VANCOUVER, Wash., July 25, 2006 (PRIMEZONE) -- Riverview Bancorp, Inc. (Nasdaq:RVSB) today reported that an expanded net interest margin, coupled with excellent loan growth, generated a 44% increase in net income for the first fiscal quarter of 2007 ended June 30, 2006. Net income for the first quarter increased to $2.6 million, or $0.46 per diluted share, compared to $1.8 million, or $0.33 per diluted share, in the first quarter of fiscal 2006.
The management team of Riverview Bancorp will host a conference call on Wednesday, July 26, at 8:00 a.m. PDT, to discuss first quarter results. The conference call can be accessed live by telephone at 303-262-2130. To listen to the call online go to www.actioncast.acttel.com and use event ID 34421.
"Over the past year we have continued to grow our balance sheet by attracting core deposits in a competitive marketplace and building our loan portfolio to reflect that of a commercial bank. The success of these initiatives, coupled with the continuing benefits from our expansion into the Portland market by acquiring American Pacific Bank, has helped generate double digit profit growth," said Pat Sheaffer, Chairman and CEO. The acquisition was completed on April 22, 2005, therefore the first quarter a year ago contains two months of contribution from American Pacific.
First Quarter Financial Highlights (at or for periods ended June 30, 2006, compared to June 30, 2005) ------------------------------------------------------------------ - Net income increased 44% to $2.6 million. - Net interest income increased 27% to $9.0 million. - Revenues increased 20% to $11.1 million. - Cash dividend increased 12% to $0.19 per share. - Net interest margin increased 53 basis points to 5.23% compared to 4.70% a year ago. - Efficiency ratio improved to 60.83%. - Total assets increased 8% to $793 million. - Non-performing assets improved to 0.15% of total assets, compared to 0.33% a year ago. - Loans increased 17% to $659 million.
Operating Results
For first fiscal quarter 2007 net interest margin was 5.23%, compared to 5.24% for the immediate prior quarter and improved from 4.70% for the first fiscal quarter a year ago. "Although we saw strong loan growth for the first quarter, our net interest margin remained stable," said Sheaffer. "We expect our margin to remain steady in future quarters given the current short term interest rate environment."
In the first quarter, revenues increased 20% to $11.1 million, compared to $9.3 million in the first quarter a year ago. Net interest income before the provision for loan loss increased 27% to $9.0 million in the first quarter of fiscal 2007, compared to $7.1 million in the first quarter a year ago. Non-interest income declined slightly to $2.1 million in the first quarter compared to $2.2 million in the prior year's first quarter. Higher fees for asset management partially offset lower fees for transaction accounts and the gain from the sale of the credit card portfolio helped offset lower gains on the sale of loans due to reduced mortgage broker activity.
Fiscal first quarter non-interest expense was $6.8 million, compared to $6.1 million for the same period a year earlier. "The majority of the increase in operating costs is a result of the additional branch opened during the year, a full quarter of expenses from our new Portland area branches, the expansion of our lending team and the rising costs of employee benefits," said Ron Wysaske, President and COO. Salaries and employee benefits increased 13% to $3.8 million from $3.4 million a year ago. The efficiency ratio, which measures operating expenses as proportion of revenue, improved to 60.83% for the quarter, compared to 65.65% in 2006's first fiscal quarter.
Balance Sheet Growth
"Our lending team has done an excellent job of growing the loan portfolio and adding to the loan pipeline while maintaining exceptional loan quality. For the linked quarter, loans were up $35.9 million, or 23% annualized, as a result of their efforts," said Wysaske. "We anticipate continued high growth throughout Southwest Washington and the greater Portland metropolitan area, which should continue to fuel double digit growth in our loan portfolio. In fact, Marple's Pacific Northwest Letter stated in the June 21, 2006 issue that, `The economy of the Pacific Northwest in fact is booming -- growing at the fastest rate since before the recession in 2001.' This puts us in an enviable position." Net loans at June 30, 20006, increased 17% to $659 million compared to $561 million a year ago. Commercial real estate loans now account for 59% of the total loan portfolio and permanent single family loans represents just 5% of Riverview's loan portfolio.
Total assets increased 8% to $793 million at June 30, 2006, compared to $738 million a year ago. Total deposits grew 4% to $607 million, compared to $583 million at June 30, 2005. Core deposits, which increased 7% from year ago levels, account for 67 % of total deposits. "As interest rates have increased, we have seen a greater demand for higher-yielding checking," noted Wysaske. "Non-interest checking balances also grew 22% to $97 million, or 16% of total deposits, and money market accounts grew 6% to $134 million, or 22% of total deposits."
Shareholders' equity increased 7% to $93.5 million, compared to $87.4 million at the end of the first fiscal quarter a year ago. Book value per share was $16.17 at June 30, 2006, compared to $15.06 a year earlier, and tangible book value per share was $11.54 at quarter-end, compared to $10.25 at quarter-end a year earlier.
Credit Quality and Performance Measures
Credit quality remains strong, with non-performing assets improving to just 0.15% of total assets at June 30, 2006, compared to 0.33% of total assets at June 30, 2005. The allowance for loan losses including unfunded loan commitments was $8.0 million, or 1.20% of net loans at quarter-end, compared to $6.9 million, or 1.21% of net loans, a year ago.
