VANCOUVER, Wash., Jan. 24, 2006 (PRIMEZONE) -- Riverview Bancorp, Inc. (Nasdaq:RVSB) today reported that an expanding net interest margin and excellent loan growth generated improved net interest income and contributed to a record fiscal 2006 third quarter profit. Net income was $2.7 million, or $0.48 per diluted share, for the fiscal third quarter ended December 31, 2005, compared to $760,000, or $0.16 per diluted share, in the same quarter a year ago. Year-to-date, net income increased 47% to $7.1 million, or $1.26 per diluted share, compared to $4.9 million, or $1.00 per diluted share, in the same period a year ago.
In the third quarter a year ago, the Company recorded a non-cash, non-operating charge of approximately $890,000 after-tax, or $0.18 per diluted share, related to the valuation of certain Fannie Mae and Freddie Mac preferred stock which have been subsequently sold.
"We are focused on growing our franchise, maintaining a strong balance sheet and matching assets and liabilities closely as we build our presence in the Northwest," said Pat Sheaffer, Chairman and CEO. "The expansion of our branch network into the Portland market is already contributing to profitability. We are also continuing our growth in the Portland metropolitan area, where we expect to open at least one new bank facility later this year."
Third Quarter Financial Highlights (at or periods ended December 31, 2005 compared to December 31, 2004)
- Net income increased to record $2.7 million.
- Net interest income increased 54% to $8.5 million.
- Net interest margin improved 64 basis points to 5.23%.
- Revenues increased 48% to $10.7 million when the prior year
$1.3 pre-tax million impairment charge is excluded.
- Total assets increased 36% to $739 million.
- Loans increased 50% to $600 million.
- Deposits grew 38% to $592 million, with a 36% increase in
transaction account balances.
- Non-performing assets were just 0.11% of total assets.
Operating Results
Revenues (net interest income before the provision for loan losses plus non-interest income) increased 48% to $10.7 million for the quarter compared to $7.2 million in the same quarter a year ago excluding the $1.3 million pre-tax impairment charge. Net interest income before the provision for loan loss increased 54% to $8.5 million in the third quarter of fiscal 2006 compared to $5.5 million in the third quarter a year ago. Non-interest income increased $0.4 million to $2.1 million in the third fiscal quarter of 2006 compared to $1.7 million in the prior year's third quarter excluding the $1.3 pre-tax million impairment charge. This increase was largely due to the 30% increase in fee based transaction accounts income and mortgage broker activity, which contributed $1.5 million to third quarter revenue, compared to $1.1 million in the same quarter a year ago.
For the first nine months of fiscal 2006 revenues increased 42% to $30.5 million compared to $21.5 million in the nine-month period a year ago. Year-to-date, net interest income before the provision for loan losses increased 41% to $23.7 million compared to $16.9 million in the same period a year ago. Non-interest income increased 13% to $6.8 million in the first nine months of fiscal 2006 compared to $6.0 million in the first nine months of fiscal 2005 excluding the $1.3 pre-tax million impairment charge.
Riverview's net interest margin was 5.23% for the third fiscal quarter of 2006, a 30 basis point improvement compared to 4.93% in the previous quarter, and a 64 basis point improvement from 4.59% for the third fiscal quarter of 2005. "Our improved margin reflects our growth in loans and our asset sensitive balance sheet," said Ron Wysaske, President and COO. The net interest margin for the first nine months of fiscal 2006 expanded 17 basis points to 4.96% from 4.79% in the nine-month period a year ago.
Non-interest expense increased $6.1 million in the third fiscal quarter compared to $4.7 million during the same period a year ago. For the first nine months of the fiscal year, non-interest expenses were $18.5 million, up from $14.2 million in the like period a year ago. Net of intangible asset amortization, the efficiency ratio improved 146 basis points to 56.82% for the third fiscal quarter of 2006, compared to 58.28% in the second fiscal quarter of 2006. The efficiency ratio was 64.61% in the prior year's third fiscal quarter excluding the impairment charge.
Balance Sheet Growth
"We have been taking steps to grow our loan portfolio while maintaining strong loan quality," said Wysaske. "As a result, our loan production increased our net loans 50% in our well diversified loan portfolio." Net loans at December 31, 2005, were $600 million compared to $398 million at December 31, 2004.
Total assets increased 36% to $739 million at December 31, 2005, compared to $542 million a year ago. Core deposits increased 39%, or $113 million; from year ago levels, and now account for 67% of total deposits. Deposits grew 38% to $592 million compared to $428 million at December 31, 2004, but were down from $600 million at September 30, 2005, due to normal transaction account activity. "Building transaction accounts continues to be a priority," added Wysaske. "We reduced interest-sensitive wholesale deposits by $2 million this year."
