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Riverview Bancorp Second Quarter Profits Increase 16 Percent to $3.0 Million
25 October 2006 Riverview Bancorp, Inc. (Nasdaq:RVSB) today reported that excellent loan growth and a continued focus on operating efficiencies contributed to record profits for the second fiscal quarter of 2007 ended September 30, 2006. Net income for the second quarter increased 16% to $3.0 million, or $0.26 per diluted share, compared to $2.6 million, or $0.22 per diluted share, in the second quarter a year ago. For the first six months of fiscal 2007, net income increased 28% to $5.6 million, or $0.49 per diluted share, compared to $4.4 million, or $0.39 per diluted share, in the first half a year ago. All per share data has been adjusted to reflect the August 2006 2-for-1 stock split.
"A growing balance sheet, growing revenues and improved efficiencies contributed to our record performance in the second quarter," said Pat Sheaffer, Chairman and CEO. "We are achieving our profit goals by delivering a high level of service to our customers and maintaining solid asset quality. The exceptional growth throughout the Southwest Washington and greater Portland metropolitan area, which we see continuing, is fueling our balance sheet growth and has helped generate double-digit growth in profits for the quarter and for the first half of our fiscal year.
"A good example of the market area growth we are seeing is that SEH America is apparently planning to invest $350 million in Vancouver to launch production of a new facility to build 12-inch silicon wafers for the semiconductor industry," Sheaffer added.
Second Quarter Financial Highlights (at or for periods ended September 30, 2006, compared to September 30, 2005)
-- Net income increased 16% to $3.0 million.
-- Net interest income increased 13% to $9.1 million.
-- Net interest margin increased 4 basis points to 4.97%
compared to 4.93% a year ago.
-- Efficiency ratio improved to 54.9%.
-- Total assets increased 14% to $844 million.
-- Loans increased 19% to $691 million.
-- 2-for-1 stock split in August 2006.
-- Cash dividend increased 5% to $0.10 per split adjusted share.
Operating Results
Revenues (net interest income before the provision for loan losses plus non-interest income) increased 8% to $11.4 million for the quarter compared to $10.6 million in the same quarter a year ago. Net interest income before the provision for loan loss increased 13% to $9.1 million in the second quarter of fiscal 2007 compared to $8.1 million in the second quarter a year ago. Non-interest income was $2.3 million in the second fiscal quarter of 2007 compared to $2.5 million in the prior year's second quarter. This decrease was largely due to the sale of the credit card portfolio inherited with the acquisition of American Pacific Bank. The sale of the credit card portfolio, which took place in the second fiscal quarter of 2006, led to a pre-tax gain on sale of $304,000. Asset management fees from our trust company, Riverview Asset Management Corp., increased to $455,000 in the second quarter of fiscal 2007 compared to $342,000 in the second quarter a year ago.
For the first half of fiscal 2007 revenues increased 14% to $22.5 million compared to $19.9 million in the six-month period a year ago. Year-to-date, net interest income before the provision for loan losses increased 19% to $18.1 million compared to $15.2 million in the same period a year ago. Non-interest income was $4.4 million in the first six months of fiscal 2007 compared to $4.7 million in the first six months of fiscal 2006.
The quarterly net interest margin increased 4 basis points to 4.97% from 4.93% in the second fiscal quarter a year ago, but contracted from 5.23% in the prior linked quarter. For the first half of fiscal 2007, net interest margin improved to 5.10% compared to 4.82% for the same period a year ago. "Although our net interest margin improved from the same periods in the prior year, we had a contraction in our margin from the previous quarter as we experienced higher costs for funding," said Ron Wysaske, President and COO.
"We reduced our expense ratio 36 basis points to 3.09% of average assets compared to 3.45% of average assets in the second fiscal quarter a year ago. Our non-interest expense remained unchanged for the quarter and slightly increased in the first six months of the fiscal year," said Wysaske. Non-interest expense was unchanged at $6.3 million in the second quarter compared to the second quarter a year ago. For the first half of the fiscal year, non-interest expense was $13.0 million compared to $12.4 million in the like period a year ago. The efficiency ratio improved 430 basis points to 54.9% for the quarter, compared to 59.2% in the same quarter a year ago. For the first half of the fiscal year, the efficiency ratio improved 440 basis points to 57.8%, compared to 62.2% in the like period a year ago.
Balance Sheet Growth
Net loans increased 19% to $691 million at September 30, 2006, compared to $579 million a year ago. Commercial real estate loans account for 59% and permanent single family loans represent just 5% of the total loan portfolio, respectively. "We continue to find success growing the loan portfolio while maintaining exceptional credit quality and a well diversified loan portfolio," said Wysaske. "We anticipate continued high growth throughout Southwest Washington and the greater Portland metropolitan area, which should continue to fuel growth in our loan portfolio for the rest of the year."
