VANCOUVER, Wash., April 28, 2016 (GLOBE NEWSWIRE) -- Riverview Bancorp, Inc. (Nasdaq:RVSB) (“Riverview” or the “Company”) today reported net income of $1.4 million, or $0.06 per diluted share, in the fourth fiscal quarter ended March 31, 2016. This compares to $1.7 million, or $0.08 per diluted share, in the preceding quarter and $1.5 million, or $0.07 per diluted share, in the fourth fiscal quarter a year ago.

Net income increased 42% for fiscal year 2016 to $6.4 million, or $0.28 per diluted share, compared to $4.5 million, or $0.20 per diluted share, in fiscal 2015.

“Solid profitability, strong capital, improving asset quality and strong loan and deposit growth were the highlights of our fiscal 2016 financial results,” said Pat Sheaffer, chairman and chief executive officer. “The strength of the economy in the Portland-Vancouver marketplace continues to sustain and build our community banking franchise with strong on-going demand for our high-service approach to lending and savings programs. Our focus in the coming fiscal year remains on the local markets and expanding our franchise. We will continue to look for local opportunities to grow in the Portland market area.”

Fourth Quarter Highlights (at or for the period ended March 31, 2016)

• Net income was $1.4 million, or $0.06 per diluted share.
• Net interest margin was 3.67% compared to 3.69% in the preceding quarter.
• Total loans increased $14.1 million during the quarter and $45.0 million year-over-year to $624.8 million.
• Total deposits increased $32.2 million during the quarter and $59.0 million year-over-year to $779.8 million.
• Classified assets decreased to $6.8 million, or 6.4% of total capital.
• Non-performing assets declined to 0.36% of total assets.
• Total risk-based capital ratio was 16.07% and Tier 1 leverage ratio was 11.18%.
• Increased quarterly cash dividend to $0.02 per share, generating a current dividend yield of 1.8%.

Balance Sheet Review

“Strong economic growth in our primary market area continues to fuel solid demand for loans primarily in the commercial real estate sector,” said Ron Wysaske, president and chief operating officer. “Our loan pipeline has remained robust as our lenders continue expanding relationships with businesses throughout the Portland metro area.” At March 31, 2016, the loan pipeline totaled $65.6 million.

Total loans increased $14.1 million, or 2.3% (9.3% annualized), during the quarter and increased $45.0 million, or 7.8%, during fiscal year 2016.

Organic loan originations totaled $69.1 million during the fourth quarter compared to $60.7 million in the preceding quarter. Total undisbursed construction loans increased to $44.3 million at March 31, 2016, primarily as a result of $15.4 million in new commercial construction loan originations during the quarter. The majority of these undisbursed construction loans are expected to fund during the next fiscal year.

Total deposits increased $32.2 million to $779.8 million at March 31, 2016 compared to $747.6 million at December 31, 2015. Average deposit balances increased $6.4 million during the quarter and were $48.3 million higher than the fourth quarter a year ago. The deposit mix improved during the quarter as a result of the Company’s continued focus on growing its core customer deposits balances. At March 31, 2016, checking account balances represented 41.5% of total deposits compared to 37.1% a year ago.

At March 31, 2016, Riverview’s shareholders’ equity was $108.3 million compared to $106.0 million at December 31, 2015. Tangible book value per share improved to $3.66 at March 31, 2016 compared to $3.56 at December 31, 2015. A quarterly cash dividend of $0.02 per share was paid on April 25, 2016, generating a current yield of 1.8% based on the recent stock price.

Income Statement

“Our core profitability continues to build year-over-year, reflecting our increased revenue growth with contributions from both the loan portfolio and non-interest income,” said Wysaske. “Core earnings (defined as earnings before taxes and provision for loan losses) increased 78%, or $3.8 million, during the year compared to fiscal year 2015 results.” Net interest income for the fourth fiscal quarter was $7.4 million compared to $7.5 million in the preceding quarter and $6.9 million in the fourth fiscal quarter a year ago. For fiscal 2016, Riverview’s net interest income increased 9% to $29.2 million compared to $26.7 million in fiscal 2015.

The fourth quarter net interest margin contracted slightly to 3.67% compared to 3.69% in the preceding quarter and 3.71% in the fourth quarter a year ago. “The modest decrease in the net interest margin was primarily the result of an increase in the Company’s excess cash balances as a result of the significant growth in deposit balances during the quarter as well as the continued pressure on loan pricing,” noted Kevin Lycklama, executive vice president and chief financial officer. “However, our net interest margin improved year-over-year to 3.67% in fiscal 2016, from 3.59% in fiscal 2015, as we increased our loan-to-deposit ratio during fiscal 2016.”

Non-interest income was $2.2 million in the fourth quarter compared to $2.4 million in the preceding quarter and $2.2 million in the fourth quarter one year ago. Fees and service charges decreased $206,000 during the fourth quarter primarily due to a decrease of $213,000 in prepayment penalties on loan payoffs. For fiscal 2016, non-interest income increased to $9.4 million compared to $8.9 million for fiscal 2015.

Asset management fees increased to $757,000 during the fourth fiscal quarter compared to $727,000 in the fourth quarter a year ago. For fiscal year 2016, asset management fees increased to $3.2 million compared to $3.0 million in fiscal 2015. Riverview Asset Management and Trust Company’s assets under management were $389.1 million at March 31, 2016 compared to $409.3 million a year ago.