Including the issuance of $16.7 million in stock associated with the American Pacific Bank acquisition, shareholders' equity increased 33% to $90.9 million, from $68.5 million at the end of the third fiscal quarter last year. Book value was $15.65 at December 31, 2005, compared to $13.70 a year earlier. Tangible book value was $10.93 at December 31, 2005, compared to $11.63 a year ago.
Riverview completed the issuance of $7.0 million in trust preferred securities in the third fiscal quarter 2006. The net proceeds will provide additional capital for general corporate purposes, including current and future expansion of the Bank. Under the terms of the transaction, the trust preferred securities have a maturity of 30 years and are redeemable at par after five years. The securities require quarterly interest payments (subject to certain deferment options) and bear an interest rate tied to three-month LIBOR, plus 1.36%
Credit Quality and Performance Measures
Credit quality remains exceptional, as non-performing assets were just 0.11% of total assets at December 31, 2005, compared to 0.14% of total assets at December 31, 2004. The allowance for loan losses including loan commitments, was $7.4 million, or 1.22% of net loans at December 31, 2005, compared to $4.6 million or 1.15% of net loans at December 31, 2004. "Even though our nonperforming assets are low, due to growth in the loan portfolio we added $400,000 to the provision for loan losses in the third quarter, compared to $70,000 in the same quarter of 2004 and $450,000 for the quarter ended September 30, 2005," Wysaske added.
Riverview's third fiscal quarter 2006 return on average assets was 1.50% compared to return on average assets of 0.56% for the third fiscal quarter of 2005. Return on average equity was 11.90% for the quarter compared to 4.36% for the same period last year.
Conference Call
Riverview Bancorp will host a conference call Wednesday, January 25, at 8:00 a.m. PST, to discuss third quarter results. The conference call can be accessed live at 303-262-2143. To listen to the call online go to www.actioncast.acttel.com and use event ID 31728. An archived recording of the call can be accessed by dialing 303-590-3000 access code 11049704# until Wednesday, February 1, 2006, or via the Internet at www.actioncast.acttel.com event ID 31728.
Riverview Bancorp, Inc. (www.riverviewbank.com) is headquartered in Vancouver, Washington -- just north of Portland, Oregon on the I-5 corridor. With assets of $739 million, it is the parent company of the 82-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, and one lending center. The Bank offers true community banking services, focusing on providing the highest quality service and financial products to commercial and retail customers. On April 22, 2005, the Company completed its acquisition of American Pacific Bank (Nasdaq:AMPB), based in Portland, Oregon, with assets of $125 million.
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 integrate the American Pacific acquisition and 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
December 31, 2005, March 31, 2005 and December 31, 2004
(In thousands, except share data)
(Unaudited) DEC. 31, MARCH 31, DEC. 31,
2005 2005 2004
-------- -------- --------
ASSETS
Cash (including interest-earning
accounts of $8,338, $45,501
and $40,914) $ 34,451 $ 61,719 $ 55,423
Loans held for sale -- 510 140
Investment securities available for
sale, at fair value (amortized cost
of $24,124, $22,993 and $29,324) 24,011 22,945 29,438
Mortgage-backed securities held to
maturity, at amortized cost (fair
value of $2,013, $2,402 and $2,455) 1,991 2,343 2,407
Mortgage-backed securities available
for sale, at fair value (amortized
cost of $9,044, $11,756 and $12,645) 8,791 11,619 12,696
Loans receivable (net of allowance
for loan losses of $7,050,
$4,395 and $4,391) 599,634 429,449 398,421
Real estate owned -- 270 --
Prepaid expenses and other assets 2,103 1,538 1,262
Accrued interest receivable 3,324 2,151 1,874
Federal Home Loan Bank stock,
at cost 7,350 6,143 6,119
Premises and equipment, net 14,648 8,391 8,416
Deferred income taxes, net 2,450 2,624 2,827
Mortgage servicing intangible, net 403 470 518
Goodwill 26,058 9,214 9,214
