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| Contacts: Pat Sheaffer or Ron Wysaske, Riverview Bancorp, Inc. 360-693-6650 | |
Riverview Bancorp Earns $16.6 Million in Fourth Fiscal Quarter and $19.4 Million for Fiscal Year 2014;
Highlighted by Improved Credit Quality Metrics, OCC Agreement Termination and
Recapture of its Deferred Tax Asset Valuation Allowance
Vancouver, WA – May 1, 2014 - Riverview Bancorp, Inc. (Nasdaq GSM: RVSB) (“Riverview” or the “Company”) today reported that it earned $16.6 million, or $0.74 per diluted share, in the fourth fiscal quarter ended March 31, 2014. This compared to net income of $801,000, or $0.04 per diluted share, in the preceding quarter and $1.6 million, or $0.07 per diluted share, in the fourth fiscal quarter a year ago. The fourth quarter results include a $15.1 million recapture of its deferred tax asset valuation allowance.
For all of fiscal year 2014, net income increased to $19.4 million, or $0.87 per diluted share, compared to $2.6 million, or $0.12 per diluted share, in fiscal year 2013.
“Fiscal year 2014 was a banner year for Riverview,” stated Pat Sheaffer, Chairman and CEO. “We celebrated our seventh consecutive profitable quarter and continued to make meaningful progress in reducing nonperforming and classified assets. The combination of these two achievements led to the OCC terminating our formal agreement and the reversal of our deferred tax asset valuation allowance. As we look forward to the coming year, our future looks prosperous. Our core earnings have improved and we see opportunities for both loan and deposit growth in the coming year.”
Fourth Quarter Highlights (at or for the period ended March 31, 2014)
| · | Fourth quarter net income was $16.6 million, or $0.74 per diluted share. |
| · | Excluding the recapture of the $15.1 million deferred tax allowance, fourth quarter net income was $1.5 million, compared to $801,000 in the preceding quarter and $1.6 million in the fourth quarter a year ago. |
| · | Net loans increased $15.3 million with loan originations totaling $41.5 million during the fourth quarter. |
| · | Classified assets decreased $11.3 million during the quarter to $43.4 million (20.6% decline). |
| · | Nonperforming assets decreased $3.6 million during the quarter to $21.8 million (14.1% decline). |
| · | Deposits increased $26.3 million to $690.1 million at March 31, 2014 compared to $663.8 million a year ago. |
| · | RAMCo’s assets under management increased to $359.7 million with $2.6 million in fees during fiscal year 2014. |
| · | Capital levels increased with a total risk-based capital ratio of 16.66% and Tier 1 leverage ratio of 10.71%. |
Balance Sheet Review
“Riverview’s business outlook continues to improve as the economic recovery gains strength,” said Ron Wysaske, President and COO. “Loan demand has been strengthening the past few quarters and the momentum we have built in our loan pipeline suggests a strong prospect for continued loan growth in fiscal year 2015. The asset quality improvements made by our team will also allow us to allocate more of our resources into business development and expanding lending relationships.”
Net loans increased $15.3 million during the fourth quarter to $520.9 million at March 31, 2014 compared to $505.6 million at December 31, 2013. Loan originations totaled $41.5 million during the quarter and Riverview purchased an additional $14.4 million in a pool of automobile loans during the fourth quarter.
Core deposit growth has remained strong with checking account balances growing $28.9 million during the past year. Total deposits increased to $690.1 million at March 31, 2014 compared to $689.3 million three months earlier and $663.8 million a year earlier. As of March 31, 2014, interest checking accounts represent 15.1% and non-interest checking accounts represent 18.6% of the total deposit portfolio.
RVSB Reports Fourth Quarter Fiscal 2014 Profit
May 1, 2014
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Shareholders’ equity improved to $98.0 million at fiscal year-end compared to $78.4 million a year earlier. Tangible book value per share improved to $3.20 per share at March 31, 2014 compared to $2.33 per share a year ago.