Total assets increased 14% to a record $844 million at September 30, 2006, compared to $739 million a year ago. Total deposits grew 7% to $640 million, compared to $600 million at September 30, 2005. "Core deposits (exclude certificates of deposit) account for 66% of total deposits. We continue to see growth in the total balance of our interest checking accounts," noted Wysaske. Non-interest checking balances represent 16% of total deposits, compared to 17% of total deposits a year ago, and interest checking balances represent 24% of total deposits, compared to 22% of total deposits a year ago.
Shareholders' equity increased 7% to $95.8 million, compared to $89.1 million at the end of the second fiscal quarter a year ago. Book value per share improved to $8.28 at September 30, 2006, compared to $7.67 a year earlier, and tangible book value per share was $5.97 at quarter-end, compared to $5.28 at quarter-end a year earlier.
Credit Quality and Performance Measures
Credit quality remained strong, with non-performing assets at 0.20% of total assets at September 30, 2006, compared to 0.14% of total assets at September 30, 2005. The allowance for loan losses, including unfunded loan commitments of $385,000, was $8.6 million, or 1.24% of net loans at quarter-end, compared to $7.2 million, or 1.22% of net loans, a year ago.
Riverview's fiscal second quarter 2007 return on average assets improved to 1.45%, compared to 1.40% for fiscal second quarter 2006. Return on average equity improved to 12.22% for the quarter, compared to 11.36% for the same period last year.
Conference Call
The management team of Riverview Bancorp will host a conference call on Wednesday, October 25, at 8:00 a.m. PDT, to discuss second quarter results. The conference call can be accessed live by telephone at 303-262-2130. To listen to the call online go to www.actioncast.acttel.com and use event ID 35357.
About the Company
Riverview Bancorp, Inc. (www.riverviewbank.com) is headquartered in Vancouver, Washington - just north of Portland, Oregon on the I-5 corridor. With assets of $844 million, it is the parent company of the 83 year-old Riverview Community Bank, as well as Riverview Mortgage and Riverview Asset Management Corp. There are 17 branches, including ten in fast growing Clark County, three in the Portland metropolitan area and three lending centers. The Bank offers true community banking services, focusing on providing the highest quality service and financial products to commercial and retail customers.
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
September 30, 2006, March 31, 2006 and September 30, 2005
(In thousands, except share data) (Unaudited)
Sept. 30, March 31, Sept. 30,
2006 2006 2005
--------------------------------------------------------------------
ASSETS
Cash (including interest-
earning accounts of
$15,198, $7,786 and
$33,110) $ 43,453 $ 31,346 $ 56,486
Loans held for sale 197 65 --
Investment securities
available for sale, at
fair value (amortized cost
of $23,017, $24,139 and
$ 24,147) 22,963 24,022 24,143
Mortgage-backed securities
held to maturity, at
amortized cost (fair value
of $1,495, $1,830 and
$2,223) 1,477 1,805 2,202
Mortgage-backed securities
available for sale, at fair
value (amortized cost of
$7,608, $8,436 and $10,047) 7,404 8,134 9,898
Loans receivable (net of
allowance for loan losses
of $8,263 $7,221 and $6,752) 690,650 623,016 579,443
Prepaid expenses and other
assets 2,021 2,210 1,824
Accrued interest receivable 4,117 3,058 2,807
Federal Home Loan Bank
stock, at cost 7,350 7,350 7,350
Premises and equipment, net 21,011 19,127 11,862
Deferred income taxes, net 3,716 3,771 2,377
Mortgage servicing intangible,
net 368 384 414
Goodwill 25,572 25,572 26,354
Core deposit intangible, net 799 895 1,001
Bank owned life insurance 13,349 13,092 12,848
--------- --------- ---------
TOTAL ASSETS $ 844,447 763,847 739,009
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposit accounts $ 640,404 $ 606,964 $ 599,680
Accrued expenses and other
liabilities 7,921 8,768 8,920
Advance payments by
borrowers for taxes and
insurance 377 358 325
Federal Home Loan Bank
advances 90,000 46,100 40,938
Junior subordinated
debenture 7,217 7,217 --
Capital Lease Obligation 2,737 2,753 --
--------- --------- ---------
Total liabilities 748,656 672,160 649,863
SHAREHOLDERS' EQUITY:
Serial preferred stock,
$.01 par value; 250,000
authorized, issued and
outstanding, none -- -- --
