EX-99.1 2 ex991.htm EXHIBIT 99.1 Unassociated Document
Exhibit 99.1

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

Riverview Bancorp Increases Earnings to $854,000 in Fourth Quarter and $4.3 Million in Fiscal 2011,
Highlighted by Credit Quality Improvements, Balance Sheet Growth and Net Interest Margin Expansion

Vancouver, WA – May 5, 2011- Riverview Bancorp, Inc. (Nasdaq GSM: RVSB). (“Riverview” or the “Company”) today announced fourth quarter net income of $854,000, or $0.04 per diluted share, for the period ended March 31, 2011. This is Riverview’s fourth consecutive profitable quarter and is an increase from net income of $579,000 reported in the third fiscal quarter ended December 31, 2010. For all of fiscal 2011, Riverview earned $4.3 million, or $0.24 per diluted share compared to a net loss of $5.4 million, or $0.51 per diluted share, for fiscal 2010.

Credit quality continued to improve with non-performing loans (NPLs) decreasing 27.0% during the fourth quarter to $12.3 million. Riverview reduced the balance of NPLs by $23.7 million, or 65.8%, from the $36.0 million balance at March 31, 2010. In addition, real estate owned (REO) properties decreased during the quarter due to $3.4 million in REO sales, offset by just $536,000 in new properties acquired.

“As we continue to see positive trends in earnings, asset quality and capital levels, we are working hard to make the next year even better for clients, investors and the communities we serve,” said Pat Sheaffer, Chairman and CEO. “We have had four straight profitable quarters with positive operating results from earnings to capital and asset quality to customer deposits. We recognize that there are still challenges ahead as we work our way through the end of the current economic cycle. Riverview’s commitment to quality and attention to our core strengths as a client-focused, community bank with 88 years of investment in the region is getting us exactly where we want to go.”

Financial Statement Highlights (at or for the period ended March 31, 2011)

·  
Income & Earnings: Earnings improved both on a linked-quarter and year-over-year basis. Net income was $854,000, or $0.04 per diluted share, for the fourth consecutive profitable quarter and an increase from $579,000 reported in the third fiscal quarter ended December 31, 2010.

·  
Balance Sheet Growth: Net loans increased $12.5 million during the quarter. Increases were concentrated in both small business loans and quality single-family residential mortgages.

·  
Net Interest Margin (NIM): NIM increased during the quarter and remained strong at 4.71%. Net interest income increased slightly from the fourth fiscal quarter ended March 31, 2010.

·  
Non-Performing Loans: NPLs decreased to $12.3 million, or 1.79% of total loans, the lowest level in thirteen quarters. This compares to $16.9 million three months earlier and $36.0 million a year ago. In the fourth quarter, $5.3 million of loans were moved off of non-accrual status, while $724,000 of new loans were added.

·  
Real Estate Owned Properties: REO decreased to $27.6 million from $30.7 million reported at the previous quarter ended December 31, 2010. The decrease is primarily due to the sale of existing properties and the slowdown of new problem credits.

·  
Non-Interest Expense: Non-interest expense decreased to $8.6 million compared to $11.9 million in the fourth quarter of fiscal 2010 primarily due to a decrease in REO expenses, including write-downs on existing properties.

·  
Cost of Deposits: Fifteenth consecutive quarter of reduction in cost of deposits. Deposit costs decreased by 10 basis points from the prior quarter and 50 basis points from the fourth quarter a year ago.
 
 
 
 
 
 
RVSB Fourth Quarter Fiscal 2011 Results
May 5, 2011
Page 2
 
·  
Capital/Liquidity: Increased total risk-based capital ratio to 14.61% and remains very well capitalized. Liquidity remains strong with no outstanding borrowings.

·  
Recognized as one of Oregon’s 100 Best Places to Work 2011 by Oregon Business Magazine.

·  
Named one of the Top 75 Corporate Philanthropists 2011 in Washington State by the Puget Sound Business Journal.

 
Credit Quality
 
“It is exciting to begin this next fiscal year anticipating continued growth, new offerings and specialized services such as our new Medical Banking division,” said Dave Dahlstrom, EVP and Chief Credit Officer. “We are optimistic that this very difficult credit cycle is subsiding. Many of the problem credits have worked through the collection and foreclosure process over the last 12 – 18 months and we are seeing a noticeable slowdown in the inflow of new problem credits.”
 
