White River Bancshares Co. Earns $1.07 Million, or $1.08 Per Diluted Share, in First Quarter 2022; Highlighted By Market Expansion and Strong Core Deposit Growth
04/12/2022 - 09:00 AM
FAYETTEVILLE, Ark., April 12, 2022 (GLOBE NEWSWIRE) -- White River Bancshares Company (OTCQX: WRIV), (the “Company”) the holding company for Signature Bank of Arkansas (the “Bank”), today reported net income of $1.07 million , or $1.08 per diluted share, in the first quarter of 2022, compared to $1.55 million , or $1.60 per diluted share, in the first quarter of 2021. In the immediate prior quarter, the Company earned $1.50 million , or $1.50 per diluted share. All financial results are unaudited.
“Our first quarter results were highlighted by a number of new initiatives focused on creating value for our customers and shareholders,” said Gary Head, President and Chief Executive Officer. “We generated strong year-over-year growth in both loans and core deposits, due to expanded market offerings and new customer relationships. Over the last few months, we opened new markets in Harrison and Jonesboro. In addition, we announced plans to enter a new market later this year employing bilingual staff as we increase our efforts to better serve Arkansas area Latinos. Northwest Arkansas remains one of the fastest growing markets in the United States, and we are well positioned to take advantage of new opportunities as we continue to grow the Company.”
“We continue to strengthen our core funding mix with non-interest bearing deposits increasing 39.9% compared to a year ago, and representing 34.0% of total deposits at quarter end,” said Scott Sandlin, Chief Strategy Officer. “Our success in gathering new low-cost deposits is a direct result of the dedication and effort of our employees, who continue to focus on bringing in full banking relationships. Operating results were lower compared to the preceding quarter, primarily due to increased operating expenses associated with entering two new markets and the write-off of a single foreclosed property. With these expenses behind us, we expect to generate strong operating revenue for the remainder of the year.”
First Quarter 2022 Financial Highlights:
First quarter net income was $1.07 million , or $1.08 per diluted share, compared to $1.55 million , or $1.60 per diluted share, in the first quarter of 2021. Annualized return on average assets was 0.51% , compared to 0.82% in the first quarter a year ago. Annualized return on average equity was 5.47% from 8.44% in the first quarter a year ago. First quarter net interest margin (“NIM”) was 3.58% , compared to 3.82% in the first quarter a year ago. There was no provision for loan losses in the first quarter of 2022, or for the fourth quarter of 2021 or the first quarter of 2021. Net loans increased 7.1% to $680.3 million at March 31, 2022, compared to $635.0 million at March 31, 2021. Total deposits increased 13.8% to $776.7 million at March 31, 2022, compared to $682.6 million a year ago. Noninterest bearing deposits increased 39.9% to $264.3 million at March 31, 2022, compared to $189.0 million a year ago. Nonperforming assets totaled $664,000 , or 0.07% of total assets at March 31, 2022, compared to almost nil, or 0.00% of total assets, at March 31, 2021. Book value per common share was $78.61 at March 31, 2022, from $77.63 a year ago. Total risk-based capital ratio was 12.96% and the Tier 1 leverage ratio was 10.48% for the Bank at March 31, 2022. Recent Developments
During the first quarter of 2022, the Company opened its seventh market, located at 111 East Jackson Avenue in Jonesboro. This facility will serve as a temporary location for the market and marks the Company’s entry into Craighead County. According to the 2020 Census, Jonesboro had a population of 78,576 and is the fifth-largest city in Arkansas.
Additionally, the Company announced plans to launch a new market later this year employing bilingual staff as it increases its efforts to better serve Arkansas area Latinos. The initial market location is planned for downtown Rogers, and its staff of six to 10 will speak English and Spanish. “The Latino community has grown to become the largest minority community in the region and the United States, and we believe it is underserved,” said Brant Ward, Chief Operating Officer. “As we look at market locations for expansion, we felt strongly that this was an area that we wanted to focus on.”
During the fourth quarter of 2021, the Company opened its sixth market, located in Harrison in the Durand Center at 303 N. Main Street, Suite 100. Harrison, located in the heart of the Ozark Mountains, is nationally recognized as one of the "Best Small Towns in America" and was previously featured in Where to Retire Magazine as one of the best retirement towns in the United States. https://www.cityofharrison.com/
Income Statement
“The changes we made in our investments and funding mix over the last several quarters continue to reduce our dependency on brokered CDs, internet CDs and Federal Home Loan Bank (“FHLB”) advances. While the interest rate environment over the past few years has been challenging for the entire financial sector, our balance sheet is well positioned to benefit from rising interest rates,” said Ward.
