Riverview Bancorp, Inc. To Increase Its Provision For Loan Losses In Third Fiscal Quarter
January 13 2012 - 4:00PM
Riverview Bancorp, Inc. (Nasdaq:RVSB) ("Riverview" or the
"Company"), the parent company of Riverview Community Bank (the
"Bank") today announced that it expects to record a provision for
loan losses of between $7.3 million to $8.0 million (pre-tax)
during the third fiscal quarter-ended December 31, 2011 compared to
a $2.2 million provision for loan loss for the preceding quarter.
The anticipated increase in the provision for loan loss was
primarily the result of recent real estate appraisals received on
five loans that Riverview has identified as impaired loans. The
Company will record charge-offs and impairments of approximately
$5.7 million on these five loans. These actions will increase the
allowance for loan losses to between 2.17% and 2.27% of total loans
at December 31, 2011. The Company also expects to record
write-downs on real estate owned (REO) properties of approximately
$2.5 million for the quarter-ended December 31, 2011. These
write-downs were primarily the result of a recent appraisal on one
REO property and a pending sale on a second property.
The increase in the third quarter provision for loan losses,
combined with the REO write-downs, is expected to result in a net
loss for the quarter-ended December 31, 2011 ranging from
approximately $4.5 million to $5.6 million, or $0.20 to $0.25 per
share. For the first nine months of fiscal year 2012, Riverview
estimates that its net loss will range from $3.8 million to $4.7
million, or $0.17 to $0.21 per share. Based on these estimates, the
Bank will continue to be "well-capitalized" according to regulatory
guidelines.
"While our liquidity and capital levels remain strong, real
estate values continue to be under pressure locally and
nationally," stated Pat Sheaffer, Chairman and CEO. "Recognizing
the valuation declines and bolstering our loan loss reserves will
help position Riverview for recovery and financial growth over the
long term. We continue to have success in our core operations with
strong deposit flows, a solid net interest margin, and a growing
customer base."
"Riverview's third fiscal quarter results reflect the continued
challenging conditions in the real estate markets," stated Ron
Wysaske, President and COO. "Our management team has worked
diligently to identify problem credits and reduce our exposure on
these properties while also working to preserve capital. The
loans and properties giving rise to the charges this past quarter
represent primarily land development and building-lot
loans. Our intention is to continue to reduce our exposure to
these types of loans and to sell any properties we acquire as
expeditiously as possible."
The Company is also currently analyzing the value of goodwill to
determine whether the value of goodwill has been impaired. Any
potential goodwill impairment could be material but would be a
non-cash charge and have no effect on the Company's cash balances,
liquidity or tangible equity. In addition, because goodwill is not
included in the calculation of regulatory capital, the Company's
well-capitalized regulatory ratios would not be affected by this
potential non-cash expense.
About the Company
Riverview Bancorp, Inc. (www.riverviewbank.com) is headquartered
in Vancouver, Washington – just north of Portland, Oregon on the
I-5 corridor. With assets of $873 million, it is the parent company
of the 88 year-old Riverview Community Bank, as well as Riverview
Asset Management Corp. There are 17 branches, including twelve in
the Portland-Vancouver area and three lending centers. The Bank
offers true community banking services, focusing on providing the
highest quality service and financial products to commercial and
retail customers.
"Safe Harbor" statement under the Private Securities Litigation
Reform Act of 1995: This press release contains forward-looking
statements that are subject to risks and uncertainties, including,
but not limited to: the Company's ability to raise common capital,
the amount of capital it intends to raise and its intended use of
that capital. The credit risks of lending activities, including
changes in the level and trend of loan delinquencies and write-offs
and changes in the Company's allowance for loan losses and
provision for loan losses that may be impacted by deterioration in
the housing and commercial real estate markets; changes in general
economic conditions, either nationally or in the Company's market
areas; changes in the levels of general interest rates, and the
relative differences between short and long term interest rates,
deposit interest rates, the Company's net interest margin and
funding sources; fluctuations in the demand for loans, the number
of unsold homes, land and other properties and fluctuations in real
estate values in the Company's market areas; secondary market
conditions for loans and the Company's ability to sell loans in the
secondary market; results of examinations of us by the Office of
Thrift Supervision or other regulatory authorities, including the
possibility that any such regulatory authority may, among other
things, require us to increase the Company's reserve for loan
losses, write-down assets, change Riverview Community Bank's
regulatory capital position or affect the Company's ability to
borrow funds or maintain or increase deposits, which could
adversely affect its liquidity and earnings; the Company's
compliance with regulatory enforcement actions; we have entered
into with the OCC as successor to the OTS and the possibility that
our noncompliance could result in the imposition of additional
enforcement actions and additional requirements or restrictions on
our operations; legislative or regulatory changes that
adversely affect the Company's business including changes in
regulatory policies and principles, or the interpretation of
regulatory capital or other rules; the Company's ability to attract
and retain deposits; further increases in premiums for deposit
insurance; the Company's ability to control operating costs and
expenses; the use of estimates in determining fair value of certain
of the Company's assets, which estimates may prove to be incorrect
and result in significant declines in valuation; difficulties in
reducing risks associated with the loans on the Company's balance
sheet; staffing fluctuations in response to product demand or the
implementation of corporate strategies that affect the Company's
workforce and potential associated charges; computer systems on
which the Company depends could fail or experience a security
breach; the Company's ability to retain key members of its senior
management team; costs and effects of litigation, including
settlements and judgments; the Company's ability to successfully
integrate any assets, liabilities, customers, systems, and
management personnel it may in the future acquire into its
operations and the Company's ability to realize related revenue
synergies and cost savings within expected time frames and any
goodwill charges related thereto; increased competitive pressures
among financial services companies; changes in consumer spending,
borrowing and savings habits; the availability of resources to
address changes in laws, rules, or regulations or to respond to
regulatory actions; the Company's ability to pay dividends on its
common stock; and interest or principal payments on its junior
subordinated debentures; adverse changes in the securities markets;
inability of key third-party providers to perform their obligations
to us; changes in accounting policies and practices, as may be
adopted by the financial institution regulatory agencies or the
Financial Accounting Standards Board, including additional guidance
and interpretation on accounting issues and details of the
implementation of new accounting methods; other economic,
competitive, governmental, regulatory, and technological factors
affecting the Company's operations, pricing, products and services
and the other risks described from time to time in our filings with
the Securities and Exchange Commission.
Such forward-looking statements may include projections. Any
such projections were not prepared in accordance with published
guidelines of the American Institute of Certified Public
Accountants or the Securities Exchange Commission regarding
projections and forecasts nor have such projections been audited,
examined or otherwise reviewed by independent auditors of the
Company. In addition, such projections are based upon many
estimates and inherently subject to significant economic and
competitive uncertainties and contingencies, many of which are
beyond the control of management of the Company. Accordingly,
actual results may be materially higher or lower than those
projected. The inclusion of such projections herein should not be
regarded as a representation by the Company that the projections
will prove to be correct.
The Company cautions readers not to place undue reliance on any
forward-looking statements. Moreover, you should treat these
statements as speaking only as of the date they are made and based
only on information then actually known to the Company. The Company
does not undertake and specifically disclaims any obligation to
revise any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the date
of such statements. These risks could cause our actual results for
fiscal 2012 and beyond to differ materially from those expressed in
any forward-looking statements by, or on behalf of, us, and could
negatively affect the Company's operating and stock price
performance.
CONTACT: Pat Sheaffer or Ron Wysaske,
Riverview Bancorp, Inc. 360-693-6650
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