Riverview Bancorp, Inc. (Nasdaq:RVSB) (“Riverview” or the
“Company”), the parent company of Riverview Community Bank (the
“Bank”) today announced that it has increased its provision for
loan losses an additional $3.2 million for its fourth fiscal
quarter ended March 31, 2012. As a result, the Company’s net loss
was $16.0 million, or $0.71 per share, for the quarter ended March
31, 2012, compared to a net loss of $16.6 million, or $0.74 per
share in the preceding quarter and net income of $854,000, or $0.04
per share, in its fourth fiscal quarter a year ago. For the fiscal
year, Riverview’s net loss was $31.7 million, or $1.42 per share,
compared to net income of $4.3 million, or $0.24 per share, for
fiscal year 2011.
“The increase in the provision for loan losses was necessary as
a result of updated information received by the Bank on three
commercial properties as well as the current regulatory guidance
for these individual properties,” said Pat Sheaffer, Chairman and
CEO. “This additional provision for loan losses increases the
Bank’s reserves as we remain diligent in our efforts to reduce our
non-performing assets.”
Credit Quality
Riverview’s provision for loan losses totaled $17.5 million for
the fourth quarter of fiscal year 2012, compared to $8.1 million in
the preceding quarter and $500,000 in the fourth quarter of fiscal
year 2011. The allowance for loan losses increased to $19.9 million
at March 31, 2012, representing 2.91% of total loans and 45.11% of
non-performing loans (NPLs). NPLs decreased to $44.2 million, or
6.45% of total loans at March 31, 2012, as a result of an
additional charge-off of $867,000 on a nonperforming commercial
real estate loan.
The additional provision for loan losses was primarily related
to three individual properties. The first was a $2.7 million
commercial real estate property located in Portland, Oregon. The
second was a $992,000 commercial real estate loan to a related
borrower located in Portland, Oregon. The Company increased its
provision for loan losses $926,000 and charged-off a total of $1.9
million for these two properties. Both of these loans have
continued to pay as agreed and have not missed any of their
required payments. An additional provision of $600,000 was for a
land development project located in southwest Washington. The
Company also bolstered its general allowance by an additional $1.7
million.
The Company’s non-performing assets totaled to $62.9 million at
March 31, 2012. At March 31, 2012, Riverview’s non-performing
assets were 7.35% of total assets, compared to 6.11% at the end of
the preceding quarter and 4.65% a year ago. Additionally, as
previously reported, the Company sold several additional
non-performing assets subsequent to March 31, 2012. These asset
sales have totaled more than $7 million, resulting in a net loss of
$218,000.
Capital and Liquidity
“From a capital standpoint, the Bank remains sound and strong,”
said Ron Wysaske, President and COO. “Additionally, the positive
movements we have seen in REO and land sales during the last
several months should prove beneficial to the Bank over the next
several quarters.”
The Bank continues to maintain capital levels in excess of the
regulatory requirements to be categorized as “well capitalized”
with a total risk-based capital ratio of 12.11% and a Tier 1
leverage ratio of 8.76% at March 31, 2012. To be considered “well
capitalized” a bank has to have a total risk-based capital ratio of
10% and a Tier 1 leverage ratio of 5%. Subsequent to March 31,
2012, the Company invested an additional $2.7 million into the
Bank, increasing the Bank’s total risk-based capital ratio to
approximately 12.78% and its Tier 1 leverage ratio to 9.25%.
At March 31, 2012, the Bank had available total and contingent
liquidity of over $500 million, including over $300 million of
borrowing capacity from the Federal Home Loan Bank of Seattle and
the Federal Reserve Bank of San Francisco, and more than $80
million of cash and short-term investments.
About Riverview
Riverview Bancorp, Inc. (www.riverviewbank.com) is headquartered
in Vancouver, Washington – just north of Portland, Oregon on the
I-5 corridor. With assets of $856 million, it is the parent company
of the 89 year-old Riverview Community Bank, as well as Riverview
Asset Management Corp. The Bank offers true community banking
services, focusing on providing the highest quality service and
financial products to commercial and retail customers. There are 17
branches, including twelve in the Portland-Vancouver area and three
lending centers, with a new branch scheduled to open in the rapidly
growing metropolitan area of Gresham, Oregon in the summer of
2012.
“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
Comptroller of the Currency (OCC) 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 Office of Thrift Supervision 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.
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.
