VANCOUVER, Wash., May 5, 2008 (PRIME NEWSWIRE) -- Riverview Bancorp, Inc. (Nasdaq:RVSB) today reported results for fiscal year end and fourth quarter ended March 31, 2008. "The Northwest economy has been impacted by the real estate slowdown that is affecting the whole country, but our local markets remain among the best in the USA," said Pat Sheaffer, Chairman and CEO. "Riverview, in many ways, is as strong or stronger than the previous year, which was our best year ever. Strength in our local markets, growth in customers, our balance sheet, and our multiple sources of revenue, create opportunities for Riverview in our market area."
Fourth quarter net income was $1.2 million, or $0.11 per diluted share, compared to $2.8 million, or $0.24 per diluted share, in the fourth quarter of fiscal 2007. A $1.8 million provision for loan losses in the fourth quarter 2008, compares to a $100,000 provision in fourth quarter 2007. For fiscal year 2008, net income was $8.6 million, or $0.79 per diluted share, compared to $11.6 million, or $1.01 per diluted share, in fiscal 2007. Again, the 2008 provision of $2.9 million compared to the 2007 provision of $1.4 million explains most of the difference.
"In fiscal 2008 changes in the economy affected the local markets that we served. While loan growth has remained strong, we have seen a marked slowdown in residential real estate sales in all our markets which directly impacted our land development and speculative construction lending," said Sheaffer. "We believe our actions to strengthen our allowance for loan losses and address these issues immediately is prudent for our future success. Even with these aggressive steps to meet credit quality concerns, our fourth quarter and fiscal 2008 results show that we remain well positioned to pursue our strategies for growth over the long term."
"The local housing markets have slowed to a more moderate pace compared to the last few years and as a result, our one-to-four family real estate construction portfolio is now down to $93 million from $110 million a year ago," said Ron Wysaske, President and COO. "Despite the slowing housing market, population growth in the Southwest Washington and metropolitan Portland, Oregon area remains strong. We will continue to focus on our customers' needs in order to expand our existing relationships while looking to add new customers. We believe this presents an excellent opportunity for us to grow in fiscal 2009."
Fiscal 2008 Highlights (at or for the period ended March 31, 2008, compared to March 31, 2007)
* Net income was $8.6 million, or $0.79 per diluted share. * Added $1.5 million more to the loan loss provision than a year ago. * Net interest margin was 4.66% for the year. * Net loans increased 11% to $757 million. * Riverview Asset Management Corp. increased assets under management 16% to $330.5 million. * Asset management fees increased 14% to $2.1 million. * Capital position remains strong - Riverview remains "well- capitalized" with the total capital ratio at 10.99%.
Credit Quality
"We have always placed a strong emphasis on managing asset quality by applying a disciplined approach to the approval process and monitoring the loan portfolio for signs of deterioration," said Wysaske. "Since we have recently seen an increase in nonperforming loans, we proactively added to our reserves for possible loan losses." As expected, non-performing assets increased to $8.2 million, or 0.92% of total assets, at March 31, 2008, compared to $1.1 million, or 0.14% of total assets, at December 31, 2007 and $226,000, or 0.03% of total assets, at March 31, 2007. The increase is comprised primarily of three borrowers, which include one land development loan for $3.9 million, one commercial loan for $1.1 million and two construction loans to the same borrower for $1.9 million. Riverview had a total of $7.7 million in non-performing loans and $494,000 in other real estate owned (OREO) at the end of March 2008. The allowance for loan losses, including unfunded loan commitments of $337,000, was $11.0 million, or 1.44% of net loans at year end, compared with $9.9 million, or 1.37% of total loans at December 31, 2007, and $9.0 million, or 1.31% of net loans, a year ago. Management believes the allowance for loan losses is adequate and appropriate based on its current analysis of the loan portfolio's credit quality and current economic conditions. Net loan charge-offs were $866,000, or 0.11% of total loans, for the year ended March 31, 2008.
