Exhibit 99.1
Contacts: Pat Sheaffer or Ron Wysaske,
Riverview Bancorp, Inc. 360-693-6650
Riverview Bancorp Earns $1.1 Million in Second Fiscal Quarter
Vancouver, WA – October 26, 2010 – Riverview Bancorp, Inc. (“Riverview” or the “Company”) (NASDAQ GSM: RVSB), the parent company of Riverview Community Bank (“Bank”), today reported that net income increased to $1.1 million, or $0.06 per diluted share, for the second fiscal quarter ended September 30, 2010, compared to $202,000, or $0.02 per diluted share, for the second fiscal quarter a year ago. For the first six months of fiscal 2011 net income increased to $2.9 million, or $0.20 per diluted share, compared to $545,000, or $0.05 per diluted share, for the first six months of fiscal 2010.
“Riverview’s second quarter was highlighted by a successful capital raise and continued strong operating performance,” said Pat Sheaffer, Chairman and CEO. “We posted profits for the second consecutive quarter and have continued to see meaningful improvements throughout the Bank during the first half of fiscal 2011. While credit costs remained elevated, we are seeing signs of a return to normalcy from an operating perspective.”
Common Stock Offering
During the second fiscal quarter, the Company successfully raised $18.9 million in net proceeds through an underwritten public offering. The Company issued 11.5 million shares of its common stock, including 1.5 million shares pursuant to the underwriter’s over-allotment option. “The successful completion of this offering increased our already-strong capital and liquidity levels and further enhanced the Bank’s ability to respond to the banking needs in our communities,” added Sheaffer. “To help in accomplishing our goals, we have also hired additional talented and experienced bankers. Together with our existing team, we are looking for opportunities to attract new customers and grow our existing franchise.”
Second Quarter Fiscal 2011 Highlights (at or for the period ended September 30, 2010)
| · | Net income of $1.1 million, or $0.06 per diluted share. |
| · | Completed capital offering and raised $18.9 million in net proceeds. |
| · | Improved capital levels - total risk-based capital ratio of 14.07%, significantly above the 10.00% minimum for “well-capitalized” designation. |
| · | Net interest margin remains strong at 4.46%. |
| · | Average deposit balances increased $16.8 million compared to prior quarter. |
| · | Non-performing assets were 6.42% of total assets. |
| · | Allowance for loan losses was 2.72% of total loans and 53.84% of non-performing loans. |
| · | Reduced concentration in land development and speculative construction loans by $9.4 million during the quarter. These two segments accounted for 12.4% of the total loan portfolio at September 30, 2010. |
Credit Quality
“We continue to be proactive in managing our asset quality,” said Dave Dahlstrom, EVP and Chief Credit Officer. “While we have experienced an increase in non-performing loans during the quarter due to one new commercial real estate (CRE) credit, there has been a considerable slowdown in new problem loans.”
Non-performing loans (NPLs) increased slightly during the quarter to $35.3 million compared to $33.0 million three months earlier, but were down from the $41.1 million at their peak level at June 30, 2009. NPLs represented 5.06% of total loans at September 30, 2010, compared to 4.59% of total loans three months earlier. “The increase in non-performing loans during the quarter was primarily due to one commercial real estate loan totaling $6.3 million. We are working on a deal for the sale of this property and based on a current appraisal of the property we do not anticipate any loss on the property settlement at this time,” said Dahlstrom. “While we believe the worst of the credit problems are behind us, we do expect some continued volatility in the non-performing asset (NPA) balances in the coming quarters.” Loans delinquent 30 to 89 days improved to 1.30% of total loans compared to 1.78% of total loans at June 30, 2010. The bulk of these
RVSB Second Quarter Fiscal 2011 Results
October 26, 2010
Page 2
delinquencies were concentrated in one CRE loan totaling $7.2 million. This loan is reserved for at its current market value with a total an impairment of $699,000 at September 30, 2010.
The results of our most recent stress tests on the CRE portfolio showed no significant issues, unlike our previous experience in the residential land development and construction portfolios. The Bank expects any potential issues that may arise in the CRE portfolio will result from individual loans and not represent a systemic weakness from this portfolio.
Real estate owned (REO) was $19.8 million at September 30, 2010 compared to $14.9 million at June 30, 2010. REO balances increased as the Bank has continued to make progress in moving non-performing loans through the foreclosure process, which will allow for more efficient resolution of these properties and continued reductions in our NPA levels in future quarters. “During the second quarter, we sold a total of $1.6 million of REO, added 13 properties that totaled $6.4 million and have several additional properties which we expect to be sold during the third fiscal quarter,” Dahlstrom added. The REO balance consisted primarily of completed residential properties and residential building land and lots. The Bank has written these properties down to their net realizable value based on recent or updated appraisals.
