Riverview Bancorp, Inc. (Nasdaq GSM: RVSB) (“Riverview” or the
“Company”) today reported earnings for the second fiscal quarter
ended September 30, 2019 increased to $4.5 million, or $0.20 per
diluted share, compared to $4.2 million, or $0.18 per diluted
share, in the preceding quarter, and $4.2 million, or $0.19 per
diluted share, in the second fiscal quarter a year ago.
“Riverview’s second quarter financial results
continue to demonstrate the strength of our franchise, generating
record earnings for both the second quarter and for the first six
months of fiscal year 2020,” said Kevin Lycklama, president and
chief executive officer. “I am extremely proud of the outstanding
job by our entire team. Growing our deposits by more than $60
million and producing record quarterly earnings is a truly
remarkable accomplishment.”
Second Quarter Highlights (at or for the
period ended September 30, 2019)
- Record quarterly net income of $4.5
million, or $0.20 per diluted share.
- Net interest margin (NIM) increased
to 4.36% for the quarter.
- Return on average assets improved
to 1.55% for the second quarter.
- Total deposits increased $60.0
million during the quarter to $982.3 million.
- FHLB Advances paid down to zero
during the quarter.
- Total loans were $881.3 million at
September 30, 2019.
- Asset quality remains strong, with
non-performing assets at 0.13% of total assets.
- Total risk-based capital ratio was
17.27% and Tier 1 leverage ratio was 11.79%.
- Paid a quarterly cash dividend of
$0.045 per share, generating a current dividend yield of 2.49%
based on the share price at close of market on October 15,
2019.
Income
Statement
Return on average assets improved to 1.55% in
the second quarter of fiscal year 2020 compared to 1.46% in the
second quarter of fiscal 2019. Return on average equity and average
tangible equity (non-GAAP) remained healthy at 12.68% and 15.79%,
respectively, compared to 13.68% and 17.75% for the second fiscal
quarter a year ago.
“Riverview’s operating performance during the
quarter was outstanding, generating strong core earnings, while
maintaining excellent asset quality,” stated Lycklama. “We continue
to monitor and manage our overhead expenses, as we grow our
franchise.”
Total net revenues increased during the quarter
to $14.9 million compared to $14.6 million in both the prior
quarter and the year ago quarter. Year-to-date, total net
revenues increased to $29.5 million from $29.2 million in the same
period a year ago. The increase was primarily driven by an increase
in average loans and non-interest income.
Net interest income for the quarter was $11.7
million compared to $11.5 million in the preceding quarter and
$11.8 million in the second fiscal quarter a year ago. In the first
six months of fiscal 2020, net interest income was $23.2 million,
compared to $23.4 million in the first six months of fiscal 2019.
The decrease in net interest income for the six months ended
September 30, 2019 was primarily attributable to an increase in
funding costs compared to the same prior year period in addition to
$585,000 of non-accrual interest from a prior charged off loan that
was collected during the six months ended September 30, 2018.
Riverview’s second fiscal quarter NIM was 4.36%
compared to 4.33% in the prior quarter and 4.39% in the second
fiscal quarter a year ago. The accretion on purchased loans totaled
$78,000 during the current quarter compared to $108,000 during the
preceding quarter and $152,000 in the same period a year ago,
resulting in a two basis point increase in the NIM for the current
period compared to a four basis point increase for the preceding
quarter and a seven basis point increase for the same period a year
ago. Net fees on loan prepayments were $112,000 for the second
fiscal quarter of 2020 which added four basis points to the NIM
compared to $31,000 adding one basis point to the NIM in the
preceding quarter and $172,000 adding six basis points to the NIM
in the second fiscal quarter a year ago. In the first six months of
fiscal 2020, Riverview’s NIM was 4.35% compared to 4.43% in the
same period a year earlier. Net fees on loan prepayments were
$144,000 for the six month ended September 30, 2019 which added
three basis points to the NIM compared to $282,000 adding five
basis points to the NIM in the same six month period a year
ago.
“Our net interest margin remains strong,
however, funding costs increased during the quarter due to deposit
pricing pressures as we increased rates on certain deposit
products,” said David Lam, executive vice president and chief
financial officer. “We anticipate the increased competition in our
market areas will continue to place pressure on both loan and
deposit pricing.”
The weighted average rate on loans originated
during the quarter ended September 30, 2019, was 5.21% compared to
5.73% for the quarter ended June 30, 2019, and 5.63% for the
quarter ended September 30, 2018. The decrease in the weighted
average rate on loans was attributed to the recent fed rate
decreases along with pricing competition in our market area.
Non-interest income increased to $3.2 million in
the second fiscal quarter compared to $3.1 million in the preceding
quarter and $2.8 million in the second fiscal quarter a year ago.
The improvement in non-interest income was primarily driven by an
increase in fees and service charges. In the first six months
of fiscal 2020, non-interest income increased 10.4% to $6.3 million
compared to $5.7 million in the same period a year ago.
Asset management fees increased 15.6% compared
to the same quarter a year ago. Asset management fees were $1.1
million during the second fiscal quarter compared to $943,000 in
the second fiscal quarter a year ago. In the first six months of
fiscal 2020, asset management fees increased 19.5% to $2.2 million
compared to $1.9 million in the first six months of fiscal 2019.
Riverview Trust Company’s assets under management decreased
slightly to $690.5 million at September 30, 2019 compared to $694.8
million three months earlier and increased $76.5 million, or 12.5%,
compared to $614.0 million one year earlier.
