VANCOUVER, Wash., Oct. 23, 2007 (PRIME NEWSWIRE) -- Riverview Bancorp, Inc. (Nasdaq:RVSB) today reported that strong core deposit growth and continued excellent credit quality contributed to fiscal second quarter 2008 earnings. For the quarter ended September 30, 2007, net income was $2.4 million, or $0.22 per diluted share, compared to the record earnings of $3.0 million, or $0.26 per diluted share, posted in the second quarter of fiscal 2007. For the first six months of fiscal 2008, net income was $5.3 million, or $0.47 per diluted share, compared to $5.6 million, or $0.49 per diluted share, in the first six months of fiscal 2007. All per share data has been adjusted to reflect the August 2006 2-for-1 stock split.
"While our second quarter profits were below last year's record setting earnings, they reflect the very strong franchise we are building in the healthy Southwestern Washington and metropolitan Portland, Oregon markets," stated Pat Sheaffer, Chairman and CEO. "Leveraging our reputation as a provider of premier customer service has helped us gather low cost deposits and utilize them to fund our healthy and growing loan portfolio."
Second Quarter Fiscal 2008 Highlights (at or for the period ended September 30, 2007, compared to September 30, 2006)
* Net income was $2.4 million, or $0.22 per diluted share. * Asset quality remains excellent -- Non-performing assets are just 0.03% of total assets. * Core deposits increased 11%. * Net interest margin was 4.72%. * Riverview Asset Management Corp. increased assets under management 9.6% to $302.9 million. * Asset management fees increased 12.7% to $513,000.
Operating Results
For the second quarter of fiscal 2008, the net interest margin was 4.72% compared to 4.83% in the previous linked quarter and 4.97% in the second fiscal quarter a year ago. For the first six months of fiscal 2008, the net interest margin was 4.78% compared to 5.10% in the first half of fiscal 2007. "The yield curve remained a challenge for us as well as the entire banking industry. We expect improved spreads in light of the recent Federal Reserve rate cut, and anticipate our margin will stabilize or improve as we see the effect of our interest bearing deposits re-price," said Ron Wysaske, President and COO.
Reflecting the impact of the increase in funding costs, net interest income in the second fiscal quarter of 2008 decreased to $8.7 million compared to $9.1 million in the second fiscal quarter a year ago. For the first six months of fiscal 2008, net interest income was $17.5 million, compared to $18.1 million in the first six months of fiscal 2007. Non-interest income was down slightly to $2.2 million for the quarter, compared to $2.3 million a year ago, primarily due to lower mortgage broker loan fees that are included in fees and service charges. However, for the first six months of fiscal 2008, non-interest income increased 3% to $4.5 million compared to $4.4 million for the first six months a year ago, largely due to fee income from Riverview Asset Management Corp., which increased 19% to $1.1 million during the first half of fiscal 2008.
Non-interest expenses were $6.8 million in the second quarter of fiscal 2008, unchanged from the previous linked quarter and an increase from $6.3 million in the second quarter of fiscal 2007. The efficiency ratio was 62.61% for the second quarter, compared to 54.93% in the second quarter a year ago and 61.76% for the first six months of fiscal 2008, compared to 57.84% for the same period a year ago. "We have increased our infrastructure to accommodate expanding our franchise in Southwest Washington and into Oregon in the last six months," said Wysaske. "We expect our efficiency ratio to return to more normalized levels in the second half of the year."
Riverview's return on average assets was 1.19% for the second quarter and 1.29% year-to-date, compared to 1.45% and 1.41% for the respective periods last year. Return on average equity was 9.98% for the quarter and 10.58% for the first six months of fiscal 2008, compared to 12.22% and 11.70%, respectively, for the same periods last year.
