White River Capital, Inc. Announces Results for Third Quarter 2009

RANCHO SANTA FE, Calif.--White River Capital, Inc. (NYSE Amex: RVR) (“White River”) today announced net income and net operating income for the third quarter 2009 was $1.3 million, or $0.31 per diluted share, compared to third quarter 2008 net operating income of $1.5 million, or $0.37 per diluted share. The net income results for the third quarter of 2009 are due to the following:

• $2.5 million of earnings from operations contributed by the Coastal Credit LLC (“Coastal Credit”) subsidiary,
• $0.1 million loss from operations contributed by the Union Acceptance Company LLC (“UAC”) subsidiary,
• $0.5 million of operating expenses at the holding company and income tax expense of $0.6 million.

Third quarter 2008 net operating income did not include a pre-tax, non-cash write-off of $34.5 million White River recorded for the impairment of goodwill. When this item is included, the net loss for the third quarter of 2008 was $20.5 million, or $5.20 per diluted share.

Martin Szumski, Chief Financial Officer, stated, “Once again, Coastal Credit, White River’s main operating subsidiary, excelled in an economic environment which shows signs of stability. Delinquency and charge-off trends were sound for the Coastal Credit portfolio. Coastal Credit’s net charge offs increased during the third quarter, and 30+ day delinquency remained flat at 3.9% at September 30, 2009 compared to 3.9% at June 30, 2009. Coastal Credit’s allowance for loan losses was essentially flat with the allowance for loan losses to total loans at 7.27% at September 30, 2009 compared to 7.19% at June 30, 2009.”

Mr. Szumski continued, “White River now has equity of $99.5 million and this equity value translates into a book value per share of $24.50. On September 30, 2009, UAC portfolio receivables were only $0.1 million. While the UAC subsidiary was a significant contributor to earnings in 2008, its earnings contribution for this quarter and future quarters will be immaterial.”

PROVISION FOR ESTIMATED CREDIT LOSSES

The consolidated provision for estimated credit losses was $2.2 million compared to $2.1 million for the quarters ended September 30, 2009 and 2008, respectively.

The following table documents the quarterly provision, allowance for loan losses and net charge offs at Coastal Credit for the third quarter 2007 through the third quarter 2009:

			Quarter				Provision (in millions)				Allowance for Loan Losses as a Percent of Finance Receivables				Net Charge-offs as a Percent of Finance Receivables (annualized for 1st, 2nd and 3rd quarters)
			3rd 2009				$2.2				7.27%				7.02%
			2nd 2009				$2.1				7.19%				6.95%
			1st 2009				$1.9				7.24%				6.79%
			4th 2008				$2.8				7.45%				7.69%
			3rd 2008				$2.3				7.23%				7.10%
			2nd 2008				$1.9				7.02%				6.75%
			1st 2008				$1.6				7.02%				6.64%
			4th 2007				$3.2				7.04%				7.45%
			3rd 2007				$2.0				6.28%				6.27%

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

The recovery at UAC for the third quarter of 2009 was approximately $65,000 compared to a recovery for the third quarter of 2008 of approximately $198,000. This change in recovery reflects the shrinking UAC portfolio and the recovery on the portfolio during liquidation.

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,
				2009						2008
				$			%			$			%
Finance receivables - gross balance				$	112,692					$	104,599
Delinquencies:
30-59 days				$	1,357		1.2	%		$	1,452		1.4	%
60-89 days					1,070		0.9	%			1,269		1.2	%
90+ days					1,931		1.7	%			1,943		1.9	%
Total delinquencies				$	4,358		3.9	%		$	4,664		4.5	%

Coastal Credit LLC
Allowance for Loan Losses - Finance Receivables
(in thousands except percentages)
				Quarters Ended September 30,								Nine Months Ended September 30,
				2009				2008				2009				2008
Balance at beginning of period				$	7,860			$	6,935			$	7,560			$	6,810
Charge-offs, net of recoveries					(2,099	)			(1,987	)			(5,799	)			(5,325	)
Provision for estimated credit losses					2,249				2,287				6,249				5,750
Balance at the end of the period				$	8,010			$	7,235			$	8,010			$	7,235
Finance receivables, net of unearned finance charges				$	110,218			$	100,041			$	110,218			$	100,041
Allowance for loan losses as a percent of finance receivables, net of unearned finance charges					7.27	%			7.23	%			7.27	%			7.23	%
Annualized net charge-offs as a percent of finance receivables, net of unearned finance charges					7.62	%			7.94	%			7.02	%			7.10	%
Allowance for loan losses as a percent of annualized net charge-offs					95.40	%			91.03	%			103.60	%			101.90	%

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 20 states – California, Colorado, Delaware, Florida, Georgia, Hawaii, Louisiana, Maryland, Mississippi, Nevada, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia and Washington – through its 16 branch locations. The Coastal Credit receivables portfolio, net of unearned finance charges, was $110.2 million at September 30, 2009.