NPAs increased during the quarter to $55.1 million, or 6.42% of total assets, at September 30, 2010 compared to $47.9 million, or 5.54% of total assets, in the prior quarter. This increase was primarily the result of the one CRE loan discussed earlier.
The total CRE loan portfolio was $360.0 million as of September 30, 2010, of which 28% was owner-occupied and 72% was investor-owned. At September 30, 2010, the CRE portfolio contained five loans totaling $9.5 million that were more than 90 days past due, representing 2.7% of the total commercial real estate. Due primarily to our conservative underwriting standards for this portfolio, none of these loans required any type of impairment at September 30, 2010. The underwriting standards for this portfolio generally require a minimum debt service coverage ratio of 1.20 or greater, a maximum loan-to-value of 75% and personal guarantees.
Riverview continues to reduce its exposure to land development and speculative construction loans, reducing the balance of these portfolios to $87.0 million at September 30, 2010 compared to $96.4 million in the prior quarter, $120.2 million at September 30, 2009 and $237.5 million at their peak at October 31, 2006. Speculative construction loans declined to $24.4 million, and represent only 3.5% of the total loan portfolio and land development loans declined to $62.6 million and represent 9.0% of the total loan portfolio at September 30, 2010.
Riverview’s allowance for loan losses was $19.0 million at September 30, 2010 representing 2.72% of total loans compared to an allowance for loan losses of $19.6 million, or 2.73% of total loans, at June 30, 2010. The ratio of allowance for loan losses to non-performing loans was 53.84% at September 30, 2010 compared to 59.37% three months earlier. For the second fiscal quarter, the provision for loan losses was $1.7 million compared to net charge-offs of $2.2 million. The provision for loan losses was $1.3 million in the preceding quarter and $3.2 million in the second quarter a year ago.
Capital and Liquidity
The Bank continues to maintain capital levels significantly in excess of the requirements to be categorized as “well capitalized.” The Bank’s total risk-based capital ratio was 14.07% and its Tier 1 capital ratio was 12.81% at September 30, 2010. Riverview’s total shareholders’ equity was $105.7 million at September 30, 2010 compared to $89.6 million at September 30, 2009. Book value per share was $4.70 per share at September 30, 2010 compared to $8.20 a year ago and tangible book value per share was $3.53 at September 30, 2010 compared to $5.78 a year earlier. Riverview’s tangible shareholder equity was 9.5% of tangible assets at September 30. 2010. The Company also has an additional $12.5 million in cash that could be used in the future to boost the Bank’s capital levels or support future growth.
Riverview Community Bank’s actual and required minimum capital amounts and ratios are presented as follows:
| Sept. 30, 2010 | | Actual | | Adequately Capitalized | | Well Capitalized |
| | | Amount | | Ratio | | Amount | | Ratio | | Amount | | Ratio |
| Total Capital | | (dollars in thousands) |
| (To Risk-Weighted Assets) | | $ 99,144 | | 14.07% | | $ 56,371 | | 8.00% | | $ 70,464 | | 10.00% |
| Tier 1 Capital | | | | | | | | | | | | |
| (To Risk-Weighted Assets) | | 90,285 | | 12.81% | | 28,186 | | 4.00% | | 42,278 | | 6.00% |
| Tier 1 Capital | | | | | | | | | | | | |
| (To Adjusted Tangible Assets) | | 90,285 | | 11.00% | | 32,836 | | 4.00% | | 41,045 | | 5.00% |
RVSB Second Quarter Fiscal 2011 Results
October 26, 2010
Page 3
At September 30, 2010, the Bank had available liquidity of $400 million, including over $318 million of borrowing capacity from the Federal Home Loan Bank of Seattle and the Federal Reserve Bank of San Francisco, and $56 million from our cash and short-term investments. As of September 30, 2010, the Bank had no outstanding borrowings.