Non-interest expense decreased to $9.0 million
during the second fiscal quarter of 2020 compared to $9.2 million
in the preceding quarter. The decrease during the current quarter
was, in part, related to an $81,000 gain on the disposal of
equipment in addition to the utilization of the Federal Deposit
Insurance Corporation (FDIC) credits of $76,000 to offset current
quarter FDIC insurance assessments as a result of the FDIC deposit
insurance fund exceeding the statutorily required minimum reserve
ratio of 1.35% and assessment credits being issued when the reserve
ratio is at or above 1.38%. Year-to-date, non-interest expense was
$18.2 million compared to $17.9 million in the first six months of
fiscal 2019. The increase in non-interest expense is attributable
to strategic growth initiatives and improved digital product
offerings which increased our technology related expenses as well
as the addition of several experienced bankers.
The efficiency ratio improved to 60.47% for the
second fiscal quarter compared to 62.95% in the preceding quarter
and 60.99% in the second fiscal quarter a year ago.
For the second fiscal quarter of 2020, income
tax expense totaled $1.4 million, for an effective tax rate of
23.0%, compared to 22.5% in the first fiscal quarter of 2020 and
22.4% in the second fiscal quarter of 2019.
Balance Sheet Review
Total deposits increased $60.0 million during
the quarter to $982.3 million compared to $922.3 million three
months earlier. Deposit costs increased from 0.15% in the previous
quarter to 0.28%, reflecting the continued deposit pricing
pressures in our local markets.
“We made significant progress in growing our
deposits during the quarter,” said Lycklama. “With the increase in
deposits, we were able to repay our outstanding FHLB borrowings and
reduce our loan to deposit ratio to 89.7% compared to 96.3% in the
previous quarter.”
Federal Home Loan Bank (FHLB) advances were paid
down to zero during the second fiscal quarter of 2020 compared to
$56.9 million in outstanding FHLB advances at June 30, 2019.
Riverview’s total loans decreased modestly
during the quarter to $881.3 million compared to $888.0 million
three months earlier and increased $31.5 million, or 3.7%, when
compared to $849.8 million a year ago. Total loans continue to be
impacted by an increase in paydowns on existing loans, however, the
loan pipeline remained healthy at $43.8 million at September 30,
2019 compared to $47.7 million at the end of the prior quarter.
Undisbursed construction loans totaled $53.3 million at September
30, 2019, compared to $69.0 million three months earlier, with the
majority of the undisbursed construction loans expected to fund
over the next several quarters.
Shareholders’ equity increased to $143.1 million
at September 30, 2019 compared to $138.7 million three months
earlier and $122.4 million a year earlier. Tangible book value per
share (non-GAAP) increased to $5.06 at September 30, 2019 compared
to $4.88 at June 30, 2019, and $4.17 at September 30, 2018.
Riverview will pay a quarterly cash dividend of $0.045 per share on
October 25, 2019, to shareholders of record on October 14,
2019.
Credit Quality
Riverview’s asset quality continues to improve,
with non-performing loans, non-performing assets and classified
assets all decreasing compared to a year ago. Riverview recorded no
provision for loan losses during the second fiscal quarter of 2020
or in the linked quarter. In the second fiscal quarter a year ago,
Riverview recorded a provision for loan losses of $250,000.
Non-performing loans totaled $1.5 million, or
0.17% of total loans, at September 30, 2019 compared to $1.5
million, or 0.16% of total loans, at June 30, 2019 and $2.3
million, or 0.27% of total loans, at September 30, 2018. Riverview
has had no real estate owned balances for the last 4 quarters.
Net loan charge offs were $6,000 during the
second fiscal quarter of 2020 compared to $15,000 in the preceding
quarter and $86,000 in the second fiscal quarter a year ago.
Classified assets decreased to $4.3 million at
September 30, 2019 compared to $6.0 million at June 30, 2019 and
$6.2 million at September 30, 2018. The classified asset to total
capital ratio was 3.0% at September 30, 2019 compared to 4.1% three
months earlier and 4.7% a year earlier.
At September 30, 2019, the allowance for loan
losses totaled $11.4 million, which was unchanged compared to three
months earlier. The allowance for loan losses represented 1.30% of
total loans at September 30, 2019 compared to 1.29% of total loans
at the end of the prior quarter. Included in the carrying value of
loans are net discounts on the MBank purchased loans, which may
reduce the need for an allowance for loan losses on these loans
because they are carried at an amount below the outstanding
principal balance. The remaining net discount on these purchased
loans was $1.3 million at September 30, 2019 compared to $1.4
million at the end of the prior quarter and $1.9 million at
September 30, 2018.
Capital
Riverview continues to maintain capital levels
well in excess of the regulatory requirements to be categorized as
“well capitalized” with a total risk-based capital ratio of 17.27%
and a Tier 1 leverage ratio of 11.79% at September 30, 2019. The
Company’s tangible common equity to average tangible assets ratio
(non-GAAP) increased to 10.06% at September 30, 2019.
Non-GAAP Financial
Measures
In addition to results presented in accordance
with generally accepted accounting principles (“GAAP”), this press
release contains certain non-GAAP financial measures. We believe
that certain non-GAAP financial measures provide investors with
information useful in understanding the Company’s financial
performance; however, readers of this report are urged to review
these non-GAAP financial measures in conjunction with GAAP results
as reported.
