Riverview Bancorp, Inc. (Nasdaq GSM: RVSB) (“Riverview” or the
“Company”) today reported net income increased to $4.4 million, or
$0.19 per diluted share, in its third fiscal quarter ended December
31, 2018, compared to $4.2 million, or $0.19 per diluted share, in
the preceding quarter and $1.5 million, or $0.07 per diluted share,
in the third fiscal quarter a year ago.
“We reported strong third quarter operating
results, delivering steady loan growth and solid revenue while
expanding our net interest margin,” said Kevin Lycklama, president
and chief executive officer. “Overall, these factors contributed to
a return on average assets of 1.53% and a return on average equity
of 13.90% for the quarter. The economic fundamentals in our market
are strong and we remain optimistic about the upcoming fiscal
year.”
Third Quarter Highlights (at or for the
period ended December 31, 2018)
- Net income grew to $4.4 million, or
$0.19 per diluted share.
- Net interest margin (NIM) expanded
by six basis points to 4.39% compared to the preceding
quarter.
- Return on average assets increased
to 1.53% compared to 1.46% in the preceding quarter.
- Return on average equity improved
to 13.90% compared to 13.68% in the preceding quarter.
- Total loans increased $18.8 million
during the quarter to $868.6 million at December 31, 2018.
- Cost of deposits remained low at
0.10% for the quarter, the same as the preceding quarter.
- Non-performing assets improved to
0.14% of total assets.
- Tangible book value per share
(non-GAAP) was $4.43.
- Total risk-based capital ratio was
16.35% and Tier 1 leverage ratio was 11.22%.
- Increased its quarterly cash
dividend to $0.04 per share, generating a current dividend yield of
2.13% based on the January 18, 2019 share price.
Income
Statement
Third quarter net interest income was $11.7
million, a modest increase compared to $11.6 million in the
preceding quarter, and an $884,000 increase compared to $10.8
million in the third fiscal quarter a year ago. The increase in net
interest income was due to higher rates on earning assets and an
increase in outstanding loans. In the first nine months of fiscal
2019, net interest income increased 8.8% to $34.8 million, compared
to $32.0 million in the first nine months of fiscal 2018.
“Our robust loan growth, coupled with our low
cost of deposits, contributed to the net interest margin expansion
during the quarter,” said David Lam, executive vice president and
chief financial officer. “However, increased competition for loans
and deposits and a flattening yield curve remains a challenge.”
Riverview’s third fiscal quarter net interest
margin increased six basis points to 4.39% compared to 4.33% in the
second fiscal quarter and increased 33 basis points when compared
to 4.06% in the third fiscal quarter a year ago. In the preceding
quarter, the collection of $98,000 of non-accrual interest from a
prior charged-off loan added four basis points to the NIM. The
accretion on purchased loans totaled $172,000 during the current
quarter and $152,000 during the linked quarter resulting in a seven
basis point increase in the NIM for both periods. In the first nine
months of fiscal 2019, Riverview’s NIM increased 31 basis points to
4.37%, compared to the same period a year earlier.
The weighted average rate on loans originated
during the quarter ended December 31, 2018, increased to 6.04%
compared to 5.63% for the quarter ended September 30, 2018, and
4.75% for the quarter ended December 31, 2017.
Non-interest income was $2.8 million in the
third fiscal quarter compared to $3.0 million in the preceding
quarter and $2.9 million in the same quarter a year ago. Year to
date, non-interest income was $8.9 million compared to $8.3 million
in the same period in the prior year. During the preceding quarter,
other non-interest income included a net gain of approximately
$70,000 on the sale of deposit accounts associated with the closing
of the Company’s Longview, WA branch. Additionally, prepayment fees
decreased $122,000 to $54,000 for the third fiscal quarter compared
to $176,000 in the preceding quarter.
Asset management fees were $935,000 in the third
fiscal quarter of 2019 compared to $943,000 in the preceding
quarter and $911,000 in the third fiscal quarter a year ago.
Riverview Trust Company’s assets under management decreased to
$570.4 million at December 31, 2018, compared to $614.0 million
three months earlier but increased compared to $490.1 million one
year earlier. The current quarter decrease was primarily due to the
recent stock market volatility.
The efficiency ratio improved to 60.9% for the
third fiscal quarter compared to 61.0% in the preceding quarter and
62.5% in the third fiscal quarter a year ago. Non-interest expense
decreased to $8.8 million during the third fiscal quarter of 2019
compared to $8.9 million in the preceding quarter, primarily
related to a $355,000 gain on sale of the building related to the
Longview branch closing. Offsetting this decrease was an increase
in salaries and employee benefits and professional fees as the
Company continues to invest in employees and technology
infrastructure. In the first nine months of fiscal 2019,
non-interest expense was $26.7 million compared to $26.5 million in
the same period a year earlier.