Operating Results
For the fourth quarter of fiscal 2008, the net interest margin was 4.41% compared to 4.71% in the previous linked quarter and 4.95% in the fourth fiscal quarter a year ago. For fiscal 2008, the net interest margin was 4.66% compared to 5.01% in fiscal 2007. "Margin compression continued to be a challenge for Riverview, as well as the entire banking industry. We expect improved spreads in light of the Federal Reserve rate cuts in January and March, and anticipate our margin will stabilize as our interest-bearing deposits re-price," said Wysaske.
Net interest income in the fourth fiscal quarter of 2008 was $8.6 million compared to $9.1 million in the fourth fiscal quarter a year ago, largely due to interest-bearing assets re-pricing down faster than interest-bearing liabilities as a result of the recent Federal Reserve rate cuts. Non-interest income was unchanged at $2.2 million for the quarter, compared to the same quarter a year ago.
For fiscal 2008, net interest income was $35.0 million, compared to $36.5 million in fiscal 2007. Non-interest income was $8.9 million for the year compared to $9.0 million a year ago. "Although fee income from Riverview Asset Management Corp. increased 14% during the year, it was offset by declining mortgage broker loan fees reflecting the continued slowdown in the real estate market," added Wysaske.
"During the fourth fiscal quarter we moved into our new Hazel Dell branch, which replaced an existing branch. In the third quarter we opened a new lending center in Clackamas, Oregon, which houses three commercial lending officers, creating our second lending center to serve the east Portland area," said Sheaffer. "The hiring of these additional quality lenders has helped contribute to our continued loan growth in the fourth quarter and we believe will generate a good deal of new business in the future." Non-interest expenses were $7.2 million in the fourth quarter of fiscal 2008, and $27.8 million for the fiscal year, compared to $6.9 million and $26.4 million for the respective periods a year ago, reflecting the opening of new facilities and the continued expansion of the lending team.
The efficiency ratio was 66.46% for the fourth quarter, compared to 60.75% in the fourth quarter a year ago and 63.40% for all of fiscal 2008, compared to 57.85% a year ago. "The increase in our efficiency ratio reflects the decline in net interest margin and the increase in non-interest expense due to our new facilities and expanded lending team," said Wysaske. "As we grow into our increased capacity we expect our efficiency ratio will improve."
Riverview's return on average assets was 0.54% for the fourth quarter and 1.04% for the year, compared to 1.36% and 1.43% for the fourth quarter and full year fiscal 2007. Return on average equity was 4.92% for the quarter and 8.92% for fiscal 2008, compared to 11.11% and 11.88%, respectively, for the same periods last year.
Balance Sheet Growth
Total assets increased 8% to $887 million at March 31, 2008, compared to $820 million a year ago.
"The recent growth in our loan portfolio is a direct result of the expansion of the lending team throughout the year," Wysaske said. "Our plan remains to keep a well-diversified, high quality loan portfolio." Net loans were up 11% to $757 million at March 31, 2008, compared to $683 million a year ago and up $41 million, or 6%, over the linked December 2007 quarter end. At March 31, 2008, commercial loans and construction loans accounted for 70% and 19%, respectively, of our total loan portfolio compared to 65% and 24% at March 31, 2007.
The following table breaks out the composition of commercial and construction loan types based on loan purpose:
COMPOSITION OF COMMERCIAL AND CONSTRUCTION LOAN TYPES BASED ON
LOAN PURPOSE
-------------------------------------------------------------------
Commercial Other Real Real
& Construction Estate Estate
March 31, 2008 Total Commercial Mortgage Construction
-------------- ---- ---------- -------- ------------
(Dollars in thousands)
Commercial $109,585 $109,585 $ -- $ --
Commercial construction 55,277 -- -- 55,277
Office buildings 88,106 -- 88,106 --
Warehouse/industrial 39,903 -- 39,903 --
Retail/shopping centers/
strip malls 70,510 -- 70,510 --
Assisted living
facilities 28,072 -- 28,072 --
Single purpose facilities 65,756 -- 65,756 --
Land 108,030 -- 108,030 --
Multi-family 29,045 -- 29,045 --
One-to-four family 93,354 -- -- 93,354
-----------------------------------------
Total $687,638 $109,585 $429,422 $148,631
=========================================
Riverview does not have sub-prime residential real estate in its loan portfolio and does not believe that it has any exposure to sub-prime lending in its Mortgage Backed Securities portfolio.