The Company’s NIM was 3.58% in the first quarter of 2022, compared to 3.82% in the first quarter of 2021, and 3.61% in the prior quarter.
Net interest income increased 4.9% to $7.3 million , compared to $7.0 million in the first quarter of 2021. Total interest income was unchanged at $8.2 million in both the first quarter of 2022 and in the first quarter of 2021. Total interest expense decreased by 29.8% to $896,000 in the first quarter of 2022, from $1.3 million during the first quarter of 2021.
Noninterest income was $1.3 million in the first quarter of 2022, compared to $1.7 million in the first quarter a year ago. The increase in deposit fees and other service charges from the first quarter a year ago was primarily a result of increased transaction deposit account activity. These increases were more than offset by a loss on sales and write-downs on foreclosed assets, as well as lower secondary market fee income during the first quarter of 2022.
Noninterest expense increased to $7.2 million in the first quarter of 2022, compared to $6.6 million in the first quarter of 2021. Higher commissions due to increased revenues in business lines, residual costs related to the core conversion and costs associated with the two new markets contributed to the increase during the first quarter of 2022 compared to the first quarter a year ago.
Balance Sheet
Total assets increased 11.1% to $895.6 million at March 31, 2022, from $806.0 million at March 31, 2021, and increased 5.1% compared to $852.0 million at December 31, 2021. Cash and cash equivalents increased to $90.3 million at March 31, 2022 from $60.8 million a year ago and nearly doubled when compared to $45.9 million at December 31, 2021. Investment securities increased to $85.5 million at March 31, 2022, from $68.9 million a year ago, as the Company actively moved cash balances into better yielding investment securities during the quarter.
Loans, net of allowance for loan losses, increased 7.1% to $680.3 million at March 31, 2022, compared to $635.0 million a year ago, and decreased modestly compared to $685.4 million three months earlier.
“We were active with helping our customers receive Paycheck Protection Program (“PPP”) loans from the Small Business Administration over the last two years,” said Jeff Maland, Chief Risk Officer. “Over the course of the two rounds of PPP lending, we funded 433 PPP loans totaling $29.0 million to both existing and new customers, and as of March 31, 2022, we had no PPP loans remaining on the books. Our team has done an excellent job replacing PPP loans with new loan originations, and we anticipate this trend to continue with strong demand for commercial and industrial loans and non-owner occupied commercial real estate loans.”
Total deposits increased 13.8% to $776.7 million at March 31, 2022, compared to $682.6 million a year ago and increased 7.0% compared to $726.2 million at December 31, 2021. Noninterest bearing deposits increased 39.9% to $264.3 million at March 31, 2022, compared to $189.0 million a year ago. New customer relationships, primarily with low cost checking accounts, continue to account for a majority of the deposit growth year-over-year.
FHLB advances continue to decline, totaling $10.9 million at March 31, 2022, from $17.0 million at March 31, 2021. Total stockholders’ equity increased 3.7% to $78.0 million at March 31, 2022, from $75.2 million at March 31, 2021, and decreased 2.7% when compared to $80.2 million at December 31, 2021. Book value per common share was $78.61 at March 31, 2022, from $77.63 at March 31, 2021, and $80.77 at December 31, 2021.
Credit Quality
“We continue to be encouraged by the overall asset quality of our loan portfolio, and are working hard to maintain a moderate risk profile, during all credit cycles,” said Maland. Due to sound credit quality and a strong allowance for loan losses, the Company reported no provision for loan losses in the first quarter of 2022, the fourth quarter of 2021, or the first quarter of 2021.
Nonperforming loans totaled $114,000 at March 31, 2022. This compared to $221,000 in nonperforming loans at December 31, 2021, and no nonperforming loans at March 31, 2021. Nonperforming assets were $664,000 at March 31, 2022, compared to $932,000 at December 31, 2021, and no nonperforming assets at March 31, 2021. The increase year-over-year was primarily due to the addition of one single property added to Other Real Estate Owned during the fourth quarter of 2021.