Riverview’s effective tax rate for the first
nine months of fiscal year 2019 was 22.4% compared to 47.6% for the
same prior year period. The decrease was a result of the passage of
the Tax Cuts and Jobs Act in December 2017.
Balance Sheet Review
Riverview’s total loans increased $18.8 million
during the quarter to $868.6 million at December 31, 2018, an
annualized growth rate of 8.8%. The increase was primarily
concentrated in commercial construction loans and single purpose
commercial real estate facilities. Total loan balances also
continue to be impacted by elevated pay downs on existing
loans.
The loan pipeline totaled $33.6 million at
December 31, 2018 compared to $91.9 million at the end of the prior
quarter. Undisbursed construction loans totaled $79.0 million at
December 31, 2018 compared to $82.0 million three months earlier.
The majority of the undisbursed construction loans are expected to
fund over the next several quarters.
“Loan demand remains robust in our market area,
and our lending teams are doing an outstanding job of capitalizing
on opportunities,” said Lycklama. “While we did experience a
decrease in our loan pipeline, this was mostly expected due to
seasonal conditions as well as the strong loan originations during
the quarter.”
Total deposits decreased to $943.6 million at
December 31, 2018 compared to $982.3 million three months earlier
and $972.2 million a year ago. Money market, certificates of
deposit and other interest-rate sensitive accounts continue to
experience the greatest pressure due to an increase in competition
and pricing pressures in our market area.
Shareholders’ equity improved to $128.1 million
at December 31, 2018, compared to $122.4 million three months
earlier and $116.8 million a year earlier. Tangible book value per
share (non-GAAP) increased to $4.43 at December 31, 2018, compared
to $4.17 at September 30, 2018 and $3.93 at December 31, 2017. A
quarterly cash dividend of $0.04 per share was paid on January 22,
2019.
Credit Quality
As a result of improving asset quality and a low
level of net charge-offs, Riverview recorded no provision for loan
losses during the third fiscal quarter of 2019. This compares to a
$250,000 recapture for loan losses in the preceding quarter and no
provision for loan losses for the third fiscal quarter a year
ago.
Non-performing loans improved to $1.6 million,
or 0.19% of total loans, at December 31, 2018, compared to $2.3
million, or 0.27% of total loans, three months earlier and $2.7
million, or 0.33% of total loans at December 31, 2017. Riverview
had no real estate owned balances at December 31, 2018 and
September 30, 2018. Riverview had $298,000 in real estate owned
balances as of December 31, 2017.
Net loan charge offs were $11,000 during the
third fiscal quarter of 2019 compared to net loan charge offs of
$86,000 during the second fiscal quarter of 2019 and net loan
recoveries of $250,000 during the third fiscal quarter a year
ago.
Classified assets totaled $6.0 million at
December 31, 2018, compared to $6.2 million at September 30, 2018,
and $6.9 million at December 31, 2017. The classified asset to
total capital ratio was 4.4% at December 31, 2018, compared to 4.7%
three months earlier and 5.7% a year earlier.
The allowance for loan losses totaled $11.5
million, which was unchanged compared to the preceding quarter end.
The allowance for loan losses represented 1.32% of total loans at
December 31, 2018, compared to 1.35% of total loans at September
30, 2018. 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 $1.7 million at December
31, 2018, compared to $1.9 million at the end of the prior
quarter.
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 16.35%
and a Tier 1 leverage ratio of 11.22% at December 31, 2018. In
addition, at that date the Company’s tangible common equity to
average tangible assets ratio (non-GAAP) was 8.91%.