Financial measures that exclude intangible
assets are non-GAAP measures. To provide investors with a broader
understanding of capital adequacy, Riverview provides non-GAAP
financial measures for tangible common equity, along with the GAAP
measure. Tangible shareholders’ equity is calculated as
shareholders’ equity less goodwill and other intangible assets. In
addition, tangible assets are total assets less goodwill and other
intangible assets. We calculate tangible book value per share by
dividing tangible shareholders’ equity by the number of common
shares outstanding. This non-GAAP financial measure has inherent
limitations, is not required to be uniformly applied and is not
audited. Further, the non-GAAP financial measure should not be
considered in isolation or as a substitute for book value per share
or total shareholders' equity determined in accordance with GAAP
and may not be comparable to similarly titled measures reported by
other companies. Reconciliations of the GAAP and non-GAAP financial
measures are presented below.
(Dollars in thousands) |
|
September 30, 2019 |
|
June 30, 2019 |
|
September 30, 2018 |
|
March 31, 2019 |
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
$ |
143,119 |
|
$ |
138,663 |
|
$ |
122,410 |
|
$ |
133,122 |
Goodwill |
|
|
27,076 |
|
|
27,076 |
|
|
27,076 |
|
|
27,076 |
Core deposit intangible, net |
|
|
839 |
|
|
880 |
|
|
1,011 |
|
|
920 |
Tangible shareholders'
equity |
|
$ |
115,204 |
|
$ |
110,707 |
|
$ |
94,323 |
|
$ |
105,126 |
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,173,019 |
|
$ |
1,165,234 |
|
$ |
1,148,447 |
|
$ |
1,156,921 |
Goodwill |
|
|
27,076 |
|
|
27,076 |
|
|
27,076 |
|
|
27,076 |
Core deposit intangible, net |
|
|
839 |
|
|
880 |
|
|
1,011 |
|
|
920 |
Tangible assets |
|
$ |
1,145,104 |
|
$ |
1,137,278 |
|
$ |
1,120,360 |
|
$ |
1,128,925 |
|
|
|
|
|
|
|
|
|
About Riverview
Riverview Bancorp, Inc. (www.riverviewbank.com)
is headquartered in Vancouver, Washington – just north of Portland,
Oregon, on the I-5 corridor. With assets of $1.17 billion at
September 30, 2019, it is the parent company of the 96-year-old
Riverview Community Bank, as well as Riverview Trust Company. The
Bank offers true community banking services, focusing on providing
the highest quality service and financial products to commercial
and retail clients. There are 18 branches, including 14 in the
Portland-Vancouver area and three lending centers. For the past 6
years, Riverview has been named Best Bank by the readers of The
Vancouver Business Journal, The Columbian and The Gresham
Outlook.
“Safe Harbor” statement under the Private
Securities Litigation Reform Act of 1995: This press release
contains forward-looking statements that are subject to risks and
uncertainties, including, but not limited to: the Company’s ability
to raise common capital; the credit risks of lending activities,
including changes in the level and trend of loan delinquencies and
write-offs and changes in the Company’s allowance for loan losses
and provision for loan losses that may be impacted by deterioration
in the housing and commercial real estate markets; changes in
general economic conditions, either nationally or in the Company’s
market areas; changes in the levels of general interest rates, and
the relative differences between short and long term interest
rates, deposit interest rates, the Company’s net interest margin
and funding sources; fluctuations in the demand for loans, the
number of unsold homes, land and other properties and fluctuations
in real estate values in the Company’s market areas; secondary
market conditions for loans and the Company’s ability to sell loans
in the secondary market; results of examinations of us by the
Office of Comptroller of the Currency or other regulatory
authorities, including the possibility that any such regulatory
authority may, among other things, require us to increase the
Company’s reserve for loan losses, write-down assets, change
Riverview Community Bank’s regulatory capital position or affect
the Company’s ability to borrow funds or maintain or increase
deposits, which could adversely affect its liquidity and earnings;
legislative or regulatory changes that adversely affect the
Company’s business including changes in regulatory policies and
principles, or the interpretation of regulatory capital or other
rules; the Company’s ability to attract and retain deposits;
further increases in premiums for deposit insurance; the Company’s
ability to control operating costs and expenses; the use of
estimates in determining fair value of certain of the Company’s
assets, which estimates may prove to be incorrect and result in
significant declines in valuation; difficulties in reducing risks
associated with the loans on the Company’s balance sheet; staffing
fluctuations in response to product demand or the implementation of
corporate strategies that affect the Company’s workforce and
potential associated charges; computer systems on which the Company
depends could fail or experience a security breach; the Company’s
ability to retain key members of its senior management team; costs
and effects of litigation, including settlements and judgments; the
Company’s ability to successfully integrate any assets,
liabilities, customers, systems, and management personnel it may in
the future acquire into its operations and the Company’s ability to
realize related revenue synergies and cost savings within expected
time frames and any goodwill charges related thereto; increased
competitive pressures among financial services companies; changes
in consumer spending, borrowing and savings habits; the
availability of resources to address changes in laws, rules, or
regulations or to respond to regulatory actions; the Company’s
ability to pay dividends on its common stock; and interest or
principal payments on its junior subordinated debentures; adverse
changes in the securities markets; inability of key third-party
providers to perform their obligations to us; changes in accounting
policies and practices, as may be adopted by the financial
institution regulatory agencies or the Financial Accounting
Standards Board, including additional guidance and interpretation
on accounting issues and details of the implementation of new
accounting methods; other economic, competitive, governmental,
regulatory, and technological factors affecting the Company’s
operations, pricing, products and services and the other risks
described from time to time in our filings with the SEC.