Credit Quality
“Asset quality continues to remain a top priority for Riverview,” said Dan Cox, Executive Vice President and Chief Credit Officer. “We have made substantial progress during fiscal year 2014 and we expect that our credit quality metrics will continue to improve during the next fiscal year. The improvements that we made reflect strongly on the hard work, dedication and teamwork demonstrated by our employees during the last several years.”
Classified assets decreased $11.3 million during the quarter to $43.4 million at March 31, 2014 compared to $54.7 million at December 31, 2013. The classified asset to total capital ratio decreased to 45.1% at March 31, 2014 compared to 57.6% three months earlier.
Nonperforming assets totaled $21.8 million at March 31, 2014, compared to $25.3 million three months earlier and $36.8 million a year ago.
REO sales totaled $4.6 million during the quarter with $220,000 in write-downs and $553,000 in additions. Riverview also sold an additional $551,000 in properties since March 31st and has an additional $1.2 million in properties currently under contract, which are expected to close during the first fiscal quarter of 2015 with minimal to no projected losses on these sales.
Riverview recorded a $1.2 million recapture of loan losses during the fourth quarter of fiscal 2014, compared to no provision in the preceding quarter and a $3.6 million recapture of loan losses in the fourth quarter a year ago. In fiscal year 2014, Riverview recorded a $3.7 million recapture of loan losses compared to a $900,000 provision for loan losses in fiscal year 2013. The decrease in required loan loss provision reflects the improvement in credit quality and the increase in loan recoveries during the past fiscal year.
Net loan charge-offs totaled $297,000 in the fourth quarter compared to a net recovery of $352,000 in the preceding quarter and net charge-offs of $390,000 in the fourth quarter a year ago. In fiscal year 2014, Riverview had net recoveries totaling $608,000 compared to net charge-offs of $5.2 million in fiscal year 2013.
The allowance for loan losses at March 31, 2014 totaled $12.6 million, representing 2.35% of total loans and 89.25% of nonperforming loans.
Income Statement
Riverview’s fourth quarter net interest income was $6.0 million, which was the same as in the preceding quarter and decreased slightly from $6.2 million in the fourth quarter a year ago. For fiscal year 2014, net interest income was $24.2 million compared to $29.4 million in fiscal year 2013.
“Riverview’s net interest margin improved four basis points compared to the preceding quarter, primarily due to the deployment of cash into higher yielding investment securities during the quarter as well as the increase in our loan portfolio,” said Kevin Lycklama, Executive Vice President and Chief Financial Officer. “During the last fiscal year, we deployed over $95 million of cash into our investment portfolio in order to offset some of the pressure from the continued low interest rate environment.”
Riverview’s net interest margin was 3.33% in the fiscal fourth quarter compared to 3.29% for the preceding quarter and 3.64% in the fiscal fourth quarter a year ago. For the fiscal year, Riverview’s net interest margin was 3.37% compared to 4.06% in fiscal year 2013. The decrease in the net interest margin compared to prior year was largely due to the decline in loan yields and the higher level of lower yielding interest-bearing cash balances held by the Company. Loan yields have contracted as a result of the lower yields on new loan originations and the repricing of existing loans.
Non-interest income was $1.9 million in the fourth quarter compared to $2.4 million in the preceding quarter and $2.0 million in the fourth quarter a year ago. Asset management fees increased to $694,000 during the quarter compared to $547,000 in the same quarter a year ago as a result of an increase in assets under management. Non-interest income was also impacted by the slowdown in mortgage related volumes. This slowdown was primarily driven by lower refinance and purchase activity due to an increase in interest rates and the seasonal cyclicality of the housing market.
RVSB Reports Fourth Quarter Fiscal 2014 Profit
May 1, 2014
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Non-interest expense was $7.5 million in the fourth quarter, compared to $7.6 million in the preceding quarter and $10.2 million in the fourth quarter a year ago. The primary driver for the decrease from prior year was a reduction in REO expenses. REO expenses decreased to $363,000 in the fourth quarter compared to $2.9 million in the same quarter a year ago. For the full year, non-interest expense totaled $32.0 million compared to $34.8 million in fiscal 2013.