Asset quality continued to improve with non-performing assets (NPAs) declining $7.7 million, or 16.1%, during the fourth fiscal quarter 2011 to $39.9 million, or 4.65% of total assets, compared to $47.6 million, or 5.68% of total assets, at December 31, 2010. NPAs have decreased $19.5 million, or 32.9%, from their peak of $59.5 million, or 6.93% of total assets, at December 31, 2009. The ongoing effort to work NPAs down and move them through the collection process is resulting in continued positive trends in asset quality. NPLs decreased to $12.3 million at March 31, 2011 and represent 1.79% of total loans, down from 2.49% at December 31, 2010. This compares to $36.0 million, or 4.90% of total loans, at March 31, 2010. NPLs declined in all loan categories compared to both December 31, 2010 and March 31, 2010. Classified loans have also continued to decline.

This also marks the third consecutive quarter of declining balances of new loans added to non-accrual status. The consistently decreasing level of delinquent loans should result in a trend of fewer future transfers of new loans into non-accrual. REO decreased to $27.6 million at March 31, 2011 as a result of the steady liquidation of REO properties and the slowdown in new problem credits. During the quarter, Riverview sold properties totaling $3.4 million and has several additional properties that it expects will be sold before the end of June. During fiscal year 2011, Riverview recognized a total of $386,000 in gains on the sale of REO property, with more than $7.6 million in REO sales during the same period.
 
The allowance for loan losses was $15.0 million at March 31, 2011 representing 2.18% of total loans. The ratio of allowance for loan losses to non-performing loans increased to 121.46% at March 31, 2011. The provision for loan losses was $500,000 in the fourth quarter compared to $1.6 million in the preceding quarter and $5.9 million in the fourth quarter a year ago. Charge-offs for the fourth quarter totaled $3.0 million compared to $3.2 million in the prior quarter. Charge-offs during the quarter exceeded the provision for loan losses, due primarily to specific impairment reserves established by the Company in previous quarters being charged off during the current quarter.
 
 
Balance Sheet Review
 
New loan demand is starting to pick up with encouraging growth in total loans during the quarter despite the Company’s continued planned reductions in our land development and speculative construction loan portfolios. Net loans increased $12.5 million during the quarter to $672.6 million at March 31, 2011, compared to $660.1 million at December 31, 2010 and $712.8 million a year earlier.
 
Riverview continues to reduce its exposure to land development and speculative construction loans, reducing the balance of these portfolios to $71.7 million at March 31, 2011 compared to $75.1 million in the prior quarter and $105.4 million a year ago. Speculative construction loans declined $2.7 million from the preceding quarter to $16.5 million, and represent only 2.4% of the total loan portfolio while land development loans declined $718,000 from the prior quarter to $55.3 million and represent 8.0% of the total loan portfolio at March 31, 2011.

The commercial real estate (CRE) loan portfolio totaled $364.7 million as of March 31, 2011, of which 29% was owner-occupied and 71% was investor-owned. At March 31, 2011, the CRE portfolio contained four loans totaling $1.4 million
 
 
 
 
 
RVSB Fourth Quarter Fiscal 2011 Results
May 5, 2011
Page 3
 
that were more than 90 days past due, representing 0.4% of the total CRE portfolio. There were three CRE loans delinquent 30 to 89 days at March 31, 2011 totaling $2.1 million, representing 0.6% of the total CRE portfolio. The Company recently completed a new round of stress testing on its CRE portfolio. The results of the testing continued to show no significant systemic problems within this portfolio.
 
Total deposits were $716.5 million at March 31, 2011, a $19.8 million increase compared to the preceding quarter end and a $28.5 million increase compared to a year ago. Non-interest bearing deposits increased $8.2 million during the quarter and currently accounts for 14.3% of total deposits, compared to 12.2% at March 31, 2010. Riverview currently has no wholesale brokered deposits or funding. The loan to deposit ratio was 96% at March 31, 2011 compared to 107% a year ago.
 
 
Net Interest Margin
 
Riverview’s net interest margin improved to 4.71% for the fourth quarter, which was an 11 basis point improvement compared to the preceding quarter and 17 basis points compared to the fourth quarter a year ago. The increase in the net interest margin continues to be the result of decreasing interest expense on deposits and disciplined loan pricing. The cost of deposits was 0.77% during the current quarter, a decrease of 10 basis points from the prior quarter and 50 basis points from the fourth quarter a year ago. For the year the net interest margin improved 25 basis points to 4.64%, compared to 4.39% for fiscal 2010.
 