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) |
|
December 31, 2018 |
|
September 30, 2018 |
|
December 31, 2017 |
|
March 31, 2018 |
|
|
|
|
|
|
|
|
|
Shareholders'
equity |
|
$ |
128,094 |
|
$ |
122,410 |
|
$ |
116,803 |
|
$ |
116,901 |
Goodwill |
|
|
27,076 |
|
|
27,076 |
|
|
27,076 |
|
|
27,076 |
Core deposit
intangible, net |
|
|
966 |
|
|
1,011 |
|
|
1,161 |
|
|
1,103 |
Tangible shareholders'
equity |
|
$ |
100,052 |
|
$ |
94,323 |
|
$ |
88,566 |
|
$ |
88,722 |
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,151,225 |
|
$ |
1,148,447 |
|
$ |
1,128,342 |
|
$ |
1,151,535 |
Goodwill |
|
|
27,076 |
|
|
27,076 |
|
|
27,076 |
|
|
27,076 |
Core deposit
intangible, net |
|
|
966 |
|
|
1,011 |
|
|
1,161 |
|
|
1,103 |
Tangible assets |
|
$ |
1,123,183 |
|
$ |
1,120,360 |
|
$ |
1,100,105 |
|
$ |
1,123,356 |
|
|
|
|
|
|
|
|
|
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 $1.15 billion at
December 31, 2018, it is the parent company of the 95-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 customers. There are 17 branches, including 14 in the
Portland-Vancouver area and three lending centers. For the past 5
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 2019 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) |
December 31, 2018 |
|
September 30, 2018 |
|
December 31, 2017 |
|
March 31, 2018 |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
(including interest-earning accounts of $4,641, $12,537 $3,739 |
$ |
23,394 |
|
|
$ |
27,080 |
|
|
$ |
23,105 |
|
|
$ |
44,767 |
|
and
$30,052) |
|
|
|
|
|
|
|
Certificate of deposits held for investment |
|
747 |
|
|
|
3,984 |
|
|
|
6,963 |
|
|
|
5,967 |
|
Loans
held for sale |
|
- |
|
|
|
- |
|
|
|
351 |
|
|
|
210 |
|
Investment securities: |
|
|
|
|
|
|
|
Available
for sale, at estimated fair value |
|
182,280 |
|
|
|
190,792 |
|
|
|
224,931 |
|
|
|
213,221 |
|
Held to
maturity, at amortized cost |
|
36 |
|
|
|
38 |
|
|
|
44 |
|
|
|
42 |
|
Loans
receivable (net of allowance for loan losses of $11,502,
$11,513 |
|
|
|
|
|
|
|
$10,867,
and $10,766) |
|
857,134 |
|
|
|
838,329 |
|
|
|
786,460 |
|
|
|
800,610 |
|
Real
estate owned |
|
- |
|
|
|
- |
|
|
|
298 |
|
|
|
298 |
|
Prepaid
expenses and other assets |
|
4,021 |
|
|
|
5,104 |
|
|
|
4,843 |
|
|
|
3,870 |
|
Accrued
interest receivable |
|
3,789 |
|
|
|
3,671 |
|
|
|
3,464 |
|
|
|
3,477 |
|
Federal
Home Loan Bank stock, at cost |
|
2,735 |
|
|
|
1,353 |
|
|
|
1,223 |
|
|
|
1,353 |
|
Premises
and equipment, net |
|
14,940 |
|
|
|
15,403 |
|
|
|
15,680 |
|
|
|
15,783 |
|
Deferred
income taxes, net |
|
4,680 |
|
|
|
5,352 |
|
|
|
3,988 |
|
|
|
4,813 |
|
Mortgage
servicing rights, net |
|
325 |
|
|
|
344 |
|
|
|
399 |
|
|
|
388 |
|
Goodwill |
|
27,076 |
|
|
|
27,076 |
|
|
|
27,076 |
|
|
|
27,076 |
|
Core
deposit intangible, net |
|
966 |
|
|
|
1,011 |
|
|
|
1,161 |
|
|
|
1,103 |
|
Bank
owned life insurance |
|
29,102 |
|
|
|
28,910 |
|
|
|
28,356 |
|
|
|
28,557 |
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
$ |
1,151,225 |
|
|
$ |
1,148,447 |
|
|
$ |
1,128,342 |
|
|
$ |
