White River Capital, Inc. (NYSE Amex: RVR) (“White River”) today announced net income for the third quarter 2011 of $2.9 million, or $0.79 per diluted share, compared to third quarter 2010 net income of $1.8 million, or $0.48 per diluted share. The net income results for the third quarter of 2011 are due to the following:
  • $4.6 million of earnings from operations contributed by the Coastal Credit LLC (“Coastal Credit”) subsidiary, and
  • $0.3 million of operating expenses at the holding company, and income tax expense of $1.4 million.

Martin Szumski, Chief Financial Officer, stated, "Coastal Credit’s 30+ day delinquency declined to 1.6% at September 30, 2011 compared to 1.8% at December 31, 2010 and 1.9% at September 30, 2010. Coastal Credit’s allowance for loan losses as a percentage of finance receivables, net of unearned finance charges was 5.83% at September 30, 2011 compared to 6.92% at December 31, 2010.”

Mr. Szumski continued, "Shareholders’ equity was $84.5 million at quarter end or $23.93 per common share.”

DIVIDEND

As previously announced, White River paid a quarterly dividend of 25 cents per share on its common stock on August 25, 2011.

On October 28, 2011, White River announced that its Board of Directors had declared a quarterly cash dividend of 25 cents per share on its common stock to be paid November 21, 2011 to shareholders of record on November 7, 2011.

STOCK REPURCHASE PROGRAM

On August 11, 2011, White River announced that its Board of Directors approved a new program to repurchase up to 250,000 shares of its outstanding common stock, from time to time and subject to market conditions, on the open market or in privately negotiated transactions. As of September 30, 2011, White River has repurchased 62,829 shares of its outstanding common stock under this new program at an average price per share of $19.40.

In addition, White River has completed repurchases under its prior stock repurchase program originally authorized in October 2008 and reauthorized in November 2009. Under this program, White River was authorized to repurchase up to 500,000 shares of its outstanding common stock, from time to time and subject to market conditions, on the open market or in privately negotiated transactions. As of September 30, 2011, White River has repurchased all 500,000 shares under this program at an average price per share of $15.34.

PROVISION FOR LOAN LOSSES

The consolidated provision for loan losses was $0.9 million compared to $1.6 million for the quarters ended September 30, 2011 and 2010, respectively.

The following table documents the quarterly provision, allowance for loan losses and net charge offs at Coastal Credit for the third quarter 2009 through the third quarter 2011:

 

Quarter
     

Provision

(in millions)
       

Allowance for LoanLosses as a Percent ofFinance Receivables
       

Annualized Net Charge-offsas a Percent ofFinance Receivables
3rd 2011 $0.9 5.83% 2.81%
2nd 2011 $0.7 6.07% 2.99%
1st 2011 $1.1 6.59% 4.14%
4th 2010 $1.3 6.92% 5.40%
3rd 2010 $1.6 7.19% 5.21%
2nd 2010 $1.6 7.33% 5.54%
1st 2010 $1.9 7.42% 6.27%
4th 2009 $2.3 7.44% 7.40%
3rd 2009 $2.2 7.27% 7.62%
 

This provision for loan losses at Coastal Credit reflects management’s assessment of the reserves necessary for the current credit environment.

CREDIT QUALITY

The following tables set forth delinquency, charge-off and allowance levels for the Coastal Credit portfolio:
Coastal Credit LLC
Delinquency Rates Experienced - Finance Receivables
(in thousands except percentages)
                     
September 30, December 31, September 30,
2011 2010 2010
$ % $ % $ %
 
Finance receivables - gross balance $ 133,928 $ 119,788 $ 118,898
 
Delinquencies:
30-59 days $ 1,225 0.9 % $ 1,209 1.0 % $ 1,025 0.9 %
60-89 days 512 0.4 % 538 0.4 % 552 0.5 %
90+ days   442 0.3 %   354 0.3 %   630 0.5 %
Total delinquencies $ 2,179 1.6 % $ 2,101 1.8 % $ 2,207 1.9 %
 
               
 
Coastal Credit LLC
Allowance for Loan Losses - Finance Receivables
(in thousands except percentages)
 

Quarters Ended September 30,

Nine Months Ended September 30,
2011 2010 2011 2010
Balance at beginning of period $ 7,703 $ 8,345 $ 8,153 $ 8,085
Charge-offs (1,614 ) (2,062 ) (5,051 ) (6,453 )
Recoveries 686 539 1,924 1,613
Provision for loan losses   928     1,583     2,677     5,160  
 
Balance at the end of the period $ 7,703   $ 8,405   $ 7,703   $ 8,405  
 
Finance receivables, net of unearned finance charges $ 132,070 $ 116,944 $ 132,070 $ 116,944
 
Allowance for loan losses as a percent of finance receivables, net of unearned finance charges 5.83 % 7.19 % 5.83 % 7.19 %
 
Annualized net charge-offs as a percent of finance receivables, net of unearned finance charges 2.81 % 5.21 % 3.16 % 5.52 %
 
Allowance for loan losses as a percent of annualized net charge-offs 207.52 % 137.97 % 184.75 % 130.24 %
 
 

ABOUT WHITE RIVER AND COASTAL CREDIT

Founded in 2004, White River is the holding company for Coastal Credit LLC.

