EX-99.1 2 riv8k102617exh991.htm EXHIBIT 99.1
Exhibit 99.1
 
Contacts:       Pat Sheaffer or Kevin Lycklama
Riverview Bancorp, Inc. 360-693-6650
 
Riverview Bancorp Earnings Increase to $3.1 Million in Second Fiscal Quarter 2018;
 Results Highlighted by Strong Net Interest Income and Improved Operating Efficiencies

Vancouver, WA – October 26, 2017 - Riverview Bancorp, Inc. (Nasdaq GSM: RVSB) ("Riverview" or the "Company") today reported net income increased to $3.1 million, or $0.14 per diluted share, in the second fiscal quarter ended September 30, 2017, compared to $2.7 million, or $0.12 per diluted share, in the preceding quarter and $1.7 million, or $0.07 per diluted share, in the second fiscal quarter ended September 30, 2016.
In the first six months of fiscal year 2018, Riverview's earnings increased to $5.7 million, or $0.25 per diluted share, compared to $3.4 million, or $0.15 per diluted share, in the first six months of fiscal year 2017.
"Solid revenue growth combined with improving operating efficiencies contributed to a profitable second quarter," stated Pat Sheaffer, chairman and chief executive officer. "We are proud of our entire team for their hard work and dedication to growing the Company. Without their efforts none of this would be possible. This positions us well for continued growth in the Portland-Vancouver market over the next fiscal year."
Second Quarter Highlights (at or for the period ended September 30, 2017)

·
Net income grew to $3.1 million, or $0.14 per diluted share.
·
Net interest margin (NIM) expanded by 33 basis points to 4.03% compared to the second quarter a year ago.
·
Total loans were $783.7 million at September 30, 2017.
·
Non-performing assets were 0.27% of total assets.
·
Tangible book value per share improved to $3.93.
·
Total risk-based capital ratio was 15.07% and Tier 1 leverage ratio was 9.75%.
·
Efficiency ratio improved to 65.2%.
·
Declared quarterly cash dividend of $0.0225 per share, generating a current dividend yield of 1.07%.
Income Statement
Riverview's net interest income increased $2.6 million, or 33%, to $10.7 million for the second fiscal quarter of 2018 compared to $8.1 million in the second fiscal quarter a year ago, and increased $292,000, or 3%, compared to $10.4 million in the preceding quarter. The increase in net interest income was primarily due to a rise in interest and fees on loans as a result of the average balance growth of our outstanding loans and an increase in our loan yield. In the first six months of fiscal 2018, net interest income increased $5.3 million to $21.2 million compared to $15.9 million in the first six months of fiscal 2017.
"Our net interest margin compressed six basis points in the second quarter of fiscal 2018 compared to the prior linked quarter, reflecting our higher balance of cash and liquid assets," said Kevin Lycklama, executive vice president and chief operating officer. "The prior linked quarter also included the collection of $104,000 of nonaccrual interest income which contributed four basis points to our prior quarter's NIM." The interest accretion on purchased loans totaled $273,000 and resulted in an 10 basis point increase in our NIM during the second fiscal quarter. Year-to-date, the NIM increased 34 basis points to 4.06% compared to 3.72% in the first six months of fiscal 2017.
Non-interest income was $2.7 million in the second fiscal quarter, which was the same as in the preceding quarter. Non-interest income increased $132,000 compared to $2.6 million in the second quarter a year ago. In the first six months of fiscal 2018, non-interest income increased to $5.5 million compared to $5.1 million in the first six months of fiscal 2017. The year over year increase was primarily due to continued organic growth as well as an increase in fees and service
 