Such forward-looking statements may include
projections. Any such projections were not prepared in accordance
with published guidelines of the American Institute of Certified
Public Accountants or the Securities Exchange Commission regarding
projections and forecasts nor have such projections been audited,
examined or otherwise reviewed by independent auditors of the
Company. In addition, such projections are based upon many
estimates and inherently subject to significant economic and
competitive uncertainties and contingencies, many of which are
beyond the control of management of the Company. Accordingly,
actual results may be materially higher or lower than those
projected. The inclusion of such projections herein should not be
regarded as a representation by the Company that the projections
will prove to be correct.
The Company cautions readers not to place undue
reliance on any forward-looking statements. Moreover, you should
treat these statements as speaking only as of the date they are
made and based only on information then actually known to the
Company. The Company does not undertake and specifically disclaims
any obligation to revise any forward-looking statements to reflect
the occurrence of anticipated or unanticipated events or
circumstances after the date of such statements. These risks could
cause our actual results for fiscal 2020 and beyond to differ
materially from those expressed in any forward-looking statements
by, or on behalf of, us, and could negatively affect the Company’s
operating and stock price performance.
RIVERVIEW BANCORP,
INC. AND SUBSIDIARY |
|
|
|
|
|
|
|
Consolidated Balance
Sheets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except share data)
(Unaudited) |
September 30, 2019 |
|
June 30, 2019 |
|
September 30, 2018 |
|
March 31, 2019 |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash (including interest-earning accounts of $32,632, $6,852, |
$ |
48,888 |
|
$ |
24,112 |
|
|
$ |
27,080 |
|
|
$ |
22,950 |
|
$12,537 and $5,844) |
|
|
|
|
|
|
|
Certificate of deposits held for investment |
|
249 |
|
|
747 |
|
|
|
3,984 |
|
|
|
747 |
|
Loans held for sale |
|
310 |
|
|
- |
|
|
|
- |
|
|
|
909 |
|
Investment securities: |
|
|
|
|
|
|
|
Available for sale, at estimated fair value |
|
163,682 |
|
|
170,762 |
|
|
|
190,792 |
|
|
|
178,226 |
|
Held to maturity, at amortized cost |
|
31 |
|
|
33 |
|
|
|
38 |
|
|
|
35 |
|
Loans receivable (net of allowance for loan losses of $11,436, |
|
|
|
|
|
|
|
$11,442, $11,513, and $11,457) |
|
869,880 |
|
|
876,535 |
|
|
|
838,329 |
|
|
|
864,659 |
|
Prepaid expenses and other assets |
|
8,136 |
|
|
8,705 |
|
|
|
5,104 |
|
|
|
4,596 |
|
Accrued interest receivable |
|
3,827 |
|
|
3,989 |
|
|
|
3,671 |
|
|
|
3,919 |
|
Federal Home Loan Bank stock, at cost |
|
1,380 |
|
|
3,658 |
|
|
|
1,353 |
|
|
|
3,644 |
|
Premises and equipment, net |
|
15,490 |
|
|
15,453 |
|
|
|
15,403 |
|
|
|
15,458 |
|
Deferred income taxes, net |
|
3,296 |
|
|
3,520 |
|
|
|
5,352 |
|
|
|
4,195 |
|
Mortgage servicing rights, net |
|
247 |
|
|
280 |
|
|
|
344 |
|
|
|
296 |
|
Goodwill |
|
27,076 |
|
|
27,076 |
|
|
|
27,076 |
|
|
|
27,076 |
|
Core deposit intangible, net |
|
839 |
|
|
880 |
|
|
|
1,011 |
|
|
|
920 |
|
Bank owned life insurance |
|
29,688 |
|
|
29,484 |
|
|
|
28,910 |
|
|
|
29,291 |
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
$ |
1,173,019 |
|
$ |
1,165,234 |
|
|
$ |
1,148,447 |
|
|
$ |
1,156,921 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
Deposits |
$ |
982,275 |
|
$ |
922,274 |
|
|
$ |
982,272 |
|
|
$ |
925,068 |
|
Accrued expenses and other liabilities |
|
17,502 |
|
|
17,675 |
|
|
|
13,767 |
|
|
|
12,536 |
|
Advance payments by borrowers for taxes and insurance |
|
1,117 |
|
|
689 |
|
|
|
1,050 |
|
|
|
631 |
|
Federal Home Loan Bank advances |
|
- |
|
|
56,941 |
|
|
|
- |
|
|
|
56,586 |
|
