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.