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets (In thousands, except share
data) (Unaudited) March 31, 2012
December 31, 2011 March 31, 2011 ASSETS
Cash (including interest-earning accounts
of $33,437, $23,146 and $37,349)
$ 46,393 $ 36,313 $ 51,752 Certificate of deposits 41,473 42,718
14,900 Loans held for sale 480 659 173 Investment securities held
to maturity, at amortized cost 493 493 506 Investment securities
available for sale, at fair value 6,314 6,337 6,320 Mortgage-backed
securities held to maturity, at amortized 171 177 190
Mortgage-backed securities available for sale, at fair value 974
1,146 1,777
Loans receivable (net of allowance for
loan losses of $19,921, $15,926 and $14,968)
664,888 678,626 672,609 Real estate and other pers. property owned
18,731 20,667 27,590 Prepaid expenses and other assets 6,362 6,087
5,887 Accrued interest receivable 2,158 2,378 2,523 Federal Home
Loan Bank stock, at cost 7,350 7,350 7,350 Premises and equipment,
net 17,068 16,351 16,100 Deferred income taxes, net 603 594 9,447
Mortgage servicing rights, net 278 299 396 Goodwill 25,572 25,572
25,572 Core deposit intangible, net 137 157 219 Bank owned life
insurance 16,553 16,406 15,952
TOTAL ASSETS $ 855,998 $ 862,330 $
859,263
LIABILITIES AND EQUITY
LIABILITIES: Deposit accounts $ 744,455 $ 735,046 $ 716,530 Accrued
expenses and other liabilities 9,398 9,574 9,396 Advance payments
by borrowers for taxes and insurance 800 409 680 Junior
subordinated debentures 22,681 22,681 22,681 Capital lease
obligation 2,513 2,531 2,567
Total liabilities 779,847 770,241 751,854 EQUITY:
Shareholders' equity
Serial preferred stock, $.01 par value;
250,000 authorized, issued and outstanding, none
- - - Common stock, $.01 par value; 50,000,000 authorized, March
31, 2012 – 22,471,890 issued and outstanding; 225 225 225 December
31, 2011 - 22,471,890 issued and outstanding; March 31, 2011 –
22,471,890 issued and outstanding; Additional paid-in capital
65,610 65,621 65,639 Retained earnings 11,536 27,493 43,193
Unearned shares issued to employee stock ownership trust (593 )
(619 ) (696 ) Accumulated other comprehensive loss (1,171 )
(1,153 ) (1,417 ) Total shareholders’ equity 75,607
91,567 106,944 Noncontrolling interest 544
522 465 Total equity 76,151
92,089 107,409 TOTAL
LIABILITIES AND EQUITY $ 855,998 $ 862,330 $ 859,263
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Operations Three Months
Ended Twelve Months Ended (In thousands,
except share data) (Unaudited) March 31, 2012
Dec. 31, 2011 March 31, 2011
March 31, 2012 March 31, 2011 INTEREST INCOME:
Interest and fees on loans receivable $ 9,130
$ 9,669 $ 10,239 $ 38,894 $ 42,697 Interest on investment
securities-taxable 36 28 49 145 164 Interest on investment
securities-non taxable 7 11 12 42 55 Interest on mortgage-backed
securities 10 12 18 51 88 Other interest and dividends 127
109 70 400
210
Total interest income
9,310 9,829 10,388 39,532 43,214 INTEREST EXPENSE: Interest
on deposits 908 1,061 1,337 4,357 6,569 Interest on borrowings
387 381 364
1,508 1,483 Total interest expense
1,295 1,442 1,701
5,865 8,052 Net interest income 8,015 8,387
8,687 33,667 35,162 Less provision for loan losses 17,500
8,100 500 29,350
5,075 Net interest income (loss) after
provision for loan losses (9,485 ) 287 8,187 4,317 30,087
NON-INTEREST INCOME: Fees and service charges 914 962 916 3,996
4,047 Asset management fees 604 568 546 2,367 2,079 Gain on sale of
loans held for sale 87 29 54 160 393 Bank owned life insurance
income 146 151 150 601 601 Other (190 ) (180 )
73 (297 ) 769 Total non-interest
income 1,561 1,530 1,739 6,827 7,889 NON-INTEREST EXPENSE:
Salaries and employee benefits 3,850 4,014 4,601 15,889 16,716
Occupancy and depreciation 1,253 1,211 1,180 4,793 4,677 Data
processing 285 306 293 1,421 1,067 Amortization of core deposit
intangible 20 20 24 82 96 Advertising and marketing expense 184 286