Junior subordinated debentures |
|
26,619 |
|
|
26,597 |
|
|
|
26,530 |
|
|
|
26,575 |
|
Capital lease obligations |
|
2,387 |
|
|
2,395 |
|
|
|
2,418 |
|
|
|
2,403 |
|
Total liabilities |
|
1,029,900 |
|
|
1,026,571 |
|
|
|
1,026,037 |
|
|
|
1,023,799 |
|
|
|
|
|
|
|
|
|
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, 2019 - 22,748,385 issued and outstanding; |
|
|
|
|
|
|
|
June 30, 2019 – 22,705,385 issued and outstanding; |
|
227 |
|
|
226 |
|
|
|
226 |
|
|
|
226 |
|
September 30, 2018 - 22,598,712 issued and outstanding; |
|
|
|
|
|
|
|
March 31, 2019 – 22,607,712 issued and outstanding; |
|
|
|
|
|
|
|
Additional paid-in capital |
|
65,559 |
|
|
65,326 |
|
|
|
65,044 |
|
|
|
65,094 |
|
Retained earnings |
|
77,112 |
|
|
73,602 |
|
|
|
63,642 |
|
|
|
70,428 |
|
Accumulated other comprehensive income (loss) |
|
221 |
|
|
(491 |
) |
|
|
(6,502 |
) |
|
|
(2,626 |
) |
Total shareholders’ equity |
|
143,119 |
|
|
138,663 |
|
|
|
122,410 |
|
|
|
133,122 |
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY |
$ |
1,173,019 |
|
$ |
1,165,234 |
|
|
$ |
1,148,447 |
|
|
$ |
1,156,921 |
|
|
|
|
|
|
|
|
|
RIVERVIEW BANCORP,
INC. AND SUBSIDIARY |
|
|
|
|
|
|
Consolidated
Statements of Income |
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
(In thousands, except share data)
(Unaudited) |
Sept. 30, 2019 |
June 30, 2019 |
Sept. 30, 2018 |
|
Sept. 30, 2019 |
Sept. 30, 2018 |
INTEREST INCOME: |
|
|
|
|
|
|
Interest and fees on loans receivable |
$ |
11,893 |
$ |
11,554 |
$ |
11,119 |
|
$ |
23,447 |
$ |
22,079 |
Interest on investment securities - taxable |
|
860 |
|
878 |
|
1,116 |
|
|
1,738 |
|
2,314 |
Interest on investment securities - nontaxable |
|
36 |
|
37 |
|
36 |
|
|
73 |
|
73 |
Other interest and dividends |
|
93 |
|
87 |
|
118 |
|
|
180 |
|
211 |
Total interest and dividend income |
|
12,882 |
|
12,556 |
|
12,389 |
|
|
25,438 |
|
24,677 |
|
|
|
|
|
|
|
INTEREST EXPENSE: |
|
|
|
|
|
|
Interest on deposits |
|
660 |
|
351 |
|
259 |
|
|
1,011 |
|
519 |
Interest on borrowings |
|
503 |
|
735 |
|
352 |
|
|
1,238 |
|
710 |
Total interest expense |
|
1,163 |
|
1,086 |
|
611 |
|
|
2,249 |
|
1,229 |
Net interest income |
|
11,719 |
|
11,470 |
|
11,778 |
|
|
23,189 |
|
23,448 |
Provision for loan losses |
|
- |
|
- |
|
250 |
|
|
- |
|
50 |
|
|
|
|
|
|
|
Net interest income after
provision for loan losses |
|
11,719 |
|
11,470 |
|
11,528 |
|
|
23,189 |
|
23,398 |
|
|
|
|
|
|
|
NON-INTEREST INCOME: |
|
|
|
|
|
|
Fees and service charges |
|
1,752 |
|
1,637 |
|
1,514 |
|
|
3,389 |
|
3,086 |
Asset management fees |
|
1,090 |
|
1,143 |
|
943 |
|
|
2,233 |
|
1,869 |
Net gain on sale of loans held for sale |
|
46 |
|
96 |
|
44 |
|
|
142 |
|
196 |
Bank owned life insurance |
|
204 |
|
193 |
|
174 |
|
|
397 |
|
353 |
Other, net |
|
77 |
|
67 |
|
165 |
|
|
144 |
|
205 |
Total non-interest income, net |
|
3,169 |
|
3,136 |
|
2,840 |
|
|
6,305 |
|
5,709 |
|
|
|
|
|
|
|
NON-INTEREST EXPENSE: |
|
|
|
|
|
|
Salaries and employee benefits |
|
5,697 |
|
5,715 |
|
5,283 |
|
|
11,412 |
|
10,861 |
Occupancy and depreciation |
|
1,277 |
|
1,320 |
|
1,351 |
|
|
2,597 |
|
2,710 |
Data processing |
|
669 |
|
680 |
|
622 |
|
|
1,349 |
|
1,253 |
Amortization of core deposit intangible |
|
41 |
|
40 |
|
46 |
|
|
81 |
|
92 |
Advertising and marketing |
|
298 |
|
210 |
|
266 |
|
|
508 |
|
458 |
FDIC insurance premium |
|
- |
|
80 |
|
85 |
|
|
80 |
|
161 |
State and local taxes |
|
174 |
|
195 |
|
182 |
|
|
369 |
|
350 |
Telecommunications |
|
76 |
|
86 |
|
88 |
|
|
162 |
|
181 |
Professional fees |
|
263 |
|
325 |
|
387 |
|
|
588 |
|
671 |
Other |
|
508 |
|
543 |
|
605 |
|
|
1,051 |
|
1,197 |
Total non-interest expense |
|
9,003 |
|
9,194 |
|
8,915 |
|
|
18,197 |
|
17,934 |
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES |
|
5,885 |
|
5,412 |
|
5,453 |
|
|
11,297 |
|
11,173 |
PROVISION FOR INCOME