Total nonperforming assets were 0.07% of total assets at March 31, 2022, 0.11% at December 31, 2021, and 0.00% at March 31, 2021.
The allowance for loan losses was $8.2 million , or 1.19% of total loans, at March 31, 2022, compared to $8.7 million , or 1.33% of total loans, at March 31, 2021. Net loan recoveries were $11,000 in the first quarter of 2022, compared to net loan charge-offs of $394,000 in the fourth quarter of 2021, and net loan recoveries of $10,000 in the first quarter of 2021.
Capital
The Bank’s capital ratios continued to exceed regulatory “well-capitalized” requirements, with a Tier 1 leverage ratio estimate of 10.48% , Common equity Tier 1 capital ratio of 11.88% , Tier 1 risk-based capital ratio of 11.88% and Total capital ratio of 12.96% , at March 31, 2022.
About White River Bancshares Company
White River Bancshares Company is the single bank holding company for Signature Bank of Arkansas, headquartered in Fayetteville, Arkansas. The Bank has locations in Fayetteville, Springdale, Bentonville, Rogers, Brinkley, Harrison and Jonesboro, Arkansas. Founded in 2005, Signature Bank of Arkansas provides a full line of financial services to small businesses, families and farms. White River Bancshares Company (OTCQX: WRIV), trades on the OTCQX® Best Market.
About the Region
White River Bancshares Company is located in thriving Northwest Arkansas in the Fayetteville-Springdale-Rogers MSA. The region is home to the corporate headquarters for Walmart Stores Inc, Sam’s Club, Tyson Foods, Simmons Foods, and J.B. Hunt Transport. Hundreds of other market-leading companies including Procter & Gamble, Johnson & Johnson, Coca-Cola and Rubbermaid maintain offices in the region in order to maintain their relationships with the locally-based Fortune 500 companies. Northwest Arkansas is also home to the state’s flagship public educational institution, The University of Arkansas and its Sam M. Walton College of Business. The region has seen significant growth in its medical and arts infrastructures with the continued expansion of Washington Regional Medical System, Northwest Medical System, Mercy Health System of Northwest Arkansas and Arkansas Children’s Hospital Northwest. Crystal Bridges Museum of American Art and the Walton Arts Center have led the expansion of the arts. Northwest Arkansas has been repeatedly recognized in recent years as one of the best places to live in the country and remains one of the nation’s fastest-growing regions.
Recently, the Company has expanded into Northeast Arkansas, with new markets in Jonesboro and Harrison. Jonesboro, located in Craighead County, is a city located on Crowley's Ridge in the northeastern corner of Arkansas. It is the home of Arkansas State University and the cultural and economic center of Northeast Arkansas. Jonesboro also houses the region’s hospital network. U.S. Steel Corp. announced in January 2022 that it would locate a new $3 billion steel factory in Northeast Arkansas in Osceola, a move expected to create 900 jobs with an average pay over $100,000 annually, making it the largest capital investment project in Arkansas history. Dubbed “Project Blueprint,” the steel mill will begin construction in early 2022. Harrison sits below Branson, Missouri, which is a family tourist destination and outdoor recreation, and is well known as an entertainment destination.
The Company currently operates two markets in Washington County, two markets in Benton County, two markets in Monroe County, one market in Boone County and one market in Craighead County.
The housing market in Washington and Benton counties remains robust. According to the Northwest Multiple Listing Service, the average home in Washington County sold for $348,000 , up 28.2% in February 2022, compared to a year ago, with an average of 76 days on the market. For Benton County, the average house sold for $363,000 , up 12.9% from a year ago with an average of 69 days on the market.
Washington County’s population is projected to grow 4.52% from 2022 through 2027, and median household income is projected to increase by 8.35% during the same time frame. Benton County’s population is projected to grow 5.89% from 2022 through 2027, and median household income is projected to increase by 11.08% . Monroe County’s population is projected to decrease by 7.25% from 2022 through 2027 and median household income is projected to increase by 11.05% . Boone County’s population is projected to grow 0.37% from 2022 through 2027 and median household income is projected to increase by 12.48% . Craighead County’s population is projected to grow 4.13% from2022 through 2027, and the median household income is projected to increase by 4.13% .
