Exhibit 99.1
| Contacts: | Pat Sheaffer or Ron Wysaske, |
| | Riverview Bancorp, Inc. 360-693-6650 |
| | |
| | |
Riverview Bancorp Reports Continued Profitability in Third Fiscal Quarter,
Highlighted by Credit Quality Improvements
Vancouver, WA – January 30, 2013 - Riverview Bancorp, Inc. (Nasdaq GSM: RVSB) (“Riverview” or the “Company”) today reported it earned $1.0 million, or $0.05 per diluted share, in its third fiscal quarter ended December 31, 2012 compared to a net loss of $16.6 million, or $0.74 per diluted share, in third quarter a year ago. In the first nine months of fiscal 2013, Riverview earned $1.0 million, or $0.05 per diluted share, compared to a net loss of $15.7 million, or $0.70 per diluted share, in the same period a year ago.
“Riverview’s turnaround plan is on schedule,” stated Pat Sheaffer, Chairman and CEO. “We were profitable for the second consecutive quarter and have improved the overall health of the Company. Credit quality improved for the third consecutive quarter as we continue to focus on resolving problem credits and our capital ratios improved as we continued to manage our balance sheet growth. Now that profitability looks sustainable and our capital position is strengthened, we can turn our focus on responsible organic growth that supports lending in the communities we serve.”
Highlights (at or for the period ended December 31, 2012)
| · | Net income was $1.0 million, or $0.05 per diluted share |
| · | Net interest margin was 4.03% for the quarter and 4.19% for the nine month period |
| · | Nonperforming loans decreased $3.4 million during the quarter to $24.7 million (12.0% decline) |
| · | Nonperforming assets decreased $7.1 million during the quarter to $45.4 million (13.6% decline) |
| · | Net charge-offs for the quarter decreased 61.9% to $507,000 compared to $1.3 million for the preceding quarter |
| · | Core deposits were very strong and make up 95% of total deposits |
| · | Capital levels continue to exceed the regulatory requirements to be categorized as “well capitalized” with a total risk-based capital ratio of 14.25% and a Tier 1 leverage ratio of 9.50% |
Credit Quality
“As a result of the continued improvement in asset quality and the third consecutive quarter of declining loan charge-offs, no provision for loan losses was recorded during the third quarter,” said Ron Wysaske, President and COO. Riverview recorded a $500,000 provision for loan losses in the preceding quarter and $4.5 million for the nine months ended December 31, 2012. The allowance for loan losses was $19.6 million at December 31, 2012, representing 3.51% of total loans and 79.60% of nonperforming loans.
Nonperforming loan balances decreased $3.4 million during the quarter, primarily in the commercial and commercial real estate loan categories. Nonperforming loans were $24.7 million, or 4.41% of total loans, at December 31, 2012, compared to $28.0 million, or 4.81% of total loans, at September 30, 2012, and $32.0 million, or 4.61% of total loans, a year ago. The decrease in nonperforming loans was driven by a reduction in the inflow of new nonperforming loans as well as several commercial and commercial real estate loans that returned to accrual status or made principal reductions. During the third quarter ended December 31, 2012, $1.2 million new loans were placed on non-accrual status, marking the third consecutive quarter that inflows have declined.
Net charge-offs declined for the third consecutive quarter as the Company continued to see a slowdown in loan charge-offs and an increase in recoveries on prior loan charge-offs. Net charge-offs in the third quarter of fiscal 2013 were $507,000, compared to $1.3 million in the preceding quarter and $6.8 million in the third fiscal quarter a year ago.
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January 30, 2013
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Real estate owned (“REO”) decreased $3.8 million, or 15.5%, during the quarter to $20.7 million due to continued strong sales activity. REO sales during the quarter totaled $3.9 million with write-downs of $865,000 and additions of $942,000. “Due to continued strong sales during the past several quarters and the continuing improvement in economic conditions and real estate activity in our market areas, we are optimistic that the progress we have made will continue,” said Wysaske. A December 2012 report by Bill Wyatt, Executive Director Port of Portland noted that the Portland/Vancouver MSA was ranked 9th among the top 100 US metros for job growth over the past 2 years.
Balance Sheet Review
Loan balances declined $23.0 million during the quarter, due to planned reductions in classified loan balances and an increase in pay-downs on existing loans. Classified loan balances continued the year-long trend of improvement during the third quarter, with classified loan balances declining by $14.2 million, or 17.6% compared to September 30, 2012.
“The planned reduction in our balance sheet over the last three quarters has helped us to clean up the loan portfolio and improve our capital position,” said Wysaske. “Riverview is now able to focus on organic growth by building new relationships.”
