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FAYETTEVILLE, Ark., March 15, 2019 (GLOBE NEWSWIRE) -- White River Bancshares Company (OTCQX: WRIV), (the 'Company') the holding company for Signature Bank of Arkansas (the 'Bank'), today reported that growing revenues and an expanding net interest margin contributed to fourth quarter net income of $928,000, or $0.95 per diluted share. This compares to a net loss of $132,000, or $0.16 loss per diluted share in the fourth quarter of 2017, which included an additional tax expense of $911,997 from a one-time write-down of its deferred tax assets and liabilities due to the impact of the Tax Cuts and Jobs Act of 2017. For the full year ended December 31, 2018, net income increased to $4.6 million, or $4.74 per diluted share, compared to $3.0 million, or $3.67 per diluted share, in 2017.
Financial Highlights:
Annual net income of $4.6 million, or $4.74 per diluted share. Quarterly net income of $928,000, or $0.95 per diluted share. Quarterly net interest margin ('NIM') expanded by seven basis points to 3.87% compared to the fourth quarter a year ago. Net loans of $504.2 million at December 31, 2018, an increase of 3.28% from December 31, 2017. Total deposits of $510.11 million at December 31, 2018, an increase of 6.70% from December 31, 2017. Non-performing assets at December 31, 2018 improved to 1.26% of total assets from 1.94% a year ago. Book value per common share of $64.43 at December 31, 2018. Total risk-based capital ratio of 15.18% and Tier 1 leverage ratio of 11.86% for the Bank at December 31, 2018. 'We reported strong fourth quarter and year end operating results, delivering steady loan and deposit growth, while expanding our net interest income,' said Gary Head, President and Chief Executive Officer. 'Looking forward, we remain focused on growing low cost deposits, diversifying our loan portfolio and improving operating efficiencies across the board. The economic fundamentals in our market are strong and we remain optimistic about the upcoming year. At the same time, we will continue to execute upon our commitment to improve liquidity and to increase our franchise value.'
'As previously announced at the end of 2018, the Company shares qualified to trade on the OTCQX Best Markets,' added Head. 'This enables us to improve communications and tell our story through a public medium and provides new and existing shareholders with access to a public trading market for our shares.'
Income Statement
The Company's net interest margin improved 7 basis points to 3.87% in the fourth quarter of 2018, compared to 3.80% in fourth quarter a year ago. For the full year 2018, the net interest margin was 3.73% compared to 3.92% in 2017.
Fourth quarter net interest income increased by 7.75% to $5.69 million, from $5.28 million in the fourth quarter of 2017. Total interest income increased by 8.61% to $7.32 million in the fourth quarter of 2018 from $6.74 million during the like period in 2017. Total interest expense increased by 11.69% to $1.63 million in the fourth quarter of 2018, from $1.46 million during the same period in 2017 largely as a result of the increase in interest-bearing deposits.
For the year ended December 31, 2018, net interest income increased by 7.79% to $22.12 million from $20.52 million in 2017. Total interest income increased by 10.99% to $28.53 million in 2018, from $25.70 million in 2017; total interest expense increased by 23.66% to $6.42 million in 2018 from $5.19 million in 2017, primarily due to the increase in interest bearing deposits.
Non-interest income was ($567,806) in the fourth quarter of 2018 and $774,121 in the fourth quarter of 2017, a decrease of 173.35%. The decrease was largely a result of a $1.94 million increase in loss on sales and write-downs of foreclosed assets during the fourth quarter of 2018 over the same period in 2017. For the year ended December 31, 2018, non-interest income decreased 9.42% to $2.38 million compared to $2.63 million in 2017. The decrease was mainly a result of a $1.03 million increase in loss on sales and write-downs of foreclosed assets over the same period.
Non-interest expense decreased 3.28% to $4.62 million in the fourth quarter of 2018 compared to $4.78 million in the fourth quarter of 2017. Salaries and benefits, the largest component of non-interest expense, decreased by $117,800, or 3.78%, over the like period. For the year ended December 31, 2018, non-interest expense was $19.17 million compared to $18.06 million in 2017, an increase of 6.14%. Salaries and benefits increased by $640,239, or 5.45%, over the same period.
Balance Sheet Review
Total assets increased by 3.58% to $613.69 million at December 31, 2018 from $592.46 million at December 31, 2017. Cash and cash equivalents increased to $29.05 million at December 31, 2018 from $27.95 million a year ago. Investment securities increased to $53.94 million at December 31, 2018 from $47.77 million at December 31, 2017.
