White River Capital, Inc. Announces Results for the Second Quarter 2007

INDIANAPOLIS--White River Capital, Inc. (AMEX: RVR) (“White River”) today announced net income for the second quarter 2007 was $1.7 million, or $0.42 per diluted share, compared to second quarter 2006 net income of $3.6 million, or $0.94 per diluted share. The results for the second quarter of 2007 are due to the following:

• $2.2 million of earnings from operations contributed by the Coastal Credit LLC (“Coastal Credit”) subsidiary,
• $1.3 million of earnings from operations contributed by the Union Acceptance Company LLC (“UAC”) subsidiary,
• $(0.9) million of interest and expenses at the holding company, and
• an income tax expense of $(0.9) million.

Net income for the six months ended June 30, 2007, was $8.7 million, or $2.20 per diluted share, compared to net income of $4.8 million, or $1.23 per diluted share, for the same period of 2006.

Mark Ruh, President and Chief Operating Officer, stated, "Coastal Credit once again had an excellent quarter, although the Coastal Credit portfolio has shown slight increases in delinquencies and charge-offs consistent with industry trends, while the UAC receivable portfolio sustained its orderly liquidation.” Mr. Ruh continued, “This liquidation of the UAC receivable portfolio continues to generate significant income and cash flow and we expect this to continue well into 2008. However, the variable nature of earnings recognition at UAC will continue to result in volatile consolidated earnings for White River until at least the fourth quarter of 2007.”

Martin Szumski, Chief Financial Officer, commented, "White River now has equity of $111.3 million, and tangible equity is now $76.6 million. These values translate into a book value per share of $28.96 and a tangible book value per share of $19.93, while our tangible equity is now 49.82% of tangible assets.” Mr. Szumski continued, “At the end of this quarter, White River had $5.9 million in cash and cash equivalents and $27.7 million in line of credit availability. This gives White River $33.6 million of cash at its disposal for both future opportunities and to pay company obligations.”

ACCRETION AND OTHER INTEREST

Accretion and other interest decreased to $1.0 million compared to $2.7 million for the second quarters of 2007 and 2006, respectively. It also decreased compared to $10.3 million during the first quarter 2007. This decrease during the second quarter 2007 is the result of volatility in UAC’s recognition of accretion income in anticipation of cash being released, or cash actually being released, from the UAC Master Trust account.

RECOVERY (PROVISION) FOR ESTIMATED CREDIT LOSSES

Provision for estimated credit losses was $(862,000) compared to a recovery for estimated credit losses of $523,000 for the quarters ended June 30, 2007 and 2006, respectively.

The provision at Coastal Credit for the second quarters of 2007 and 2006 was $(1.7) million and $(1.0) million, respectively. During both quarters ended June 30, 2007 and 2006, UAC offset these provisions for estimated credit losses with recoveries. These recoveries were due to the stable performance of UAC’s contracting securitized finance receivable portfolio during these periods.

CHARGE TO MASTER TRUST, NET

The charge to Master Trust, net was $429,000 for the second quarter 2007 compared to $5.6 million for the second quarter 2006.

Charge to Master Trust, net is an expense related to future transfers of funds to the Master Trust from on balance sheet securitized finance receivables of UAC. As the performance of UAC’s on balance sheet securitized finance receivables has improved and stabilized, there has been a recovery for estimated credit losses, and interest income has increased. However, as the UAC portfolio has significantly decreased in size, the amounts related to future transfers of funds owed to the Master Trust have decreased resulting in a decrease in the charge to Master Trust, net.

INCOME TAX BENEFIT (EXPENSE)

White River recognized a $(925,000) income tax expense during the second quarter 2007 compared to a $439,000 income tax benefit during the second quarter 2006. Prior to the fourth quarter 2006, White River calculated the deferred tax asset valuation allowance based on the estimated taxable income for the future five-year period and made quarterly adjustments as required. These adjustments were reflected as income tax benefits. However, during the fourth quarter 2006, in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, White River determined it was “more likely than not” that it would utilize the majority of its deferred tax asset as a result of the successful integration of Coastal Credit, the strong performance of the liquidating UAC portfolio and the sound cash position of the holding company. Thus, the majority of the deferred tax asset valuation allowance was removed during the fourth quarter 2006 and a $37.8 million income tax benefit was realized. There remains a $1.6 million valuation allowance on the deferred tax asset primarily related to state tax net operating losses. Because of this recognition of the majority of the deferred tax asset, beginning with the first quarter 2007 and in the future when pre-tax income is generated, income tax expense will be recognized on White River’s statement of operations.