Balance Sheet Growth
"In spite of a very competitive market for deposits, we have been successful at growing core deposits to fund our loan growth," Wysaske said. "Non-interest checking balances represent 13% of total deposits and interest checking balances represent 20% of total deposits." Total deposits were $660 million at the end of September 2007 compared to $640 million at the end of September 2006. Core deposits, defined as all deposits excluding certificates of deposit, increased 11% over the past year to $480 million, and represent 73% of total deposits. The following table breaks out deposits by category:
At the six months ended At the year September 30, ended March 31, 2007 2006 2007 ---- ---- ---- (Dollars in thousands) DEPOSIT DATA ------------ Interest checking $132,340 20.06% $153,631 23.99% $144,451 21.71% Regular savings 27,408 4.15% 32,896 5.14% 29,472 4.43% Money market deposit accounts 235,091 35.63% 145,612 22.74% 205,007 30.81% Non-interest checking 85,492 12.96% 101,852 15.90% 86,601 13.01% Certificates of deposit 179,454 27.20% 206,413 32.23% 199,874 30.04% --------------------------------------------------------- Total deposits $659,785 100.00% $640,404 100.00% $665,405 100.00% =========================================================
Total assets were $821 million at the end of September 2007, compared to $844 million a year ago.
"During the current quarter we saw our loan growth improve," Wysaske said. "Growth in the loan portfolio will drive revenue growth." Net loans at September 30, 2007 grew 3.6% over the linked June 2007 quarter end. "As our loan portfolio grows, our goal is to keep it well-diversified and maintain our excellent credit quality. Loan growth and excellent credit quality should drive revenue growth going forward," stated Wysaske. Net loans were $687 million at September 30, 2007, compared to $691 million a year ago. Commercial and construction loans account for 89% of the total loan portfolio, similar to last year. The following table breaks out loans by category:
At the At the quarter ended quarter ended September 30, September 30, 2007 2006 ---- ---- (Dollars in thousands) LOAN DATA (1) ------------ Commercial and construction Commercial $ 90,515 13.00% $ 95,689 13.69% Other real estate mortgage 367,380 52.75% 360,756 51.62% Real estate construction 162,429 23.32% 166,233 23.78% ------------------ ------------------ Total commercial and construction 620,324 89.07% 622,678 89.09% Consumer Real estate one-to-four family 71,725 10.30% 72,319 10.35% Other installment 4,432 0.63% 3,916 0.56% ------------------ ------------------ Total consumer 76,157 10.93% 76,235 10.91% ------------------ ------------------ Total loans $696,481 100.00% $698,913 100.00% ================== ================== (1) Certain prior period loan balances have been reclassified to conform to management's current year presentation.
Shareholders' Equity
Shareholders' equity was $92.6 million, compared to $95.8 million a year ago. Book value per share improved to $8.42 at the end of September 2007, compared to $8.28 a year earlier, and tangible book value per share improved to $6.01 at quarter-end, compared to $5.97 a year ago. During fiscal 2008, 775,000 shares have been purchased on the open market under the announced Repurchase Plans. Under the current Repurchase Plan announced June 21, 2007, there are 225,000 shares remaining to be purchased. Riverview remains a well-capitalized institution.
Credit Quality and Performance Measures
"Our lending team has done an excellent job at maintaining loan quality," noted Wysaske. "We continue to keep a watchful eye on industry and regional trends and closely monitor credit risk." Riverview has no sub-prime residential real estate loans in portfolio. Non-performing assets were $206,000, or 0.03% of total assets, at September 30, 2007, compared to $1.7 million, or 0.20% of total assets, at September 30, 2006. The allowance for loan losses, including unfunded loan commitments of $422,000, was $9.5 million, or 1.36% of net loans at quarter-end, compared to $8.6 million, or 1.24% of net loans, a year ago.
Conference Call
The management team of Riverview Bancorp, Inc. will host a conference call on Wednesday, October 24, at 8:00 a.m. PDT, to discuss the second quarter results. The conference call can be accessed live by telephone at 303-262-2211. To listen to the call online go 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 $821 million, it is the parent company of the 84 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 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.