Sources:
http://www.nwarealtors.org/market-statistics/
Forward Looking Statements
This press release contains statements about future events. These forward-looking statements, which are based on certain assumptions of management of the Company and the Bank and describe our future plans, strategies and expectations, can generally be identified by use of forward-looking terminology such as “may,” “will,” “believe,” “plan,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions or the negative of those terms. Our ability to predict results of future events and the actual effect of future plans or strategies are inherently uncertain and actual results may differ materially from those predicted in such forward-looking statements. Factors that could have a material adverse effect on our operations and future prospects or that could affect the outcome of such forward-looking statements include, but are not limited to, changes in interest rates; the economic health of the local real estate market; general economic conditions; credit deterioration in our loan portfolio that would cause us to increase our allowance for loan losses; legislative or regulatory changes; technological developments; monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of our loan and securities portfolios; demand for loan products in our market areas; deposit flows and costs of capital; competition; retention and recruitment of qualified personnel; demand for financial services in our market areas; and changes in accounting principles, policies, and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. The Company does not undertake and specifically declines any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
WHITE RIVER BANCSHARES COMPANY CONSOLIDATED BALANCE SHEETS March 31, 2022, December 31, 2021 and March 31, 2021 UNAUDITED March 31, 2022 December 31, 2021 March 31, 2021 ASSETS Cash and due from banks $ 89,878,824 $ 45,693,588 $ 60,216,957 Federal funds sold 387,305 230,523 573,134 Total cash and cash equivalents 90,266,129 45,924,111 60,790,091 Investment securities 85,467,563 80,596,752 68,937,591 Loans held for sale 1,071,950 2,737,798 7,782,522 Loans, net of allowance for loan losses 680,309,888 685,383,789 634,992,334 Premises and equipment, net 27,647,249 26,902,610 24,669,345 Foreclosed assets held for sale 550,100 711,100 100 Accrued interest receivable 2,122,175 2,451,610 1,883,499 Deferred income taxes 2,907,803 1,967,775 1,848,883 Other investments 3,201,021 2,826,485 2,894,085 Other assets 2,085,714 2,453,776 2,161,705 $ 895,629,592 $ 851,955,806 $ 805,960,155 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Demand deposits - non-interest bearing $ 264,274,031 $ 231,800,711 $ 188,958,889 - interest bearing 301,469,500 284,979,694 253,269,377 Savings deposits 26,468,788 25,556,108 22,126,159 Time deposits - under $250M 93,163,512 96,755,986 116,989,664 - $250M and over 91,292,242 87,093,241 101,253,092 Total deposits 776,668,073 726,185,740 682,597,181 Federal Home Loan Bank advances 10,933,627 12,264,849 16,950,930 Notes payable 10,804,347 10,798,035 10,779,101 Accrued interest payable 305,509 175,835 425,731 Other liabilities 18,917,083 22,378,553 19,982,625 Total liabilities 817,628,639 771,803,012 730,735,568 Stockholders' equity: Common stock 10,012 10,072 9,763 Surplus 88,767,186 88,475,229 88,082,809 Accumulated deficit (6,833,041 ) (7,907,902 ) (12,921,378 ) Treasury stock, at cost (563,441 ) (563,128 ) (431,865 ) Accumulated other comprehensive (loss) income (3,379,763 ) 138,523 485,258 Total stockholders' equity 78,000,953 80,152,794 75,224,587 $ 895,629,592 $ 851,955,806 $ 805,960,155