Net Interest Margin
Riverview’s net interest margin was 4.46% for the second quarter compared to 4.79% for the preceding quarter and 4.35% for the second quarter a year ago. For the first six months of fiscal 2011 the net interest margin was 4.63%, a 33 basis point improvement compared to the first six months of fiscal 2010. “The decline in the net interest margin compared to the preceding quarter is primarily the result of the Bank holding higher levels of cash and investments which bear lower interest rates,” said Kevin Lycklama, EVP and CFO. The average cash and investment balances increased by $37.0 million during the quarter. The increase in this on-balance sheet liquidity resulted in a 21 basis point reduction in the net interest margin for the quarter. Loans placed on nonaccrual during the quarter resulted in a five basis point reduction in the margin. The margin was also negatively impacted by the declining balance of the loan portfolio. The average cost of deposits decreased by 11 basis points during the quarter to 0.98%.
Income Statement
Net interest income was $8.7 million in the second quarter compared to $9.0 million in the preceding quarter and $8.9 million in the second quarter a year ago. In the first six months of fiscal 2011 net interest income was $17.7 million, compared to $17.6 million in the first six months of fiscal 2010. Operating revenue, which consists of net interest income plus non-interest income, was $10.7 million in the second quarter compared to $11.3 million in the preceding quarter and $10.7 million in the second quarter a year ago. In the first six months of fiscal 2011 operating revenue increased to $22.0 million compared to $21.5 million in the same period a year ago.
Non-interest income was $2.1 million in the second quarter compared to $2.2 million in the preceding quarter and $1.8 million in the second quarter a year ago. For the first half of fiscal 2011 non-interest income increased 10.0% to $4.3 million compared to $3.9 million for the first half of fiscal 2010. The increase from prior year is primarily due to a $459,000 impairment charge on an investment security in prior year.
Non-interest expense was $7.4 million in the second quarter compared to $7.3 million in the preceding quarter and in the second quarter a year ago. For the first half of fiscal 2011 non-interest expense was $14.7 million compared to $15.3 million a year ago.
Balance Sheet Review
Loan balances outstanding at September 30, 2010 declined reflecting the continued weak economic conditions and the planned reduction in the construction and land development portfolios over the past year. Net loans declined $17.9 million during the quarter to $679.9 million at September 30, 2010, compared to $697.8 million at June 30, 2010, and $730.2 million a year ago.
Total deposits increased by $2.5 million during the quarter to $718.0 million at September 30, 2010 compared to $715.6 million three months earlier and $662.5 million a year ago. Checking accounts represented the largest growth during the quarter with balances increasing $8.1 million or 4.8% from the previous linked quarter. Average total deposits for the second quarter were $716.3 million, an increase of $16.8 million from the prior quarter’s average balance of $699.5 million. The loan to deposit ratio decreased to 0.97 at September 30, 2010 compared to 1.00 three months earlier and 1.13 a year ago.
During the quarter, the Bank paid down its borrowings by $28.0 million. The Bank had no borrowings at September 30, 2010.
Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. Riverview believes 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.
RVSB Second Quarter Fiscal 2011 Results
Financial measures that exclude intangible assets are non-GAAP measures. To provide investors with a broader understanding of capital adequacy, Riverview provided non-GAAP financial measures for tangible common equity, along with the GAAP measure. Tangible common 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.
The following table provides reconciliations of ending shareholders’ equity (GAAP) to ending tangible shareholders’ equity (non-GAAP), and ending assets (GAAP) to ending tangible assets (non-GAAP).
| | | Sept. 30, | | | June 30, | | | Sept. 30, | | | March 31, |
(Dollars in thousands) | | 2010 | | | 2010 | | | 2009 | | | 2010 |
| | | | | | | | | | | | |
| Shareholders’ equity | $ | 105,719 | | $ | 85,718 | | $ | 89,567 | | $ | 83,934 |
| Goodwill | | 25,572 | | | 25,572 | | | 25,572 | | | 25,572 |
| Other intangible assets, net | | 735 | | | 781 | | | 896 | | | 823 |
| | | | | | | | | | | | |
| Tangible shareholders’ equity | $ | 79,412 | | $ | 59,365 | | $ | 63,099 | | $ | 57,539 |
| | | | | | | | | | | | |
| Total assets | $ | 858,865 | | $ | 863,424 | | $ | 863,670 | | $ | 837,953 |
| Goodwill | | 25,572 | | | 25,572 | | | 25,572 | | | 25,572 |
| Other intangible assets, net | | 735 | | | 781 | | | 896 | | | 823 |
| | | | | | | | | | | | |
| Tangible assets | $ | 832,558 | | $ | 837,071 | | $ | 837,202 | | $ | 811,558 |
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 $859 million, it is the parent company of the 87 year-old Riverview Community Bank, as well as Riverview Asset Management Corp. There are 17 branches, including twelve in the Portland-Vancouver 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.