Income Taxes
As a result of the improvement in Riverview’s financial condition, specifically an improvement in asset quality and core earnings, and its forecast for future earnings, the Company reversed the $15.1 million valuation allowance on its deferred tax asset during the fourth quarter. The fourth fiscal quarter ended March 31, 2014 marked Riverview’s seventh consecutive profitable quarter. Classified assets have improved during the past eight consecutive quarters and Riverview has been in a net loan recovery position during the past fiscal year.
Capital and Liquidity
Riverview 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 16.66%, Tier 1 leverage ratio of 10.71% and tangible common equity to tangible assets of 9.02% at March 31, 2014.
The Bank had available total and contingent liquidity of more than $500 million, representing 62% of total assets as of March 31, 2014. Included in the Bank’s total liquidity was more than $200 million of cash and short-term investments.
Regulatory
The Company recently announced that the Office of the Comptroller of the Currency has lifted the formal agreement (“Agreement”) with Riverview Community Bank. This action immediately ended the regulatory restrictions that were contained in the Agreement and no further reporting under the Agreement is necessary.
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. 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) | | March 31, 2014 | | | December 31, 2013 | | | March 31, 2013 | |
| | | | | | | | | | |
| Shareholders' equity | | $ | 97,978 | | | $ | 81,264 | | | $ | 78,442 | |
| Goodwill | | | 25,572 | | | | 25,572 | | | | 25,572 | |
| Other intangible assets, net | | | 395 | | | | 419 | | | | 454 | |
| Tangible shareholders' equity | | $ | 72,011 | | | $ | 55,273 | | | $ | 52,416 | |
| | | | | | | | | | | | | |
| Total assets | | $ | 824,521 | | | $ | 804,949 | | | $ | 777,003 | |
| Goodwill | | | 25,572 | | | | 25,572 | | | | 25,572 | |
| Other intangible assets, net | | | 395 | | | | 419 | | | | 454 | |
| Tangible assets | | $ | 798,554 | | | $ | 778,958 | | | $ | 750,977 | |
| | | | | | | | | | | | | |
RVSB Reports Fourth Quarter Fiscal 2014 Profit
May 1, 2014
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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 $825 million, it is the parent company of the 91 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 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 2014 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 Reports Fourth Quarter Fiscal 2014 ProfitMay 1, 2014
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| RIVERVIEW BANCORP, INC. AND SUBSIDIARY | | | | | |
| Consolidated Balance Sheets | | | | | |
| (In thousands, except share data) (Unaudited) | March 31, 2014 | | December 31, 2013 | | March 31, 2013 |
| ASSETS | | | | | |
| | | | | | |
| Cash (including interest-earning accounts of $51,715, $110,104 | $ 68,577 | | $ 123,140 | | $ 115,415 |
| and $100,093) | | | | | |
| Certificate of deposits | 36,925 | | 37,174 | | 44,635 |
| Loans held for sale | 1,024 | | 148 | | 831 |
| Investment securities available for sale, at fair value | 23,394 | | 19,794 | | 6,216 |
| Mortgage-backed securities held to maturity, at amortized | 101 | | 104 | | 125 |
| Mortgage-backed securities available for sale, at fair value | 78,575 | | 34,529 | | 431 |
| Loans receivable (net of allowance for loan losses of $12,551, $14,048 | | | | |
