 11.61%, Common equity tier 1 capital ratio of 13.16%, Tier 1 capital ratio of 13.16% and Total capital ratio of 14.37%, at September 30, 2019.

About White River Bancshares Company

White River Bancshares Company is the single bank holding company for Signature Bank of Arkansas.  Both are headquartered in Fayetteville, Arkansas.  The Bank has locations in Fayetteville, Springdale, Bentonville, 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
September 30, 2019, June 30, 2019 and September 30, 2018
UNAUDITED			September 30, 2019				June 30, 2019				September 30, 2018
ASSETS
Cash and due from banks			$	17,033,866			$	26,921,777			$	43,084,096
Federal funds sold				214,047				49,920				1,264,703
Total cash and cash equivalents				17,247,913				26,971,697				44,348,799
Investment securities				55,937,666				56,491,454				51,249,295
Loans held for sale				1,562,200				1,910,237				1,083,004
Loans, net of allowance for loan losses				551,184,762				535,276,253				503,506,673
Premises and equipment, net				18,821,452				19,186,933				8,334,998
Foreclosed assets held for sale				5,804,185				6,331,228				9,893,440
Accrued interest receivable				2,465,854				2,369,594				2,384,546
Deferred income taxes				2,226,003				2,058,613				2,224,063
Other investments				2,797,885				2,779,585				2,726,885
Other assets				2,210,704				2,567,363				2,108,783
			$	660,258,624			$	655,942,957			$	627,860,486
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand deposits		– non-interest bearing	$	107,892,361			$	108,136,610			$	98,278,558
		– interest bearing		139,110,640				136,078,594				133,232,192
Savings deposits				13,110,144				13,569,006				11,777,521
Time deposits	– under $250M			162,730,976				163,753,062				174,667,750
	– $250M and over			116,737,980				117,425,097				100,310,520
Total deposits				539,582,101				538,962,369				518,266,541
Federal Home Loan Bank advances				27,572,634				25,173,016				32,968,811
Note payable				11,643,475				11,793,120				12,229,403
Accrued interest payable				781,770				726,945				578,510
Other liabilities				12,367,698				12,474,372				2,679,813
Total liabilities				591,947,678				589,129,822				566,723,078
Stockholders’ equity:
Common stock				9,763				9,763				9,613
Surplus				87,562,406				87,420,115				86,971,084
Accumulated deficit				(19,430,581	)			(20,760,386	)			(24,369,183	)
Treasury stock, at cost				(112,732	)			(50,824	)			(49,888	)
Accumulated other comprehensive loss				282,090				194,467				(1,424,218	)
Total stockholders’ equity				68,310,946				66,813,135				61,137,408
			$	660,258,624			$	655,942,957			$	627,860,486

WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended September 30, 2019, June 30, 2019 and September 30, 2018
	For the Three Months Ended
UNAUDITED	September 30, 2019				June 30, 2019					September 30, 2018
Interest income:
Loans, including fees	$	7,768,738			$	7,544,769				$	6,789,483
Investment securities		347,434				358,304					305,880
Federal funds sold and other		79,507				56,882					202,888
Total interest income		8,195,679				7,959,955					7,298,251
Interest expense:
Deposits		1,797,879				1,630,369					1,356,452
Federal Home Loan Bank advances		146,602				156,632					184,362
Note payable		147,018				147,296					154,409
Federal funds purchased and other		705				2,951					–
Total interest expense		2,092,204				1,937,248					1,695,223
Net interest income		6,103,475				6,022,707					5,603,028
Provision for loan losses		–				–					–
Net interest income after provision for loan losses		6,103,475				6,022,707					5,603,028
Non-interest income:
Service charges and fees on deposits		184,032				163,127					207,588
Wealth management fee income		456,522				434,754					459,445
Secondary market fee income		287,084				250,271					160,608
Loss on sales and write-downs of foreclosed assets		(526,944	)			(181,382	)				–
Other		221,225				154,825					142,998
Total non-interest income		621,919				821,595					970,639
Non-interest expense:
Salaries and benefits		3,431,056				3,289,366					3,091,417
Occupancy and equipment		582,957				598,348					550,629
Data processing		319,184				291,728					299,838
Marketing and business development		132,424				175,625					107,727
Professional services		182,403				321,401					373,960
Other		288,570				370,760					345,334
Total non-interest expense		4,936,594				5,047,228					4,768,905
Income before income taxes		1,788,800				1,797,074					1,804,762
Income tax provision		458,995				283,154					471,458
Net income	$	1,329,805			$	1,513,920				$	1,333,304
Basic earnings per common share	$	1.36			$	1.55				$	1.39
Diluted earnings per common share	$	1.36			$	1.55				$	1.39