TAXES |
|
1,351 |
|
1,220 |
|
1,224 |
|
|
2,571 |
|
2,502 |
NET INCOME |
$ |
4,534 |
$ |
4,192 |
$ |
4,229 |
|
$ |
8,726 |
$ |
8,671 |
|
|
|
|
|
|
|
Earnings per common
share: |
|
|
|
|
|
|
Basic |
$ |
0.20 |
$ |
0.19 |
$ |
0.19 |
|
$ |
0.39 |
$ |
0.38 |
Diluted |
$ |
0.20 |
$ |
0.18 |
$ |
0.19 |
|
$ |
0.38 |
$ |
0.38 |
Weighted average number of
common shares outstanding: |
|
|
|
|
|
|
Basic |
|
22,643,103 |
|
22,619,580 |
|
22,579,839 |
|
|
22,631,406 |
|
22,575,009 |
Diluted |
|
22,702,696 |
|
22,685,343 |
|
22,658,737 |
|
|
22,694,067 |
|
22,655,297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
|
At or for the three months ended |
|
At or for the six months ended |
|
|
Sept. 30, 2019 |
|
June 30, 2019 |
|
Sept. 30, 2018 |
|
Sept. 30, 2019 |
|
Sept. 30, 2018 |
AVERAGE
BALANCES |
|
|
|
|
|
|
|
|
|
|
Average interest–earning assets |
|
$ |
1,069,209 |
|
|
$ |
1,066,247 |
|
|
$ |
1,064,386 |
|
|
$ |
1,067,737 |
|
$ |
1,056,522 |
Average interest-bearing
liabilities |
|
|
708,846 |
|
|
|
728,976 |
|
|
|
717,085 |
|
|
|
718,856 |
|
|
721,550 |
Net average earning assets |
|
|
360,363 |
|
|
|
337,271 |
|
|
|
347,301 |
|
|
|
348,881 |
|
|
334,972 |
Average loans |
|
|
889,208 |
|
|
|
877,427 |
|
|
|
839,497 |
|
|
|
883,350 |
|
|
826,309 |
Average deposits |
|
|
952,283 |
|
|
|
920,558 |
|
|
|
986,948 |
|
|
|
936,507 |
|
|
979,341 |
Average equity |
|
|
142,195 |
|
|
|
136,592 |
|
|
|
122,630 |
|
|
|
139,409 |
|
|
120,813 |
Average tangible equity
(non-GAAP) |
|
|
114,256 |
|
|
|
108,614 |
|
|
|
94,515 |
|
|
|
111,450 |
|
|
92,675 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET
QUALITY |
|
Sept. 30, 2019 |
|
June 30, 2019 |
|
Sept. 30, 2018 |
|
|
|
|
Non-performing loans |
|
$ |
1,485 |
|
|
$ |
1,457 |
|
|
$ |
2,283 |
|
|
|
|
|
Non-performing loans to total
loans |
|
|
0.17% |
|
|
|
0.16% |
|
|
|
0.27% |
|
|
|
|
|
Real estate/repossessed assets
owned |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
Non-performing assets |
|
$ |
1,485 |
|
|
$ |
1,457 |
|
|
$ |
2,283 |
|
|
|
|
|
Non-performing assets to total
assets |
|
|
0.13% |
|
|
|
0.13% |
|
|
|
0.20% |
|
|
|
|
|
Net loan charge-offs in the
quarter |
|
$ |
6 |
|
|
$ |
15 |
|
|
$ |
86 |
|
|
|
|
|
Net charge-offs in the
quarter/average net loans |
|
|
0.00% |
|
|
|
0.01% |
|
|
|
0.04% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
|
$ |
11,436 |
|
|
$ |
11,442 |
|
|
$ |
11,513 |
|
|
|
|
|
Average interest-earning assets
to average |
|
|
|
|
|
|
|
|
|
|
interest-bearing liabilities |
|
|
150.84% |
|
|
|
146.27% |
|
|
|
148.43% |
|
|
|
|
|
Allowance for loan losses to |
|
|
|
|
|
|
|
|
|
|
non-performing loans |
|
|
770.10% |
|
|
|
785.31% |
|
|
|
504.29% |
|
|
|
|
|
Allowance for loan losses to
total loans |
|
|
1.30% |
|
|
|
1.29% |
|
|
|
1.35% |
|
|
|
|
|
Shareholders’ equity to
assets |
|
|
12.20% |
|
|
|
11.90% |
|
|
|
10.66% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS |
|
|
|
|
|
|
|
|
|
|
Total capital (to risk weighted
assets) |
|
|
17.27% |
|
|
|
17.18% |
|
|
|
15.82% |
|
|
|
|
|
Tier 1 capital (to risk weighted
assets) |
|
|
16.02% |
|
|
|
15.93% |
|
|
|
14.57% |
|
|
|
|
|
Common equity tier 1 (to risk
weighted assets) |
|
|
16.02% |
|
|
|
15.93% |
|
|
|
14.57% |
|
|
|
|
|
Tier 1 capital (to average
tangible assets) |
|
|
11.79% |
|
|
|
11.94% |
|
|
|
10.72% |
|
|
|
|
|
Tangible common equity (to
average tangible assets) (non-GAAP) |
|
|
10.06% |
|
|
|
9.73% |
|
|
|
8.42% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
MIX |
|
Sept. 30, 2019 |
|
June 30, 2019 |
|
Sept. 30, 2018 |
|
March 31, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
|
$ |
178,854 |
|
|
$ |
184,658 |
|
|
$ |
182,947 |
|
|
$ |
183,388 |
|
|
Regular savings |
|
|
196,340 |
|
|
|
160,937 |
|
|
|
138,082 |
|
|
|
137,503 |
|
|
Money market deposit
accounts |
|
|
186,842 |
|
|
|
205,881 |
|
|
|
252,738 |
|
|
|
233,317 |