1,151,535 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
Deposits |
$ |
943,578 |
|
|
$ |
982,272 |
|
|
$ |
972,214 |
|
|
$ |
995,691 |
|
Accrued
expenses and other liabilities |
|
15,855 |
|
|
|
13,767 |
|
|
|
9,117 |
|
|
|
9,391 |
|
Advance
payments by borrowers for taxes and insurance |
|
192 |
|
|
|
1,050 |
|
|
|
260 |
|
|
|
637 |
|
Federal
Home Loan Bank advances |
|
34,543 |
|
|
|
- |
|
|
|
1,050 |
|
|
|
- |
|
Junior
subordinated debentures |
|
26,553 |
|
|
|
26,530 |
|
|
|
26,461 |
|
|
|
26,484 |
|
Capital
lease obligations |
|
2,410 |
|
|
|
2,418 |
|
|
|
2,437 |
|
|
|
2,431 |
|
Total
liabilities |
|
1,023,131 |
|
|
|
1,026,037 |
|
|
|
1,011,539 |
|
|
|
1,034,634 |
|
|
|
|
|
|
|
|
|
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, 2018 - 22,598,712 issued and outstanding; |
|
|
|
|
|
|
|
September
30, 2018 - 22,598,712 issued and outstanding; |
|
226 |
|
|
|
226 |
|
|
|
226 |
|
|
|
226 |
|
December
31, 2017 - 22,551,912 issued and outstanding; |
|
|
|
|
|
|
|
March 31,
2018 – 22,570,179 issued and outstanding; |
|
|
|
|
|
|
|
Additional paid-in capital |
|
65,056 |
|
|
|
65,044 |
|
|
|
64,703 |
|
|
|
64,871 |
|
Retained
earnings |
|
67,126 |
|
|
|
63,642 |
|
|
|
53,878 |
|
|
|
56,552 |
|
Accumulated other comprehensive loss |
|
(4,314 |
) |
|
|
(6,502 |
) |
|
|
(2,004 |
) |
|
|
(4,748 |
) |
Total
shareholders’ equity |
|
128,094 |
|
|
|
122,410 |
|
|
|
116,803 |
|
|
|
116,901 |
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY |
$ |
1,151,225 |
|
|
$ |
1,148,447 |
|
|
$ |
1,128,342 |
|
|
$ |
1,151,535 |
|
|
|
|
|
|
|
|
|
RIVERVIEW
BANCORP, INC. AND SUBSIDIARY |
|
|
|
|
|
|
Consolidated
Statements of Income |
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
(In thousands, except share data)
(Unaudited) |
Dec. 31, 2018 |
Sept. 30, 2018 |
Dec. 31, 2017 |
|
Dec. 31, 2018 |
Dec. 31, 2017 |
INTEREST INCOME: |
|
|
|
|
|
|
Interest
and fees on loans receivable |
$ |
11,129 |
$ |
10,943 |
$ |
9,978 |
|
$ |
32,849 |
$ |
29,761 |
Interest
on investment securities - taxable |
|
1,110 |
|
1,116 |
|
1,201 |
|
|
3,424 |
|
3,413 |
Interest
on investment securities - nontaxable |
|
37 |
|
36 |
|
31 |
|
|
110 |
|
59 |
Other
interest and dividends |
|
60 |
|
118 |
|
168 |
|
|
271 |
|
483 |
Total
interest and dividend income |
|
12,336 |
|
12,213 |
|
11,378 |
|
|
36,654 |
|
33,716 |
|
|
|
|
|
|
|
INTEREST EXPENSE: |
|
|
|
|
|
|
Interest
on deposits |
|
240 |
|
259 |
|
298 |
|
|
759 |
|
933 |
Interest
on borrowings |
|
416 |
|
352 |
|
284 |
|
|
1,126 |
|
829 |
Total
interest expense |
|
656 |
|
611 |
|
582 |
|
|
1,885 |
|
1,762 |
Net interest
income |
|
11,680 |
|
11,602 |
|
10,796 |
|
|
34,769 |
|
31,954 |
Provision for loan
losses |
|
- |
|
250 |
|
- |
|
|
50 |
|
- |
|
|
|
|
|
|
|
Net interest income
after provision for loan losses |
|
11,680 |
|
11,352 |
|
10,796 |
|
|
34,719 |
|
31,954 |
|
|
|
|
|
|
|
NON-INTEREST
INCOME: |
|
|
|
|
|
|
Fees and
service charges |
|
1,511 |
|
1,690 |
|
1,451 |
|
|
4,956 |
|
4,348 |
Asset
management fees |
|
935 |
|
943 |
|
911 |
|
|
2,804 |
|
2,582 |
Net gain
on sale of loans held for sale |
