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
10/14/2021 - 09:00 AM
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 %