Non-interest expense was $7.6 million during the fourth fiscal quarter compared to $7.3 million in the preceding quarter and $7.7 million in the fourth quarter a year ago. For fiscal 2016, non-interest expense decreased to $29.9 million compared to $30.7 million for fiscal 2015. The year-over-year decrease was the result of a decrease in salaries and employee benefits, FDIC insurance premiums, professional fees and real estate owned (“REO”) expenses.

Credit Quality

“We were able to cut our nonperforming loans and nonperforming assets in half this year, reflecting the hard work of our lenders and the credit management team as well as the the continuing improvement in our local markets,” said Dan Cox, executive vice president and chief credit officer. Total nonperforming assets decreased to $3.3 million at March 31, 2016 compared to $4.3 million three months earlier and $6.9 million a year ago.

Nonperforming loans decreased to $2.7 million, or 0.43% of total loans, at March 31, 2016 compared to $3.9 million, or 0.65% of total loans, at December 31, 2015 and $5.3 million, or 0.92% of total loans, a year ago. Loans past due 30-89 days were 0.10% of total loans at March 31, 2016 compared to 0.11% in the preceding quarter.

REO balances were $595,000 at March 31, 2016 compared to $388,000 at December 31, 2015. Sales of REO properties totaled $45,000 during the quarter, with $46,000 in write-downs and one new addition totaling $298,000.

Classified assets decreased to $6.8 million at March 31, 2016 compared to $7.1 million at December 31, 2015. The classified asset to total capital ratio was 6.4% at March 31, 2016 compared to 6.7% three months earlier. During the past twelve months, Riverview has reduced its classified assets by 60%, or $10.0 million.

Riverview recorded a $350,000 recapture of loan losses during the fourth fiscal quarter of 2016 compared to no provision for loan losses during the preceding quarter and a $750,000 recapture of loan losses during the fourth quarter one year ago. For fiscal year 2016, the Company recorded a $1.2 million recapture of loan losses compared to $1.8 million in fiscal year 2015. The recapture of loan losses reflects the continued improvement in credit quality and the decline in loan charge-offs during the past few years.

Net loan recoveries were $62,000 during the fourth fiscal quarter of 2016 compared to $60,000 in the preceding quarter. The allowance for loan losses at March 31, 2016 totaled $9.9 million, representing 1.58% of total loans and 364.2% of nonperforming loans.

Capital

Riverview continues to maintain capital levels well in excess of the regulatory requirements to be categorized as “well capitalized” with a total risk-based capital ratio of 16.07%, Tier 1 leverage ratio of 11.18% and tangible common equity to tangible assets ratio of 9.20% at March 31, 2016.

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 total assets (GAAP) to ending tangible assets (non-GAAP).

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 $921 million at March 31, 2016, it is the parent company of the 92 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 17 branches, including twelve in the Portland-Vancouver area and three lending centers. For the past 3 years, Riverview has been named Best Bank by the readers of The Vancouver Business Journal, The Columbian and The Gresham Outlook.

“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements that are subject to risks and uncertainties, including, but not limited to: the Company’s ability to raise common capital; the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in the Company’s allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets; changes in general economic conditions, either nationally or in the Company’s market areas; changes in the levels of general interest rates, and the relative differences between short and long term interest rates, deposit interest rates, the Company’s net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in the Company’s market areas; secondary market conditions for loans and the Company’s ability to sell loans in the secondary market; results of examinations of us by the Office of Comptroller of the Currency or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase the Company’s reserve for loan losses, write-down assets, change Riverview Community Bank’s regulatory capital position or affect the Company’s ability to borrow funds or maintain or increase deposits, which could adversely affect its liquidity and earnings; legislative or regulatory changes that adversely affect the Company’s business including changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules; the Company’s ability to attract and retain deposits; further increases in premiums for deposit insurance; the Company’s ability to control operating costs and expenses; the use of estimates in determining fair value of certain of the Company’s assets, which estimates may prove to be incorrect and result in significant declines in valuation; difficulties in reducing risks associated with the loans on the Company’s balance sheet; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect the Company’s workforce and potential associated charges; computer systems on which the Company depends could fail or experience a security breach; the Company’s ability to retain key members of its senior management team; costs and effects of litigation, including settlements and judgments; the Company’s ability to successfully integrate any assets, liabilities, customers, systems, and management personnel it may in the future acquire into its operations and the Company’s ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; the Company’s ability to pay dividends on its common stock; and interest or principal payments on its junior subordinated debentures; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; other economic, competitive, governmental, regulatory, and technological factors affecting the Company’s operations, pricing, products and services and the other risks described from time to time in our filings with the SEC.

Such forward-looking statements may include projections. Any such projections were not prepared in accordance with published guidelines of the American Institute of Certified Public Accountants or the Securities Exchange Commission regarding projections and forecasts nor have such projections been audited, examined or otherwise reviewed by independent auditors of the Company. In addition, such projections are based upon many estimates and inherently subject to significant economic and competitive uncertainties and contingencies, many of which are beyond the control of management of the Company. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by the Company that the projections will prove to be correct.

The Company cautions readers not to place undue reliance on any forward-looking statements. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. The Company does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for fiscal 2016 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.

Contacts:
Pat Sheaffer, Ron Wysaske or Kevin Lycklama,
Riverview Bancorp, Inc. 360-693-6650