|
82 |
|
44 |
|
140 |
|
|
278 |
|
522 |
Bank
owned life insurance |
|
192 |
|
174 |
|
207 |
|
|
545 |
|
618 |
Other,
net |
|
62 |
|
165 |
|
181 |
|
|
267 |
|
271 |
Total
non-interest income, net |
|
2,782 |
|
3,016 |
|
2,890 |
|
|
8,850 |
|
8,341 |
|
|
|
|
|
|
|
NON-INTEREST
EXPENSE: |
|
|
|
|
|
|
Salaries
and employee benefits |
|
5,794 |
|
5,283 |
|
5,383 |
|
|
16,655 |
|
16,056 |
Occupancy
and depreciation |
|
1,306 |
|
1,351 |
|
1,347 |
|
|
4,016 |
|
4,105 |
Data
processing |
|
621 |
|
622 |
|
534 |
|
|
1,874 |
|
1,730 |
Amortization of core deposit intangible |
|
45 |
|
46 |
|
58 |
|
|
137 |
|
174 |
Advertising and marketing |
|
151 |
|
266 |
|
137 |
|
|
609 |
|
627 |
FDIC
insurance premium |
|
85 |
|
85 |
|
108 |
|
|
246 |
|
389 |
State and
local taxes |
|
125 |
|
182 |
|
96 |
|
|
475 |
|
427 |
Telecommunications |
|
85 |
|
88 |
|
102 |
|
|
266 |
|
309 |
Professional fees |
|
449 |
|
387 |
|
250 |
|
|
1,120 |
|
926 |
Other |
|
142 |
|
605 |
|
543 |
|
|
1,339 |
|
1,748 |
Total
non-interest expense |
|
8,803 |
|
8,915 |
|
8,558 |
|
|
26,737 |
|
26,491 |
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES |
|
5,659 |
|
5,453 |
|
5,128 |
|
|
16,832 |
|
13,804 |
PROVISION FOR INCOME
TAXES |
|
1,271 |
|
1,224 |
|
3,608 |
|
|
3,773 |
|
6,571 |
NET INCOME |
$ |
4,388 |
$ |
4,229 |
$ |
1,520 |
|
$ |
13,059 |
$ |
7,233 |
|
|
|
|
|
|
|
Earnings per common
share: |
|
|
|
|
|
|
Basic |
$ |
0.19 |
$ |
0.19 |
$ |
0.07 |
|
$ |
0.58 |
$ |
0.32 |
Diluted |
$ |
0.19 |
$ |
0.19 |
$ |
0.07 |
|
$ |
0.58 |
$ |
0.32 |
Weighted average number
of common shares outstanding: |
|
|
|
|
|
|
Basic |
|
22,598,712 |
|
22,579,839 |
|
22,537,092 |
|
|
22,582,956 |
|
22,520,352 |
Diluted |
|
22,663,919 |
|
22,658,737 |
|
22,622,129 |
|
|
22,658,153 |
|
22,608,603 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands) |
|
At or for the three months ended |
|
At or for the nine months ended |
|
|
Dec. 31, 2018 |
|
Sept. 30, 2018 |
|
Dec. 31, 2017 |
|
Dec. 31, 2018 |
|
Dec. 31, 2017 |
AVERAGE
BALANCES |
|
|
|
|
|
|
|
|
|
|
Average
interest–earning assets |
|
$ |
1,057,199 |
|
|
$ |
1,064,386 |
|
|
$ |
1,055,600 |
|
|
$ |
1,056,750 |
|
$ |
1,045,283 |
Average
interest-bearing liabilities |
|
|
707,618 |
|
|
|
717,085 |
|
|
|
744,431 |
|
|
|
716,890 |
|
|
746,262 |
Net average earning
assets |
|
|
349,581 |
|
|
|
347,301 |
|
|
|
311,169 |
|
|
|
339,860 |
|
|
299,021 |
Average loans |
|
|
854,368 |
|
|
|
839,497 |
|
|
|
785,264 |
|
|
|
835,697 |
|
|
784,926 |
Average deposits |
|
|
967,246 |
|
|
|
986,948 |
|
|
|
988,558 |
|
|
|
975,295 |
|
|
980,766 |
Average equity |
|
|
125,252 |
|
|
|
122,630 |
|
|
|
118,831 |
|
|
|
122,298 |
|
|
116,399 |
Average tangible equity
(non-GAAP) |
|
|
97,182 |
|
|
|
94,515 |
|
|
|
90,562 |
|
|
|
94,182 |
|
|
88,074 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET
QUALITY |
|
Dec. 31, 2018 |
|
Sept. 30, 2018 |
|
Dec. 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing
loans |
|
$ |
1,612 |
|
|
$ |
2,283 |
|
|
$ |
2,656 |
|
|
|
|
|
Non-performing loans to
total loans |
|
|
0.19% |
|
|
|
0.27% |