Land development and speculative construction loan balances declined $2.9 million during the quarter to $28.6 million. These portfolios represent a combined 5.1% of the total loan portfolio at December 31, 2012.
The commercial real estate (“CRE”) loan portfolio totaled $306.8 million, at December 31, 2012, of which 29.2% was owner-occupied and 70.8% was investor-owned. The CRE portfolio contained seven loans totaling $10.6 million that were nonperforming, representing 3.5% of the total CRE portfolio and 43.0% of total nonperforming loans. Of the CRE loans that are classified as nonperforming, 30.1 % are current on their payments.
Deposits declined $16.4 million during the quarter as part of the Company’s continued planned reduction in deposits. These decreases in deposits were focused on non-branch deposits, higher cost deposits and deposit concentrations to individual companies. Total deposits were $682.8 million at December 31, 2012 compared to $699.2 million at September 30, 2012 and $735.0 million a year ago. At December 31, 2012, non-interest checking deposits totaled $128.7 million, an increase of 10.1% from a year ago and represent 18.8% of total deposits. Core deposits accounted for 95.2% of total deposits at December 31, 2012.
Net Interest Margin
Riverview’s net interest margin contracted 28 basis points during the quarter to 4.03% compared to 4.31% for the preceding quarter. The decrease in net interest margin was primarily due to an increase in low-yielding cash balances as well as lower yields on the loan portfolio. The increase in cash balances resulted in a 23 basis point reduction in our net interest margin compared to the prior quarter. Loan yields have also continued to contract as existing loans re-priced and new loans were originated in the current low interest rate environment.
Income Statement
Non-interest income was $2.1 million in the third fiscal quarter compared to $2.3 million in the preceding quarter. Third quarter non-interest income included a $173,000 loss on sale of REO properties, compared to a $64,000 gain on sale of REO in the second quarter. The decreases in non-interest income were partially offset by an $110,000 increase in gain on sale of loans to the Federal Home Loan Mortgage Corporation (FHLMC) during the third quarter. Mortgage banking activity remained at a high level with a total of $19.6 million in new mortgage loans originated during the quarter.
Non-interest expense increased to $8.4 million in the third fiscal quarter compared to $7.8 million in the preceding quarter and $10.2 million in the third fiscal quarter a year ago. Non-interest expense in the third quarter included $110,000 in data processing expenses related to the Company’s ongoing conversion of its core software processing system. REO expenses increased during the quarter primarily due to a $600,000 write-down on a commercial real estate property.
In fiscal 2012, the Company established a valuation allowance against its deferred tax asset. At December 31, 2012, the total valuation allowance was $16.8 million. Management will review the deferred tax asset on a quarterly basis to determine the appropriate valuation allowance, if needed. Any future reversals of the deferred tax asset valuation
RVSB Third Quarter Fiscal 2013 Results
January 30, 2013
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allowance would decrease the Company’s income tax expense, increase its after tax net income in the period of reversal and boost shareholder equity.
Capital and Liquidity
The Bank continues to maintain capital levels in excess of the regulatory requirements to be categorized as “well capitalized” with a total risk-based capital ratio of 14.25% and a Tier 1 leverage ratio of 9.50% at December 31, 2012.
At December 31, 2012, the Bank had available total and contingent liquidity of more than $475 million, including over $225 million of borrowing capacity from the Federal Home Loan Bank of Seattle and the Federal Reserve Bank of San Francisco. The Bank also has more than $135 million of cash and short-term investments.
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.
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 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 a reconciliation of ending shareholders’ equity (GAAP) to ending tangible shareholders’ equity (non-GAAP), and ending assets (GAAP) to ending tangible assets (non-GAAP).
| (Dollars in thousands) | | Dec. 31, 2012 | | | Sept. 30, 2012 | | | Dec. 31, 2011 | | | March 31, 2012 | |
| | | | | | | | | | | | | |
| Shareholders' equity | | $ | 76,823 | | | $ | 75,607 | | | $ | 91,567 | | | $ | 75,607 | |
| Goodwill | | | 25,572 | | | | 25,572 | | | | 25,572 | | | | 25,572 | |
| Other intangible assets, net | | | 489 | | | | 520 | | | | 456 | | | | 415 | |
| | | | | | | | | | | | | | | | | |
| Tangible shareholders' equity | | $ | 50,762 | | | $ | 49,515 | | | $ | 65,539 | | | $ | 49,620 | |
| | | | | | | | | | | | | | | | | |
| Total assets | | $ | 794,564 | | | $ | 809,553 | | | $ | 862,330 | | | $ | 855,998 | |
| Goodwill | | | 25,572 | | | | 25,572 | | | | 25,572 | | | | 25,572 | |
| Other intangible assets, net | | | 489 | | | | 520 | | | | 456 | | | | 415 | |
| | | | | | | | | | | | | | | | | |
| Tangible assets | | $ | 768,503 | | | $ | 783,461 | | | $ | 836,302 | | | $ | 830,011 | |
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 $795 million, it is the parent company of the 89 year-old Riverview Community Bank, as well as Riverview Asset Management Corp. The Bank offers true community banking services, focusing on providing the highest quality service and financial products to commercial and retail customers. There are 18 branches, including thirteen in the Portland-Vancouver area and three lending centers.