Union Acceptance Company LLC is a specialized auto finance company, based in Indianapolis, Indiana, which holds and oversees its portfolio of $0.1 million in non-prime auto receivables, as of September 30, 2009.

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, 2008,
• its Proxy Statement on Schedule 14A dated April 29, 2009, and
• its Quarterly Report on Form 10-Q for the quarter ended June 30, 2009.

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.

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, 2009					December 31, 2008
Cash and cash equivalents			$	5,670				$	6,403
Finance receivables—net				89,917					84,187
Deferred tax assets—net				45,296					46,946
Other assets				840					1,292
TOTAL			$	141,723				$	138,828
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Line of credit			$	40,500				$	40,500
Accrued interest				106					165
Creditor notes payable				22					128
Other payables and accrued expenses				1,549					1,949
Total liabilities				42,177					42,742
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; 4,062,506 and 4,022,853 issued and outstanding at September 30, 2009 and December 31, 2008, respectively				182,576					182,462
Accumulated other comprehensive income, net of taxes				12					210
Accumulated deficit				(83,042	)				(86,586	)
Total shareholders’ equity				99,546					96,086
TOTAL			$	141,723				$	138,828

WHITE RIVER CAPITAL, INC.
Book Value per Share and Equity Ratios
(Unaudited)
(in thousands except share related values and percents)
					September 30, 2009					December 31, 2008
Total shareholders’ equity					$	99,546				$	96,086
Assets					$	141,723				$	138,828
Shares outstanding						4,062,506					4,022,853
Book value per share					$	24.50				$	23.89
Equity/ assets						70.2	%				69.2	%

WHITE RIVER CAPITAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share and share amounts)
			Quarters Ended September 30,									Nine Months Ended September 30,
			2009				2008					2009				2008
INTEREST:
Interest on receivables			$	7,898			$	7,584				$	23,085			$	23,321
Accretion and other interest				42				931					341				6,261
Total interest income				7,940				8,515					23,426				29,582
Interest expense				(375	)			(615	)				(1,145	)			(2,088	)
Net interest margin				7,565				7,900					22,281				27,494
Provision for estimated credit losses				(2,184	)			(2,089	)				(5,998	)			(4,907	)
Net interest margin after provision for estimated credit losses				5,381				5,811					16,283				22,587
OTHER REVENUES (EXPENSES):
Salaries and benefits				(2,003	)			(2,013	)				(6,074	)			(6,654	)
Third party servicing expense				(3	)			(50	)				(29	)			(237	)
Other operating expenses				(1,485	)			(1,264	)				(4,715	)			(4,955	)
Change in fair market valuation of creditor notes payable				43				(4	)				89				(51	)
Gain (loss) from deficiency account sale				4				-					170				158
Other income (expense)				(56	)			(87	)				(190	)			(214	)
Total other revenues (expenses)				(3,500	)			(3,418	)				(10,749	)			(11,953	)
Goodwill Impairment				-				(34,536	)				-				(34,536	)
INCOME (LOSS) BEFORE INCOME TAXES				1,881				(32,143	)				5,534				(23,902	)
INCOME TAX BENEFIT (EXPENSE)				(622	)			11,671					(1,990	)			8,649
NET INCOME (LOSS)			$	1,259			$	(20,472	)			$	3,544			$	(15,253	)
NET INCOME (LOSS) PER COMMON SHARE (BASIC)			$	0.31			$	(5.29	)			$	0.87			$	(3.94	)
NET INCOME (LOSS) PER COMMON SHARE (DILUTED)			$	0.31			$	(5.29	)			$	0.87			$	(3.94	)
BASIC WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING				4,062,129				3,872,610					4,056,751				3,869,429
DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING				4,064,591				3,872,610					4,060,039				3,869,429