Loans, net of allowance for loan losses, increased 3.28% to $504.16 million at December 31, 2018 from $488.13 million at December 31, 2017.
Total deposits increased 6.70% to $510.11 million at December 31, 2018 from $478.06 million at December 31, 2017. Non-interest-bearing deposits increased to $99.94 million at December 31, 2018 from $89.27 million a year ago, and interest-bearing deposits increased to $410.17 million at year-end from $388.78 million a year ago.
FHLB advances decreased to $25.37 million at December 31, 2018 from $38.26 million at December 31, 2017. Notes payable decreased to $12.09 million from $14.63 million over the same period.
Total stockholders' equity increased to $62.83 million at December 31, 2018 from $58.54 million at December 31, 2017. Book value per common share increased to $64.43 at December 31, 2018 from $60.97 at December 31, 2017.
Credit Quality
'We had net loan recoveries during the quarter, and as a result we recorded a negative provision for loan losses of $750,000 in the fourth quarter,' added Head. 'This compares to no provision for loan losses in the fourth quarter of 2017.' Net loan recoveries were $408,930 in the fourth quarter compared to net charge offs of $180,425 in the fourth quarter a year ago.
For the full year, the negative provision for loan losses was $750,000, compared to a negative provision of $1.35 million in 2017. Net loan recoveries totaled $493,788 for 2018 compared to net loan recoveries of $2.25 million in 2017.
There were no non-performing loans on the books at the end of 2018, compared to $575,534 in non-performing loans at December 31, 2017. Foreclosed assets held for sale decreased to $7.73 million at December 31, 2018 from $10.93 million at December 31, 2017. Total non-performing assets improved to 1.26% of total assets at year-end, compared to 1.94% of total assets one year ago.
The allowance for loan losses was $6.97 million, or 1.36% of total loans, at December 31, 2018 as compared to $7.22 million, or 1.46% of total loans, at December 31, 2017.
Capital
The Bank's capital ratios continued to exceed regulatory 'well-capitalized' requirements, with a Tier 1 leverage ratio of 11.86%, Common equity tier 1 capital ratio of 13.92%, Tier 1 capital ratio of 13.92% and Total capital ratio of 15.18% at December 31, 2018.
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, and Brinkley, Arkansas, with plans to open a new location in Rogers, Arkansas in the second quarter of 2019. 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 The Company is located in Northwest Arkansas in the Fayetteville-Springdale-Rogers MSA. Our region is the corporate headquarters for Walmart Stores Inc., Tyson Foods, Simmons Foods, and J.B. Hunt Transport. Hundreds of companies, including Procter & Gamble, Johnson & Johnson, Coca-Cola and Rubbermaid, have offices in order to manage their relationships with the locally based Fortune 500 companies. Northwest Arkansas is also the home of the University of Arkansas, the state's flagship public institution including the Sam M. Walton College of Business. Northwest Arkansas has also seen significant growth in its medical and arts infrastructures with Washington Regional Medical System, Northwest Medical System, Mercy Health System of Northwest Arkansas and Arkansas Children's Hospital Northwest expanding throughout the area in recent years. Crystal Bridges Museum, an American art museum and the Walton Arts Center, have led the arts expansion throughout the region. Northwest Arkansas has ranked among the nation's fastest-growing regions in recent years.