“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
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January 30, 2013
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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; the Company’s compliance with regulatory enforcement actions we have entered into with the OCC 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 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 2013 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.
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January 30, 2013
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| RIVERVIEW BANCORP, INC. AND SUBSIDIARY | | | | | | | | | | | | |
| Consolidated Balance Sheets | | | | | | | | | | | | |
| (In thousands, except share data) (Unaudited) | | December 31, 2012 | | | September 30, 2012 | | | December 31, 2011 | | | March 31, 2012 | |
| ASSETS | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Cash (including interest-earning accounts of $88,308, $83,642, $23,146 | | | | | | | | | | | | | | | | |
| and $33,437) | | $ | 107,080 | | | $ | 98,367 | | | $ | 36,313 | | | $ | 46,393 | |
| Certificate of deposits | | | 44,137 | | | | 41,797 | | | | 42,718 | | | | 41,473 | |
| Loans held for sale | | | 2,551 | | | | 1,289 | | | | 659 | | | | 480 | |
| Investment securities held to maturity, at amortized cost | | | - | | | | - | | | | 493 | | | | 493 | |
| Investment securities available for sale, at fair value | | | 6,204 | | | | 6,278 | | | | 6,337 | | | | 6,314 | |
| Mortgage-backed securities held to maturity, at amortized | | | 129 | | | | 164 | | | | 177 | | | | 171 | |
| Mortgage-backed securities available for sale, at fair value | | | 549 | | | | 679 | | | | 1,146 | | | | 974 | |
| Loans receivable (net of allowance for loan losses of $19,633, $20,140, | | | | | | | | | | | | | |
| $15,926, and $19,921) | | | 539,549 | | | | 562,058 | | | | 678,626 | | | | 664,888 | |
| Real estate and other pers. property owned | | | 20,698 | | | | 24,481 | | | | 20,667 | | | | 18,731 | |
| Prepaid expenses and other assets | | | 3,399 | | | | 3,894 | | | | 6,087 | | | | 6,362 | |
| Accrued interest receivable | | | 1,818 | | | | 1,958 | | | | 2,378 | | | | 2,158 | |
| Federal Home Loan Bank stock, at cost | | | 7,219 | | | | 7,285 | | | | 7,350 | | | | 7,350 | |
| Premises and equipment, net | | | 17,647 | | | | 17,745 | | | | 16,351 | | | | 17,068 | |
| Deferred income taxes, net | | | 527 | | | | 616 | | | | 594 | | | | 603 | |
| Mortgage servicing rights, net | | | 406 | | | | 420 | | | | 299 | | | | 278 | |
| Goodwill | | | 25,572 | | | | 25,572 | | | | 25,572 | | | | 25,572 | |
| Core deposit intangible, net | | | 83 | | | | 100 | | | | 157 | | | | 137 | |
| Bank owned life insurance | | | 16,996 | | | | 16,850 | | | | 16,406 | | | | 16,553 | |
| | | | | | | | | | | | | | | | | |
| TOTAL ASSETS | | $ | 794,564 | | | $ | 809,553 | | | $ | 862,330 | | | $ | 855,998 | |
| | | | | | | | | | | | | | | | | |
| LIABILITIES AND EQUITY | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| LIABILITIES: | | | | | | | | | | | | | | | | |
| Deposit accounts | | $ | 682,794 | | | $ | 699,227 | | | $ | 735,046 | | | $ | 744,455 | |
| Accrued expenses and other liabilities | | | 8,700 | | | | 7,926 | | | | 9,574 | | | | 9,398 | |
| Advance payments by borrowers for taxes and insurance | | | 520 | | | | 1,060 | | | | 409 | | | | 800 | |
| Junior subordinated debentures | | | 22,681 | | | | 22,681 | | | | 22,681 | | | | 22,681 | |
| Capital lease obligation | | | 2,458 | | | | 2,477 | | | | 2,531 | | | | 2,513 | |