|
|
Non-interest checking |
|
|
299,062 |
|
|
|
280,336 |
|
|
|
300,659 |
|
|
|
284,854 |
|
|
Certificates of deposit |
|
|
121,177 |
|
|
|
90,462 |
|
|
|
107,846 |
|
|
|
86,006 |
|
|
Total deposits |
|
$ |
982,275 |
|
|
$ |
922,274 |
|
|
$ |
982,272 |
|
|
$ |
925,068 |
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPOSITION OF COMMERCIAL AND CONSTRUCTION
LOANS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
Commercial |
|
|
Commercial |
|
Real Estate |
|
Real Estate |
|
& Construction |
|
|
Business |
|
Mortgage |
|
Construction |
|
Total |
|
|
|
September 30, 2019 |
|
(Dollars in thousands) |
Commercial business |
|
$ |
167,782 |
|
$ |
- |
|
$ |
- |
|
$ |
167,782 |
Commercial construction |
|
|
- |
|
|
- |
|
|
67,437 |
|
|
67,437 |
Office buildings |
|
|
- |
|
|
113,713 |
|
|
- |
|
|
113,713 |
Warehouse/industrial |
|
|
- |
|
|
102,285 |
|
|
- |
|
|
102,285 |
Retail/shopping centers/strip
malls |
|
|
- |
|
|
65,381 |
|
|
- |
|
|
65,381 |
Assisted living facilities |
|
|
- |
|
|
1,117 |
|
|
- |
|
|
1,117 |
Single purpose facilities |
|
|
- |
|
|
189,075 |
|
|
- |
|
|
189,075 |
Land |
|
|
- |
|
|
14,166 |
|
|
- |
|
|
14,166 |
Multi-family |
|
|
- |
|
|
55,978 |
|
|
- |
|
|
55,978 |
One-to-four family
construction |
|
|
- |
|
|
- |
|
|
15,737 |
|
|
15,737 |
Total |
|
$ |
167,782 |
|
$ |
541,715 |
|
$ |
83,174 |
|
$ |
792,671 |
|
|
|
|
|
|
|
|
|
March 31, 2019 |
|
|
|
|
|
|
|
|
Commercial business |
|
$ |
162,796 |
|
$ |
- |
|
$ |
- |
|
$ |
162,796 |
Commercial construction |
|
|
- |
|
|
- |
|
|
70,533 |
|
|
70,533 |
Office buildings |
|
|
- |
|
|
118,722 |
|
|
- |
|
|
118,722 |
Warehouse/industrial |
|
|
- |
|
|
91,787 |
|
|
- |
|
|
91,787 |
Retail/shopping centers/strip
malls |
|
|
- |
|
|
64,934 |
|
|
- |
|
|
64,934 |
Assisted living facilities |
|
|
- |
|
|
2,740 |
|
|
- |
|
|
2,740 |
Single purpose facilities |
|
|
- |
|
|
183,249 |
|
|
- |
|
|
183,249 |
Land |
|
|
- |
|
|
17,027 |
|
|
- |
|
|
17,027 |
Multi-family |
|
|
- |
|
|
51,570 |
|
|
- |
|
|
51,570 |
One-to-four family
construction |
|
|
- |
|
|
- |
|
|
20,349 |
|
|
20,349 |
Total |
|
$ |
162,796 |
|
$ |
530,029 |
|
$ |
90,882 |
|
$ |
783,707 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOAN MIX |
|
Sept. 30, 2019 |
|
June 30, 2019 |
|
Sept. 30, 2018 |
|
March 31, 2019 |
Commercial and construction |
|
|
|
|
|
|
|
|
Commercial business |
|
$ |
167,782 |
|
$ |
164,400 |
|
$ |
155,487 |
|
$ |
162,796 |
Other real estate mortgage |
|
|
541,715 |
|
|
539,409 |
|
|
533,258 |
|
|
530,029 |
Real estate construction |
|
|
83,174 |
|
|
93,716 |
|
|
62,795 |
|
|
90,882 |
Total commercial and construction |
|
|
792,671 |
|
|
797,525 |
|
|
751,540 |
|
|
783,707 |
Consumer |
|
|
|
|
|
|
|
|
Real estate one-to-four family |
|
|
82,578 |
|
|
83,256 |
|
|
86,950 |
|
|
84,053 |
Other installment |
|
|
6,067 |
|
|
7,196 |
|
|
11,352 |
|
|
8,356 |
Total consumer |
|
|
88,645 |
|
|
90,452 |
|
|
98,302 |
|
|
92,409 |
|
|
|
|
|
|
|
|
|
Total loans |
|
|
881,316 |
|
|
887,977 |
|
|
849,842 |
|
|
876,116 |
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
Allowance for loan losses |
|
|
11,436 |
|
|
11,442 |
|
|
11,513 |
|
|
11,457 |
Loans receivable, net |
|
$ |
869,880 |
|
$ |
876,535 |
|
$ |
838,329 |
|
$ |
864,659 |
|
|
|
|
|
|
|
|
|
DETAIL OF
NON-PERFORMING ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
Southwest |
|
|
|
|
|
|
|
|
Oregon |
|
Washington |
|
Other |
|
Total |
September 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business |
|
$ |
- |
|
$ |
243 |
|
$ |
- |
|
$ |
243 |
Commercial real
estate |
|
|
851 |
|
|
175 |
|
|
- |
|
|
1,026 |
Consumer |
|
|
- |
|
|
184 |
|
|
32 |
|
|
216 |
|
|
|
|
|
|
|
|
|
|
|
Total
non-performing assets |
|
$ |
851 |
|
$ |
602 |
|
$ |
32 |
|
$ |
1,485 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DETAIL OF