| and $15,643) | 520,937 | | 505,632 | | 520,369 |
| Real estate and other pers. property owned | 7,703 | | 11,951 | | 15,638 |
| Prepaid expenses and other assets | 3,197 | | 3,268 | | 3,063 |
| Accrued interest receivable | 1,836 | | 1,670 | | 1,747 |
| Federal Home Loan Bank stock, at cost | 6,744 | | 6,958 | | 7,154 |
| Premises and equipment, net | 16,417 | | 16,685 | | 17,693 |
| Deferred income taxes, net | 15,433 | | 348 | | 522 |
| Mortgage servicing rights, net | 369 | | 386 | | 388 |
| Goodwill | 25,572 | | 25,572 | | 25,572 |
| Core deposit intangible, net | 26 | | 33 | | 66 |
| Bank owned life insurance | 17,691 | | 17,557 | | 17,138 |
| | | | | | |
| TOTAL ASSETS | $ 824,521 | | $ 804,949 | | $ 777,003 |
| | | | | | |
| LIABILITIES AND EQUITY | | | | | |
| | | | | | |
| LIABILITIES: | | | | | |
| Deposit accounts | $ 690,066 | | $ 689,271 | | $ 663,806 |
| Accrued expenses and other liabilities | 10,497 | | 8,707 | | 8,006 |
| Advance payments by borrowers for taxes and insurance | 467 | | 193 | | 1,025 |
| Junior subordinated debentures | 22,681 | | 22,681 | | 22,681 |
| Capital lease obligation | 2,361 | | 2,381 | | 2,440 |
| Total liabilities | 726,072 | | 723,233 | | 697,958 |
| | | | | | |
| 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, | | | | | |
| March 31, 2014 – 22,471,890 issued and outstanding; | 225 | | 225 | | 225 |
| December 31, 2013 - 22,471,890 issued and outstanding; | | | | | |
| March 31, 2013 – 22,471,890 issued and outstanding; | | | | | |
| Additional paid-in capital | 65,195 | | 65,176 | | 65,551 |
| Retained earnings | 33,592 | | 16,951 | | 14,169 |
| Unearned shares issued to employee stock ownership trust | (387) | | (413) | | (490) |
| Accumulated other comprehensive loss | (647) | | (675) | | (1,013) |
| Total shareholders’ equity | 97,978 | | 81,264 | | 78,442 |
| | | | | | |
| Noncontrolling interest | 471 | | 452 | | 603 |
| Total equity | 98,449 | | 81,716 | | 79,045 |
| | | | | | |
| TOTAL LIABILITIES AND EQUITY | $ 824,521 | | $ 804,949 | | $ 777,003 |
| | | | | | |
RVSB Reports Fourth Quarter Fiscal 2014 ProfitMay 1, 2014
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| RIVERVIEW BANCORP, INC. AND SUBSIDIARY | | | | | | | | | | | | | |
| Consolidated Statements of Operations | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| (In thousands, except share data) (Unaudited) | | March 31, 2014 | | | Dec. 31, 2013 | | | March 31, 2013 | | | March 31, 2014 | | | March 31, 2013 | |
| INTEREST INCOME: | | | | | | | | | | | | | | | |
| Interest and fees on loans receivable | | $ | 6,034 | | | $ | 6,319 | | | $ | 6,690 | | | $ | 25,423 | | | $ | 32,041 | |
| Interest on investment securities-taxable | | | 80 | | | | 75 | | | | 54 | | | | 271 | | | | 276 | |
| Interest on investment securities-non taxable | | | - | | | | - | | | | - | | | | - | | | | 16 | |
| Interest on mortgage-backed securities | | | 268 | | | | 88 | | | | 4 | | | | 424 | | | | 25 | |
| Other interest and dividends | | | 154 | | | | 191 | | | | 157 | | | | 686 | | | | 574 | |
| Total interest income | | | 6,536 | | | | 6,673 | | | | 6,905 | | | | 26,804 | | | | 32,932 | |
| | | | | | | | | | | | | | | | | | | | | |
| INTEREST EXPENSE: | | | | | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 436 | | | | 496 | | | | 550 | | | | 1,973 | | | | 2,667 | |
| Interest on borrowings | | | 146 | | | | 149 | | | | 150 | | | | 595 | | | | 818 | |