| Total liabilities | | | 717,153 | | | | 733,371 | | | | 770,241 | | | | 779,847 | |
| | | | | | | | | | | | | | | | | |
| 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, | | | | | | | | | | | | | | | | |
| December 31, 2012 - 22,471,890 issued and outstanding; | | | 225 | | | | 225 | | | | 225 | | | | 225 | |
| September 30, 2012 - 22,471,890 issued and outstanding; | | | | | | | | | | | | | | | | |
| December 31, 2011 - 22,471,890 issued and outstanding; | | | | | | | | | | | | | | | | |
| March 31, 2012 – 22,471,890 issued and outstanding; | | | | | | | | | | | | | | | | |
| Additional paid-in capital | | | 65,563 | | | | 65,576 | | | | 65,621 | | | | 65,610 | |
| Retained earnings | | | 12,574 | | | | 11,543 | | | | 27,493 | | | | 11,536 | |
| Unearned shares issued to employee stock ownership trust | | | (516 | ) | | | (541 | ) | | | (619 | ) | | | (593 | ) |
| Accumulated other comprehensive loss | | | (1,023 | ) | | | (1,196 | ) | | | (1,153 | ) | | | (1,171 | ) |
| Total shareholders’ equity | | | 76,823 | | | | 75,607 | | | | 91,567 | | | | 75,607 | |
| | | | | | | | | | | | | | | | | |
| Noncontrolling interest | | | 588 | | | | 575 | | | | 522 | | | | 544 | |
| Total equity | | | 77,411 | | | | 76,182 | | | | 92,089 | | | | 76,151 | |
| | | | | | | | | | | | | | | | | |
| TOTAL LIABILITIES AND EQUITY | | $ | 794,564 | | | $ | 809,553 | | | $ | 862,330 | | | $ | 855,998 | |
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| RIVERVIEW BANCORP, INC. AND SUBSIDIARY | | | | | | | | | | | | | | | |
| Consolidated Statements of Income | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| (In thousands, except share data) (Unaudited) | | Dec. 31, 2012 | | | Sept. 30, 2012 | | | Dec. 31, 2011 | | | Dec. 31, 2012 | | | Dec. 31, 2011 | |
| INTEREST INCOME: | | | | | | | | | | | | | | | |
| Interest and fees on loans receivable | | $ | 7,838 | | | $ | 8,468 | | | $ | 9,669 | | | $ | 25,351 | | | $ | 29,764 | |
| Interest on investment securities-taxable | | | 131 | | | | 38 | | | | 28 | | | | 222 | | | | 109 | |
| Interest on investment securities-non taxable | | | 1 | | | | 7 | | | | 11 | | | | 16 | | | | 35 | |
| Interest on mortgage-backed securities | | | 6 | | | | 7 | | | | 12 | | | | 21 | | | | 41 | |
| Other interest and dividends | | | 160 | | | | 128 | | | | 109 | | | | 417 | | | | 273 | |
| Total interest income | | | 8,136 | | | | 8,648 | | | | 9,829 | | | | 26,027 | | | | 30,222 | |
| | | | | | | | | | | | | | | | | | | | | |
| INTEREST EXPENSE: | | | | | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 595 | | | | 699 | | | | 1,061 | | | | 2,117 | | | | 3,449 | |
| Interest on borrowings | | | 157 | | | | 162 | | | | 381 | | | | 668 | | | | 1,121 | |
| Total interest expense | | | 752 | | | | 861 | | | | 1,442 | | | | 2,785 | | | | 4,570 | |
| Net interest income | | | 7,384 | | | | 7,787 | | | | 8,387 | | | | 23,242 | | | | 25,652 | |
| Less provision for loan losses | | | - | | | | 500 | | | | 8,100 | | | | 4,500 | | | | 11,850 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 7,384 | | | | 7,287 | | | | 287 | | | | 18,742 | | | | 13,802 | |
| | | | | | | | | | | | | | | | | | | | | |
| NON-INTEREST INCOME: | | | | | | | | | | | | | | | | | | | | |
| Fees and service charges | | | 1,224 | | | | 1,331 | | | | 962 | | | | 3,612 | | | | 3,082 | |
| Asset management fees | | | 517 | | | | 504 | | | | 568 | | | | 1,625 | | | | 1,763 | |
| Gain on sale of loans | | | 262 | | | | 152 | | | | 29 | | | | 1,141 | | | | 73 | |
| Bank owned life insurance income | | | 146 | | | | 148 | | | | 151 | | | | 443 | | | | 455 | |