“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 amount of capital it intends to raise and its intended use of that 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 Thrift Supervision 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; the Company’s compliance with regulatory enforcement actions; we have entered into with the OTS and the possibility that our noncompliance could result in the imposition of additional enforcement actions and additional requirements or restrictions on our operations; 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 Securities and Exchange Commission.
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 2010 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.
RVSB Second Quarter Fiscal 2011 Results
| RIVERVIEW BANCORP, INC. AND SUBSIDIARY | | | | | | | |
| Consolidated Balance Sheets | | | | | | | |
| (In thousands, except share data) (Unaudited) | September 30, 2010 | | June 30, 2010 | | September 30, 2009 | | March 31, 2010 |
| ASSETS | | | | | | | |
| | | | | | | | |
| Cash (including interest-earning accounts of $36,002, $41,345, $4,862 | $ 48,505 | | $ 53,244 | | $ 18,513 | | $ 13,587 |
| and $3,384) | | | | | | | |
| Certificate of deposits with other financial institutions | 14,951 | | - | | - | | - |
| Loans held for sale | 417 | | 667 | | 180 | | 255 |
| Investment securities held to maturity, at amortized cost | 512 | | 511 | | 523 | | 517 |
| Investment securities available for sale, at fair value | 6,688 | | 6,727 | | 8,451 | | 6,802 |
| Mortgage-backed securities held to maturity, at amortized | 199 | | 203 | | 406 | | 259 |
| Mortgage-backed securities available for sale, at fair value | 2,306 | | 2,554 | | 3,397 | | 2,828 |
| Loans receivable (net of allowance for loan losses of $19,029, $19,565, | | | | | | |
| $18,071, and $21,642) | 679,925 | | 697,795 | | 730,227 | | 712,837 |
| Real estate and other pers. property owned | 19,766 | | 14,908 | | 20,482 | | 13,325 |
| Prepaid expenses and other assets | 6,541 | | 7,560 | | 2,953 | | 7,934 |
| Accrued interest receivable | 2,644 | | 2,653 | | 2,891 | | 2,849 |
| Federal Home Loan Bank stock, at cost | 7,350 | | 7,350 | | 7,350 | | 7,350 |
| Premises and equipment, net | 15,893 | | 16,201 | | 18,770 | | 16,487 |
| Deferred income taxes, net | 11,209 | | 11,197 | | 8,008 | | 11,177 |
| Mortgage servicing rights, net | 470 | | 493 | | 528 | | 509 |
| Goodwill | 25,572 | | 25,572 | | 25,572 | | 25,572 |
| Core deposit intangible, net | 265 | | 288 | | 368 | | 314 |
| Bank owned life insurance | 15,652 | | 15,501 | | 15,051 | | 15,351 |
| TOTAL ASSETS | $ 858,865 | | $ 863,424 | | $ 863,670 | | $ 837,953 |
| | | | | | | | |
| LIABILITIES AND EQUITY | | | | | | | |
| | | | | | | | |
| LIABILITIES: | | | | | | | |
| Deposit accounts | $ 718,028 | | $ 715,573 | | $ 662,494 | | $ 688,048 |
| Accrued expenses and other liabilities | 8,898 | | 8,224 | | 5,468 | | 6,833 |
| Advance payments by borrowers for taxes and insurance | 507 | | 194 | | 435 | | 427 |
| Federal Home Loan Bank advances | - | | 28,000 | | 5,000 | | 23,000 |
| Federal Reserve Bank advances | - | | - | | 75,000 | | 10,000 |
| Junior subordinated debentures | 22,681 | | 22,681 | | 22,681 | | 22,681 |
| Capital lease obligation | 2,589 | | 2,599 | | 2,630 | | 2,610 |
| Total liabilities | 752,703 | | 777,271 | | 773,708 | | 753,599 |
| | | | | | | | |
| EQUITY: | | | | | | | |