Common stock, $.01 par value;
50,000,000 authorized,
September 30, 2006-
11,575,480 issued,
11,575,472 outstanding; 116 57 58
March 31, 2006 -
1,545,380 issued,
11,545,372 outstanding
September 30, 2005 -
11,623,880 issued,
11,623,872 outstanding
Additional paid-in capital 57,794 57,316 58,139
Retained earnings 39,134 35,776 32,339
Unearned shares issued to
employee stock ownership
trust (1,083) (1,186) (1,289)
Accumulated other
comprehensive loss (170) (276) (101)
--------- --------- ---------
Total shareholders' equity 95,791 91,687 89,146
--------- --------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 844,447 $ 763,847 $ 739,009
========= ========= =========
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Income for the Three
and Six Months Ended September 30, 2006 and 2005
(In thousands, except share data) (Unaudited)
Three Months Ended Six Months Ended
September 30, September 30,
2006 2005 2006 2005
---------------------------------------------------------------------
INTEREST INCOME:
Interest and fees
on loans
receivable $14,834 $11,010 $28,603 $20,607
Interest on
investment
securities-taxable 221 195 442 381
Interest on
investment
securities-non
taxable 42 43 84 86
Interest on
mortgage-backed
securities 109 138 223 283
Other interest and
dividends 96 250 148 504
------- ------- ------- -------
Total interest
income 15,302 11,636 29,500 21,861
------- ------- ------- -------
INTEREST EXPENSE:
Interest on
deposits 4,908 3,059 9,130 5,530
Interest on
borrowings 1,267 482 2,230 1,138
------- ------- ------- -------
Total interest
expense 6,175 3,541 11,360 6,668
------- ------- ------- -------
Net interest
income 9,127 8,095 18,140 15,193
Less provision
for loan losses 600 450 950 900
------- ------- ------- -------
Net interest
income after
provision
for loan losses 8,527 7,645 17,190 14,293
------- ------- ------- -------
NON-INTEREST INCOME:
Fees and service
charges 1,449 1,598 2,780 3,084
Asset management
fees 455 342 891 706
Gain on sale of
loans held for sale 111 77 183 203
Gain on sale of
real estate owned -- -- -- 21
Loan servicing
income (expense) 36 (8) 81 19
Gain on sale of
credit card
portfolio 66 304 133 304
Bank owned life
insurance income 129 122 257 242
Other 45 47 81 90
------- ------- ------- -------
Total non-interest
income 2,291 2,482 4,406 4,669
------- ------- ------- -------
NON-INTEREST EXPENSE:
Salaries and
employee benefits 3,532 3,441 7,367 6,840
Occupancy and
depreciation 1,135 883 2,209 1,686
Data processing 222 373 557 738
Amortization of core
deposit intangible 46 55 96 104
Advertising and
marketing expense 356 306 658 537
FDIC insurance
premium 13 17 37 32
State and local taxes 133 148 288 283
Telecommunications 101 99 213 162
Professional fees 198 388 376 752
Other 536 551 1,240 1,223
------- ------- ------- -------
Total non-interest
expense 6,272 6,261 13,041 12,357
------- ------- ------- -------
INCOME BEFORE
INCOME TAXES 4,546 3,866 8,555 6,605
PROVISION FOR
INCOME TAXES 1,573 1,304 2,951 2,222
------- ------- ------- -------
NET INCOME $ 2,973 $ 2,562 $ 5,604 $ 4,383
======= ======= ======= =======
Earnings per common share:
Basic $ 0.26 $ 0.23 $ 0.50 $ 0.39
Diluted $ 0.26 $ 0.22 $ 0.49 $ 0.39
Weighted average number of
shares outstanding:
Basic 11,302,927 11,309,322 11,289,143 11,107,745
Diluted 11,473,750 11,443,810 11,463,125 11,242,686
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
FINANCIAL HIGHLIGHTS
(Unaudited)
At or for the six months At or for the Year
months ended September 30, ended March 31,
2006 2005 2006
---- ---- ----
(Dollars in thousands, except share data)
FINANCIAL CONDITION DATA
Average interest-
earning assets $711,372 $631,307 $645,084
Average interest-
bearing liabilities 592,679 522,114 532,521
Net average earning
assets 118,693 109,193 112,563
Non-performing assets 1,704 1,043 415
Non-performing loans 1,704 1,043 415
Allowance for loan
losses 8,263 6,752 7,221
Allowance for loan
losses and unfunded
loan commitments 8,648 7,160 7,583
Average interest-
earning assets to
average interest-
bearing liabilities 120.03% 120.91% 121.14%
Allowance for loan
losses to non-
performing loans 484.92% 647.36% 1740.00%
Allowance for loan
losses to net loans 1.18% 1.15% 1.15%
Allowance for loan
losses and unfunded
loan commitments to
net loans 1.24% 1.22% 1.20%
Non-performing loans
to total net loans 0.24% 0.18% 0.07%
Non-performing
assets to total
assets 0.20% 0.14% 0.05%
Shareholders' equity