| Other | | | (62 | ) | | | 179 | | | | (180 | ) | | | 20 | | | | (107 | ) |
| Total non-interest income | | | 2,087 | | | | 2,314 | | | | 1,530 | | | | 6,841 | | | | 5,266 | |
| | | | | | | | | | | | | | | | | | | | | |
| NON-INTEREST EXPENSE: | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 3,872 | | | | 3,609 | | | | 4,014 | | | | 11,274 | | | | 12,039 | |
| Occupancy and depreciation | | | 1,241 | | | | 1,236 | | | | 1,211 | | | | 3,711 | | | | 3,540 | |
| Data processing | | | 435 | | | | 292 | | | | 306 | | | | 1,041 | | | | 1,136 | |
| Amortization of core deposit intangible | | | 17 | | | | 18 | | | | 20 | | | | 54 | | | | 62 | |
| Advertising and marketing expense | | | 193 | | | | 269 | | | | 286 | | | | 681 | | | | 814 | |
| FDIC insurance premium | | | 433 | | | | 394 | | | | 289 | | | | 1,114 | | | | 848 | |
| State and local taxes | | | 132 | | | | 137 | | | | 150 | | | | 417 | | | | 410 | |
| Telecommunications | | | 73 | | | | 116 | | | | 109 | | | | 310 | | | | 324 | |
| Professional fees | | | 447 | | | | 281 | | | | 334 | | | | 1,149 | | | | 971 | |
| Real estate owned expenses | | | 1,069 | | | | 891 | | | | 2,781 | | | | 2,899 | | | | 3,967 | |
| Other | | | 522 | | | | 569 | | | | 692 | | | | 1,872 | | | | 2,083 | |
| Total non-interest expense | | | 8,434 | | | | 7,812 | | | | 10,192 | | | | 24,522 | | | | 26,194 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME (LOSS) BEFORE INCOME TAXES | | | 1,037 | | | | 1,789 | | | | (8,375 | ) | | | 1,061 | | | | (7,126 | ) |
| PROVISION FOR INCOME TAXES | | | 6 | | | | 2 | | | | 8,220 | | | | 23 | | | | 8,574 | |
| NET INCOME (LOSS) | | $ | 1,031 | | | $ | 1,787 | | | $ | (16,595 | ) | | $ | 1,038 | | | $ | (15,700 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Earnings (loss) per common share: | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.05 | | | $ | 0.08 | | | $ | (0.74 | ) | | $ | 0.05 | | | $ | (0.70 | ) |
| Diluted | | $ | 0.05 | | | $ | 0.08 | | | $ | (0.74 | ) | | $ | 0.05 | | | $ | (0.70 | ) |
| Weighted average number of shares outstanding: | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 22,345,644 | | | | 22,339,487 | | | | 22,321,011 | | | | 22,339,509 | | | | 22,314,876 | |
| Diluted | | | 22,345,644 | | | | 22,339,487 | | | | 22,321,011 | | | | 22,339,509 | | | | 22,314,876 | |
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| | | | | | | | | | | | | | | | |
| (Dollars in thousands) | | At or for the three months ended | | | At or for the nine months ended | |
| | | Dec. 31, 2012 | | | Sept. 30, 2012 | | | Dec. 31, 2011 | | | Dec. 31, 2012 | | | Dec. 31, 2011 | |
| AVERAGE BALANCES | | | | | | | | | | | | | | | |
| Average interest–earning assets | | $ | 727,322 | | | $ | 716,932 | | | $ | 790,922 | | | $ | 737,358 | | | $ | 774,326 | |
| Average interest-bearing liabilities | | | 579,653 | | | | 591,460 | | | | 651,368 | | | | 602,293 | | | | 642,974 | |
| Net average earning assets | | | 147,669 | | | | 125,472 | | | | 139,554 | | | | 135,065 | | | | 131,352 | |
| Average loans | | | 574,617 | | | | 605,382 | | | | 694,205 | | | | 617,067 | | | | 693,856 | |
| Average deposits | | | 694,073 | | | | 699,243 | | | | 742,899 | | | | 708,622 | | | | 727,704 | |
| Average equity | | | 77,838 | | | | 76,008 | | | | 109,301 | | | | 76,777 | | | | 109,402 | |
| Average tangible equity | | | 51,759 | | | | 49,886 | | | | 83,238 | | | | 51,778 | | | | 83,287 | |
| ASSET QUALITY | | Dec. 31, 2012 | | Sept. 30, 2012 | | Dec. 31, 2011 |
| | | | | | | |
| Non-performing loans | | 24,665 | | 28,031 | | 32,037 |