 
Income Statement
 
“I am pleased to report on a full year of sustained profitability starting in the first quarter,” said Ron Wysaske, President and COO. “Our many achievements this year came about through hard work, focus, and our commitment to helping our customers achieve their financial goals. Examples include the lowest non-performing loan balance since March 2008 and the resulting decrease in non-interest expense, increases in capital, increases in deposits, and excellent liquidity.”
 
Fourth quarter net interest income was $8.7 million compared to $8.8 million in the preceding quarter and $8.6 million in the fourth quarter a year ago. For fiscal 2011, net interest income was $35.2 million, compared to $34.9 million for fiscal 2010. Operating revenue, which consists of net interest income plus non-interest income, was $10.4 million in the fourth quarter compared to $10.7 million in the prior linked quarter, and $10.4 million in the fourth quarter a year ago.
 
Non-interest income was $1.7 million in the fourth quarter compared to $1.9 million in the preceding quarter and $1.8 million in the fourth quarter a year ago. For all of fiscal 2011, non-interest income increased 8.6% to $7.9 million compared to $7.3 million for fiscal 2010. The increase from the prior year is primarily due to a $1.0 million impairment charge on an investment security in fiscal 2010.
 
Non-interest expense was $8.6 million in the fourth quarter compared to $8.3 million in the preceding quarter and $11.9 million in the fourth quarter a year ago. For all of fiscal 2011, non-interest expense improved to $31.5 million compared to $35.0 million for fiscal 2010.
 
Riverview Asset Management Corp. (“RAMCorp”), a trust company subsidiary of the Bank, increased its fee income 21.1% compared to the same quarter in the prior year. RAMCorp fee income totaled $2.1 million for fiscal year 2011 compared to $1.9 million in the same period last year. Assets under management increased 17.6% to $328 million at March 31, 2011 compared to $279 million a year earlier.
 
 
Capital and Liquidity
 
 
The Bank continues to maintain capital levels significantly in excess of the requirements to be categorized as “well capitalized” with a total risk-based capital ratio of 14.61% and a Tier 1 leverage ratio of 11.24% at March 31, 2011. The Company also has an additional $12 million in assets that could be used in the future to boost the Bank’s capital levels or support future growth.
 
Riverview’s total shareholders’ equity was $106.9 million at March 31, 2011. Book value was $4.76 per share and tangible book value was $3.59 per share at March 31, 2011. Since Riverview has not taken part in the US Treasury’s TARP/CPP program, all its shareholders’ equity is common stock. The Company’s tangible common equity ratio is 9.7%.
 
 
 
 
 
 
RVSB Fourth Quarter Fiscal 2011 Results
May 5, 2011
Page 4
 
At March 31, 2011, the Bank had available liquidity of over $470 million, including more than $300 million of borrowing capacity from the Federal Home Loan Bank of Seattle and the Federal Reserve Bank of San Francisco, and $50 million from cash and short-term investments. As of March 31, 2011, the Bank had no outstanding borrowings.
 
 
Community Investment
 
Riverview has a long history of community involvement and investment. Last year, Riverview contributed over $200,000 in support of local health and children services, the arts, culture and education. However, the money is only part of the equation. Riverview’s annual food drive effort brought in the equivalent of 296,000 pounds of food for local food banks during 2010’s Winter Fill-A-Bag and Walk and Knock efforts, including a $5,500 contribution from Riverview. The Company was also recently recognized by the Puget Sound Business Journal’s 2011 list of Top 75 Corporate Philanthropists in the Puget Sound region. Riverview’s employee-owners contribute thousands of hours of their personal time to numerous local organizations, including more than 35 that have a Riverview representative on its Board of Directors. As youth sports coaches, chamber presidents, charity volunteers and participants in fund raising events, they personally give back to the community. It is this dedication and action that sets the Riverview family apart.
 
 
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 provided non-GAAP financial measures for tangible common equity, along with the GAAP measure. Tangible common equity is calculated as shareholders’ equity less goodwill and other intangible assets. In addition, tangible assets are total assets less goodwill and other intangible assets.
 
The following table provides reconciliations of ending shareholders’ equity (GAAP) to ending tangible shareholders’ equity (non-GAAP), and ending assets (GAAP) to ending tangible assets (non-GAAP).
 