Coastal Credit LLC is a specialized auto finance company, headquartered in Virginia Beach, Virginia, engaged in acquiring sub-prime auto receivables from both franchised and independent automobile dealers which have entered into contracts with purchasers of typically used, but some new, cars and light trucks. Coastal Credit then services the receivables it acquires. Coastal Credit commenced operations in Virginia in 1987 and conducts business in 26 states – California, Colorado, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Nevada, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia and Washington – through its 16 branch locations. The Coastal Credit receivables portfolio, net of unearned finance charges, was $132.1 million at September 30, 2011.

ADDITIONAL INFORMATION AND WHERE TO FIND IT

Additional information about White River is available at White River’s web site located at: www.WhiteRiverCap.com.

This site includes financial highlights, stock information, public filings with the U.S. Securities and Exchange Commission (the "SEC"), and corporate governance documents.

The SEC public filings available for review include but are not limited to:
  • its Annual Report on Form 10-K for the year ended December 31, 2010,
  • its Proxy Statement on Schedule 14A dated April 1, 2011, and
  • its Quarterly Report on Form 10-Q for the quarter ended June 30, 2011.

White River’s public filings with the SEC can also be viewed on the SEC’s website at: www.sec.gov.

FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking information about White River that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Such information includes forward-looking statements above regarding the future financial performance of Coastal Credit and also White River's prospects for future earnings, earnings volatility and the likelihood of recognizing future value from its deferred tax assets. All statements other than statements of historical fact are forward-looking statements. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of White River. White River cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, implied or projected by, such forward-looking statements. Risks and uncertainties include, but are not limited to:
  • losses and prepayments on our receivable portfolios;
  • general economic, market, or business conditions;
  • changes in interest rates, the cost of funds, and demand for our financial services;
  • changes in our competitive position;
  • our ability to manage growth and integrate acquired businesses;
  • the opportunities that may be presented to and pursued by us;
  • competitive actions by other companies;
  • changes in laws or regulations;
  • changes in the policies of federal or state regulators and agencies.

If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, White River's results could differ materially from those expressed in, implied or projected by such forward-looking statements. White River assumes no obligation to update such forward-looking statements.
           
 
WHITE RIVER CAPITAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
 
ASSETS September 30, 2011 December 31, 2010
 
Cash and cash equivalents $ 2,500 $ 3,287
Finance receivables—net 110,965 96,723
Deferred tax assets—net 37,576 40,914
Other assets   951     684  
 
TOTAL $ 151,992   $ 141,608  
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
LIABILITIES:
Line of credit $ 65,000 $ 56,000
Accrued interest 159 130
Other payables and accrued expenses   2,293     2,449  
 
Total liabilities   67,452     58,579  
 
COMMITMENTS AND CONTINGENCIES
 
SHAREHOLDERS’ EQUITY:

Preferred Stock, without par value, authorized 3,000,000 shares; none issued and outstanding
- -

Common Stock, without par value, authorized 20,000,000 shares; 3,532,480 and 3,706,759 issued and outstanding at September 30, 2011 and December 31, 2010, respectively
174,163 177,403
Accumulated deficit   (89,623 )   (94,374 )
 
Total shareholders’ equity   84,540     83,029  
 
TOTAL $ 151,992   $ 141,608  
 
           
 
WHITE RIVER CAPITAL, INC. AND SUBSIDIARIES
Book Value per Share and Equity Ratios
(Unaudited)
(in thousands except share related values and percents)
 
September 30, December 31,
2011 2010
 
Total shareholders’ equity $ 84,540 $ 83,029
Assets $ 151,992 $ 141,608
Shares outstanding 3,532,480 3,706,759
 
Book value per share $ 23.93 $ 22.40
Equity/ assets 55.6 % 58.6 %
 
 
 
WHITE RIVER CAPITAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share and share amounts)
               

Quarters Ended September 30,

Nine Months Ended September 30,
2011 2010 2011 2010
INTEREST:
Interest on receivables $ 9,037 $ 8,382 $ 26,082 $ 24,333
Accretion and other interest 1 1 2 15
 
Total interest income 9,038 8,383 26,084 24,348
 
Interest expense (471) (382) (1,385) (1,098)
 
Net interest margin 8,567 8,001 24,699 23,250
 
Provision for loan losses (928) (1,587) (2,683) (5,088)
 
Net interest margin after provision for loan losses 7,639 6,414 22,016 18,162
 
OTHER REVENUES (EXPENSES):
Salaries and benefits (2,312) (2,157) (6,947) (6,470)
Other operating expenses (1,005) (1,081) (3,427) (3,526)
Change in fair market valuation of creditor notes payable - 46 43 135
Gain from deficiency account sale - - - 37
Other expense (88) (67) (313) (118)
 
Total other expenses (3,405) (3,259) (10,644) (9,942)
 
INCOME BEFORE INCOME TAXES 4,234 3,155 11,372 8,220
 
INCOME TAX EXPENSE (1,383) (1,364) (3,888) (3,106)
 
NET INCOME $ 2,851 $ 1,791 $ 7,484 $ 5,114
 
NET INCOME PER COMMON SHARE (BASIC) $ 0.79 $ 0.48 $ 2.06 $ 1.32
 
NET INCOME PER COMMON SHARE (DILUTED) $ 0.79 $ 0.48 $ 2.06 $ 1.32
 

BASIC WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
3,588,898 3,756,059 3,630,041 3,871,051
 

DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
3,592,497 3,758,098 3,635,438 3,872,621
 

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