| 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, 2010 - 22,471,890 issued and outstanding; | | | | | | | |
| June 30, 2010 – 10,923,773 issued and outstanding; | 225 | | 109 | | 109 | | 109 |
| September 30, 2009 – 10,923,773 issued and outstanding; | | | | | | | |
| March 31, 2010 – 10,923,773 issued and outstanding; | | | | | | | |
| Additional paid-in capital | 65,746 | | 46,980 | | 46,889 | | 46,948 |
| Retained earnings | 41,760 | | 40,643 | | 44,867 | | 38,878 |
| Unearned shares issued to employee stock ownership trust | (748) | | (773) | | (851) | | (799) |
| Accumulated other comprehensive loss | (1,264) | | (1,241) | | (1,447) | | (1,202) |
| Total shareholders’ equity | 105,719 | | 85,718 | | 89,567 | | 83,934 |
| | | | | | | | |
| Noncontrolling interest | 443 | | 435 | | 395 | | 420 |
| Total equity | 106,162 | | 86,153 | | 89,962 | | 84,354 |
| TOTAL LIABILITIES AND EQUITY | $ 858,865 | | $ 863,424 | | $ 863,670 | | $ 837,953 |
RVSB Second Quarter Fiscal 2011 Results
October 26, 2010
Page 6
| RIVERVIEW BANCORP, INC. AND SUBSIDIARY | | | | | | |
| Consolidated Statements of Income | | | | | | |
| | Three Months Ended | | Six Months Ended |
| (In thousands, except share data) (Unaudited) | Sept. 30, 2010 | June 30, 2010 | Sept. 30, 2009 | | Sept. 30, 2010 | Sept. 30, 2009 |
| INTEREST INCOME: | | | | | | |
| Interest and fees on loans receivable | $ 10,672 | $ 11,193 | $ 11,639 | | $ 21,865 | $ 23,349 |
| Interest on investment securities-taxable | 32 | 55 | 66 | | 87 | 164 |
| Interest on investment securities-non taxable | 14 | 15 | 31 | | 29 | 63 |
| Interest on mortgage-backed securities | 23 | 26 | 35 | | 49 | 75 |
| Other interest and dividends | 48 | 15 | 26 | | 63 | 40 |
| Total interest income | 10,789 | 11,304 | 11,797 | | 22,093 | 23,691 |
| | | | | | | |
| INTEREST EXPENSE: | | | | | | |
| Interest on deposits | 1,764 | 1,901 | 2,448 | | 3,665 | 5,142 |
| Interest on borrowings | 375 | 385 | 436 | | 760 | 956 |
| Total interest expense | 2,139 | 2,286 | 2,884 | | 4,425 | 6,098 |
| Net interest income | 8,650 | 9,018 | 8,913 | | 17,668 | 17,593 |
| Less provision for loan losses | 1,675 | 1,300 | 3,200 | | 2,975 | 5,550 |
| | | | | | | |
| Net interest income after provision for loan losses | 6,975 | 7,718 | 5,713 | | 14,693 | 12,043 |
| | | | | | | |
| NON-INTEREST INCOME: | | | | | | |
| Fees and service charges | 1,077 | 1,099 | 1,151 | | 2,176 | 2,395 |
| Asset management fees | 492 | 521 | 465 | | 1,013 | 974 |
| Gain on sale of loans held for sale | 124 | 119 | 159 | | 243 | 560 |
| Impairment of investment security | - | - | (201) | | - | (459) |
| Bank owned life insurance income | 150 | 150 | 151 | | 300 | 302 |
| Other | 207 | 347 | 70 | | 554 | 126 |
| Total non-interest income | 2,050 | 2,236 | 1,795 | | 4,286 | 3,898 |
| | | | | | | |
| NON-INTEREST EXPENSE: | | | | | | |
| Salaries and employee benefits | 4,085 | 3,940 | 3,689 | | 8,025 | 7,564 |
| Occupancy and depreciation | 1,148 | 1,141 | 1,217 | | 2,289 | 2,450 |
| Data processing | 248 | 252 | 237 | | 500 | 477 |
| Amortization of core deposit intangible | 23 | 26 | 28 | | 49 | 58 |
| Advertising and marketing expense | 255 | 135 | 151 | | 390 | 310 |
| FDIC insurance premium | 417 | 421 | 445 | | 838 | 1,140 |
| State and local taxes | 147 | 171 | 151 | | 318 | 300 |
| Telecommunications | 105 | 107 | 113 | | 212 | 229 |
| Professional fees | 321 | 326 | 330 | | 647 | 634 |
| Real estate owned expenses | 120 | 166 | 353 | | 286 | 962 |