|
|
|
0.33% |
|
|
|
|
|
Real estate/repossessed
assets owned |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
298 |
|
|
|
|
|
Non-performing
assets |
|
$ |
1,612 |
|
|
$ |
2,283 |
|
|
$ |
2,954 |
|
|
|
|
|
Non-performing assets
to total assets |
|
|
0.14% |
|
|
|
0.20% |
|
|
|
0.26% |
|
|
|
|
|
Net loan charge-offs
(recoveries) in the quarter |
|
$ |
11 |
|
|
$ |
86 |
|
|
$ |
(250) |
|
|
|
|
|
Net charge-offs
(recoveries) in the quarter/average net loans |
|
|
0.01% |
|
|
|
0.04% |
|
|
|
(0.13)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses |
|
$ |
11,502 |
|
|
$ |
11,513 |
|
|
$ |
10,867 |
|
|
|
|
|
Average
interest-earning assets to average |
|
|
|
|
|
|
|
|
|
|
interest-bearing
liabilities |
|
|
149.40% |
|
|
|
148.43% |
|
|
|
141.80% |
|
|
|
|
|
Allowance for loan
losses to |
|
|
|
|
|
|
|
|
|
|
non-performing
loans |
|
|
713.52% |
|
|
|
504.29% |
|
|
|
409.15% |
|
|
|
|
|
Allowance for loan
losses to total loans |
|
|
1.32% |
|
|
|
1.35% |
|
|
|
1.36% |
|
|
|
|
|
Shareholders’ equity to
assets |
|
|
11.13% |
|
|
|
10.66% |
|
|
|
10.35% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS |
|
|
|
|
|
|
|
|
|
|
Total capital (to risk
weighted assets) |
|
|
16.35% |
|
|
|
15.82% |
|
|
|
15.07% |
|
|
|
|
|
Tier 1 capital (to risk
weighted assets) |
|
|
15.10% |
|
|
|
14.54% |
|
|
|
13.82% |
|
|
|
|
|
Common equity tier 1
(to risk weighted assets) |
|
|
15.10% |
|
|
|
14.54% |
|
|
|
13.82% |
|
|
|
|
|
Tier 1 capital (to
average tangible assets) |
|
|
11.22% |
|
|
|
10.72% |
|
|
|
9.82% |
|
|
|
|
|
Tangible common equity
(to average tangible assets) (non-GAAP) |
|
|
8.91% |
|
|
|
8.42% |
|
|
|
8.05% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
MIX |
|
Dec. 31, 2018 |
|
Sept. 30, 2018 |
|
Dec. 31, 2017 |
|
March 31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
|
$ |
183,426 |
|
|
$ |
182,947 |
|
|
$ |
170,151 |
|
|
$ |
192,989 |
|
|
Regular savings |
|
|
137,323 |
|
|
|
138,082 |
|
|
|
136,249 |
|
|
|
134,931 |
|
|
Money market deposit
accounts |
|
|
242,081 |
|
|
|
252,738 |
|
|
|
270,193 |
|
|
|
265,661 |
|
|
Non-interest
checking |
|
|
284,939 |
|
|
|
300,659 |
|
|
|
264,728 |
|
|
|
278,966 |
|
|
Certificates of
deposit |
|
|
95,809 |
|
|
|
107,846 |
|
|
|
130,893 |
|
|
|
123,144 |
|
|
Total
deposits |
|
$ |
943,578 |
|
|
$ |
982,272 |
|
|
$ |
972,214 |
|
|
$ |
995,691 |
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPOSITION OF COMMERCIAL AND CONSTRUCTION
LOANS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
Commercial |
|
|
Commercial |
|
Real Estate |
|
Real Estate |
|
& Construction |
|
|
Business |
|
Mortgage |
|
Construction |
|
Total |
|
|
|
December 31, 2018 |
|
(Dollars in thousands) |
Commercial
business |
|
$ |
154,360 |
|
$ |
- |
|
$ |
- |
|
$ |
154,360 |
Commercial
construction |
|
|
- |
|
|
- |
|
|
58,197 |
|
|
58,197 |
Office buildings |
|
|
- |
|
|
119,850 |
|
|
- |
|
|
119,850 |
Warehouse/industrial |
|
|
- |
|
|
90,167 |
|
|
- |
|
|
90,167 |
Retail/shopping
centers/strip malls |
|
|
- |
|
|
64,317 |
|
|
- |
|
|
64,317 |
Assisted living
facilities |
|
|