Northwest Arkansas has an unemployment rate of 2.7% compared to the national average of 3.9%. Northwest Arkansas has seen its job market increase by 0.7% over the last year. Future job growth over the next ten years is predicted to be 42.2%, which is higher than the US average of 33.5%. https://www.forbes.com/places/ar/fayetteville/
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
December 31, 2018 and December 31, 2017
UNAUDITED 2018 2017
ASSETS
Cash and due from banks $ 27,944,329 $ 27,453,943
Federal funds sold 1,101,025 495,867
Total cash and cash equivalents 29,045,354 27,949,810
Investment securities 53,940,001 47,765,626
Loans held for sale 494,937 217,000
Loans, net of allowance for loan losses 504,160,307 488,133,143
Premises and equipment, net 8,532,146 8,427,051
Foreclosed assets held for sale 7,733,440 10,929,172
Accrued interest receivable 2,511,191 2,061,910
Deferred income taxes 2,539,052 2,310,482
Other investments 2,743,885 2,685,085
Other assets 1,992,144 1,980,609
$ 613,692,457 $ 592,459,888
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits - non-interest bearing $ 99,939,633 $ 89,274,500
- interest bearing 131,535,024 116,948,463
Savings deposits 11,856,239 10,364,704
Time deposits - under $250M 168,979,360 173,042,775
- $250M and over 97,799,817 88,428,825
Total deposits 510,110,073 478,059,267
Federal Home Loan Bank advances 25,371,095 38,256,778
Note payable 12,086,880 14,630,430
Accrued interest payable 587,056 488,276
Other liabilities 2,709,944 2,486,227
Total liabilities 550,865,048 533,920,978
Stockholders' equity:
Preferred stock - 1,389
Common stock 9,763 8,224
Surplus 87,129,011 86,974,340
Accumulated deficit (23,440,979 ) (28,010,723 )
Treasury stock, at cost (49,888 ) (49,888 )
Accumulated other comprehensive loss (820,498 ) (384,432 )
Total stockholders' equity 62,827,409 58,538,910
$ 613,692,457 $ 592,459,888
WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended December 31, 2018 and December 31, 2017
UNAUDITED 2018 2017
Interest income:
Loans, including fees $ 6,882,662 $ 6,456,141
Investment securities 340,926 267,748
Federal funds sold and other 96,446 16,103
Total interest income 7,320,034 6,739,992
Interest expense:
Deposits 1,350,383 1,008,970
Federal Home Loan Bank advances 123,371 190,840
Note payable 152,605 253,097
Federal funds purchased and other 225 3,369
Total interest expense 1,626,584 1,456,276
Net interest income 5,693,450 5,283,716
Provision for loan losses (750,000 ) -
Net interest income after provision for loan losses 6,443,450 5,283,716
Non-interest income:
Service charges and fees on deposits 198,929 201,659
Wealth management fee income 494,996 398,276
Secondary market fee income 137,998 251,740
Loss on sales and write-downs of foreclosed assets (2,150,000 ) (210,427 )
Other 750,271 132,873
Total non-interest income (567,806 ) 774,121
Non-interest expense:
Salaries and benefits 2,997,064 3,114,864
Occupancy and equipment 539,425 545,462
Data processing 302,157 252,790
Marketing and business development 60,411 145,270
Professional services 339,343 338,272
Other 385,946 384,725
Total non-interest expense 4,624,346 4,781,383
Income before income taxes 1,251,298 1,276,454
Income tax provision 323,094 1,408,717
Net income $ 928,204 $ (132,263 )
Basic earnings per common share $ 0.95 $ (0.16 )
Diluted earnings per common share $ 0.95 $ (0.16 )
WHITE RIVER BANCSHARES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the twelve months ended December 31, 2018 and December 31, 2017
UNAUDITED 2018 2017
Interest income:
Loans, including fees $ 26,798,021 $ 24,645,168
Investment securities 1,203,636 1,016,335
Federal funds sold and other 529,052 43,206
Total interest income 28,530,709 25,704,709
Interest expense:
Deposits 5,103,493 3,488,375
Federal Home Loan Bank advances 684,544 735,069
Note payable 618,219 953,533
Federal funds purchased and other 9,104 10,858
Total interest expense 6,415,360 5,187,835
Net interest income 22,115,349 20,516,874
Provision for loan losses (750,000 ) (1,350,000 )
Net interest income after provision for loan losses 22,865,349 21,866,874
Non-interest income:
Service charges and fees on deposits 815,192 778,392