| Other | 543 | 580 | 553 | | 1,123 | 1,131 |
| Total non-interest expense | 7,412 | 7,265 | 7,267 | | 14,677 | 15,255 |
| | | | | | | |
| INCOME BEFORE INCOME TAXES | 1,613 | 2,689 | 241 | | 4,302 | 686 |
| PROVISION FOR INCOME TAXES | 496 | 924 | 39 | | 1,420 | 141 |
| NET INCOME | $ 1,117 | $ 1,765 | $ 202 | | $ 2,882 | $ 545 |
| | | | | | | |
| Earnings per common share: | | | | | | |
| Basic | $ 0.06 | $ 0.16 | $ 0.02 | | $ 0.20 | $ 0.05 |
| Diluted | $ 0.06 | $ 0.16 | $ 0.02 | | $ 0.20 | $ 0.05 |
| Weighted average number of shares outstanding: | | | | | | |
| Basic | 18,033,354 | 10,735,946 | 10,717,471 | | 14,404,588 | 10,714,409 |
| Diluted | 18,033,354 | 10,735,946 | 10,717,471 | | 14,404,588 | 10,714,409 |
| | | | | | | |
RVSB Second Quarter Fiscal 2011 Results
October 26, 2010
Page 7
| (Dollars in thousands) | | At or for the three months ended | | At or for the six months ended |
| | | Sept. 30, 2010 | | June 30, 2010 | | Sept. 30, 2009 | | Sept. 30, 2010 | | Sept. 30, 2009 |
| AVERAGE BALANCES | | | | | | | | | | |
| Average interest–earning assets | | $ 769,423 | | $ 755,123 | | $ 813,673 | | $ 762,312 | | $ 817,531 |
| Average interest-bearing liabilities | | 658,973 | | 656,099 | | 707,876 | | 657,543 | | 717,257 |
| Net average earning assets | | 110,450 | | 99,024 | | 105,797 | | 104,769 | | 100,274 |
| Average loans | | 707,944 | | 729,851 | | 765,470 | | 718,838 | | 778,438 |
| Average deposits | | 716,279 | | 699,483 | | 655,388 | | 707,926 | | 650,691 |
| Average equity | | 100,306 | | 86,431 | | 91,303 | | 93,407 | | 90,894 |
| Average tangible equity | | 73,969 | | 60,051 | | 64,803 | | 67,049 | | 64,400 |
| ASSET QUALITY | | Sept. 30, 2010 | | June 30, 2010 | | Sept. 30, 2009 |
| | | | | | | |
| Non-performing loans | | 35,346 | | 32,954 | | 36,085 |
| Non-performing loans to total loans | | 5.06% | | 4.59% | | 4.82% |
| Real estate/repossessed assets owned | | 19,766 | | 14,908 | | 20,482 |
| Non-performing assets | | 55,112 | | 47,862 | | 56,567 |
| Non-performing assets to total assets | | 6.42% | | 5.54% | | 6.55% |
| Net loan charge-offs in the quarter | | 2,211 | | 3,377 | | 2,905 |
| Net charge-offs in the quarter/average net loans | | 1.24% | | 1.86% | | 1.51% |
| | | | | | | |
| Allowance for loan losses | | 19,029 | | 19,565 | | 18,071 |
| Allowance for loan losses and unfunded loan | | | | | | |
| commitments | | 19,188 | | 19,755 | | 18,355 |
| Average interest-earning assets to average | | | | | | |
| interest-bearing liabilities | | 116.76% | | 115.09% | | 114.95% |
| Allowance for loan losses to | | | | | | |
| non-performing loans | | 53.84% | | 59.37% | | 50.08% |
| Allowance for loan losses to total loans | | 2.72% | | 2.73% | | 2.41% |
| Allowance for loan losses and | | | | | | |
| unfunded loan commitments to total loans | | 2.75% | | 2.75% | | 2.45% |
| Shareholders’ equity to assets | | 12.31% | | 9.93% | | 10.37% |
| LOAN MIX | | Sept. 30, 2010 | | June 30, 2010 | | Sept. 30, 2009 | | March 31, 2010 |
| Commercial and construction | | | | | | | | |
| Commercial | | $ 93,026 | | $ 106,002 | | $ 112,578 | | $ 108,368 |
| Other real estate mortgage | | 458,621 | | 455,106 | | 449,405 | | 459,178 |
| Real estate construction | | 52,262 | | 68,717 | | 94,319 | | 75,456 |
| Total commercial and construction | | 603,909 | | 629,825 | | 656,302 | | 643,002 |
| Consumer | | | | | | | | |
| Real estate one-to-four family | | 92,682 | | 84,956 | | 88,862 | | 88,861 |