Core deposit intangible, net 948 578 611
Bank owned life insurance 12,968 12,607 12,521
-------- -------- --------
TOTAL ASSETS $739,130 $572,571 $541,887
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposit accounts $592,208 $456,878 $427,649
Accrued expenses and
other liabilities 8,559 5,858 5,645
Advance payments by borrowers for
taxes and insurance 146 313 75
Federal Home Loan Bank advances 40,071 40,000 40,000
Junior subordinated debenture 7,217 -- --
-------- -------- --------
Total liabilities 648,201 503,049 473,369
SHAREHOLDERS' EQUITY:
Serial preferred stock, $.01 par
value; 250,000 authorized, issued
and outstanding, none -- -- --
Common stock, $.01 par value;
50,000,000 authorized December 31,
2005 - 5,811,940 issued,
5,811,936 outstanding; March 31,
2005 - 5,015,753 issued,
5,015,749 outstanding; December 31,
2004 - 5,001,579 issued,
5,001,575 outstanding; 58 50 50
Additional paid-in capital 58,225 41,112 40,847
Retained earnings 34,125 29,874 28,956
Unearned shares issued to employee
stock ownership trust (1,237) (1,392) (1,443)
Accumulated other comprehensive
(loss) income (242) (122) 108
-------- -------- --------
Total shareholders' equity 90,929 69,522 68,518
-------- -------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $739,130 $572,571 $541,887
======== ======== ========
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Income
For The Three And Nine Months Ended
December 31, 2005 And 2004
(In thousands, except share data)
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
2005 2004 2005 2004
--------- --------- --------- ---------
INTEREST INCOME:
Interest and fees on
loans receivable $ 11,783 $ 6,883 $ 32,390 $ 20,506
Interest on investment
securities-taxable 211 162 592 498
Interest on investment
securities-non-taxable 42 -- 128 --
Interest on mortgage-
backed securities 128 158 411 482
Other interest and
dividends 126 293 630 633
--------- --------- --------- ---------
Total interest income 12,290 7,496 34,151 22,119
--------- --------- --------- ---------
INTEREST EXPENSE:
Interest on deposits 3,290 1,438 8,820 3,741
Interest on borrowings 457 509 1,595 1,509
--------- --------- --------- ---------
Total interest
expense 3,747 1,947 10,415 5,250
--------- --------- --------- ---------
Net interest income 8,543 5,549 23,736 16,869
Less provision for
loan losses 400 70 1,300 260
--------- --------- --------- ---------
Net interest income
after provision for
loan losses 8,143 5,479 22,436 16,609
--------- --------- --------- ---------
NON-INTEREST INCOME:
Fees and service charges 1,460 1,127 4,544 3,439
Asset management fees 378 286 1,084 815
Gain on sale of loans
held for sale 81 97 284 409
Gain on sale of real
estate owned -- -- 21 --
Loss on impairment of
securities -- (1,349) -- (1,349)
Loan servicing income 49 11 68 45
Gain on sale of land
and fixed assets 2 -- -- 829
Gain on sale of credit
card portfolio 7 -- 311 --
Bank owned life
insurance 119 124 361 400
Other 47 27 139 73
--------- --------- --------- ---------
Total non-interest
income 2,143 323 6,812 4,661
--------- --------- --------- ---------
NON-INTEREST EXPENSE:
Salaries and employee
benefits 3,681 2,796 10,521 8,029
Occupancy and
depreciation 954 749 2,640 2,261
Data processing 335 254 1,073 740
Amortization of core
deposit intangible 53 33 157 148
Advertising and
marketing expense 160 165 697 638
FDIC insurance premium 19 14 51 44
State and local taxes 136 116 419 391
Telecommunications 117 79 279 213
Professional fees 248 143 1,000 395
Other 445 394 1,668 1,330
--------- --------- --------- ---------
Total non-interest
expense 6,148 4,743 18,505 14,189
--------- --------- --------- ---------
INCOME BEFORE INCOME
TAXES 4,138 1,059 10,743 7,081
PROVISION FOR INCOME
TAXES 1,390 299 3,612 2,220
--------- --------- --------- ---------
NET INCOME $ 2,748 $ 760 $ 7,131 $ 4,861
========= ========= ========= =========
Earnings per common
share:
Basic $ 0.49 $ 0.16 $ 1.28 $ 1.01
Diluted 0.48 0.16 1.26 1.00
Weighted average number
of shares outstanding:
Basic 5,661,324 4,824,463 5,589,820 4,809,201
Diluted 5,731,472 4,899,840 5,657,012 4,883,538
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
FINANCIAL HIGHLIGHTS
(Unaudited)
At or