   
March 31,
    
Dec. 31,
    
March 31,
  
(Dollars in thousands)
  
2011
    
2010
    
2010
  
                   
Shareholders’ equity
   $ 106,944     $ 106,030     $ 83,934  
Goodwill
     25,572       25,572       25,572  
Other intangible assets, net
     615       665       823  
                         
Tangible shareholders’ equity
   $ 80,757     $ 79,793     $ 57,539  
                         
Total assets
   $ 859,263     $ 838,417     $ 837,953  
Goodwill
     25,572       25,572       25,572  
Other intangible assets, net
     615       665       823  
                         
Tangible assets
   $ 833,076     $ 812,180     $ 811,558  
 
About Riverview
 
Riverview Bancorp, Inc. (www.riverviewbank.com) is headquartered in Vancouver, Washington – just north of Portland, Oregon on the I-5 corridor. With assets of $859 million, it is the parent company of the 88 year-old Riverview Community Bank, as well as Riverview Asset Management Corp. There are 17 branches, including twelve in the Portland-Vancouver area and three lending centers. The Bank offers true community banking services, focusing on providing the highest quality service and financial products to commercial and retail customers.
 
 
 
 
 
 
RVSB Fourth Quarter Fiscal 2011 Results
May 5, 2011
Page 5

 
 
“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995:This press release contains forward-looking statements that are subject to risks and uncertainties, including, but not limited to: the Company’s ability to raise common capital, the amount of capital it intends to raise and its intended use of that capital. The credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in the Company’s allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets; changes in general economic conditions, either nationally or in the Company’s market areas; changes in the levels of general interest rates, and the relative differences between short and long term interest rates, deposit interest rates, the Company’s net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in the Company’s market areas; secondary market conditions for loans and the Company’s ability to sell loans in the secondary market; results of examinations of us by the Office of Thrift Supervision or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase the Company’s reserve for loan losses, write-down assets, change Riverview Community Bank’s regulatory capital position or affect the Company’s ability to borrow funds or maintain or increase deposits, which could adversely affect its liquidity and earnings; the Company’s compliance with regulatory enforcement actions; we have entered into with the OTS and the possibility that our noncompliance could result in the imposition of additional enforcement actions and additional requirements or restrictions on our operations; legislative or regulatory changes that adversely affect the Company’s business including changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules; the Company’s ability to attract and retain deposits; further increases in premiums for deposit insurance; the Company’s ability to control operating costs and expenses; the use of estimates in determining fair value of certain of the Company’s assets, which estimates may prove to be incorrect and result in significant declines in valuation; difficulties in reducing risks associated with the loans on the Company’s balance sheet; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect the Company’s workforce and potential associated charges; computer systems on which the Company depends could fail or experience a security breach; the Company’s ability to retain key members of its senior management team; costs and effects of litigation, including settlements and judgments; the Company’s ability to successfully integrate any assets, liabilities, customers, systems, and management personnel it may in the future acquire into its operations and the Company’s ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; the Company’s ability to pay dividends on its common stock; and interest or principal payments on its junior subordinated debentures; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; other economic, competitive, governmental, regulatory, and technological factors affecting the Company’s operations, pricing, products and services and the other risks described from time to time in our filings with the Securities and Exchange Commission.
 
 
The Company cautions readers not to place undue reliance on any forward-looking statements. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. The Company does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for fiscal 2010 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us, and could negatively affect the Company’s operating and stock price performance.
 

 
 
 
RVSB Fourth Quarter Fiscal 2011 Results
May 5, 2011
Page 6


RIVERVIEW BANCORP, INC. AND SUBSIDIARY
                  
Consolidated Balance Sheets
                  
(In thousands, except share data)  (Unaudited)
  
March 31, 2011
    
Dec. 31, 2010
    
March 31, 2010
  
ASSETS
                  
                   
  Cash (including interest-earning accounts of $37,349, $27,548, and $3,384)
   $ 51,752     $ 35,900     $ 13,587  
  Certificate of deposits
     14,900       17,141       -  
  Loans held for sale
     173       581       255  
  Investment securities held to maturity, at amortized cost
     506       505       517  
  Investment securities available for sale, at fair value
     6,320       6,255       6,802  
  Mortgage-backed securities held to maturity, at amortized
     190       194       259  
  Mortgage-backed securities available for sale, at fair value
     1,777       2,007       2,828  
  Loans receivable (net of allowance for loan losses of $14,968, $17,463 and $21,642)
     672,609       660,075       712,837  
  Real estate and other pers. property owned
     27,590       30,704       13,325  
  Prepaid expenses and other assets
     5,887       6,206       7,934  
  Accrued interest receivable
     2,523       2,498       2,849  
  Federal Home Loan Bank stock, at cost
     7,350       7,350       7,350  
  Premises and equipment, net
     16,100       15,655       16,487  
  Deferred income taxes, net
     9,447       11,307       11,177  
  Mortgage servicing rights, net
     396       423       509  
  Goodwill
     25,572       25,572       25,572  
  Core deposit intangible, net
     219       242       314  
  Bank owned life insurance
     15,952       15,802       15,351  
                         