| Other installment | | 2,363 | | 2,579 | | 3,134 | | 2,616 |
| Total consumer | | 95,045 | | 87,535 | | 91,996 | | 91,477 |
| | | | | | | | | |
| Total loans | | 698,954 | | 717,360 | | 748,298 | | 734,479 |
| | | | | | | | | |
| Less: | | | | | | | | |
| Allowance for loan losses | | 19,029 | | 19,565 | | 18,071 | | 21,642 |
| Loans receivable, net | | $ 679,925 | | $ 697,795 | | $ 730,227 | | $ 712,837 |
RVSB Second Quarter Fiscal 2011 Results
October 26, 2010
Page 8
| COMPOSITION OF COMMERCIAL AND CONSTRUCTION LOANS | | | | |
| | | | | | | | | |
| | | | | Commercial | | | | Commercial |
| | | | | Real Estate | | Real Estate | | & Construction |
| | �� | Commercial | | Mortgage | | Construction | | Total |
| September 30, 2010 | | (Dollars in thousands) |
| Commercial | | $ 93,026 | | $ - | | $ - | | $ 93,026 |
| Commercial construction | | - | | - | | 25,329 | | 25,329 |
| Office buildings | | - | | 88,374 | | - | | 88,374 |
| Warehouse/industrial | | - | | 47,089 | | - | | 47,089 |
| Retail/shopping centers/strip malls | | - | | 93,799 | | - | | 93,799 |
| Assisted living facilities | | - | | 35,955 | | - | | 35,955 |
| Single purpose facilities | | - | | 94,734 | | - | | 94,734 |
| Land | | - | | 62,571 | | - | | 62,571 |
| Multi-family | | - | | 36,099 | | - | | 36,099 |
| One-to-four family | | - | | - | | 26,933 | | 26,933 |
| Total | | $ 93,026 | | $ 458,621 | | $ 52,262 | | $ 603,909 |
| | | | | | | | | |
| March 31, 2010 | | (Dollars in thousands) |
| Commercial | | $ 108,368 | | $ - | | $ - | | $ 108,368 |
| Commercial construction | | - | | - | | 40,017 | | 40,017 |
| Office buildings | | - | | 90,000 | | - | | 90,000 |
| Warehouse/industrial | | - | | 46,731 | | - | | 46,731 |
| Retail/shopping centers/strip malls | | - | | 80,982 | | - | | 80,982 |
| Assisted living facilities | | - | | 39,604 | | - | | 39,604 |
| Single purpose facilities | | - | | 93,866 | | - | | 93,866 |
| Land | | - | | 74,779 | | - | | 74,779 |
| Multi-family | | - | | 33,216 | | - | | 33,216 |
| One-to-four family | | - | | - | | 35,439 | | 35,439 |
| Total | | $ 108,368 | | $ 459,178 | | $ 75,456 | | $ 643,002 |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| (Dollars in thousands) | | | | | | | | |
| | | | | | | | | |
| DEPOSIT MIX | | Sept. 30, 2010 | | June 30, 2010 | | Sept. 30, 2009 | | March 31, 2010 |
| | | | | | | | | |
| Interest checking | | $ 82,318 | | $ 78,837 | | $ 69,507 | | $ 70,837 |
| Regular savings | | 35,132 | | 32,837 | | 28,858 | | 32,131 |
| Money market deposit accounts | | 207,607 | | 209,588 | | 189,150 | | 209,580 |
| Non-interest checking | | 93,590 | | 89,006 | | 87,495 | | 83,794 |
| Certificates of deposit | | 299,381 | | 305,305 | | 287,484 | | 291,706 |
| Total deposits | | $ 718,028 | | $ 715,573 | | $ 662,494 | | $ 688,048 |
RVSB Second Quarter Fiscal 2011 Results
October 26, 2010
Page 9
| DETAIL OF NON-PERFORMING ASSETS | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | Northwest | | Other | | Southwest | | Other | | | | |
| | | | | Oregon | | Oregon | | Washington | | Washington | | Other | | Total |
| September 30, 2010 | | (dollars in thousands) |
| Non-performing assets | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | Commercial | | $ 1,293 | | $ 2,534 | | $ 3,297 | | $ - | | $ - | | $ 7,124 |
| | Commercial real estate | | 1,212 | | 6,547 | | 751 | | - | | 1,030 | | 9,540 |
| | Land | | - | | 1,165 | | 6,427 | | 147 | | 1,379 | | 9,118 |