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 September 30, 2007, March 31, 2007 and September 30, 2006 (In thousands, except share data) Sept. 30, March 31, Sept. 30, (Unaudited) 2007 2007 2006 --------------------------------------------------------------------- ASSETS Cash (including interest-earning accounts of $15,271, $7,818 and $15,198) $ 36,877 $ 31,423 $ 43,453 Loans held for sale 604 -- 197 Investment securities available for sale, at fair value (amortized cost of $8,735, $19,258 and $23,017) 8,761 19,267 22,963 Mortgage-backed securities held to maturity, at amortized cost (fair value of $1,039, $1,243 and $1,495) 1,027 1,232 1,477 Mortgage-backed securities available for sale, at fair value (amortized cost of $6,043, $6,778 and $7,608) 5,943 6,640 7,404 Loans receivable (net of allowance for loan losses of $9,062, $8,653 and $8,263) 687,419 682,951 690,650 Real estate and other pers. property owned 74 -- -- Prepaid expenses and other assets 2,957 1,905 2,021 Accrued interest receivable 3,850 3,822 4,117 Federal Home Loan Bank stock, at cost 7,350 7,350 7,350 Premises and equipment, net 21,336 21,402 21,011 Deferred income taxes, net 4,089 4,108 3,716 Mortgage servicing rights, net 332 351 368 Goodwill 25,572 25,572 25,572 Core deposit intangible, net 630 711 799 Bank owned life insurance 13,893 13,614 13,349 ---------- ---------- ---------- TOTAL ASSETS $ 820,714 $ 820,348 $ 844,447 ========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES: Deposit accounts $ 659,785 $ 665,405 $ 640,404 Accrued expenses and other liabilities 8,982 9,349 7,921 Advance payments by borrowers for taxes and insurance 376 397 377 Federal Home Loan Bank advances 33,600 35,050 90,000 Junior subordinated debentures 22,681 7,217 7,217 Capital lease obligation 2,704 2,721 2,737 ---------- ---------- ---------- Total liabilities 728,128 720,139 748,656 SHAREHOLDERS' EQUITY: Serial preferred stock, $.01 par value; 250,000 authorized, issued and outstanding, none -- -- -- Common stock, $.01 par value; 50,000,000 authorized, September 30, 2007 - 10,996,650 issued, 10,996,650 outstanding; 110 117 116 March 31, 2007 - 11,707,980 issued, 11,707,980 outstanding; September 30, 2006 - 11,575,480 issued, 11,575,472 outstanding; Additional paid-in capital 47,953 58,438 57,794 Retained earnings 45,629 42,848 39,134 Unearned shares issued to employee stock ownership trust (1,057) (1,108) (1,083) Accumulated other comprehensive loss (49) (86) (170) ---------- ---------- ---------- Total shareholders' equity 92,586 100,209 95,791 ---------- ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 820,714 $ 820,348 $ 844,447 ========== ========== ========== RIVERVIEW BANCORP, INC. AND SUBSIDIARY FINANCIAL HIGHLIGHTS (Unaudited) RIVERVIEW BANCORP, INC. AND SUBSIDIARY Consolidated Statements of Income for the Three and Six Months Ended September 30, 2007 and 2006 Three Months Ended Six Months Ended (In thousands, except September 30, September 30, share data)(Unaudited) 2007 2006 2007 2006 --------------------------------------------------------------------- INTEREST INCOME: Interest and fees on loans receivable $ 14,631 $ 14,834 $ 29,511 $ 28,603 Interest on investment securities-taxable 140 221 312 442 Interest on investment securities-non taxable 38 42 76 84 Interest on mortgage- backed securities 85 109 176 223 Other interest and dividends 420 96 663 148 -------- -------- -------- -------- Total interest income 15,314 15,302 30,738 29,500 -------- -------- -------- -------- INTEREST EXPENSE: Interest on deposits 6,033 4,908 12,223 9,130 Interest on