| Total interest expense | | | 582 | | | | 645 | | | | 700 | | | | 2,568 | | | | 3,485 | |
| Net interest income | | | 5,954 | | | | 6,028 | | | | 6,205 | | | | 24,236 | | | | 29,447 | |
| Less provision for (recapture of) loan losses | | | (1,200 | ) | | | - | | | | (3,600 | ) | | | (3,700 | ) | | | 900 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net interest income after provision for (recapture of) loan losses | | | 7,154 | | | | 6,028 | | | | 9,805 | | | | 27,936 | | | | 28,547 | |
| | | | | | | | | | | | | | | | | | | | | |
| NON-INTEREST INCOME: | | | | | | | | | | | | | | | | | | | | |
| Fees and service charges | | | 957 | | | | 1,177 | | | | 1,083 | | | | 4,258 | | | | 4,695 | |
| Asset management fees | | | 694 | | | | 605 | | | | 547 | | | | 2,630 | | | | 2,172 | |
| Gain on sale of loans held for sale | | | 58 | | | | 176 | | | | 245 | | | | 667 | | | | 1,386 | |
| Bank owned life insurance income | | | 134 | | | | 136 | | | | 142 | | | | 553 | | | | 585 | |
| Other | | | 7 | | | | 290 | | | | 15 | | | | 259 | | | | 35 | |
| Total non-interest income | | | 1,850 | | | | 2,384 | | | | 2,032 | | | | 8,367 | | | | 8,873 | |
| | | | | | | | | | | | | | | | | | | | | |
| NON-INTEREST EXPENSE: | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 4,059 | | | | 3,959 | | | | 4,051 | | | | 15,755 | | | | 15,325 | |
| Occupancy and depreciation | | | 1,190 | | | | 1,187 | | | | 1,259 | | | | 4,811 | | | | 4,970 | |
| Data processing | | | 417 | | | | 523 | | | | 379 | | | | 2,058 | | | | 1,420 | |
| Amortization of core deposit intangible | | | 7 | | | | 7 | | | | 17 | | | | 40 | | | | 71 | |
| Advertising and marketing expense | | | 148 | | | | 170 | | | | 153 | | | | 726 | | | | 834 | |
| FDIC insurance premium | | | 259 | | | | 400 | | | | 418 | | | | 1,487 | | | | 1,532 | |
| State and local taxes | | | 122 | | | | 106 | | | | 130 | | | | 462 | | | | 547 | |
| Telecommunications | | | 77 | | | | 78 | | | | 74 | | | | 304 | | | | 384 | |
| Professional fees | | | 295 | | | | 342 | | | | 307 | | | | 1,290 | | | | 1,456 | |
| Real estate owned expenses | | | 363 | | | | 298 | | | | 2,882 | | | | 2,765 | | | | 5,781 | |
| Other | | | 523 | | | | 541 | | | | 566 | | | | 2,263 | | | | 2,438 | |
| Total non-interest expense | | | 7,460 | | | | 7,611 | | | | 10,236 | | | | 31,961 | | | | 34,758 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME BEFORE INCOME TAXES | | | 1,544 | | | | 801 | | | | 1,601 | | | | 4,342 | | | | 2,662 | |
| PROVISION (BENEFIT) FOR INCOME TAXES | | | (15,097 | ) | | | - | | | | 6 | | | | (15,081 | ) | | | 29 | |
| NET INCOME | | $ | 16,641 | | | $ | 801 | | | $ | 1,595 | | | $ | 19,423 | | | $ | 2,633 | |
| | | | | | | | | | | | | | | | | | | | | |
| Earnings per common share: | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.74 | | | $ | 0.04 | | | $ | 0.07 | | | $ | 0.87 | | | $ | 0.12 | |
| Diluted | | $ | 0.74 | | | $ | 0.04 | | | $ | 0.07 | | | $ | 0.87 | | | $ | 0.12 | |
| Weighted average number of shares outstanding: | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 22,376,437 | | | | 22,370,277 | | | | 22,351,804 | | | | 22,367,174 | | | | 22,342,541 | |
| Diluted | | | 22,385,244 | | | | 22,371,914 | | | | 22,352,229 | | | | 22,369,046 | | | | 22,342,541 | |
RVSB Reports Fourth Quarter Fiscal 2014 Profit
May 1, 2014
Page 7