172 998 749 FDIC insurance premium 288 289 400 1,136 1,640 State
and local taxes 139 150 136 549 638 Telecommunications 110 109 111
434 428 Professional fees 283 334 352 1,254 1,310 Real estate owned
expenses 1,130 2,781 634 5,097 1,817 Other 687
692 663 2,770
2,358 Total non-interest expense 8,229
10,192 8,566 34,423
31,496 INCOME (LOSS) BEFORE INCOME TAXES
(16,153 ) (8,375 ) 1,360 (23,279 ) 6,480 PROVISION (BENEFIT) FOR
INCOME TAXES (196 ) 8,220
506 8,378 2,165 NET INCOME (LOSS) $
(15,957 ) $ (16,595 ) $ 854 $ (31,657 ) $
4,315 Earnings (loss) per common share: Basic $ (0.71 ) $
(0.74 ) $ 0.04 $ (1.42 ) $ 0.24 Diluted $ (0.71 ) $ (0.74 ) $ 0.04
$ (1.42 ) $ 0.24 Weighted average number of shares outstanding:
Basic 22,327,171 22,321,011 22,302,538 22,317,933 18,341,191
Diluted 22,327,171 22,321,011 22,302,538 22,317,933 18,341,308
(Dollars in thousands)
At or for the three months
ended At or for the twelve months ended March
31, 2012 Dec. 31, 2011 March 31,
2011 March 31, 2012 March 31, 2011
AVERAGE
BALANCES
Average interest–earning assets $ 788,488 $ 790,922 $
748,907 $ 777,864 $ 758,847 Average interest-bearing liabilities
652,607 651,368 639,503 645,369 649,342 Net average earning assets
135,881 139,554 109,404 132,495 109,505 Average loans 695,973
694,205 685,507 694,382 703,861 Average deposits 741,320 742,899
705,456 731,089 708,169 Average equity 91,171 109,301 108,114
104,869 100,643 Average tangible equity 65,156 83,238 81,896 78,779
74,337
ASSET
QUALITY
March 31, 2012 Dec. 31, 2011 March 31,
2011 Non-performing loans 44,163 32,037 12,323
Non-performing loans to total loans 6.45 % 4.61 % 1.79 % Real
estate/repossessed assets owned 18,731 20,667 27,590 Non-performing
assets 62,894 52,704 39,913 Non-performing assets to total assets
7.35 % 6.11 % 4.65 % Net loan charge-offs in the quarter 13,505
6,846 2,995 Net charge-offs in the quarter/average net loans 7.80 %
3.91 % 1.77 % Allowance for loan losses 19,921 15,926 14,968
Average interest-earning assets to average
interest-bearing liabilities
120.82 % 121.42 % 117.11 %
Allowance for loan losses to
non-performing loans
45.11 % 49.71 % 121.46 % Allowance for loan losses to total loans
2.91 % 2.29 % 2.18 % Shareholders’ equity to assets 8.83 % 10.62 %
12.45 %
CAPITAL
RATIOS
Total capital (to risk weighted assets) 12.11 % 13.14 % 14.61 %
Tier 1 capital (to risk weighted assets) 10.84 % 11.89 % 13.35 %
Tier 1 capital (to leverage assets) 8.76 % 9.74 % 11.24 % Tangible
common equity (to tangible assets) 5.98 % 7.84 % 9.69 %
DEPOSIT
MIX
March 31, 2012 Dec. 31, 2011 March 31,
2011 Interest checking $ 106,904 $ 96,757 $ 77,399
Regular savings 45,741 42,453 37,231 Money market deposit accounts
244,919 235,902 236,321 Non-interest checking 116,882 116,854
102,429 Certificates of deposit 230,009
243,080 263,150 Total deposits $ 744,455
$ 735,046 $ 716,530
COMPOSITION OF
COMMERCIAL AND CONSTRUCTION LOANS
Commercial
Commercial
Real Estate
Mortgage
Real Estate
Construction
Commercial
& Construction
Total
March 31,
2012
(Dollars in thousands) Commercial $ 87,238 $ - $ - $ 87,238
Commercial construction - - 13,496 13,496 Office buildings - 94,541
- 94,541 Warehouse/industrial - 48,605 - 48,605 Retail/shopping
centers/strip malls - 80,595 - 80,595 Assisted living facilities -
35,866 - 35,866 Single purpose facilities - 93,473 - 93,473 Land -
38,888 - 38,888 Multi-family - 42,795 - 42,795 One-to-four family
- - 12,295 12,295 Total $ 87,238 $
434,763 $ 25,791 $ 547,792
March 31,
2011
(Dollars in thousands) Commercial $ 85,511 $ - $ - $ 85,511
Commercial construction - - 8,608 8,608 Office buildings - 95,529 -
95,529 Warehouse/industrial - 49,627 - 49,627 Retail/shopping
centers/strip malls - 85,719 - 85,719 Assisted living facilities -
35,162 - 35,162 Single purpose facilities - 98,651 - 98,651 Land -
55,258 - 55,258 Multi-family - 42,009 - 42,009 One-to-four family
- - 18,777 18,777 Total $ 85,511 $