borrowings 587 1,267 993 2,230 -------- -------- -------- -------- Total interest expense 6,620 6,175 13,216 11,360 -------- -------- -------- -------- Net interest income 8,694 9,127 17,522 18,140 Less provision for loan losses 400 600 450 950 -------- -------- -------- -------- Net interest income after provision for loan losses 8,294 8,527 17,072 17,190 -------- -------- -------- -------- NON-INTEREST INCOME: Fees and service charges 1,382 1,449 2,809 2,780 Asset management fees 513 455 1,061 891 Gain on sale of loans held for sale 92 111 183 183 Loan servicing income 27 36 66 81 Gain on sale of credit card portfolio -- 66 -- 133 Bank owned life insurance income 140 129 279 257 Other 62 45 120 81 -------- -------- -------- -------- Total non-interest income 2,216 2,291 4,518 4,406 -------- -------- -------- -------- NON-INTEREST EXPENSE: Salaries and employee benefits 3,908 3,532 7,876 7,367 Occupancy and depreciation 1,244 1,135 2,546 2,209 Data processing 208 222 376 557 Amortization of core deposit intangible 38 46 80 96 Advertising and marketing expense 370 356 652 658 FDIC insurance premium 19 13 38 37 State and local taxes 178 133 349 288 Telecommunications 92 101 196 213 Professional fees 172 198 395 376 Other 602 536 1,104 1,240 -------- -------- -------- -------- Total non-interest expense 6,831 6,272 13,612 13,041 -------- -------- -------- -------- INCOME BEFORE INCOME TAXES 3,679 4,546 7,978 8,555 PROVISION FOR INCOME TAXES 1,249 1,573 2,709 2,951 -------- -------- -------- -------- NET INCOME $ 2,430 $ 2,973 $ 5,269 $ 5,604 ======== ======== ======== ======== Earnings per common share: Basic $ 0.22 $ 0.26 $ 0.47 $ 0.50 Diluted 0.22 0.26 0.47 0.49 Weighted average number of shares outstanding: Basic 10,904,464 11,302,927 11,146,813 11,289,143 Diluted 11,026,598 11,473,750 11,275,562 11,463,125 RIVERVIEW BANCORP, INC. AND SUBSIDIARY FINANCIAL HIGHLIGHTS At or for the six months At or for the year ended September 30, ended March 31, FINANCIAL 2007 2006 2007 CONDITION ---- ---- ---- DATA (Dollars in thousands) ---------- Average interest- earning assets $732,999 $ 711,372 $ 731,089 Average interest- bearing liabilities 621,295 592,679 614,546 Net average earning assets 111,704 118,693 116,543 Non-performing assets 206 1,704 226 Non-performing loans 132 1,704 226 Allowance for loan losses 9,062 8,263 8,653 Allowance for loan losses and unfunded loan commitments 9,484 8,648 9,033 Average interest- earning assets to average interest-bearing liabilities 117.98% 120.03% 118.96% Allowance for loan losses to non- performing loans 6,865.15% 484.92% 3,828.76% Allowance for loan losses to net loans 1.30% 1.18% 1.25% Allowance for loan losses and unfunded loan commitments to net loans 1.36% 1.24% 1.31% Non-performing loans to total net loans 0.02% 0.24% 0.03% Non-performing assets to total assets 0.03% 0.20% 0.03% Shareholders' equity to assets 11.28% 11.34% 12.22% Number of banking facilities 19 18 19 LOAN DATA (1) ------------- Commercial and construction Commercial $ 90,515 13.00% $ 95,689 13.69% $ 91,174 13.18% Other real estate mortgage 367,380 52.75% 360,756 51.62% 360,930 52.19% Real estate con- struction 162,429 23.32% 166,233 23.78% 166,073 24.01% ------------------------------------------------------- Total commercial and con- struction 620,324 89.07% 622,678 89.09% 618,177 89.38% Consumer Real estate one-to-four family 71,725 10.30% 72,319 10.35% 69,808 10.10% Other installment 4,432 0.63% 3,916 0.56% 3,619 0.52% ------------------------------------------------------- Total consumer 76,157 10.93% 76,235 10.91% 73,427 