TOTAL ASSETS
   $ 859,263     $ 838,417     $ 837,953  
                         
LIABILITIES AND EQUITY
                        
                         
LIABILITIES:
                        
  Deposit accounts
   $ 716,530     $ 696,749     $ 688,048  
  Accrued expenses and other liabilities
     9,396       9,697       6,833  
  Advance payments by borrowers for taxes and insurance
     680       227       427  
  Federal Home Loan Bank advances
     -       -       23,000  
  Federal Reserve Bank advances
     -       -       10,000  
  Junior subordinated debentures
     22,681       22,681       22,681  
  Capital lease obligation
     2,567       2,578       2,610  
     Total liabilities
     751,854       731,932       753,599  
                         
EQUITY:
                        
  Shareholders' equity
                        
  Serial preferred stock, $.01 par value; 250,000 authorized,
                        
      issued and outstanding, none
     -       -       -  
  Common stock, $.01 par value; 50,000,000 authorized,
                        
      March 31, 2011 – 22,471,890 issued and outstanding;
     225       225       109  
      December 31, 2010 – 22,471,890 issued and outstanding;
                        
      March 31, 2010 – 10,923,773 issued and outstanding;
                        
  Additional paid-in capital
     65,639       65,642       46,948  
  Retained earnings
     43,193       42,339       38,878  
  Unearned shares issued to employee stock ownership trust
     (696 )     (722 )     (799 )
  Accumulated other comprehensive loss
     (1,417 )     (1,454 )     (1,202 )
Total shareholders’ equity
     106,944       106,030       83,934  
                         
Noncontrolling interest
     465       455       420  
    Total equity
     107,409       106,485       84,354  
                         
TOTAL LIABILITIES AND EQUITY
   $ 859,263     $ 838,417     $ 837,953  

 
 
 
RVSB Fourth Quarter Fiscal 2011 Results
May 5, 2011
Page 7

RIVERVIEW BANCORP, INC. AND SUBSIDIARY
          
Consolidated Statements of Operations
            
 
Three Months Ended
  
Twelve Months Ended
(In thousands, except share data)   (Unaudited)
March 31, 2011
Dec. 31, 2010
March 31, 2010
  
March 31, 2011
March 31, 2010
INTEREST INCOME:
            
   Interest and fees on loans receivable
 $             10,239
 $           10,593
 $           10,950
  
 $            42,697
 $            45,675
   Interest on investment securities-taxable
                       49
                     28
                     47
  
                    164
                    267
   Interest on investment securities-non taxable
                       12
                     14
                     15
  
                      55
                    104
   Interest on mortgage-backed securities
                       18
                     21
                     29
  
                      88
                    136
   Other interest and dividends
                       70
                     77
                     17
  
                    210
                      80
      Total interest income
                10,388
              10,733
              11,058
  
               43,214
               46,262
             
INTEREST EXPENSE:
            
   Interest on deposits
                  1,337
                1,567
                2,102
  
                 6,569
                 9,635
   Interest on borrowings
                     364
                   359
                   389
  
                 1,483
                 1,741
      Total interest expense
                  1,701
                1,926
                2,491
  
                 8,052
               11,376
Net interest income
                  8,687
                8,807
                8,567
  
               35,162
               34,886
Less provision for loan losses
                     500
                1,600
                5,850
  
                 5,075
               15,900
             
Net interest income after provision for loan losses
                  8,187
                7,207
                2,717
  
               30,087
               18,986
             
NON-INTEREST INCOME:
            
   Fees and service charges
                     916
                   955
                   997
  
                 4,047
                 4,513
   Asset management fees
                     546
                   520
                   451
  
                 2,079
                 1,885
   Gain on sale of loans held for sale
                       54
                     96
                   175
  
                    393
                    887
   Impairment of investment security
                         -
                        -
                   (88)
  
                        -
               (1,003)
   Bank owned life insurance income
                     150
                   151
                   147
  
                    601
                    603
   Other
                       73
                   142
                   164
  
                    769
                    381
      Total non-interest income
                  1,739
                1,864
                1,846
  
                 7,889
                 7,266
             
NON-INTEREST EXPENSE:
            
Salaries and employee benefits
                  4,601
                4,090
                4,021
  
               16,716
               15,326
Occupancy and depreciation
                  1,180
                1,208
                1,123
  