RVSB Reports Second Quarter Fiscal 2018 Profits
October 26, 2017
Page 2
 
charges and asset management fees. The increase in fees and service charges was primarily due to the collection of $113,000 in loan prepayment penalties and an increase of $128,000 in debit interchange income. Other non-interest income decreased during the three and six months ended September 30, 2017 compared to the same prior year period due to $407,000 of income from a BOLI claim which was offset by a $132,000 impairment charge on an investment security during the prior year period.
Asset management fees were $818,000 in the second fiscal quarter of 2018 compared to $853,000 in the preceding quarter and $727,000 in the same quarter a year ago. Riverview Trust Company's ("RTC") assets under management increased to $461.2 million at September 30, 2017 compared to $440.5 million three months earlier and $401.2 million a year earlier. During the fourth quarter of fiscal 2017, RTC opened a second office in the Portland suburb of Lake Oswego, expanding its footprint and product offerings in the Portland market.
Non-interest expense decreased $415,000 to $8.8 million during the second fiscal quarter of 2018 compared to $9.2 million in the preceding quarter and increased $362,000 from $8.4 million for the same prior year period. The efficiency ratio improved to 65.2% for the quarter ended September 30, 2017 compared to 69.7% in the preceding quarter. Second quarter fiscal 2018 operating expenses included $177,000 in transaction-related expenses in connection with the MBank purchase compared to $429,000 in the preceding quarter. "We have continued to see improvements in our profitability and performance ratios as we realize the expected cost savings and operating efficiencies from this transaction," said Lycklama.
Balance Sheet Review
With several large loan payoffs during the quarter, total loans decreased $13.8 million during the quarter to $783.7 million at September 30, 2017 compared to $797.5 million at June 30, 2017. Undisbursed construction loans totaled $64.1 million at September 30, 2017, with the majority of the undisbursed construction loans expected to fund over the next several quarters. The commercial loan pipeline totaled $47.7 million at the end of the quarter.
Total deposits increased $16.8 million to $990.3 million at September 30, 2017 compared to $973.5 million at June 30, 2017. Checking account balances accounted for $16.2 million of the gain and grew to 45.0% of total deposits compared to 44.2% a year ago.
Shareholders' equity was $116.7 million at September 30, 2017 compared to $113.9 million three months earlier and $111.0 million a year earlier. Tangible book value per share was $3.93 at September 30, 2017 compared to $3.80 at June 30, 2017, and $3.79 at September 30, 2016. A quarterly cash dividend of $0.0225 per share was paid on October 24, 2017.
Credit Quality
Riverview's classified assets totaled $7.1 million at September 30, 2017 compared to $8.8 million three months earlier. At September 30, 2017, the classified asset to total capital ratio was 6.0% compared to 7.5% three months earlier.
Non-performing loans were $2.7 million, or 0.35% of total loans, at September 30, 2017 compared to $2.8 million, or 0.35% of total loans, three months earlier. REO balances were $298,000 at September 30, 2017 unchanged compared to the preceding quarter.
The allowance for loan losses totaled $10.6 million, representing 1.35% of total loans at September 30, 2017 compared to 1.33% of total loans at June 30, 2017. Included in the carrying value of loans are net discounts on the MBank purchased loans which may reduce the need for an allowance for loan losses on these loans because they are carried at an amount below the outstanding principal balance. The remaining net discount on these purchased loans was $2.6 million at September 30, 2017 compared to $2.8 million in the prior quarter. Net loan recoveries were $20,000 during the second fiscal quarter of 2018 compared to $69,000 in the preceding quarter.
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 15.07%, Tier 1 leverage ratio of 9.75% and tangible common equity to tangible assets ratio of 7.90% at September 30, 2017.
 
RVSB Reports Second Quarter Fiscal 2018 Profits
October 26, 2017
Page 3
 
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. We believe 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).

   
September 30,
2017
    
June 30,
2017
    
September 30,
2016
    
March 31,
2017
  
                         
Shareholders' equity
  
$
116,742
    
$
113,917
    
$
110,986
    
$
111,264
  
Goodwill
    
27,076
      
27,076
      
25,572
      
27,076
  
Core deposit intangible, net
    
1,219
      
1,277
      
-
      
1,335
  
                                 
Tangible shareholders' equity
  
$
88,447
    
$
85,564
    
$
85,414
    
$
82,853
  
                                 
Total assets
  
$
1,147,680
    
$
1,125,161
    
$
984,045
    
$
1,133,939
  
Goodwill
    
27,076
      
27,076
      
25,572
      
27,076
  
Core deposit intangible, net
    
1,219
      
1,277
      
-
      
1,335
  
                                 
Tangible assets
  
$
1,119,385
    
$
1,096,808
    
$
958,473
    
$
1,105,528
  
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 $1.15 billion at September 30, 2017, it is the parent company of the 94-year-old Riverview Community Bank, as well as Riverview Trust Company. The Bank offers true community banking services, focusing on providing the highest quality service and financial products to commercial and retail customers. There are 19 branches, including 14 in the Portland-Vancouver area and three lending centers. For the past 4 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: expected cost savings, synergies and other financial benefits from our pending purchase of certain assets and assumption of certain liabilities of MBank and Merchants Bancorp pursuant to the Purchase and Assumption Agreement (the "Agreement") with Merchants Bancorp and its wholly owned subsidiary MBank (the "transaction") might not be realized within the expected time frames or at all, and costs or difficulties relating to integration matters might be greater than expected; the requisite approval of Merchants Bancorp's shareholders and regulatory approvals for the transaction might not be obtained; 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
 