| (Dollars in thousands) | | At or for the three months ended | | At or for the twelve months ended |
| | | March 31, 2014 | | Dec. 31, 2013 | | March 31, 2013 | | March 31, 2014 | | March 31, 2013 |
| AVERAGE BALANCES | | | | | | | | | | |
| Average interest–earning assets | $ 726,218 | | $ 727,943 | | $ 691,793 | | $ 718,802 | | $ 726,123 |
| Average interest-bearing liabilities | | 585,686 | | 581,327 | | 574,763 | | 577,543 | | 595,504 |
| Net average earning assets | | 140,532 | | 146,616 | | 117,030 | | 141,259 | | 130,619 |
| Average loans | | 517,419 | | 516,864 | | 543,906 | | 522,806 | | 599,028 |
| Average deposits | | 682,888 | | 680,167 | | 662,978 | | 672,740 | | 697,367 |
| Average equity | | 82,866 | | 82,665 | | 78,370 | | 81,858 | | 77,170 |
| Average tangible equity | | 56,883 | | 56,667 | | 52,321 | | 55,851 | | 51,113 |
| | | | | | | | | | | |
| | | | | | | | | | | |
| ASSET QUALITY | | March 31, 2014 | | Dec. 31, 2013 | | March 31, 2013 | | | | |
| | | | | | | | | | | |
| Non-performing loans | | 14,062 | | 13,377 | | 21,133 | | | | |
| Non-performing loans to total loans | | 2.64% | | 2.57% | | 3.94% | | | | |
| Real estate/repossessed assets owned | 7,703 | | 11,951 | | 15,638 | | | | |
| Non-performing assets | | 21,765 | | 25,328 | | 36,771 | | | | |
| Non-performing assets to total assets | | 2.64% | | 3.15% | | 4.73% | | | | |
| Net loan charge-offs (recoveries) in the quarter | 297 | | (352) | | 390 | | | | |
| Net charge-offs in the quarter/average net loans | 0.23% | | -0.27% | | 0.29% | | | | |
| | | | | | | | | | | |
| Allowance for loan losses | | 12,551 | | 14,048 | | 15,643 | | | | |
| Average interest-earning assets to average | | | | | | | | |
| interest-bearing liabilities | | 123.99% | | 125.22% | | 120.36% | | | | |
| Allowance for loan losses to | | | | | | | | | | |
| non-performing loans | | 89.25% | | 105.02% | | 74.02% | | | | |
| Allowance for loan losses to total loans | 2.35% | | 2.70% | | 2.92% | | | | |
| Shareholders’ equity to assets | | 11.88% | | 10.10% | | 10.10% | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| CAPITAL RATIOS | | | | | | | | | | |
| Total capital (to risk weighted assets) | | 16.66% | | 16.76% | | 15.29% | | | | |
| Tier 1 capital (to risk weighted assets) | 15.40% | | 15.49% | | 14.02% | | | | |
| Tier 1 capital (to leverage assets) | | 10.71% | | 10.42% | | 9.99% | | | | |
| Tangible common equity (to tangible assets) | 9.02% | | 7.10% | | 6.98% | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| DEPOSIT MIX | | March 31, 2014 | | Dec. 31, 2013 | | March 31, 2013 | | | | |
| | | | | | | | | | | |
| Interest checking | | $ 104,543 | | $ 99,374 | | $ 91,754 | | | | |
| Regular savings | | 66,702 | | 63,230 | | 54,316 | | | | |
| Money market deposit accounts | | 227,933 | | 233,581 | | 217,091 | | | | |
| Non-interest checking | | 128,635 | | 123,630 | | 112,527 | | | | |
| Certificates of deposit | | 162,253 | | 169,456 | | 188,118 | | | | |
| Total deposits | | $ 690,066 | | $ 689,271 | | $ 663,806 | | | | |
RVSB Reports Fourth Quarter Fiscal 2014 Profit
May 1, 2014
Page 8
| COMPOSITION OF COMMERCIAL AND CONSTRUCTION LOANS | | |
| | | | | | | | | |
| | | | | Commercial | | | Commercial |
| | | | | Real Estate | | Real Estate | | & Construction |
| | | Commercial | | Mortgage | | Construction | | Total |
| March 31, 2014 | | (Dollars in thousands) |
| Commercial | | $ 71,632 | | $ - | | $ - | | $ 71,632 |