                 4,677
                 4,814
Data processing
                     293
                   274
                   252
  
                 1,067
                    957
Amortization of core deposit intangible
                       24
                     23
                     27
  
                      96
                    111
Advertising and marketing expense
                     172
                   187
                   105
  
                    749
                    627
FDIC insurance premium
                     400
                   402
                   394
  
                 1,640
                 1,912
State and local taxes
                     136
                   184
                   326
  
                    638
                    732
Telecommunications
                     111
                   105
                   104
  
                    428
                    440
Professional fees
                     352
                   311
                   391
  
                 1,310
                 1,317
Real estate owned expenses
                     634
                   897
                4,634
  
                 1,817
                 6,421
Other
                     663
                   572
                   549
  
                 2,358
                 2,316
Total non-interest expense
                  8,566
                8,253
              11,926
  
               31,496
               34,973
             
INCOME (LOSS) BEFORE INCOME TAXES
                  1,360
                   818
              (7,363)
  
                 6,480
               (8,721)
PROVISION (BENEFIT) FOR INCOME TAXES
                     506
                   239
              (2,660)
  
                 2,165
               (3,277)
NET INCOME (LOSS)
 $                  854
 $                579
 $           (4,703)
  
 $              4,315
 $            (5,444)
             
Earnings (loss) per common share:
            
Basic
 $                 0.04
 $               0.03
 $             (0.44)
  
 $                0.24
 $              (0.51)
Diluted
 $                 0.04
 $               0.03
 $             (0.44)
  
 $                0.24
 $              (0.51)
Weighted average number of shares outstanding:
            
Basic
22,302,538
22,296,378
10,729,788
  
18,341,191
10,720,525
Diluted
22,302,538
22,297,043
10,729,788
  
18,341,308
10,720,525

 
 
 
RVSB Fourth Quarter Fiscal 2011 Results
May 5, 2011
Page 8
 

(Dollars in thousands)
  
At or for the three months ended
    
At or for the twelve months ended
  
   
March 31, 2011
    
Dec. 31, 2010
    
March 31, 2010
    
March 31, 2011
    
March 31, 2010
  
AVERAGE BALANCES
                              
Average interest–earning assets
   $ 748,907     $ 760,826     $ 766,159     $ 758,847     $ 796,166  
Average interest-bearing liabilities
     639,503       645,014       686,175       649,342       697,081  
Net average earning assets
     109,404       115,812       79,984       109,505       99,085  
Average loans
     685,507       692,025       736,850       703,861       759,490  
Average deposits
     705,456       711,305       672,852       708,169       666,181  
Average equity
     108,114       107,728       89,849       100,643       90,746  
Average tangible equity
     81,896       81,443       63,429       74,337       64,280  
                                         
 
 
ASSET QUALITY
     March 31, 2011     Dec. 31, 2010     March 31, 2010        
Non-performing loans
  
12,323
  
16,879
  
36,011
        
Non-performing loans to total loans
  
1.79%
  
2.49%
  
4.90%
        
Real estate/repossessed assets owned
  
27,590
  
30,704
  
13,325
        
Non-performing assets
  
39,913
  
47,583
  
49,336
        
Non-performing assets to total assets
  
4.65%
  
5.68%
  
5.89%
        
Net loan charge-offs in the quarter
  
2,995
  
3,166
  
2,437
        
Net charge-offs in the quarter/average net loans
1.77%
  
1.82%
  
1.34%
        
                     
Allowance for loan losses
  
14,968
  
17,463
  
21,642
        
Allowance for loan losses and unfunded loan
                
  commitments
  
15,134
  
17,634
  
21,827
        
Average interest-earning assets to average
                  
  interest-bearing liabilities
  
117.11%
  
117.95%
  
111.66%
        
Allowance for loan losses to
                    
  non-performing loans
  
121.46%
  
103.46%
  
60.10%
        
Allowance for loan losses to total loans
  
2.18%
  
2.58%
  
2.95%
        
Allowance for loan losses and
                    
   unfunded loan commitments to total loans
2.20%
  
2.60%
  
2.97%
        
Shareholders’ equity to assets
  
12.45%
  
12.65%
  
10.02%
        
                     
                     
                     
LOAN MIX
    March 31, 2011    Dec. 31, 2010    March 31, 2010        
Commercial and construction
                    