"We are continuing to expand our commercial banking products by offering remote deposit capture of checks to selected customers and enhancing our cash management product line, in an effort to grow our core deposit business," added Wysaske. Total deposits were $667 million at March 31, 2008, compared to $665 million a year ago. On a linked quarter basis, total deposits increased $44 million, or 7% over the past three months. Non-interest checking balances represent 12% of total deposits and interest checking balances represent 15% of total deposits. Core deposits, defined as all deposits excluding certificates of deposit, were $401 million at the end of March 2008, and represent 60% of total deposits.
The following table breaks out deposits by category:
March 31, 2008 Dec. 31, 2007 March 31, 2007
-------------- ------------- --------------
(Dollars in thousands)
DEPOSIT DATA
------------
Interest checking $102,489 15.37% $112,062 18.00% $144,451 21.71%
Regular savings 27,401 4.11% 26,216 4.21% 29,472 4.43%
Money market
deposit accounts 189,309 28.38% 210,084 33.74% 205,007 30.81%
Non-interest
checking 82,121 12.31% 80,710 12.96% 86,601 13.01%
Certificates of
deposit 265,680 39.83% 193,538 31.09% 199,874 30.04%
-------- ------- -------- ------- -------- -------
Total deposits $667,000 100.00% $622,610 100.00% $665,405 100.00%
======== ======= ======== ======= ======== =======
Shareholders' Equity
Shareholders' equity was $92.6 million, compared to $100.2 million a year ago. Book value per share was $8.48 at the end of March 2008, compared to $8.56 a year earlier. During the fiscal year, 875,000 shares have been purchased on the open market under the announced Repurchase Plans. Under the current Repurchase Plan announced June 21, 2007, there are 125,000 shares remaining to be purchased. Riverview's capital position remains strong, as the bank remains "well-capitalized." At March 31, 2008, the total capital ratio was 10.99% compared to 11.29% at December 31, 2007 and 11.38% at March 31, 2007.
Conference Call
The management team of Riverview Bancorp will host a conference call on Tuesday, May 6, at 8:00 a.m. PDT, to discuss fiscal 2008 results. The conference call can be accessed live by telephone at 303-262-2211. To listen to the call online go to the "About Riverview" page of Riverview's website at www.riverviewbank.com.
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 $887 million, it is the parent company of the 85 year-old Riverview Community Bank, as well as Riverview Mortgage and Riverview Asset Management Corp. There are 18 branches, including ten in fast growing Clark County, three in the Portland metropolitan area and four lending centers. The Bank offers true community banking services, focusing on providing the highest quality service and financial products to commercial and retail customers.