| Commercial construction | | - | | - | | 15,618 | | 15,618 |
| Office buildings | | - | | 77,476 | | - | | 77,476 |
| Warehouse/industrial | | - | | 45,632 | | - | | 45,632 |
| Retail/shopping centers/strip malls | | - | | 63,049 | | - | | 63,049 |
| Assisted living facilities | | - | | 7,585 | | - | | 7,585 |
| Single purpose facilities | | - | | 93,766 | | - | | 93,766 |
| Land | | - | | 16,245 | | - | | 16,245 |
| Multi-family | | - | | 21,128 | | - | | 21,128 |
| One-to-four family | | - | | - | | 3,864 | | 3,864 |
| Total | | $ 71,632 | | $ 324,881 | | $ 19,482 | | $ 415,995 |
| | | | | | | | | |
| March 31, 2013 | | (Dollars in thousands) |
| Commercial | | $ 71,935 | | $ - | | $ - | | $ 71,935 |
| Commercial construction | | - | | - | | 5,719 | | 5,719 |
| Office buildings | | - | | 86,751 | | - | | 86,751 |
| Warehouse/industrial | | - | | 41,124 | | - | | 41,124 |
| Retail/shopping centers/strip malls | | - | | 67,472 | | - | | 67,472 |
| Assisted living facilities | | - | | 13,146 | | - | | 13,146 |
| Single purpose facilities | | - | | 89,198 | | - | | 89,198 |
| Land | | - | | 23,404 | | - | | 23,404 |
| Multi-family | | - | | 34,302 | | - | | 34,302 |
| One-to-four family | | - | | - | | 3,956 | | 3,956 |
| Total | | $ 71,935 | | $ 355,397 | | $ 9,675 | | $ 437,007 |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| LOAN MIX | | March 31, 2014 | | Dec. 31, 2013 | | March 31, 2013 | | |
| Commercial and construction | | | | | | | | |
| Commercial | | $ 71,632 | | $ 69,659 | | $ 71,935 | | |
| Other real estate mortgage | | 324,881 | | 332,373 | | 355,397 | | |
| Real estate construction | | 19,482 | | 15,041 | | 9,675 | | |
| Total commercial and construction | | 415,995 | | 417,073 | | 437,007 | | |
| Consumer | | | | | | | | |
| Real estate one-to-four family | | 93,007 | | 93,026 | | 97,140 | | |
| Other installment | | 24,486 | | 9,581 | | 1,865 | | |
| Total consumer | | 117,493 | | 102,607 | | 99,005 | | |
| | | | | | | | | |
| Total loans | | 533,488 | | 519,680 | | 536,012 | | |
| | | | | | | | | |
| Less: | | | | | | | | |
| Allowance for loan losses | | 12,551 | | 14,048 | | 15,643 | | |
| Loans receivable, net | | $ 520,937 | | $ 505,632 | | $ 520,369 | | |
| | | | | | | | | |
RVSB Reports Fourth Quarter Fiscal 2014 Profit
May 1, 2014
Page 9
| DETAIL OF NON-PERFORMING ASSETS | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | Northwest | | | Other | | | Southwest | | | Other | | | | | | | |
| | | Oregon | | | Oregon | | | Washington | | | Washington | | | Other | | | Total | |
| March 31, 2014 | | (Dollars in thousands) | |
| Non-performing assets | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Commercial | | $ | - | | | $ | - | | | $ | 452 | | | $ | - | | | $ | - | | | $ | 452 | |
| Commercial real estate | | | 2,194 | | | | - | | | | 5,873 | | | | - | | | | - | | | | 8,067 | |
| Land | | | - | | | | 800 | | | | - | | | | - | | | | - | | | | 800 | |
| Multi-family | | | 2,014 | | | | - | | | | - | | | | - | | | | - | | | | 2,014 | |
| Commercial construction | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| One-to-four family construction | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Real estate one-to-four family | | | 395 | | | | - | | | | 2,065 | | | | 269 | | | | - | | | | 2,729 | |