10.62% ------------------------------------------------------- Total loans 696,481 100.00% 698,913 100.00% 691,604 100.00% Less: Allowance for loan losses 9,062 8,263 8,653 -------- --------- ---------- Loans receivable, net $ 687,419 $ 690,650 $ 682,951 ========= ========= ========= (1) Certain prior period loan balances have been reclassified to conform to management's current year presentation. RIVERVIEW BANCORP, INC. AND SUBSIDIARY FINANCIAL HIGHLIGHTS (Unaudited) COMPOSITION OF COMMERCIAL AND CONSTRUCTION LOAN TYPES BASED ON LOAN PURPOSE -------------------------------------------------------------- Commercial Other & Construction Real Estate Real Estate Total Commercial Mortgage Construction ----- ---------- -------- ------------ September 30, 2007 (Dollars in thousands) ------------------ Commercial $ 90,515 $90,515 $ -- $ -- Commercial construction 47,829 -- -- 47,829 Office buildings 77,126 -- 77,126 -- Warehouse/industrial 34,892 -- 34,892 -- Retail/shopping centers/strip malls 66,890 -- 66,890 -- Assisted living facilities 11,044 -- 11,044 -- Single purpose facilities 46,248 -- 46,248 -- Land 104,134 -- 104,134 -- Multi-family 27,046 -- 27,046 -- One-to-four family 114,600 -- -- 114,600 ---------------------------------------------- Total $620,324 $90,515 $367,380 $162,429 ============================================== 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 six months ended At the year September 30, ended March 31, 2007 2006 2007 ---- ---- ---- (Dollars in thousands) DEPOSIT DATA ------------ Interest checking $132,340 20.06% $153,631 23.99% $144,451 21.71% Regular savings 27,408 4.15% 32,896 5.14% 29,472 4.43% Money market deposit accounts 235,091 35.63% 145,612 22.74% 205,007 30.81% Non-interest checking 85,492 12.96% 101,852 15.90% 86,601 13.01% Certificates of deposit 179,454 27.20% 206,413 32.23% 199,874 30.04% -------------------------------------------------------- Total deposits $659,785 100.00% $640,404 100.00% $665,405 100.00% ======================================================== RIVERVIEW BANCORP, INC. AND SUBSIDIARY FINANCIAL HIGHLIGHTS (Unaudited) At or for the three At or for the six months ended months ended September 30, September 30, SELECTED OPERATING DATA 2007 2006 2007 2006 ------------------ ---- ---- ---- ---- (Dollars in thousands, except share data) Efficiency ratio (4) 62.61% 54.93% 61.76% 57.84% Efficiency ratio net of intangible amortization 61.98% 54.31% 61.15% 57.21% Coverage ratio (6) 127.27% 145.52% 128.72% 139.10% Coverage ratio net of intangible amortization 127.98% 146.59% 129.49% 140.13% Return on average assets (1) 1.19% 1.45% 1.29% 1.41% Return on average equity (1) 9.98% 12.22% 10.58% 11.70% Average rate earned on interest-earned assets 8.31% 8.32% 8.37% 8.28% Average rate paid on interest-bearing liabilities 4.22% 4.01% 4.24% 3.82% Spread (7) 4.09% 4.31% 4.13% 4.46% Net interest margin 4.72% 4.97% 4.78% 5.10% PER SHARE DATA -------------- Basic earnings per share (2) $ 0.22 $ 0.26 $ 0.47 $ 0.50 Diluted earnings per share (3) 0.22 0.26 0.47 0.49 Book value per share (5) 8.42 8.28 8.42 8.28 Tangible book value per share (5) 6.01 5.97 6.01 5.97 Market price per share: High for the period $ 15.73 $ 13.65 $ 16.28 $ 13.65 Low for the period 13.30 12.58 13.30 12.14 Close for period end 14.85 13.50 14.85 13.50 Cash dividends declared per share 0.110 0.100 0.220 0.195 Average number of shares outstanding: Basic (2) 10,904,464 11,302,927 11,146,813 11,289,143 Diluted (3) 11,026,598 11,473,750 11,275,562 11,463,125 (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.