| Non-performing loans to total loans | | 4.41% | | 4.81% | | 4.61% |
| Real estate/repossessed assets owned | | 20,698 | | 24,481 | | 20,667 |
| Non-performing assets | | 45,363 | | 52,512 | | 52,704 |
| Non-performing assets to total assets | | 5.71% | | 6.49% | | 6.11% |
| Net loan charge-offs in the quarter | | 507 | | 1,332 | | 6,846 |
| Net charge-offs in the quarter/average net loans | | 0.35% | | 0.87% | | 3.91% |
| | | | | | | |
| Allowance for loan losses | | 19,633 | | 20,140 | | 15,926 |
| Average interest-earning assets to average | | | | | | |
| interest-bearing liabilities | | 125.48% | | 121.21% | | 121.42% |
| Allowance for loan losses to | | | | | | |
| non-performing loans | | 79.60% | | 71.85% | | 49.71% |
| Allowance for loan losses to total loans | | 3.51% | | 3.46% | | 2.29% |
| Shareholders’ equity to assets | | 9.67% | | 9.34% | | 10.62% |
| | | | | | | |
| | | | | | | |
| CAPITAL RATIOS | | | | | | |
| Total capital (to risk weighted assets) | | 14.25% | | 13.41% | | 13.14% |
| Tier 1 capital (to risk weighted assets) | | 12.97% | | 12.13% | | 11.89% |
| Tier 1 capital (to leverage assets) | | 9.50% | | 9.09% | | 9.74% |
| Tangible common equity (to tangible assets) | | 6.61% | | 6.32% | | 7.84% |
| DEPOSIT MIX | | Dec. 31, 2012 | | | Sept. 30, 2012 | | | Dec. 31, 2011 | | | March 31, 2012 | |
| | | | | | | | | | | | | |
| Interest checking | | $ | 87,402 | | | $ | 80,634 | | | $ | 96,757 | | | $ | 106,904 | |
| Regular savings | | | 51,000 | | | | 49,813 | | | | 42,453 | | | | 45,741 | |
| Money market deposit accounts | | | 220,862 | | | | 228,236 | | | | 235,902 | | | | 244,919 | |
| Non-interest checking | | | 128,706 | | | | 136,661 | | | | 116,854 | | | | 116,882 | |
| Certificates of deposit | | | 194,824 | | | | 203,883 | | | | 243,080 | | | | 230,009 | |
| Total deposits | | $ | 682,794 | | | $ | 699,227 | | | $ | 735,046 | | | $ | 744,455 | |
RVSB Third Quarter Fiscal 2013 Results
January 30, 2013
Page 8
| COMPOSITION OF COMMERCIAL AND CONSTRUCTION LOANS | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | Commercial | | | | | | Commercial | |
| | | | | | Real Estate | | | Real Estate | | | & Construction | |
| | | Commercial | | | Mortgage | | | Construction | | | Total | |
| December 31, 2012 | | (Dollars in thousands) | |
| Commercial | | $ | 75,090 | | | $ | - | | | $ | - | | | $ | 75,090 | |
| Commercial construction | | | - | | | | - | | | | 14,868 | | | | 14,868 | |
| Office buildings | | | - | | | | 88,810 | | | | - | | | | 88,810 | |
| Warehouse/industrial | | | - | | | | 44,950 | | | | - | | | | 44,950 | |
| Retail/shopping centers/strip malls | | | - | | | | 68,553 | | | | - | | | | 68,553 | |
| Assisted living facilities | | | - | | | | 16,872 | | | | - | | | | 16,872 | |
| Single purpose facilities | | | - | | | | 87,572 | | | | - | | | | 87,572 | |
| Land | | | - | | | | 26,123 | | | | - | | | | 26,123 | |
| Multi-family | | | - | | | | 34,278 | | | | - | | | | 34,278 | |
| One-to-four family | | | - | | | | - | | | | 2,747 | | | | 2,747 | |
| Total | | $ | 75,090 | | | $ | 367,158 | | | $ | 17,615 | | | $ | 459,863 | |
| | | | | | | | | | | | | | | | | |
| March 31, 2012 | | (Dollars in thousands) | |
| Commercial | | $ | 87,238 | | | $ | - | | | $ | - | | | $ | 87,238 | |
| Commercial construction | | | - | | | | - | | | | 13,496 | | | | 13,496 | |
| Office buildings | | | - | | | | 94,541 | | | | - | | | | 94,541 | |
| Warehouse/industrial | | | - | | | | 48,605 | | | | - | | | | 48,605 | |
| Retail/shopping centers/strip malls | | | - | | | | 80,595 | | | | - | | | | 80,595 | |