At or for the for the
nine months ended year ended
December 31, March 31,
2005 2004 2005
-------- -------- --------
(Dollars in thousands,
FINANCIAL CONDITION DATA except share data)
------------------------
Average interest-earning
assets $637,599 $471,330 $479,512
Average interest-bearing
liabilities 525,156 383,703 388,426
Non-performing assets 782 782 726
Non-performing loans 782 782 456
Allowance for loan losses 7,050 4,391 4,395
Average interest-earning
assets to average
interest-bearing liabilities 121.41% 122.84% 123.45%
Allowance for loan losses
to non-performing loans 901.53% 561.51% 963.82%
Allowance for loan losses
to net loans 1.16% 1.09% 1.01%
Allowance for loan losses
to net loans and loan commitments 1.22% 1.15% 1.07%
Non-performing loans to
total net loans 0.13% 0.19% 0.10%
Non-performing assets to
total assets 0.11% 0.14% 0.13%
Shareholders' equity
to assets 12.30% 12.64% 12.14%
Number of banking facilities 17 14 14
At six
months At year
At nine months ended ended ended
December 31, Sept. 30, March 31,
2005 2004 2005 2005
-------- -------- -------- --------
LOAN DATA
---------
Residential:
One-to-four-family $ 32,350 $ 38,186 $ 32,251 $ 36,514
Multi-family 2,132 3,692 2,019 2,568
Construction:
One-to-four-family 41,578 39,249 44,618 44,415
Commercial real estate 71,546 1,453 54,224 11,138
Commercial 62,221 57,154 69,401 58,042
Consumer:
Secured 29,915 29,849 28,730 28,782
Unsecured 1,617 1,788 1,688 1,668
Land 50,276 27,972 42,532 29,151
Commercial real estate 319,250 206,450 314,776 224,691
-------- -------- -------- --------
610,885 405,793 590,239 436,969
Less:
Deferred loan fees, net 4,201 2,981 4,044 3,125
Allowance for loan losses 7,050 4,391 6,752 4,395
-------- -------- -------- --------
Loans receivable, net $599,634 $398,421 $579,443 $429,449
======== ======== ======== ========
DEPOSIT DATA
------------
Now Accounts $ 75,806 $ 60,052 $ 78,103 $ 65,667
High Yield Checking 60,412 50,683 52,263 50,562
Regular Savings 40,187 34,261 39,732 35,513
Money Market 125,668 78,214 128,926 76,331
Non-Interest Checking 91,514 66,524 103,767 79,499
Certificates of Deposit 198,621 137,915 196,889 149,306
-------- -------- -------- --------
Total Deposits $592,208 $427,649 $599,680 $456,878
======== ======== ======== ========
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
FINANCIAL HIGHLIGHTS
(UNAUDITED)
For the For the
Three months ended Nine months ended
December 31, December 31,
SELECTED OPERATING DATA 2005 2004 2005 2004
----------------------- ------ ------ ------ ------
Efficiency ratio (d) 57.53% 80.77% 60.58% 65.90%
Efficiency ratio net of
intangible amortization 56.82% 79.27% 59.75% 64.61%
Efficiency ratio net of
intangible amortization and
impairment charge 56.82% 64.61% 59.75% 60.83%
Coverage ratio net of
intangible amortization 140.16% 117.79% 129.37% 120.14%
Return on average assets (a) 1.50% 0.56% 1.34% 1.24%
Return on average assets
excluding impairment charge 1.50% 1.22% 1.34% 1.46%
Return on average equity (a) 11.90% 4.36% 10.78% 9.53%
Return on average equity
excluding impairment charge 11.90% 9.47% 10.78% 11.28%
Average rate earned on interest-
earning assets 7.51% 6.18% 7.13% 6.27%
Average rate paid on interest-
bearing liabilities 2.80% 1.96% 2.63% 1.82%
Spread 4.71% 4.22% 4.50% 4.45%
Net interest margin 5.23% 4.59% 4.96% 4.79%
At or for At or for
the three months the nine months
ended December 31, ended December 31,
2005 2004 2005 2004
PER SHARE DATA --------- --------- --------- ---------
--------------
Basic earnings per
share (b) $ 0.49 $ 0.16 $ 1.28 $ 1.01
Diluted earnings per
share (c) 0.48 0.16 1.26 1.00
Book value per share (e) 15.65 13.70 15.65 13.70
Tangible book value per
share (e) 10.93 11.63 10.93 11.63
Market price per share:
High for period 23.930 22.500 23.930 22.500
Low for the period 20.750 20.950 20.330 19.490
Close for period end 23.310 22.500 23.310 22.500
Cash dividends declared
per share 0.170 0.155 0.510 0.465
Average number of
shares outstanding:
Basic (b) 5,661,324 4,824,463 5,589,820 4,809,201
Diluted (c) 5,731,472 4,899,840 5,657,012 4,883,538
(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
plus non-interest income.
(e) Amounts calculated include ESOP shares not committed
to be released.