OTHER ASSETS

Other assets on the balance sheet decreased to $2.2 million on June 30, 2007 from $12.1 million on March 31, 2007. This decrease during the second quarter 2007 was the result of the receipt of $10.3 million in restricted cash from the UAC Master Trust during the second quarter 2007.

CREDIT QUALITY

The following tables set forth delinquency, charge-off and allowance levels for the Coastal Credit portfolio and the UAC securitized receivables:

Coastal Credit LLC
Delinquency Rates Experienced - Finance Receivables
(in thousands except percentages)
	June 30,			December 31,
	2007			2006
Finance receivables - gross balance	$	106,027		$	104,399
Delinquencies:
30-59 days	$	1,500		$	1,261
60-89 days		876			898
90+ days		1,322			1,208
Total delinquencies	$	3,698		$	3,367
Delinquencies as a percentage of finance receivables - gross balance		3.5%			3.2%

Coastal Credit LLC
Allowance for Loan Losses - Finance Receivables
(in thousands except percentages)
	Quarters Ended June 30,								Six Months Ended June 30,
	2007				2006				2007				2006
Balance at beginning of period	$	5,694			$	5,916			$	5,694			$	6,031
Charge-offs, net of recoveries		(1,605	)			(1,117	)			(3,045	)			(2,303	)
Provision for estimated credit losses		1,695				1,033				3,135				2,104
Balance at the end of the period	$	5,784			$	5,832			$	5,784			$	5,832
Net charge-offs	$	1,605			$	1,117			$	3,045			$	2,303
Finance receivables, net of unearned finance charges	$	99,029			$	95,598			$	99,029			$	95,598
Allowance for loan losses as a percent of finance receivables, net of unearned finance charges		5.84	%			6.10	%			5.84	%			6.10	%
Annualized net charge-offs as a percent of finance receivables, net of unearned finance charges		6.48	%			4.67	%			6.15	%			4.82	%
Allowance for loan losses as a percent of annualized net charge-offs		90.09	%			130.53	%			94.98	%			126.62	%

Union Acceptance Company LLC
Delinquency Rates
(in thousands except percentages)
	June 30,			December 31,
	2007			2006
Securitized finance receivables principal balance	$	10,755		$	28,800
Delinquencies:
30-59 days	$	1,021		$	2,812
60-89 days		283			748
90+ days		200			419
Total delinquencies	$	1,504		$	3,979
Delinquencies as a percentage of securitized finance receivables		14.0%			13.8%
Off-balance sheet finance receivables principal balance	$	18,306		$	33,319
Delinquencies:
30-59 days	$	906		$	1,929
60-89 days		223			544
90+ days		93			220
Total delinquencies	$	1,222		$	2,693
Delinquencies as a percentage of securitized finance receivables		6.7%			8.1%

Union Acceptance Company LLC
Allowance for Loan Losses - On Balance Sheet Securitized Finance Receivables
(in thousands except percentages)
	Quarters Ended June 30,								Six Months Ended June 30,
	2007				2006				2007				2006
Balance at the beginning of period	$	881			$	4,867			$	1,617			$	6,503
Charge-offs		(627	)			(2,064	)			(1,714	)			(6,316	)
Recoveries		900				2,842				2,054				6,391
Recovery for estimated credit losses		(832	)			(1,556	)			(1,635	)			(2,489	)
Balance at the end of the period	$	322			$	4,089			$	322			$	4,089
Net charge-offs (recoveries)	$	(273	)		$	(778	)		$	(340	)		$	(75	)
Securitized finance receivables	$	10,755			$	58,710			$	10,755			$	58,710
Allowance for loan losses as a percent of securitized finance receivables		2.99	%			6.96	%			2.99	%			6.96	%
Annualized net charge-offs as a percent of securitized finance receivables		-10.15	%			-5.30	%			-6.32	%			-0.26	%

ABOUT WHITE RIVER, COASTAL CREDIT AND UAC

Founded in 2004, White River is the holding company for Coastal Credit LLC and Union Acceptance Company 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 22 states – Alaska, Arizona, California, Colorado, Delaware, Florida, Georgia, Hawaii, Kansas, Louisiana, Maryland, Mississippi, Nevada, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and Washington – through its 16 branch locations. The Coastal Credit receivables portfolio, net of unearned finance charges, was $99.0 million at June 30, 2007.

Union Acceptance Company LLC is a specialized auto finance company, based in Indianapolis, Indiana, which holds and oversees its portfolio of approximately $29.7 million in non-prime auto receivables, as of June 30, 2007.