| Assisted living facilities | | | - | | | | 35,866 | | | | - | | | | 35,866 | |
| Single purpose facilities | | | - | | | | 93,473 | | | | - | | | | 93,473 | |
| Land | | | - | | | | 38,888 | | | | - | | | | 38,888 | |
| Multi-family | | | - | | | | 42,795 | | | | - | | | | 42,795 | |
| One-to-four family | | | - | | | | - | | | | 12,295 | | | | 12,295 | |
| Total | | $ | 87,238 | | | $ | 434,763 | | | $ | 25,791 | | | $ | 547,792 | |
| LOAN MIX | | | | | | | | | | | | |
| (Dollars in thousands) | | Dec. 31, 2012 | | | Sept. 30, 2012 | | | Dec. 31, 2011 | | | March 31, 2012 | |
| Commercial and construction | | | | | | | | | | | | |
| Commercial | | $ | 75,090 | | | $ | 74,953 | | | $ | 86,759 | | | $ | 87,238 | |
| Other real estate mortgage | | | 367,158 | | | | 385,715 | | | | 448,288 | | | | 434,763 | |
| Real estate construction | | | 17,615 | | | | 16,920 | | | | 27,544 | | | | 25,791 | |
| Total commercial and construction | | | 459,863 | | | | 477,588 | | | | 562,591 | | | | 547,792 | |
| Consumer | | | | | | | | | | | | | | | | |
| Real estate one-to-four family | | | 97,334 | | | | 102,473 | | | | 129,780 | | | | 134,975 | |
| Other installment | | | 1,985 | | | | 2,137 | | | | 2,181 | | | | 2,042 | |
| Total consumer | | | 99,319 | | | | 104,610 | | | | 131,961 | | | | 137,017 | |
| | | | | | | | | | | | | | | | | |
| Total loans | | | 559,182 | | | | 582,198 | | | | 694,552 | | | | 684,809 | |
| | | | | | | | | | | | | | | | | |
| Less: | | | | | | | | | | | | | | | | |
| Allowance for loan losses | | | 19,633 | | | | 20,140 | | | | 15,926 | | | | 19,921 | |
| Loans receivable, net | | $ | 539,549 | | | $ | 562,058 | | | $ | 678,626 | | | $ | 664,888 | |
RVSB Third Quarter Fiscal 2013 Results
January 30, 2013
Page 9
| DETAIL OF NON-PERFORMING ASSETS | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | Northwest | | | Other | | | Southwest | | | Other | | | | | | | |
| | | Oregon | | | Oregon | | | Washington | | | Washington | | | Other | | | Total | |
| December 31, 2012 | | (dollars in thousands) | |
| Non-performing assets | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Commercial | | $ | - | | | $ | - | | | $ | 1,019 | | | $ | - | | | $ | - | | | $ | 1,019 | |
| Commercial real estate | | | 2,690 | | | | 178 | | | | 7,435 | | | | 298 | | | | - | | | | 10,601 | |
| Land | | | - | | | | 800 | | | | 2,773 | | | | - | | | | - | | | | 3,573 | |
| Multi-family | | | - | | | | 3,024 | | | | 2,933 | | | | - | | | | - | | | | 5,957 | |
| Commercial construction | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| One-to-four family construction | | | 317 | | | | 365 | | | | 5 | | | | - | | | | - | | | | 687 | |
| Real estate one-to-four family | | | 579 | | | | 178 | | | | 1,763 | | | | 308 | | | | - | | | | 2,828 | |
| Consumer | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Total non-performing loans | | | 3,586 | | | | 4,545 | | | | 15,928 | | | | 606 | | | | - | | | | 24,665 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| REO | | | 2,388 | | | | 6,066 | | | | 8,344 | | | | 2,745 | | | | 1,155 | | | | 20,698 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total non-performing assets | | $ | 5,974 | | | $ | 10,611 | | | $ | 24,272 | | | $ | 3,351 | | | $ | 1,155 | | | $ | 45,363 | |
| DETAIL OF SPEC CONSTRUCTION AND LAND DEVELOPMENT LOANS | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | Northwest | | | Other | | | Southwest | | | Other | | | | | | | |
| | | Oregon | | | Oregon | | | Washington | | | Washington | | | Other | | | Total | |
| December 31, 2012 | | (dollars in thousands) | |