Statements concerning future performance, developments or events, concerning expectations for growth and market forecasts, and any other guidance on future periods, constitute forward-looking statements, which are subject to a number of risks and uncertainties that might cause actual results to differ materially from stated objectives. These factors include but are not limited to: RVSB's ability to acquire shares according to internal repurchase guidelines, regional economic conditions and the company's ability to efficiently manage expenses. Additional factors that could cause actual results to differ materially are disclosed in Riverview Bancorp's recent filings with the SEC, including but not limited to Annual Reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
March 31, 2008 and 2007
(In thousands, except share data) March 31,
(Unaudited) 2008 2007
---------------------------------------------------------------------
ASSETS
Cash (including interest-earning
accounts of $14,238 and $7,818) $ 36,439 $ 31,423
Loans held for sale -- --
Investment securities available
for sale, at fair value (amortized
cost of $7,825 and $19,258) 7,487 19,267
Mortgage-backed securities held to
maturity, at amortized cost
(fair value of $892 and $1,243) 885 1,232
Mortgage-backed securities available
for sale, at fair value (amortized
cost of $5,331 and $6,778) 5,338 6,640
Loans receivable (net of allowance
for loan losses of $10,687 and $8,653) 756,538 682,951
Real estate and other pers. property owned 494 --
Prepaid expenses and other assets 2,679 1,905
Accrued interest receivable 3,436 3,822
Federal Home Loan Bank stock, at cost 7,350 7,350
Premises and equipment, net 21,026 21,402
Deferred income taxes, net 4,571 4,108
Mortgage servicing rights, net 302 351
Goodwill 25,572 25,572
Core deposit intangible, net 556 711
Bank owned life insurance 14,176 13,614
--------- ---------
TOTAL ASSETS $ 886,849 $ 820,348
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposit accounts $ 667,000 $ 665,405
Accrued expenses and other liabilities 8,654 9,349
Advance payments by borrowers for
taxes and insurance 393 397
Federal Home Loan Bank advances 92,850 35,050
Junior subordinated debentures 22,681 7,217
Capital lease obligation 2,686 2,721
--------- ---------
Total liabilities 794,264 720,139
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, 2008
- 10,913,773 issued and outstanding; 109 117
March 31, 2007 - 11,707,980 issued
and outstanding;
Additional paid-in capital 46,799 58,438
Retained earnings 46,871 42,848
Unearned shares issued to employee
stock ownership trust (976) (1,108)
Accumulated other comprehensive loss (218) (86)
--------- ---------
Total shareholders' equity 92,585 100,209
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 886,849 $ 820,348
========= =========
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Income for the Three and Twelve
Months Ended March 31, 2008 and 2007
(In thousands, except share data) (Unaudited)
Three Months Ended Twelve Months Ended
March 31, March 31,
2008 2007 2008 2007
--------------------------------------------- ----------------------
INTEREST INCOME:
Interest and fees on
loans receivable $ 14,286 $ 15,276 $ 58,747 $ 59,496
Interest on investment
securities-taxable 85 195 488 854
Interest on investment
securities-non taxable 31 38 142 163
Interest on mortgage-
backed securities 69 96 323 421
Other interest and
dividends 137 117 982 366
---------------------- ----------------------
Total interest income 14,608 15,722 60,682 61,300
---------------------- ----------------------
INTEREST EXPENSE:
Interest on deposits 4,580 5,829 22,143 20,507
Interest on borrowings 1,456 833 3,587 4,275
---------------------- ----------------------
Total interest
expense 6,036 6,662 25,730 24,782
---------------------- ----------------------