| | Multi-family | | - | | - | | - | | - | | - | | - |
| | Commercial construction | | - | | - | | - | | - | | - | | - |
| | One-to-four family construction | 3,300 | | 3,612 | | 1,138 | | - | | - | | 8,050 |
| | Real estate one-to-four family | | 249 | | 310 | | 790 | | 165 | | - | | 1,514 |
| | Consumer | | - | | - | | - | | - | | - | | - |
| | Total non-performing loans | | 6,054 | | 14,168 | | 12,403 | | 312 | | 2,409 | | 35,346 |
| | | | | | | | | | | | | | | |
| | REO | | 4,247 | | 2,439 | | 8,281 | | 4,799 | | - | | 19,766 |
| | | | | | | | | | | | | | | |
| Total non-performing assets | | $ 10,301 | | $ 16,607 | | $ 20,684 | | $ 5,111 | | $ 2,409 | | $ 55,112 |
| DETAIL OF SPEC CONSTRUCTION AND LAND DEVELOPMENT LOANS | | | | |
| | | | | | | | | | | | | | | |
| | | | | Northwest | | Other | | Southwest | | Other | | | | |
| | | | | Oregon | | Oregon | | Washington | | Washington | | Other | | Total |
| September 30, 2010 | | (dollars in thousands) |
| Land and Spec Construction Loans | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | Land Development Loans | | $ 6,785 | | $ 4,177 | | $ 43,128 | | $ 146 | | $ 8,335 | | $ 62,571 |
| | Spec Construction Loans | | 3,300 | | 10,082 | | 11,022 | | - | | - | | 24,404 |
| | | | | | | | | | | | | | | |
| Total Land and Spec Construction | | $ 10,085 | | $ 14,259 | | $ 54,150 | | $ 146 | | $ 8,335 | | $ 86,975 |
RVSB Second Quarter Fiscal 2011 Results
October 26, 2010
Page 10
| | | At or for the three months ended | | At or for the six months ended |
| SELECTED OPERATING DATA | | Sept. 30, 2010 | | June 30, 2010 | | Sept. 30, 2009 | | Sept. 30, 2010 | | Sept. 30, 2009 |
| | | | | | | | | | | |
| Efficiency ratio (4) | | 69.27% | | 64.55% | | 67.87% | | 66.85% | | 70.98% |
| Coverage ratio (6) | | 116.70% | | 124.13% | | 122.65% | | 120.38% | | 115.33% |
| Return on average assets (1) | | 0.52% | | 0.84% | | 0.09% | | 0.68% | | 0.12% |
| Return on average equity (1) | | 4.42% | | 8.19% | | 0.88% | | 6.15% | | 1.20% |
| Average rate earned on interest-earned assets | 5.57% | | 6.01% | | 5.76% | | 5.78% | | 5.79% |
| Average rate paid on interest-bearing liabilities | 1.29% | | 1.40% | | 1.62% | | 1.34% | | 1.70% |
| Spread (7) | | 4.28% | | 4.61% | | 4.14% | | 4.44% | | 4.09% |
| Net interest margin | | 4.46% | | 4.79% | | 4.35% | | 4.63% | | 4.30% |
| | | | | | | | | | | |
| PER SHARE DATA | | | | | | | | | | |
| Basic earnings per share (2) | | $ 0.06 | | $ 0.16 | | $ 0.02 | | $ 0.20 | | $ 0.05 |
| Diluted earnings per share (3) | | 0.06 | | 0.16 | | 0.02 | | 0.20 | | 0.05 |
| Book value per share (5) | | 4.70 | | 7.85 | | 8.20 | | 4.70 | | 8.20 |
| Tangible book value per share (5) | | 3.53 | | 5.43 | | 5.78 | | 3.53 | | 5.78 |
| Market price per share: | | | | | | | | | | |
| High for the period | | $ 2.49 | | $ 3.81 | | $ 4.32 | | $ 3.81 | | $ 4.32 |
| Low for the period | | 1.73 | | 2.24 | | 2.95 | | 1.73 | | 2.63 |
| Close for period end | | 1.98 | | 2.43 | | 3.70 | | 1.98 | | 3.70 |
| Cash dividends declared per share | | - | | - | | - | | - | | - |
| | | | | | | | | | | |
| Average number of shares outstanding: | | | | | | | | | | |
| Basic (2) | | 18,033,354 | | 10,735,946 | | 10,717,471 | | 14,404,588 | | 10,714,409 |
| Diluted (3) | | 18,033,354 | | 10,735,946 | | 10,717,471 | | 14,404,588 | | 10,714,409 |
| (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. |
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