  Commercial
  
 $            85,511
  
 $          85,768
  
 $          108,368
        
  Other real estate mortgage
  
             461,955
  
           454,058
  
             459,178
        
  Real estate construction
  
               27,385
  
             32,870
  
               75,456
        
    Total commercial and construction
             574,851
  
           572,696
  
             643,002
        
Consumer
                    
  Real estate one-to-four family
  
             110,437
  
           102,488
  
               88,861
        
  Other installment
  
                 2,289
  
               2,354
  
                 2,616
        
    Total consumer
  
             112,726
  
           104,842
  
               91,477
        
                     
Total loans
  
             687,577
  
           677,538
  
             734,479
        
                     
Less:
                    
  Allowance for loan losses
  
               14,968
  
             17,463
  
               21,642
        
  Loans receivable, net
  
 $          672,609
  
 $        660,075
  
 $          712,837
        

 
 
 
RVSB Fourth Quarter Fiscal 2011 Results
May 5, 2011
Page 9
 

COMPOSITION OF COMMERCIAL AND CONSTRUCTION  LOANS
            
                 
       
Commercial
      
Commercial
       
Real Estate
  
Real Estate
  
& Construction
   
Commercial
  
Mortgage
  
Construction
  
Total
March 31, 2011
    
(Dollars in thousands)
  
Commercial
  
 $            85,511
  
 $                   -
  
 $                     -
  
 $            85,511
Commercial construction
  
                        -
  
                      -
  
                 8,608
  
                 8,608
Office buildings
  
                        -
  
            95,529
  
                        -
  
               95,529
Warehouse/industrial
  
                        -
  
            49,627
  
                        -
  
               49,627
Retail/shopping centers/strip malls
  
                        -
  
            85,719
  
                        -
  
               85,719
Assisted living facilities
  
                        -
  
            35,162
  
                        -
  
               35,162
Single purpose facilities
  
                        -
  
            98,651
  
                        -
  
               98,651
Land
  
                        -
  
            55,258
  
                        -
  
               55,258
Multi-family
  
                        -
  
            42,009
  
                        -
  
               42,009
One-to-four family
  
                        -
  
                      -
  
               18,777
  
               18,777
  Total
  
 $            85,511
  
 $       461,955
  
 $            27,385
  
 $          574,851
                 
March 31, 2010
  
(Dollars in thousands)
Commercial
  
 $          108,368
  
 $                   -
  
 $                     -
  
 $          108,368
Commercial construction
  
                        -
  
                      -
  
               40,017
  
               40,017
Office buildings
  
                        -
  
            90,000
  
                        -
  
               90,000
Warehouse/industrial
  
                        -
  
            46,731
  
                        -
  
               46,731
Retail/shopping centers/strip malls
  
                        -
  
            80,982
  
                        -
  
               80,982
Assisted living facilities
  
                        -
  
            39,604
  
                        -
  
               39,604
Single purpose facilities
  
                        -
  
            93,866
  
                        -
  
               93,866
Land
  
                        -
  
            74,779
  
                        -
  
               74,779
Multi-family
  
                        -
  
            33,216
  
                        -
  
               33,216
One-to-four family
  
                        -
  
                      -
  
               35,439
  
               35,439
  Total
  
 $          108,368
  
 $       459,178
  
 $            75,456
  
 $          643,002
                 
                 
                 
                 
                 
(Dollars in thousands)
                
                 
DEPOSIT MIX
    March 31, 2011  
Dec. 31, 2010
  
March 31, 2010
    
                 
Interest checking
  
 $            77,399
  
 $         78,327
  
 $            70,837
    
Regular savings
  
               37,231
  
            34,913
  
               32,131
    
Money market deposit accounts
  
             236,321
  
          216,155
  
             209,580
    
Non-interest checking
  
             102,429
  
            94,269
  
               83,794
    
Certificates of deposit
  
             263,150
  
          273,085
  
             291,706
    
Total deposits
  
 $          716,530
  
 $       696,749
  
 $          688,048
    
 
 

 
 
 
 
RVSB Fourth Quarter Fiscal 2011 Results
May 5, 2011
Page 10
 

DETAIL OF NON-PERFORMING ASSETS
                    
                             
       
Northwest
  
Other
  
Southwest
  
Other
        
       
Oregon
  
Oregon
  
Washington
  
Washington
  
Other
  
Total
   
March 31, 2011
          
(dollars in thousands)
        
Non-performing assets
                        
                             
 