| Consumer | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Total non-performing loans | | | 4,603 | | | | 800 | | | | 8,390 | | | | 269 | | | | - | | | | 14,062 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| REO | | | 374 | | | | 542 | | | | 5,966 | | | | 821 | | | | - | | | | 7,703 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total non-performing assets | | $ | 4,977 | | | $ | 1,342 | | | $ | 14,356 | | | $ | 1,090 | | | $ | - | | | $ | 21,765 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| DETAIL OF SPEC CONSTRUCTION AND LAND DEVELOPMENT LOANS | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Northwest | | | Other | | | Southwest | | | Other | | | | | | | | | |
| | | Oregon | | | Oregon | | | Washington | | | Washington | | | Other | | | Total | |
| March 31, 2014 | | (Dollars in thousands) | |
| Land and spec construction loans | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Land development loans | | $ | 2,676 | | | $ | 1,184 | | | $ | 12,385 | | | $ | - | | | $ | - | | | $ | 16,245 | |
| Spec construction loans | | | - | | | | - | | | | 3,617 | | | | - | | | | 30 | | | | 3,647 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total land and spec construction | | $ | 2,676 | | | $ | 1,184 | | | $ | 16,002 | | | $ | - | | | $ | 30 | | | $ | 19,892 | |
RVSB Reports Fourth Quarter Fiscal 2014 Profit
May 1, 2014
Page 10
| | | | | | | |
| | At or for the three months ended | | At or for the twelve months ended |
| SELECTED OPERATING DATA | March 31, 2014 | Dec. 31, 2013 | March 31, 2013 | | March 31, 2014 | March 31, 2013 |
| | | | | | | |
| Efficiency ratio (4) | 95.59% | 90.48% | 124.27% | | 98.03% | 90.70% |
| Coverage ratio (6) | 79.81% | 79.20% | 60.62% | | 75.83% | 84.72% |
| Return on average assets (1) | 8.44% | 0.40% | 0.83% | | 2.46% | 0.33% |
| Return on average equity (1) | 81.44% | 3.84% | 8.25% | | 23.73% | 3.41% |
| | | | | | | |
| NET INTEREST SPREAD | | | | | | |
| Yield on loans | 4.73% | 4.85% | 4.99% | | 4.86% | 5.35% |
| Yield on investment securities | 1.84% | 1.46% | 2.81% | | 1.65% | 3.62% |
| Total yield on interest earning assets | 3.65% | 3.64% | 4.05% | | 3.73% | 4.54% |
| | | | | | | |
| Cost of interest bearing deposits | 0.32% | 0.35% | 0.41% | | 0.36% | 0.47% |
| Cost of FHLB advances and other borrowings | 2.36% | 2.36% | 2.42% | | 2.37% | 3.25% |
| Total cost of interest bearing liabilities | 0.40% | 0.44% | 0.49% | | 0.44% | 0.59% |
| | | | | | | |
| Spread (7) | 3.25% | 3.20% | 3.56% | | 3.29% | 3.95% |
| Net interest margin | 3.33% | 3.29% | 3.64% | | 3.37% | 4.06% |
| | | | | | | |
| PER SHARE DATA | | | | | | |
| Basic earnings per share (2) | $ 0.74 | $ 0.04 | $ 0.07 | | $ 0.87 | $ 0.12 |
| Diluted earnings per share (3) | $ 0.74 | $ 0.04 | $ 0.07 | | $ 0.87 | $ 0.12 |
| Book value per share (5) | 4.36 | 3.62 | 3.49 | | 4.36 | 3.49 |
| Tangible book value per share (5) | 3.20 | 2.46 | 2.33 | | 3.20 | 2.33 |
| Market price per share: | | | | | | |
| High for the period | $ 3.49 | $ 2.98 | $ 2.76 | | $ 3.49 | $ 2.76 |
| Low for the period | 2.82 | 2.51 | 1.66 | | 2.27 | 1.08 |
| Close for period end | 3.43 | 2.90 | 2.64 | | 3.43 | 2.64 |
| Cash dividends declared per share | - | - | - | | - | - |
| | | | | | | |
| Average number of shares outstanding: | | | | | | |
| Basic (2) | 22,376,437 | 22,370,277 | 22,351,804 | | 22,367,174 | 22,342,541 |
| Diluted (3) | 22,385,244 | 22,371,914 | 22,352,229 | | 22,369,046 | 22,342,541 |
| (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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