| Land and spec construction loans | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Land development loans | | $ | 4,915 | | | $ | 2,356 | | | $ | 18,852 | | | $ | - | | | $ | - | | | $ | 26,123 | |
| Spec construction loans | | | 317 | | | | 365 | | | | 1,354 | | | | 418 | | | | - | | | | 2,454 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total land and spec construction | | $ | 5,232 | | | $ | 2,721 | | | $ | 20,206 | | | $ | 418 | | | $ | - | | | $ | 28,577 | |
RVSB Third Quarter Fiscal 2013 Results
January 30, 2013
Page 10
| | | At or for the three months ended | | | At or for the nine months ended | |
| SELECTED OPERATING DATA | | Dec. 31, 2012 | | | Sept. 30, 2012 | | | Dec. 31, 2011 | | | Dec. 31, 2012 | | | Dec. 31, 2011 | |
| | | | | | | | | | | | | | | | |
| Efficiency ratio (4) | | | 89.05 | % | | | 77.34 | % | | | 102.77 | % | | | 81.51 | % | | | 84.72 | % |
| Coverage ratio (6) | | | 87.55 | % | | | 99.68 | % | | | 82.29 | % | | | 94.78 | % | | | 97.93 | % |
| Return on average assets (1) | | | 0.51 | % | | | 0.88 | % | | | -7.42 | % | | | 0.17 | % | | | -2.39 | % |
| Return on average equity (1) | | | 5.25 | % | | | 9.33 | % | | | -60.24 | % | | | 1.79 | % | | | -19.05 | % |
| | | | | | | | | | | | | | | | | | | | | |
| NET INTEREST SPREAD | | | | | | | | | | | | | | | | | | | | |
| Yield on loans | | | 5.41 | % | | | 5.55 | % | | | 5.53 | % | | | 5.45 | % | | | 5.69 | % |
| Yield on investment securities | | | 6.33 | % | | | 2.38 | % | | | 2.66 | % | | | 3.86 | % | | | 2.72 | % |
| Total yield on interest earning assets | | | 4.44 | % | | | 4.79 | % | | | 4.93 | % | | | 4.69 | % | | | 5.18 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Cost of interest bearing deposits | | | 0.43 | % | | | 0.49 | % | | | 0.67 | % | | | 0.49 | % | | | 0.74 | % |
| Cost of FHLB advances and other borrowings | | | 2.47 | % | | | 2.57 | % | | | 5.99 | % | | | 3.52 | % | | | 5.89 | % |
| Total cost of interest bearing liabilities | | | 0.51 | % | | | 0.58 | % | | | 0.88 | % | | | 0.61 | % | | | 0.94 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Spread (7) | | | 3.93 | % | | | 4.21 | % | | | 4.05 | % | | | 4.08 | % | | | 4.24 | % |
| Net interest margin | | | 4.03 | % | | | 4.31 | % | | | 4.21 | % | | | 4.19 | % | | | 4.40 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PER SHARE DATA | | | | | | | | | | | | | | | | | | | | |
| Basic earnings per share (2) | | $ | 0.05 | | | $ | 0.08 | | | $ | (0.74 | ) | | $ | 0.05 | | | $ | (0.70 | ) |
| Diluted earnings per share (3) | | | 0.05 | | | | 0.08 | | | | (0.74 | ) | | | 0.05 | | | | (0.70 | ) |
| Book value per share (5) | | | 3.42 | | | | 3.36 | | | | 4.07 | | | | 3.42 | | | | 4.07 | |
| Tangible book value per share (5) | | | 2.26 | | | | 2.20 | | | | 2.92 | | | | 2.26 | | | | 2.92 | |
| Market price per share: | | | | | | | | | | | | | | | | | | | | |
| High for the period | | $ | 1.99 | | | $ | 1.49 | | | $ | 2.50 | | | $ | 2.29 | | | $ | 3.18 | |
| Low for the period | | | 1.41 | | | | 1.24 | | | | 2.11 | | | | 1.08 | | | | 2.11 | |
| Close for period end | | | 1.69 | | | | 1.37 | | | | 2.37 | | | | 1.69 | | | | 2.37 | |
| Cash dividends declared per share | | | - | | | | - | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | |
| Average number of shares outstanding: | | | | | | | | | | | | | | | | | | | | |
| Basic (2) | | | 22,345,644 | | | | 22,339,487 | | | | 22,321,011 | | | | 22,339,509 | | | | 22,314,876 | |
| Diluted (3) | | | 22,345,644 | | | | 22,339,487 | | | | 22,321,011 | | | | 22,339,509 | | | | 22,314,876 | |
| (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. |
# # #