- |
|
|
2,790 |
|
|
- |
|
|
2,790 |
Single purpose
facilities |
|
|
- |
|
|
191,237 |
|
|
- |
|
|
191,237 |
Land |
|
|
- |
|
|
18,506 |
|
|
- |
|
|
18,506 |
Multi-family |
|
|
- |
|
|
54,930 |
|
|
- |
|
|
54,930 |
One-to-four family
construction |
|
|
- |
|
|
- |
|
|
18,321 |
|
|
18,321 |
Total |
|
$ |
154,360 |
|
$ |
541,797 |
|
$ |
76,518 |
|
$ |
772,675 |
|
|
|
|
|
|
|
|
|
March 31, 2018 |
|
|
|
|
|
|
|
|
Commercial
business |
|
$ |
137,672 |
|
$ |
- |
|
$ |
- |
|
$ |
137,672 |
Commercial
construction |
|
|
- |
|
|
- |
|
|
23,158 |
|
|
23,158 |
Office buildings |
|
|
- |
|
|
124,000 |
|
|
- |
|
|
124,000 |
Warehouse/industrial |
|
|
- |
|
|
89,442 |
|
|
- |
|
|
89,442 |
Retail/shopping
centers/strip malls |
|
|
- |
|
|
68,932 |
|
|
- |
|
|
68,932 |
Assisted living
facilities |
|
|
- |
|
|
2,934 |
|
|
- |
|
|
2,934 |
Single purpose
facilities |
|
|
- |
|
|
165,289 |
|
|
- |
|
|
165,289 |
Land |
|
|
- |
|
|
15,337 |
|
|
- |
|
|
15,337 |
Multi-family |
|
|
- |
|
|
63,080 |
|
|
- |
|
|
63,080 |
One-to-four family
construction |
|
|
- |
|
|
- |
|
|
16,426 |
|
|
16,426 |
Total |
|
$ |
137,672 |
|
$ |
529,014 |
|
$ |
39,584 |
|
$ |
706,270 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOAN
MIX |
|
Dec. 31, 2018 |
|
Sept. 30, 2018 |
|
Dec. 31, 2017 |
|
March 31, 2018 |
|
|
|
|
|
(Dollars in thousands) |
Commercial and
construction |
|
|
|
|
|
|
|
|
Commercial business |
|
$ |
154,360 |
|
$ |
155,487 |
|
$ |
130,960 |
|
$ |
137,672 |
Other
real estate mortgage |
|
|
541,797 |
|
|
533,258 |
|
|
516,223 |
|
|
529,014 |
Real
estate construction |
|
|
76,518 |
|
|
62,795 |
|
|
40,743 |
|
|
39,584 |
Total
commercial and construction |
|
|
772,675 |
|
|
751,540 |
|
|
687,926 |
|
|
706,270 |
Consumer |
|
|
|
|
|
|
|
|
Real
estate one-to-four family |
|
|
86,240 |
|
|
86,950 |
|
|
91,752 |
|
|
90,109 |
Other
installment |
|
|
9,721 |
|
|
11,352 |
|
|
17,649 |
|
|
14,997 |
Total
consumer |
|
|
95,961 |
|
|
98,302 |
|
|
109,401 |
|
|
105,106 |
|
|
|
|
|
|
|
|
|
Total loans |
|
|
868,636 |
|
|
849,842 |
|
|
797,327 |
|
|
811,376 |
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
Allowance
for loan losses |
|
|
11,502 |
|
|
11,513 |
|
|
10,867 |
|
|
10,766 |
Loans
receivable, net |
|
$ |
857,134 |
|
$ |
838,329 |
|
$ |
786,460 |
|
$ |
800,610 |
|
|
|
|
|
|
|
|
|
DETAIL OF NON-PERFORMING ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
Southwest |
|
|
|
|
|
|
|
|
Oregon |
|
Washington |
|
Other |
|
Total |
|
|
|
December 31, 2018 |
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Commercial
business |
|
$ |
- |
|
$ |
163 |
|
$ |
105 |
|
$ |
268 |
Commercial
real estate |
|
|
924 |
|
|
188 |
|
|
- |
|
|
1,112 |
Consumer |
|
|
- |
|
|
173 |
|
|
59 |
|
|
232 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
non-performing loans |
|
$ |
924 |
|
$ |
524 |
|
$ |
164 |
|
$ |
1,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DETAIL OF LAND DEVELOPMENT AND SPECULATIVE CONSTRUCTION
LOANS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northwest |
|
Other |
|
Southwest |
|
|
|
|
|
|
Oregon |
|
Oregon |
|