Riverview's fiscal first quarter 2007 return on average assets improved to 1.36%, compared to 1.09% for fiscal first quarter 2006. Return on average equity improved to 11.18% for the quarter, compared to 8.89% for the first quarter a year ago.
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 $793 million, it is the parent company of the 83 year-old Riverview Community Bank, as well as Riverview Mortgage and Riverview Asset Management Corp. There are 17 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 June 30, 2006, March 31, 2006 and June 30, 2005 (In thousands, except share data) (Unaudited) June 30, March 31, June 30, 2006 2006 2005 --------------------------------------------------------------------- ASSETS Cash (including interest-earning accounts of $6,754, $7,786 and $52,262) $ 26,671 $ 31,346 $ 74,485 Loans held for sale -- 65 159 Investment securities available for sale, at fair value (amortized cost of $23,005, $24,139 and $24,136) 22,847 24,022 24,148 Mortgage-backed securities held to maturity, at amortized cost (fair value of $1,603, $1,830 and $2,297) 1,580 1,805 2,260 Mortgage-backed securities available for sale, at fair value (amortized cost of $8,011, $8,436 and $10,913) 7,666 8,134 10,828 Loans receivable (net of allowance for loan losses of $7,626 $7,221 and $6,526) 658,588 623,016 561,012 Prepaid expenses and other assets 2,164 2,210 2,166 Accrued interest receivable 3,526 3,058 2,664 Federal Home Loan Bank stock, at cost 7,350 7,350 7,350 Premises and equipment, net 19,125 19,127 9,339 Deferred income taxes, net 3,799 3,771 2,483 Mortgage servicing intangible, net 372 384 458 Goodwill 25,572 25,572 26,356 Core deposit intangible, net 845 895 1,055 Bank owned life insurance 13,220 13,092 12,726 -------- -------- -------- TOTAL ASSETS $793,325 $763,847 $737,489 ======== ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES: Deposit accounts $607,389 $606,964 $582,830 Accrued expenses and other liabilities 9,062 8,768 8,259 Advance payments by borrowers for taxes and insurance 144 358 98 Federal Home Loan Bank advances 73,300 46,100 58,904 Junior subordinated debenture 7,217 7,217 -- Capital lease obligation 2,745 2,753 -- -------- -------- -------- Total liabilities 699,857 672,160 650,091 SHAREHOLDERS' EQUITY: Serial preferred stock, $.01 par value; 250,000 authorized, issued and outstanding, none -- -- -- Common stock, $.01 par value; 50,000,000 authorized, June 30, 2006 - 5,780,090 issued, 5,780,086 outstanding; March 31, 2006 - 5,772,690 issued, 5,772,686 outstanding; June 30, 2005 - 5,804,953 issued, 5,804,949 outstanding 57 57 58 Additional paid-in capital 57,529 57,316 57,991 Retained earnings 37,348 35,776 30,737 Unearned shares issued to employee stock ownership trust (1,134) (1,186) (1,340) Accumulated other comprehensive loss (332) (276) (48) -------- -------- -------- Total shareholders' equity 93,468 91,687 87,398 -------- -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $793,325 $763,847 $737,489 ======== ======== ======== RIVERVIEW BANCORP, INC. AND SUBSIDIARY Consolidated Statements of Income for the Three Months Ended June 30, 2006 and 2005 (In thousands, except share data) Three Months Ended (Unaudited) June 30, 2006 2005 --------------------------------------------------------------------- INTEREST INCOME: Interest and fees on loans receivable $ 13,769 $ 9,597 Interest on investment securities-taxable 221 186 Interest on investment securities-non taxable 42 43 Interest on mortgage-backed securities 114 145 Other interest and dividends 52 254 ---------- ---------- Total interest income 14,198 10,225 ---------- ---------- INTEREST EXPENSE: Interest on deposits 4,222 2,471 Interest on borrowings 963 656 ---------- ---------- Total interest expense 5,185 3,127 ---------- ---------- Net interest income 9,013 7,098 Less provision for loan losses 350 450 ---------- ---------- Net interest income after provision for loan losses 8,663 6,648 ---------- ---------- NON-INTEREST INCOME: Fees and service charges 1,331 1,486 Asset management fees 436 364 Gain on sale of loans held for sale 72 126 Gain on sale of real estate owned -- 21 Loan servicing income 45 27 Gain on sale of credit card portfolio 67 -- Bank owned life insurance income 128 120 Other 36 43 ---------- ---------- Total non-interest income 2,115 2,187 ---------- ---------- NON-INTEREST EXPENSE: Salaries and employee benefits 3,835 3,399 Occupancy and depreciation 1,074 803 Data processing 335 365 Amortization of core deposit intangible 50 49 Advertising and marketing expense 302 231 FDIC insurance premium 24 15 State and local taxes 155 135 Telecommunications 112 63 Professional fees 178 363 Other 704 673 ---------- ---------- Total non-interest expense 6,769 6,096 ---------- ---------- INCOME BEFORE INCOME TAXES 4,009 2,739 PROVISION FOR INCOME TAXES 1,378 918 ---------- ---------- NET INCOME $ 2,631 $ 1,821 ========== ========== Earnings per common share: Basic $ 0.47 $ 0.33 Diluted $ 0.46 $ 0.33 Weighted average number of shares outstanding: Basic 5,637,604 5,389,547 Diluted 5,725,909 5,457,270 RIVERVIEW BANCORP, INC. AND SUBSIDIARY FINANCIAL HIGHLIGHTS (Unaudited) At or for At or for the the three months Year ended ended June 30, March 31, 2006 2005 2006 -------- -------- -------- (Dollars in thousands, except share data) FINANCIAL CONDITION DATA ------------------------ Average interest- earning assets $692,283 $608,973 $645,084 Average interest- bearing liabilities 574,714 505,581 532,521 Net average earning assets 117,569 103,392 112,563 Non-performing assets 1,173 2,420 415 Non-performing loans 1,173 2,420 415 Allowance for loan losses 7,626 6,526 7,221 Allowance for loan losses and unfunded loan commitments 8,002 6,855 7,583 Average interest-earning assets to average interest- bearing liabilities 120.46% 120.45% 121.14% Allowance for loan losses to non-performing loans 650.13% 269.67% 1740.00% Allowance for loan losses to net loans 1.14% 1.15% 1.15% Allowance for loan losses and unfunded loan commitments to net loans 1.20% 1.21% 1.20% Non-performing loans to total net loans 0.18% 0.43% 0.07% Non-performing assets to total assets 0.15% 0.33% 0.05% Shareholders' equity to assets 11.78% 11.85% 12.00% Number of branch banking facilities 17 16 17 At or for At or for the the three months Year ended ended June 30, March 31, 2006 2005 2006 LOAN DATA -------- -------- -------- --------- Residential: One-to-four family $ 32,668 $ 34,324 $ 32,553 Multi-family 3,226 2,037 2,157 Construction: 87,040 48,932 81,572 One-to-four family Commercial real estate 50,387 29,390 47,079 Commercial 66,474 67,239 59,834 Consumer: Secured 30,961 29,040 29,781 Unsecured 926 4,811 1,415 Land 56,705 36,924 49,558 Commercial real estate 342,174 318,631 330,705 ------------------------------------------------------------------- 670,561 571,328 634,654 Less: Deferred loan fees 4,347 3,790 4,352 Allowance for loan losses 7,626 6,526 7,221 ------------------------------------------------------------------- Loans receivable, net $658,588 $561,012 $623,081 =================================================================== DEPOSIT DATA ------------ Now Accounts $ 62,631 $ 88,368 $ 62,941 High Yield Checking 81,489 52,380 66,516 Regular Savings 34,871 37,613 38,344 Money Market 134,010 126,948 137,451 Non-Interest Checking 96,636 79,117 94,592 Certificates of Deposit 197,752 198,404 207,120 ------------------------------------------------------------------- Total Deposits $607,389 $582,830 $606,964 =================================================================== RIVERVIEW BANCORP, INC. AND SUBSIDIARY FINANCIAL HIGHLIGHTS (Unaudited) At or for At or for the the three months year ended ended June 30, March 31, 2006 2005 2006 --------- --------- --------- SELECTED OPERATING DATA (Dollars in thousands, ----------------------- except share data) Efficiency ratio(d) 60.83% 65.65% 61.60% Efficiency ratio net of intangible amortization 60.18% 64.77% 60.79% Coverage ratio(f) 133.15% 116.44% 127.50% Coverage ratio net of intangible amortization 134.14% 117.38% 128.56% Return on average assets(a) 1.36% 1.09% 1.36% Return on average equity(a) 11.18% 8.89% 10.95% Average rate earned on interest-earned assets 8.24% 6.76% 7.34% Average rate paid on interest-bearing liabilities 3.62% 2.48% 2.79% Spread(g) 4.62% 4.28% 4.55% Net interest margin 5.23% 4.70% 5.03% PER SHARE DATA -------------- Basic earnings per share(b) $ 0.47 $ 0.34 $ 1.74 Diluted earnings per share(c) 0.46 0.33 1.72 Book value per share(e) 16.17 15.06 15.88 Tangible book value per share(e) 11.54 10.25 11.23 Market price per share: High for the period 27.05 21.80 27.50 Low for the period 24.27 20.33 20.33 Close for period end 26.20 21.35 26.76 Cash dividends declared per share 0.19 0.17 0.68 Average number of shares outstanding: Basic(b) 5,637,604 5,389,547 5,602,240 Diluted(c) 5,725,909 5,457,270 5,675,168 (a) Amounts are annualized. (b) Amounts calculated exclude ESOP shares not committed to be released. (c) Amounts calculated exclude ESOP shares not committed to be released and include common stock equivalents. (d) Non-interest expense divided by net interest income and non-interest income. (e) Amounts calculated include ESOP shares not committed to be released. (f) Net interest income divided by non-interest expense. (g) Yield on interest-earning assets less cost of funds on interest bearing liabilities.