461,955 $ 27,385 $ 574,851
LOAN
MIX
March 31, 2012 Dec. 31, 2011 March 31, 2011
Commercial and construction Commercial $ 87,238 $ 86,759 $ 85,511
Other real estate mortgage 434,763 448,288 461,955 Real estate
construction 25,791 27,544 27,385 Total
commercial and construction 547,792 562,591 574,851 Consumer Real
estate one-to-four family 134,975 129,780 110,437 Other installment
2,042 2,181 2,289 Total consumer 137,017
131,961 112,726 Total loans 684,809 694,552
687,577 Less: Allowance for loan losses 19,921
15,926 14,968 Loans receivable, net $ 664,888 $ 678,626 $
672,609
DETAIL OF
NON-PERFORMING ASSETS
Northwest
Oregon
Other
Oregon
Southwest
Washington
Other
Washington
Other Total
March 31,
2012
(Dollars in thousands) Non-performing assets Commercial $
194 $ 746 $ 2,990 $ - $ - $ 3,930 Commercial real estate 1,867 -
9,735 - 2,348 13,950 Land - 1,902 6,383 - 4,700 12,985 Multi-family
627 1,000 - - - 1,627 Commercial construction - - - - - -
One-to-four family construction 1,246 6,117 393 - - 7,756 Real
estate one-to-four family 678 189 3,048 - - 3,915 Consumer -
- - - - - Total non-performing
loans 4,612 9,954 22,549 - 7,048 44,163 REO 2,477
5,863 6,825 3,566 - 18,731
Total non-performing assets $ 7,089 $ 15,817 $ 29,374 $
3,566 $ 7,048 $ 62,894
DETAIL OF SPEC
CONSTRUCTION AND LAND DEVELOPMENT LOANS
Northwest
Oregon
Other
Oregon
Southwest
Washington
Other
Washington
Other Total
March 31,
2012
(Dollars in thousands) Land and spec construction loans Land
development loans $ 6,044 $ 3,672 $ 24,472 $ - $ 4,700 $ 38,888
Spec construction loans 1,246 6,117 3,006
392 - 10,761 Total land and spec
construction $ 7,290 $ 9,789 $ 27,478 $ 392 $ 4,700 $ 49,649
At or for the three months ended At or for
the twelve months ended
SELECTED OPERATING
DATA
March 31, 2012 Dec. 31,
2011 March 31, 2011
March 31, 2012 March 31,
2011 Efficiency ratio (4) 85.93 % 102.77 % 82.16
% 85.01 % 73.16 % Coverage ratio (6) 97.40 % 82.29 % 101.41 % 97.80
% 111.64 % Return on average assets (1) -7.40 % -7.42 % 0.41 %
-3.64 % 0.51 % Return on average equity (1) -70.39 % -60.24 % 3.20
% -30.19 % 4.29 %
NET INTEREST
SPREAD
Yield on loans 5.32 % 5.53 % 6.06 % 5.60 % 6.07 % Yield on
investment securities 2.36 % 2.66 % 3.12 % 2.63 % 2.96 % Total
yield on interest earning assets 4.79 % 4.93 % 5.63 % 5.08 % 5.70 %
Cost of interest bearing deposits 0.59 % 0.67 % 0.88 % 0.70
% 1.06 % Cost of FHLB advances and other borrowings 6.23 % 5.99 %
5.83 % 5.97 % 4.59 % Total cost of interest bearing liabilities
0.80 % 0.88 % 1.08 % 0.91 % 1.24 % Spread (7) 3.99 % 4.05 %
4.55 % 4.17 % 4.46 % Net interest margin 4.12 % 4.21 % 4.71 % 4.33
% 4.64 %
PER SHARE
DATA
Basic earnings per share (2) $ (0.71 ) $ (0.74 ) $ 0.04 $ (1.42 ) $
0.24 Diluted earnings per share (3) (0.71 ) (0.74 ) 0.04 (1.42 )
0.24 Book value per share (5) 3.36 4.07 4.76 3.36 4.76 Tangible
book value per share (5) 2.21 2.92 3.59 2.21 3.59 Market price per
share: High for the period $ 2.46 $ 2.50 $ 3.21 $ 3.18 $ 3.81 Low
for the period 2.03 2.11 2.69 2.03 1.73 Close for period end 2.26
2.37 3.04 2.26 3.04 Cash dividends declared per share - - - - -
Average number of shares outstanding: Basic (2) 22,327,171
22,321,011 22,302,538 22,317,933 18,341,191 Diluted (3) 22,327,171
22,321,011 22,302,538 22,317,933 18,341,308 (1) Amounts for
the quarterly periods are annualized. (2) Amounts exclude ESOP
shares not committed to be released. (3) Amounts exclude ESOP
shares not committed to be released and include common stock
equivalents. (4) Non-interest expense divided by net interest
income and non-interest income. (5) Amounts calculated based on
shareholders’ equity and include ESOP shares not committed to be
released. (6) Net interest income divided by non-interest expense.
(7) Yield on interest-earning assets less cost of funds on interest
bearing liabilities.
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