to assets 11.34% 12.06% 12.00%
Number of banking
facilities 18 17 18
At three At three At the
months months year
ended ended ended
September 30, June 30, March 31,
LOAN DATA 2006 2005 2006 2006
--------- ---- ---- ---- ----
Residential:
One-to-four
family $ 34,552 $ 32,251 $ 32,668 $ 32,488
Multi-family 3,219 2,019 3,226 2,157
Construction:
One-to-four family 91,051 44,618 87,040 81,572
Commercial real
estate 51,510 54,224 50,387 47,079
Commercial 66,008 69,401 66,474 59,834
Consumer:
Secured 31,484 28,730 30,961 29,781
Unsecured 1,141 1,688 926 1,415
Land 62,989 42,532 56,705 49,558
Commercial real
estate 361,244 314,776 342,174 330,705
--------------------------------------------
703,198 590,239 670,561 634,589
Less:
Deferred loan fees 4,285 4,044 4,347 4,352
Allowance for loan
losses 8,263 6,752 7,626 7,221
--------------------------------------------
Loans receivable,
net $690,650 $579,443 $658,588 $623,01
============================================
DEPOSIT DATA
------------
Interest Checking $153,631 $130,366 $144,120 $129,457
Regular Savings 32,896 39,732 34,871 38,344
Money Market
Deposit
Accounts 145,612 128,926 134,010 137,451
Non-Interest
Checking 101,852 103,767 96,636 94,592
Certificates of
Deposit 206,413 196,889 197,752 207,120
--------------------------------------------
Total Deposits $640,404 $599,680 $607,389 $606,964
============================================
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
FINANCIAL HIGHLIGHTS
(Unaudited)
At or for the At or for the
Three months ended Six months ended
SELECTED OPERATING September 30, September 30,
DATA 2006 2005 2006 2005
------------------ ---------- ---------- ---------- ----------
(Dollars in thousands, except share data)
Efficiency ratio (d) 54.93% 59.19% 57.84% 62.21%
Efficiency ratio net
of intangible
amortization 54.31% 58.28% 57.21% 61.32%
Coverage ratio (f) 145.52% 129.29% 139.10% 122.95%
Coverage ratio net
of intangible
amortization 146.59% 130.44% 140.13% 123.99%
Return on average
assets (a) 1.45% 1.40% 1.41% 1.25%
Return on average
equity (a) 12.22% 11.36% 11.70% 10.19%
Average rate earned
on interest-earned
assets 8.32% 7.08% 8.28% 6.92%
Average rate paid on
interest-bearing
liabilities 4.01% 2.61% 3.82% 2.55%
Spread (g) 4.31% 4.47% 4.46% 4.37%
Net interest margin 4.97% 4.93% 5.10% 4.82%
PER SHARE DATA
Basic earnings per
share (b) $ 0.26 $ 0.23 $ 0.50 $ 0.39
Diluted earnings
per share (c) 0.26 0.22 0.49 0.39
Book value per
share (e) 8.28 7.67 8.28 7.67
Tangible book value
per share (e) 5.97 5.28 5.97 5.28
Market price per
share:
High for the
period $ 13.650 $ 11.050 $ 13.650 $ 11.050
Low for the
period 12.580 10.375 12.140 10.165
Close for period
end 13.500 10.405 13.500 10.405
Cash dividends
declared per share 0.100 0.085 0.195 0.170
Average number of
shares outstanding:
Basic (b) 11,302,927 11,309,322 11,289,143 11,107,745
Diluted (c) 11,473,750 11,443,810 11,463,125 11,242,686
a) Amounts are annualized.
b) Amounts calculated exclude ESOP shares not committed to
be released.
c) Amounts calculated exclude ESOP shares not committed to
be released and include common stock equivalents.
d) Non-interest expense divided by net interest income and
non-interest income.
e) Amounts calculated include ESOP shares not committed to
be released.
f) Net interest income divided by non-interest expense.
g) Yield on interest-earning assets less cost of funds on
interest bearing liabilities.
Statements concerning future performance, developments or events, concerning expectations for growth and market forecasts, and any other guidance on future periods, constitute forward-looking statements, which are subject to a number of risks and uncertainties that might cause actual results to differ materially from stated objectives. These factors include but are not limited to: RVSB's ability to acquire shares according to internal repurchase guidelines, regional economic conditions and the company's ability to efficiently manage expenses. Additional factors that could cause actual results to differ materially are disclosed in Riverview Bancorp's recent filings with the SEC, including but not limited to Annual Reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
CONTACT: Riverview Bancorp
Pat Sheaffer
Ron Wysaske
(360) 693-6650
Source: primezone
All trademarks and copyrighted information contained herein are the property of their respective owners.
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