White River Bancshares Company
Selected Financial Data		Three Months Ended
UNAUDITED		September 30, 2019				June 30, 2019				September 30, 2018
Selected Financial Condition Data: End of Period Balances
	Assets	$	660,258,624			$	655,942,957			$	627,860,486
	Investment Securities		55,937,666				56,491,454				51,249,295
	Loans, gross		559,770,307				544,196,098				511,896,594
	Allowance for Loan Losses		7,023,345				7,009,607				7,306,917
	Deposits		539,582,101				538,962,369				518,266,541
	FHLB Advances		27,572,634				25,173,016				32,968,811
	Note Payable		11,673,475				11,793,120				12,229,403
	Common Shareholders’ Equity		68,310,946				66,813,135				61,137,408
Selected Financial Condition Data: Average Balances
	Assets	$	657,501,382			$	642,050,388			$	629,243,904
	Earning Assets		625,176,901				609,106,052				605,610,938
	Investment Securities		56,478,503				55,549,672				50,014,233
	Loans, gross		552,356,254				540,960,725				511,624,455
	Deposits		540,308,694				524,810,894				516,227,353
	FHLB Advances		24,138,234				26,536,920				36,399,654
	Note Payable		11,688,777				11,830,581				12,267,811
	Common Shareholders’ Equity		67,424,620				65,248,213				60,555,078
Selected Operating Results:
	Interest Income	$	8,195,679			$	7,959,955			$	7,298,251
	Interest Expense		2,092,204				1,937,248				1,695,223
	Net Interest Income		6,103,475				6,022,707				5,603,028
	Provision for Loan Losses		–				–				–
	Net Interest Income After Provision for Loan Losses		6,103,475				6,022,707				5,603,028
	Noninterest Income		621,919				821,595				970,639
	Noninterest Expense		4,936,594				5,047,228				4,768,905
	Income Before Income Taxes		1,788,800				1,797,074				1,804,762
	Income Tax Provision		458,995				283,154				471,458
	Net Income	$	1,329,805			$	1,513,920			$	1,333,304
	Basic Net Income per Common Share	$	1.36			$	1.55			$	1.39
	Diluted Net Income per Common Share		1.36				1.55				1.39
	Dividends Paid per Common Share		–				–				–
	Book Value Per Common Share		70.13				68.52				62.70
	Book Value Per Common Share-Diluted		70.13				68.52				62.70
	Common Shares Outstanding		974,127				975,065				975,077
	Diluted Common Shares Outstanding		974,127				975,065				975,077
	Basic Weighted Average Common Shares Outstanding		975,014				975,070				961,870
	Diluted Weighted Average Common Shares Outstanding		975,014				975,810				961,870
Selected Ratios:
	Return on Average Assets		0.80	%			0.95	%			0.84	%
	Return on Average Common Shareholders’ Equity		7.82	%			9.31	%			8.74	%
	Average Common Shareholders’ Equity to Average Assets		10.25	%			10.16	%			9.62	%
	Net Interest Margin		3.87	%			3.97	%			3.67	%
	Efficiency		73.40	%			73.74	%			72.55	%
Selected Asset Quality:
	Net (Recoveries) Charge-offs	$	(13,738	)		$	(37,499	)		$	2,834
	Classified Assets		6,194,407				6,613,712				10,199,612
	Nonperforming Loans		129,111				–				128,634
	Nonperforming Assets		5,933,296				6,331,228				10,022,074
	Total Nonperforming Loans to Total Loans		0.02	%			0.00	%			0.03	%
	Total Nonperforming Loans to Total Assets		0.02	%			0.00	%			0.02	%
	Total Nonperforming Assets to Total Assets		0.90	%			0.97	%			1.60	%

Scott Sandlin, Chief Strategy Officer                                                                               
479-684-3754