Washington |
|
Total |
|
|
|
December 31, 2018 |
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Land
development |
|
$ |
2,187 |
|
$ |
1,927 |
|
$ |
14,392 |
|
$ |
18,506 |
Speculative
construction |
|
|
1,098 |
|
|
81 |
|
|
14,226 |
|
|
15,405 |
|
|
|
|
|
|
|
|
|
|
|
|
Total land
development and speculative construction |
|
$ |
3,285 |
|
$ |
2,008 |
|
$ |
28,618 |
|
$ |
33,911 |
|
|
|
|
|
|
|
|
|
|
|
|
At or for the three months
ended |
|
At or for the nine months ended |
SELECTED OPERATING
DATA |
Dec. 31, 2018 |
Sept. 30, 2018 |
Dec. 31, 2017 |
|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
|
|
|
|
|
|
Efficiency ratio
(4) |
|
60.87 |
% |
|
60.99 |
% |
|
62.53 |
% |
|
|
61.30 |
% |
|
65.74 |
% |
Coverage ratio (6) |
|
132.68 |
% |
|
130.14 |
% |
|
126.15 |
% |
|
|
130.04 |
% |
|
120.62 |
% |
Return on average
assets (1) |
|
1.53 |
% |
|
1.46 |
% |
|
0.53 |
% |
|
|
1.52 |
% |
|
0.85 |
% |
Return on average
equity (1) |
|
13.90 |
% |
|
13.68 |
% |
|
5.07 |
% |
|
|
14.17 |
% |
|
8.25 |
% |
|
|
|
|
|
|
|
NET INTEREST
SPREAD |
|
|
|
|
|
|
Yield on loans |
|
5.17 |
% |
|
5.17 |
% |
|
5.04 |
% |
|
|
5.22 |
% |
|
5.03 |
% |
Yield on investment
securities |
|
2.38 |
% |
|
2.27 |
% |
|
2.24 |
% |
|
|
2.32 |
% |
|
2.20 |
% |
Total
yield on interest-earning assets |
|
4.63 |
% |
|
4.56 |
% |
|
4.28 |
% |
|
|
4.61 |
% |
|
4.29 |
% |
|
|
|
|
|
|
|
Cost of
interest-bearing deposits |
|
0.14 |
% |
|
0.15 |
% |
|
0.17 |
% |
|
|
0.15 |
% |
|
0.17 |
% |
Cost of FHLB advances
and other borrowings |
|
4.35 |
% |
|
4.82 |
% |
|
3.89 |
% |
|
|
4.49 |
% |
|
3.80 |
% |
Total
cost of interest-bearing liabilities |
|
0.37 |
% |
|
0.34 |
% |
|
0.31 |
% |
|
|
0.35 |
% |
|
0.31 |
% |
|
|
|
|
|
|
|
Spread (7) |
|
4.26 |
% |
|
4.22 |
% |
|
3.97 |
% |
|
|
4.26 |
% |
|
3.98 |
% |
Net interest
margin |
|
4.39 |
% |
|
4.33 |
% |
|
4.06 |
% |
|
|
4.37 |
% |
|
4.06 |
% |
|
|
|
|
|
|
|
PER SHARE DATA |
|
|
|
|
|
|
Basic earnings per
share (2) |
$ |
0.19 |
|
$ |
0.19 |
|
$ |
0.07 |
|
|
$ |
0.58 |
|
$ |
0.32 |
|
Diluted earnings per
share (3) |
|
0.19 |
|
|
0.19 |
|
|
0.07 |
|
|
|
0.58 |
|
|
0.32 |
|
Book value per share
(5) |
|
5.67 |
|
|
5.42 |
|
|
5.18 |
|
|
|
5.67 |
|
|
5.18 |
|
Tangible book value per
share (5) (non-GAAP) |
|
4.43 |
|
|
4.17 |
|
|
3.93 |
|
|
|
4.43 |
|
|
3.93 |
|
Market price per
share: |
|
|
|
|
|
|
High for
the period |
$ |
8.75 |
|
$ |
9.91 |
|
$ |
9.45 |
|
|
$ |
9.91 |
|
$ |
9.45 |
|
Low for
the period |
|
7.03 |
|
|
8.47 |
|
|
8.44 |
|
|
|
7.03 |
|
|
6.51 |
|
Close for
period end |
|
7.28 |
|
|
8.84 |
|
|
8.67 |
|
|
|
7.28 |
|
|
8.67 |
|
Cash dividends declared
per share |
|
0.0400 |
|
|
0.0350 |
|
|
0.0300 |
|
|
|
0.1100 |
|
|
0.0750 |
|
|
|
|
|
|
|
|
Average number of
shares outstanding: |
|
|
|
|
|
|
Basic
(2) |
|
22,598,712 |
|
|
22,579,839 |
|
|
22,537,092 |
|
|
|
22,582,956 |
|
|
22,520,352 |
|
Diluted
(3) |
|
22,663,919 |
|
|
22,658,737 |
|
|
22,622,129 |
|
|
|
22,658,153 |
|
|
22,608,603 |
|
|
|
|
|
|
|
|
(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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