WHITE RIVER BANCSHARES COMPANY CONSOLIDATED STATEMENTS OF INCOME For the three months ended March 31, 2022, December 31, 2021 and March 31, 2021 For the Three Months Ended UNAUDITED March 31, 2022 December 31, 2021 March 31, 2021 Interest income: Loans, including fees $ 7,782,702 $ 7,997,979 $ 7,858,931 Investment securities 381,916 365,232 365,802 Federal funds sold and other 26,019 12,300 5,383 Total interest income 8,190,637 8,375,511 8,230,116 Interest expense: Deposits 660,966 734,370 1,002,824 Federal Home Loan Bank advances 66,905 83,504 103,749 Notes payable 167,874 167,874 167,874 Federal funds purchased and other - - 2,109 Total interest expense 895,745 985,748 1,276,556 Net interest income 7,294,892 7,389,763 6,953,560 Provision for loan losses - - - Net interest income after provision for loan losses 7,294,892 7,389,763 6,953,560 Non-interest income: Service charges and fees on deposits 130,114 133,424 126,264 Wealth management fee income 624,926 584,577 506,039 Secondary market fee income 402,249 668,751 921,857 Loss on sales and write-downs of foreclosed assets (161,000 ) (194,831 ) - Other 344,150 335,564 181,328 Total non-interest income 1,340,439 1,527,485 1,735,488 Non-interest expense: Salaries and benefits 4,639,448 4,684,822 4,032,581 Occupancy and equipment 762,869 708,879 644,033 Data processing 740,013 462,838 586,399 Marketing and business development 289,693 328,585 69,808 Professional services 465,147 396,947 936,803 Other 311,094 291,099 343,918 Total non-interest expense 7,208,264 6,873,170 6,613,542 Income before income taxes 1,427,067 2,044,078 2,075,506 Income tax provision 352,206 548,710 522,681 Net income $ 1,074,861 $ 1,495,368 $ 1,552,825 Basic earnings per common share $ 1.08 $ 1.51 $ 1.60 Diluted earnings per common share $ 1.08 $ 1.50 $ 1.60
White River Bancshares Company Selected Financial Data Three Months Ended UNAUDITED March 31, 2022 December 31, 2021 March 31, 2021 Selected Financial Condition Data: End of Period Balances Assets $ 895,629,592 $ 851,955,806 $ 805,960,155 Investment Securities 85,467,563 80,596,752 68,937,591 Loans, gross 689,616,825 696,346,007 651,470,670 Allowance for Loan Losses 8,234,987 8,224,420 8,695,814 Deposits 776,668,073 726,185,740 682,597,181 FHLB Advances 10,933,627 12,264,849 16,950,930 Notes Payable 10,804,347 10,798,035 10,779,101 Common Shareholders' Equity 78,000,953 80,152,794 75,224,587 Selected Financial Condition Data: Average Balances Assets $ 861,905,507 $ 849,391,347 $ 768,712,888 Earning Assets 826,588,630 812,165,799 738,370,954 Investment Securities 82,616,501 83,364,483 70,606,315 Loans, gross 689,976,579 690,968,859 639,404,515 Deposits 737,887,705 719,642,908 639,422,194 FHLB Advances & Other Borrowings 12,183,570 15,674,909 22,992,223 Notes Payable 10,801,238 10,795,497 10,775,151 Common Shareholders' Equity 79,758,478 79,246,636 74,657,832 Selected Operating Results: Interest Income $ 8,190,637 $ 8,375,511 $ 8,230,116 Interest Expense 895,745 985,748 1,276,556 Net Interest Income 7,294,892 7,389,763 6,953,560 Provision for Loan Losses - - - Net Interest Income After Provision for Loan Losses 7,294,892 7,389,763 6,953,560 Noninterest Income 1,340,439 1,527,485 1,735,488 Noninterest Expense 7,208,264 6,873,170 6,613,542 Income Before Income Taxes 1,427,067 2,044,078 2,075,506 Income Tax Provision 352,206 548,710 522,681 Net Income $ 1,074,861 $ 1,495,368 $ 1,552,825 Basic Net Income per Common Share $ 1.08 $ 1.51 $ 1.60 Dividends Paid per Common Share - - - Book Value Per Common Share 78.61 80.77 77.63 Common Shares Outstanding 992,297 992,300 969,065 Basic Weighted Average Common Shares Outstanding 992,299 992,965 969,065 Selected Ratios: Return on Average Assets 0.51 % 0.70 % 0.82 % Return on Average Common Shareholders' Equity 5.47 % 7.49 % 8.44 % Average Common Shareholders' Equity to Average Assets 9.25 % 9.33 % 9.71 % Net Interest Margin 3.58 % 3.61 % 3.82 % Efficiency 83.47 % 77.08 % 76.11 % Selected Asset Quality: Net (Recoveries) Charge-offs $ (10,567 ) $ 393,795 $ (9,731 ) Classified Assets 1,080,354 5,434,111 4,538,064 Nonperforming Loans 113,616 220,616 - Nonperforming Assets 663,716 932,326 100 Total Nonperforming Loans to Total Loans 0.02 % 0.03 % 0.00 % Total Nonperforming Loans to Total Assets 0.01 % 0.03 % 0.00 % Total Nonperforming Assets to Total Assets 0.07 % 0.11 % 0.00 %
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