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, 2006,
• its Proxy Statement on Schedule 14A dated April 19, 2007, and
• its Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.

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 UAC, 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.

These and other risks are described in White River's public filings with the SEC; see, in particular, risk factors described under Item 1A in White River’s Annual Report on Form 10-K for the year ended December 31, 2006, on file with the SEC. 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		June 30, 2007				December 31, 2006
Cash and cash equivalents		$	5,882			$	6,958
Restricted cash			6,737				13,618
Securitized finance receivables—net			10,530				27,447
Finance receivables—net			81,460				78,693
Beneficial interest in Master Trust			10,339				23,601
Goodwill			34,698				34,698
Deferred tax assets—net			36,540				38,189
Other assets			2,244				2,220
TOTAL		$	188,430			$	225,424
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Collateralized financings		$	12,543			$	32,368
Line of credit			44,500				49,500
Secured note payable			11,250				13,125
Subordinated debentures			-				7,700
Accrued interest			653				1,169
Amounts due to Master Trust			4,792				8,400
Creditor notes payable			1,053				1,392
Other payables and accrued expenses			2,359				3,852
Total liabilities			77,150				117,506
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; 3,842,287 and 3,813,155 issued and outstanding at June 30, 2007 and December 31, 2006, respectively
			179,796				179,594
Warrants, 150,000 outstanding at June 30, 2007 and December 31, 2006
			534				534
Accumulated other comprehensive income, net of taxes			6,228				11,107
Accumulated deficit			(75,278	)			(83,317	)
Total shareholders’ equity			111,280				107,918
TOTAL		$	188,430			$	225,424

WHITE RIVER CAPITAL, INC.
Book Value per Share, Tangible Book Value per Share and Equity Ratios
(Unaudited)
(in thousands except share related values and percents)
		June 30,				December 31,
		2007				2006
Total shareholders’ equity		$	111,280			$	107,918
Less goodwill			(34,698	)			(34,698	)
Tangible book value		$	76,582			$	73,220
Shares outstanding			3,842,287				3,813,155
Book value per share		$	28.96			$	28.30
Tangible book value per share		$	19.93			$	19.20
Assets		$	188,430			$	225,424
Tangible assets		$	153,732			$	190,726
Equity/ assets			59.06	%			47.87	%
Tangible equity/ tangible assets			49.82	%			38.39	%

WHITE RIVER CAPITAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share and share amounts)
		Quarters Ended June 30,								Six Months Ended June 30,
		2007				2006				2007				2006
INTEREST:
Interest on receivables		$	8,138			$	9,577			$	16,286			$	19,609
Accretion and other interest			966				2,697				11,283				3,407
Total interest income			9,104				12,274				27,569				23,016
Interest expense			(1,548	)			(3,082	)			(3,539	)			(6,423	)
Net interest margin			7,556				9,192				24,030				16,593
Recovery (provision) for estimated credit losses			(862	)			523				(1,500	)			385
Net interest margin after recovery (provision) for estimated credit losses			6,694				9,715				22,530				16,978
OTHER REVENUES (EXPENSES):
Salaries and benefits			(2,010	)			(2,127	)			(4,152	)			(4,123	)
Third party servicing expense			(136	)			(477	)			(354	)			(1,180	)
Other operating expenses			(1,499	)			(1,611	)			(2,818	)			(3,217	)
Bankruptcy costs			-				(57	)			(6	)			(131	)
Charge to Master Trust—net			(429	)			(5,614	)			(1,490	)			(8,001	)
Change in fair market valuation of creditor liabilities			50				-				(187	)			-
Gain (loss) from extinguishment of debt			-				(202	)			-				(202	)
Gain (loss) from deficiency sale			(19	)			3,663				22				3,709
Other income (expense)			(66	)			(100	)			75				(39	)
Total other revenues (expenses)			(4,109	)			(6,525	)			(8,910	)			(13,184	)
INCOME BEFORE INCOME TAXES			2,585				3,190				13,620				3,794
INCOME TAX BENEFIT (EXPENSE)			(925	)			439				(4,949	)			971
NET INCOME		$	1,660			$	3,629			$	8,671			$	4,765
NET INCOME PER COMMON SHARE (BASIC)		$	0.43			$	0.95			$	2.26			$	1.25
NET INCOME PER COMMON SHARE (DILUTED)		$	0.42			$	0.94			$	2.20			$	1.23
BASIC WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
			3,842,287				3,813,155				3,839,080				3,812,989
DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
			3,949,069				3,868,828				3,940,983				3,866,358