LAND DEVELOPMENT AND SPECULATIVE CONSTRUCTION LOANS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northwest |
|
Other |
|
Southwest |
|
|
|
|
|
|
Oregon |
|
Oregon |
|
Washington |
|
Total |
|
|
|
September 30, 2019 |
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Land
development |
|
$ |
2,178 |
|
$ |
1,871 |
|
$ |
10,117 |
|
$ |
14,166 |
Speculative
construction |
|
|
1,158 |
|
|
160 |
|
|
12,782 |
|
|
14,100 |
|
|
|
|
|
|
|
|
|
|
|
Total land
development and speculative construction |
|
$ |
3,336 |
|
$ |
2,031 |
|
$ |
22,899 |
|
$ |
28,266 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or for the three months ended |
|
At or for the six months ended |
SELECTED OPERATING DATA |
Sept. 30, 2019 |
|
June 30, 2019 |
|
Sept. 30, 2018 |
|
Sept. 30, 2019 |
|
Sept. 30, 2018 |
|
|
|
|
|
|
|
|
|
|
Efficiency ratio (4) |
|
60.47 |
% |
|
|
62.95 |
% |
|
|
60.99 |
% |
|
|
61.70 |
% |
|
|
61.51 |
% |
Coverage ratio (6) |
|
130.17 |
% |
|
|
124.76 |
% |
|
|
132.11 |
% |
|
|
127.43 |
% |
|
|
130.75 |
% |
Return on average assets
(1) |
|
1.55 |
% |
|
|
1.46 |
% |
|
|
1.46 |
% |
|
|
1.51 |
% |
|
|
1.52 |
% |
Return on average equity
(1) |
|
12.68 |
% |
|
|
12.34 |
% |
|
|
13.68 |
% |
|
|
12.52 |
% |
|
|
14.32 |
% |
Return on average tangible
equity (1) (non-GAAP) |
|
15.79 |
% |
|
|
15.52 |
% |
|
|
17.75 |
% |
|
|
15.66 |
% |
|
|
18.66 |
% |
|
|
|
|
|
|
|
|
|
|
NET INTEREST SPREAD |
|
|
|
|
|
|
|
|
|
Yield on loans |
|
5.32 |
% |
|
|
5.30 |
% |
|
|
5.25 |
% |
|
|
5.31 |
% |
|
|
5.33 |
% |
Yield on investment
securities |
|
2.15 |
% |
|
|
2.10 |
% |
|
|
2.27 |
% |
|
|
2.12 |
% |
|
|
2.29 |
% |
Total yield on interest-earning assets |
|
4.80 |
% |
|
|
4.74 |
% |
|
|
4.62 |
% |
|
|
4.77 |
% |
|
|
4.66 |
% |
|
|
|
|
|
|
|
|
|
|
Cost of interest-bearing
deposits |
|
0.40 |
% |
|
|
0.22 |
% |
|
|
0.15 |
% |
|
|
0.31 |
% |
|
|
0.15 |
% |
Cost of FHLB advances and
other borrowings |
|
3.72 |
% |
|
|
3.42 |
% |
|
|
4.82 |
% |
|
|
3.53 |
% |
|
|
4.58 |
% |
Total cost of interest-bearing liabilities |
|
0.65 |
% |
|
|
0.60 |
% |
|
|
0.34 |
% |
|
|
0.63 |
% |
|
|
0.34 |
% |
|
|
|
|
|
|
|
|
|
|
Spread (7) |
|
4.15 |
% |
|
|
4.14 |
% |
|
|
4.28 |
% |
|
|
4.14 |
% |
|
|
4.32 |
% |
Net interest margin |
|
4.36 |
% |
|
|
4.33 |
% |
|
|
4.39 |
% |
|
|
4.35 |
% |
|
|
4.43 |
% |
|
|
|
|
|
|
|
|
|
|
PER SHARE DATA |
|
|
|
|
|
|
|
|
|
Basic earnings per share
(2) |
$ |
0.20 |
|
|
$ |
0.19 |
|
|
$ |
0.19 |
|
|
$ |
0.39 |
|
|
$ |
0.38 |
|
Diluted earnings per share
(3) |
|
0.20 |
|
|
|
0.18 |
|
|
|
0.19 |
|
|
|
0.38 |
|
|
|
0.38 |
|
Book value per share (5) |
|
6.29 |
|
|
|
6.11 |
|
|
|
5.42 |
|
|
|
6.29 |
|
|
|
5.42 |
|
Tangible book value per share
(5) (non-GAAP) |
|
5.06 |
|
|
|
4.88 |
|
|
|
4.17 |
|
|
|
5.06 |
|
|
|
4.17 |
|
Market price per share: |
|
|
|
|
|
|
|
|
|
High for the period |
$ |
8.55 |
|
|
$ |
8.54 |
|
|
$ |
9.91 |
|
|
$ |
8.55 |
|
|
$ |
9.91 |
|
Low for the period |
|
6.87 |
|
|
|
7.07 |
|
|
|
8.47 |
|
|
|
6.87 |
|
|
|
8.39 |
|
Close for period end |
|
7.38 |
|
|
|
8.54 |
|
|
|
8.84 |
|
|
|
7.38 |
|
|
|
8.84 |
|
Cash dividends declared per
share |
|
0.0450 |
|
|
|
0.0450 |
|
|
|
0.0350 |
|
|
|
0.0900 |
|
|
|
0.0700 |
|
|
|
|
|
|
|
|
|
|
|
Average number of shares
outstanding: |
|
|
|
|
|
|
|
|
|
Basic (2) |
|
22,643,103 |
|
|
|
22,619,580 |
|
|
|
22,579,839 |
|
|
|
22,631,406 |
|
|
|
22,575,009 |
|
Diluted (3) |
|
22,702,696 |
|
|
|
22,685,343 |
|
|
|
22,658,737 |
|
|
|
22,694,067 |
|
|
|
22,655,297 |
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts for the quarterly periods are annualized.(2) Amounts
exclude ESOP shares not committed to be released.(3) Amounts
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 based on
shareholders’ equity and 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.
Contact:Kevin Lycklama or David LamRiverview
Bancorp, Inc. 360-693-6650
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