Net interest income 8,572 9,060 34,952 36,518
Less provision for
loan losses 1,800 100 2,900 1,425
---------------------- ----------------------
Net interest income
after provision for
loan losses 6,772 8,960 32,052 35,093
---------------------- ----------------------
NON-INTEREST INCOME:
Fees and service
charges 1,268 1,432 5,346 5,747
Asset management fees 539 479 2,145 1,874
Gain on sale of loans
held for sale 92 101 368 434
Loan servicing income 16 30 126 155
Gain on sale of credit
card portfolio -- -- -- 133
Bank owned life
insurance income 143 132 562 522
Other 156 44 335 169
---------------------- ----------------------
Total non-interest
income 2,214 2,218 8,882 9,034
---------------------- ----------------------
NON-INTEREST EXPENSE:
Salaries and employee
benefits 4,128 3,957 16,249 15,012
Occupancy and depreciation 1,296 1,293 5,146 4,687
Data processing 186 211 786 988
Amortization of core
deposit intangible 37 44 155 184
Advertising and
marketing expense 185 175 1,054 1,102
FDIC insurance premium 152 19 210 74
State and local taxes 210 190 741 644
Telecommunications 114 109 406 437
Professional fees 215 234 826 809
Other 645 619 2,218 2,416
---------------------- ----------------------
Total non-interest
expense 7,168 6,851 27,791 26,353
---------------------- ----------------------
INCOME BEFORE INCOME
TAXES 1,818 4,327 13,143 17,774
PROVISION FOR INCOME
TAXES 656 1,563 4,499 6,168
---------------------- ----------------------
NET INCOME $ 1,162 $ 2,764 $ 8,644 $ 11,606
====================== ======================
Earnings per common
share:
Basic $ 0.11 $ 0.24 $ 0.79 $ 1.03
Diluted 0.11 0.24 0.79 1.01
Weighted average number
of shares outstanding:
Basic 10,669,554 11,385,327 10,915,271 11,312,847
Diluted 10,714,453 11,588,573 11,006,673 11,516,232
At or for At or for At or for
the year ended the nine months the year ended
March 31, ended Dec. 31, March 31,
2008 2007 2007
---- ---- ----
FINANCIAL
CONDITION DATA (Dollars in thousands)
-----------------
Average interest-
earning assets $751,023 $738,053 $731,089
Average interest-
bearing
liabilities 643,265 628,104 614,546
Net average
earning assets 107,758 109,949 116,543
Non-performing
assets 8,171 1,142 226
Non-performing
loans 7,677 1,068 226
Allowance for
loan losses 10,687 9,505 8,653
Allowance for loan
losses and
unfunded loan
commitments 11,024 9,912 9,033
Average interest-
earning assets to
average interest-
bearing
liabilities 116.75% 117.50% 118.96%
Allowance for loan
losses to non-
performing loans 139.21% 889.98% 3828.76%
Allowance for loan
losses to total
loans 1.39% 1.31% 1.25%
Allowance for loan
losses and
unfunded loan
commitments to
total loans 1.44% 1.37% 1.31%
Non-performing
loans to total
loans 1.00% 0.15% 0.03%
Non-performing
assets to total
assets 0.92% 0.14% 0.03%
Shareholders'
equity to assets 10.44% 10.94% 12.22%
Number of banking
facilities 20 20 19
LOAN DATA
---------
Commercial and
construction
Commercial $109,585 14.28% $ 99,259 13.68% $ 91,174 13.18%
Other real
estate mortgage 429,422 55.97% 391,878 54.03% 360,930 52.19%
Real estate
construction 148,631 19.37% 150,951 20.81% 166,073 24.01%
--------------------------------------------------
Total commercial
and
construction 687,638 89.62% 642,088 88.52% 618,177 89.38%
Consumer
Real estate one-
to-four family 75,922 9.90% 78,479 10.82% 69,808 10.10%
Other
installment 3,665 0.48% 4,774 0.66% 3,619 0.52%
--------------------------------------------------
Total consumer 79,587 10.38% 83,253 11.48% 73,427 10.62%
--------------------------------------------------
Total loans 767,225 100.00% 725,341 100.00% 691,604 100.00%
Less:
Allowance for
loan losses 10,687 9,505 8,653
Loans receivable,-------- -------- --------
net $756,538 $715,836 $682,951
======== ======== ========
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
FINANCIAL HIGHLIGHTS
(Unaudited)