Commercial
  
 $            339
  
 $           776
  
 $        1,756
  
 $              -
  
 $              -
  
 $      2,871
 
Commercial real estate
  
                    -
  
              634
  
              751
  
                 -
  
                 -
  
         1,385
 
Land
  
                    -
  
                   -
  
           1,525
  
                 -
  
         1,379
  
         2,904
 
Multi-family
  
                    -
  
                   -
  
                   -
  
                 -
  
                 -
  
                 -
 
Commercial construction
  
                    -
  
                   -
  
                   -
  
                 -
  
                 -
  
                 -
 
One-to-four family construction
  
            2,118
  
           2,088
  
                   -
  
                 -
  
                 -
  
         4,206
 
Real estate one-to-four family
  
                    -
  
              310
  
              647
  
                 -
  
                 -
  
            957
 
Consumer
  
                    -
  
                   -
  
                   -
  
                 -
  
                 -
  
                 -
 
Total non-performing loans
  
            2,457
  
           3,808
  
           4,679
  
                 -
  
         1,379
  
       12,323
                             
 
REO
  
            4,023
  
           8,657
  
         11,017
  
         3,893
  
                 -
  
       27,590
                             
Total non-performing assets
  
 $         6,480
  
 $      12,465
  
 $      15,696
  
 $      3,893
  
 $      1,379
  
 $    39,913
                             
                             
                             
                             
                             
DETAIL OF SPEC CONSTRUCTION AND LAND DEVELOPMENT LOANS
            
                             
       
Northwest
  
Other
  
Southwest
  
Other
        
       
Oregon
  
Oregon
  
Washington
  
Washington
  
Other
  
Total
 
     March 31, 2011  
 
     (dollars in thousands)        
Land and Spec Construction Loans
                        
                             
 
Land Development Loans
  
 $         6,074
  
 $        4,159
  
 $      36,183
  
 $              -
  
 $      8,842
  
 $    55,258
 
Spec Construction Loans
  
            2,118
  
           8,491
  
           5,716
  
            149
  
                 -
  
       16,474
                             
Total Land and Spec Construction
  
 $         8,192
  
 $      12,650
  
 $      41,899
  
 $         149
  
 $      8,842
  
 $    71,732

 
 
 
RVSB Fourth Quarter Fiscal 2011 Results
May 5, 2011
Page 11
 

 
              At or for the three months ended
  
At or for the twelve months ended
SELECTED OPERATING DATA
March 31, 2011
  
Dec. 31, 2010
  
March 31, 2010
  
March 31, 2011
  
March 31, 2010
                   
Efficiency ratio (4)
82.16%
  
77.34%
  
114.53%
  
73.16%
  
82.97%
Coverage ratio (6)
101.41%
  
106.71%
  
71.83%
  
111.64%
  
99.75%
Return on average assets (1)
0.41%
  
0.27%
  
-2.22%
  
0.51%
  
-0.62%
Return on average equity (1)
3.20%
  
2.13%
  
-21.23%
  
4.29%
  
-6.00%
Average rate earned on interest-earned assets
5.63%
  
5.60%
  
5.86%
  
5.70%
  
5.82%
Average rate paid on interest-bearing liabilities
1.08%
  
1.18%
  
1.47%
  
1.24%
  
1.63%
Spread (7)
4.55%
  
4.42%
  
4.39%
  
4.46%
  
4.19%
Net interest margin
4.71%
  
4.60%
  
4.54%
  
4.64%
  
4.39%
                   
PER SHARE DATA
                  
Basic earnings per share (2)
 $                   0.04
  
 $            0.03
  
 $                 (0.44)
  
 $                   0.24
  
 $                 (0.51)
Diluted earnings per share (3)
                      0.04
  
               0.03
  
                    (0.44)
  
                      0.24
  
                    (0.51)
Book value per share (5)
                      4.76
  
               4.72
  
                      7.68
  
                      4.76
  
                      7.68
Tangible book value per share (5)
                      3.59
  
               3.55
  
                      5.27
  
                      3.59
  
                      5.27
Market price per share:
                  
   High for the period
 $                   3.21
  
 $            2.80
  
 $                   2.94
  
 $                   3.81
  
 $                   4.32
   Low for the period
                      2.69
  
               2.00
  
                      2.21
  
                      1.73
  
                      2.21
   Close for period end
                      3.04
  
               2.72
  
                      2.30
  
                      3.04
  
                      2.30
Cash dividends declared per share
                          -
  
                   -
  
                          -
  
                          -
  
                          -
                   
Average number of shares outstanding:
                
   Basic (2)
22,302,538
  
22,296,378
  
10,729,788
  
18,341,191
  
10,720,525
   Diluted (3)
22,302,538
  
22,297,043
  
10,729,788
  
18,341,308
  
10,720,525
 
 
(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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