Wealth management fee income 1,817,483 1,482,963
Secondary market fee income 844,252 1,099,284
Loss on sales and write-downs of foreclosed assets (2,263,067 ) (1,233,531 )
Other 1,170,993 505,663
Total non-interest income 2,384,853 2,632,771
Non-interest expense:
Salaries and benefits 12,381,845 11,741,606
Occupancy and equipment 2,151,760 2,167,014
Data processing 1,141,766 1,030,690
Marketing and business development 608,374 603,688
Professional services 1,486,845 1,114,975
Other 1,400,283 1,404,678
Total non-interest expense 19,170,873 18,062,651
Income before income taxes 6,079,329 6,436,994
Income tax provision 1,509,585 3,400,210
Net income $ 4,569,744 $ 3,036,784
Basic earnings per common share $ 5.02 $ 3.70
Diluted earnings per common share $ 4.74 $ 3.67
White River Bancshares Company Three months ended Twelve months ended
Selected Financial Data December December
UNAUDITED 2018 2017 2018 2017
Selected Financial Condition Data: End of Period Balances
Assets $ 613,692,457 $ 592,459,888 $ 613,692,457 $ 592,459,888
Investment Securities 53,940,001 47,765,626 53,940,001 47,765,626
Loans, gross 511,621,091 495,572,202 511,621,091 495,572,202
Allowance for Loan Losses 6,965,847 7,222,059 6,965,847 7,222,059
Deposits 510,110,073 478,059,267 510,110,073 478,059,267
FHLB Advances 25,371,095 38,256,778 25,371,095 38,256,778
Note Payable 12,086,880 14,630,430 12,086,880 14,630,430
Common Shareholders' Equity 62,827,409 50,072,555 62,827,409 50,072,555
Selected Financial Condition Data: Average Balances
Assets $ 608,170,038 $ 578,170,503 $ 616,986,136 $ 549,665,847
Earning Assets 584,124,950 552,284,894 592,555,362 523,063,332
Investment Securities 52,899,703 47,893,956 50,001,369 47,178,875
Loans, gross 511,124,646 491,143,513 511,428,854 463,984,519
Deposits 506,647,368 463,574,913 506,242,659 436,505,339
FHLB Advances 23,426,724 40,890,242 34,444,699 39,883,947
Note Payable 12,133,390 18,831,090 12,384,367 18,285,215
Common Shareholders' Equity 61,605,063 49,963,279 55,517,056 48,887,789
Selected Operating Results:
Interest Income $ 7,320,034 $ 6,739,992 $ 28,530,709 $ 25,704,709
Interest Expense 1,626,584 1,456,276 6,415,360 5,187,835
Net Interest Income 5,693,450 5,283,716 22,115,349 20,516,874
Provision for Loan Losses (750,000 ) - (750,000 ) (1,350,000 )
Net Interest Income After Provision for Loan Losses 6,443,450 5,283,716 22,865,349 21,866,874
Noninterest Income (567,806 ) 774,121 2,384,853 2,632,771
Noninterest Expense 4,624,346 4,781,383 19,170,873 18,062,651
Income Before Income Taxes 1,251,298 1,276,454 6,079,329 6,436,994
Income Tax Provision 323,094 1,408,717 1,509,585 3,400,210
Net Income $ 928,204 $ (132,263 ) $ 4,569,744 $ 3,036,784
Basic Net Income per Common Share $ 0.95 $ (0.16 ) $ 5.02 $ 3.70
Diluted Net Income per Common Share 0.95 (0.16 ) 4.74 3.67
Dividends Paid per Common Share - - - -
Book Value Per Common Share 64.43 60.97 64.43 60.97
Book Value Per Common Share-Diluted 64.43 60.97 64.43 60.97
Common Shares Outstanding 975,077 821,216 975,077 821,216
Diluted Common Shares Outstanding 975,079 960,077 975,082 960,077
Basic Weighted Average Common Shares Outstanding 975,077 821,216 909,526 821,216
Diluted Weighted Average Common Shares Outstanding 975,079 842,347 964,312 826,542
Selected Ratios:
Return on Average Assets 0.61 % -0.09 % 0.74 % 0.55 %
Return on Average Common Shareholders' Equity 5.98 % -1.05 % 8.23 % 5.89 %
Average Common Shareholders' Equity to Average Assets 10.13 % 8.64 % 9.00 % 8.89 %
Net Interest Margin 3.87 % 3.80 % 3.73 % 3.92 %
Efficiency 90.22 % 78.93 % 78.25 % 78.03 %
Selected Asset Quality:
Net (Recoveries) Charge-offs $ (408,930 ) $ 180,425 $ (493,788 ) $ (2,245,938 )
Classified Assets 8,021,842 11,691,707 8,021,842 11,691,707
Nonperforming Loans - 575,362 - 575,362
Nonperforming Assets 7,733,440 11,504,534 7,733,440 11,504,534
Total Nonperforming Loans to Total Loans 0.00 % 0.12 % 0.00 % 0.12 %
Total Nonperforming Loans to Total Assets 0.00 % 0.10 % 0.00 % 0.10 %
Total Nonperforming Assets to Total Assets 1.26 % 1.94 % 1.26 % 1.94 %
Scott Sandlin 479-684-3754
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