COMPOSITION OF COMMERCIAL AND CONSTRUCTION LOAN TYPES BASED ON
LOAN PURPOSE
-------------------------------------------------------------------
Commercial Other Real Real
& Construction Estate Estate
Total Commercial Mortgage Construction
----- ---------- -------- ------------
March 31, 2008 (Dollars in thousands)
--------------
Commercial $109,585 $109,585 $ -- $ --
Commercial construction 55,277 -- -- 55,277
Office buildings 88,106 -- 88,106 --
Warehouse/industrial 39,903 -- 39,903 --
Retail/shopping centers/
strip malls 70,510 -- 70,510 --
Assisted living
facilities 28,072 -- 28,072 --
Single purpose facilities 65,756 -- 65,756 --
Land 108,030 -- 108,030 --
Multi-family 29,045 -- 29,045 --
One-to-four family 93,354 -- -- 93,354
-----------------------------------------
Total $687,638 $109,585 $429,422 $148,631
=========================================
March 31, 2007
-------------- (Dollars in thousands)
Commercial $ 91,174 $ 91,174 $ -- $ --
Commercial construction 56,226 -- -- 56,226
Office buildings 62,310 -- 62,310 --
Warehouse/industrial 40,238 -- 40,238 --
Retail/shopping centers/
strip malls 70,219 -- 70,219 --
Assisted living facilities 11,381 -- 11,381 --
Single purpose facilities 41,501 -- 41,501 --
Land 103,240 -- 103,240 --
Multi-family 32,041 -- 32,041 --
One-to-four family 109,847 -- -- 109,847
-----------------------------------------
Total $618,177 $ 91,174 $360,930 $166,073
=========================================
At the year At the nine At the year
ended March 31, months ended Dec. 31, ended March 31,
2008 2007 2007
---- ---- ----
(Dollars in thousands)
DEPOSIT DATA
------------
Interest checking $102,489 15.37% $112,062 18.00% $144,451 21.71%
Regular savings 27,401 4.11% 26,216 4.21% 29,472 4.43%
Money market
deposit accounts 189,309 28.38% 210,084 33.74% 205,007 30.81%
Non-interest
checking 82,121 12.31% 80,710 12.96% 86,601 13.01%
Certificates of
deposit 265,680 39.83% 193,538 31.09% 199,874 30.04%
--------------------------------------------------
Total deposits $667,000 100.00% $622,610 100.00% $665,405 100.00%
==================================================
RIVERVIEW BANCORP, INC. AND SUBSIDIARY FINANCIAL HIGHLIGHTS
(Unaudited)
At or for the three At or for the twelve
months ended March 31, months ended March 31,
SELECTED OPERATING
DATA 2008 2007 2008 2007
------------------ ---- ---- ---- ----
(Dollars in thousands, except share data)
Efficiency ratio (4) 66.46% 60.75% 63.40% 57.85%
Efficiency ratio net
of intangible
amortization 65.73% 60.06% 62.78% 57.22%
Coverage ratio (6) 119.59% 132.24% 125.77% 138.57%
Coverage ratio net of
intangible
amortization 120.21% 133.10% 126.47% 139.55%
Return on average
assets (1) 0.54% 1.36% 1.04% 1.43%
Return on average
equity (1) 4.92% 11.11% 8.92% 11.88%
Average rate earned
on interest-earned
assets 7.51% 8.58% 8.09% 8.40%
Average rate paid on
interest-bearing
liabilities 3.55% 4.28% 4.00% 4.03%
Spread (7) 3.96% 4.30% 4.09% 4.37%
Net interest margin 4.41% 4.95% 4.66% 5.01%
PER SHARE DATA
--------------
Basic earnings per
share (2) $ 0.11 $ 0.24 $ 0.79 $ 1.03
Diluted earnings per
share (3) 0.11 0.24 0.79 1.01
Book value per share
(5) 8.48 8.56 8.48 8.56
Tangible book value
per share (5) 6.06 6.28 6.06 6.28
Market price per
share:
High for the period $ 12.840 $ 17.580 $ 16.280 $ 17.580
Low for the period $ 9.930 $ 15.290 $ 9.930 $ 12.135
Close for period
end $ 9.980 $ 15.940 $ 9.980 $ 15.940
Cash dividends
declared per share $ 0.090 $ 0.100 $ 0.420 $ 0.395
Average number of
shares outstanding:
Basic (2) 10,669,554 11,385,327 10,915,271 11,312,847
Diluted (3) 10,714,453 11,588,573 11,006,673 11,516,232
(1) Amounts are annualized.
(2) Amounts calculated exclude ESOP shares not committed to be
released.
(3) Amounts calculated 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 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.