RVSB Reports Second Quarter Fiscal 2018 Profits
October 26, 2017
Page 4
 
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 2018 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 Second Quarter Fiscal 2018 Profits
October 26, 2017
Page 5
 
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
                        
Consolidated Balance Sheets
                        
(In thousands, except share data)  (Unaudited)
  
September 30,
2017
    
June 30,
2017
    
September 30,
2016
    
March 31,
2017
  
ASSETS
                        
                         
Cash (including interest-earning accounts of $59,315, $14,919,
  
$
76,245
    
$
34,108
    
$
93,007
    
$
64,613
  
$77,509 and $46,245)
                                
Certificate of deposits held for investment
    
9,797
      
11,042
      
15,275
      
11,042
  
Loans held for sale
    
347
      
768
      
991
      
478
  
Investment securities:
                                
Available for sale, at estimated fair value
    
200,584
      
205,012
      
152,251
      
200,214
  
Held to maturity, at amortized cost
    
46
      
54
      
69
      
64
  
Loans receivable (net of allowance for loan losses of $10,617,
                                
$10,597, $10,063, and $10,528)
    
773,087
      
786,913
      
640,873
      
768,904
  
Real estate owned
    
298
      
298
      
539
      
298
  
Prepaid expenses and other assets
    
4,227
      
3,901
      
4,334
      
3,815
  
Accrued interest receivable
    
3,111
      
3,086
      
2,421
      
2,941
  
Federal Home Loan Bank stock, at cost
    
1,181
      
1,181
      
1,060
      
1,181
  
Premises and equipment, net
    
15,740
      
16,041
      
14,206
      
16,232
  
Deferred income taxes, net
    
6,167
      
6,051
      
7,816
      
7,610
  
Mortgage servicing rights, net
    
406
      
408
      
385
      
398
  
Goodwill
    
27,076
      
27,076
      
25,572
      
27,076
  
Core deposit intangible, net
    
1,219
      
1,277
      
-
      
1,335
  
Bank owned life insurance
    
28,149
      
27,945
      
25,246
      
27,738
  
                                 
TOTAL ASSETS
  
$
1,147,680
    
$
1,125,161
    
$
984,045
    
$
1,133,939
  
                                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                                
                                 
LIABILITIES:
                                
Deposits
  
$
990,299
    
$
973,483
    
$
838,902
    
$
980,058
  
Accrued expenses and other liabilities
    
10,838
      
8,302
      
8,175
      
13,080
  
Advance payments by borrowers for taxes and insurance
    
920
      
596
      
837
      
693
  
Junior subordinated debentures
    
26,438
      
26,414
      
22,681
      
26,390
  
Capital lease obligation
    
2,443
      
2,449
      
2,464
      
2,454
  
Total liabilities
    
1,030,938
      
1,011,244
      
873,059
      
1,022,675
  
                                 
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, 2017 - 22,533,912 issued and outstanding;
                                
June 30, 2017 – 22,527,401 issued and outstanding;
    
225
      
225
      
225
      
225
  
September 30, 2016 - 22,507,890 issued and outstanding;
                                
March 31, 2017 – 22,510,890 issued and outstanding;
                                
Additional paid-in capital
    
64,612
      
64,556
      
64,425
      
64,468
  
Retained earnings
    
53,034
      
50,482
      
45,207
      
48,335
  
Unearned shares issued to employee stock ownership plan
    
(26
)
    
(52
)
    
(129
)
    
(77
)
Accumulated other comprehensive income (loss)
    
(1,103
)
    
(1,294
)
    
1,258
      
(1,687
)
Total shareholders' equity
    
116,742
      
113,917
      
110,986
      
111,264
  
                                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  
$
1,147,680
    
$
1,125,161
    
$
984,045
    
$
1,133,939
  
 
RVSB Reports Second Quarter Fiscal 2018 Profits
October 26, 2017
Page 6
 
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
                              
Consolidated Statements of Income
                              
   
Three Months Ended
    
Six Months Ended
  
(In thousands, except share data)   (Unaudited)
  
Sept. 30, 2017
    
June 30, 2017
    
Sept. 30, 2016
    
Sept. 30, 2017
    
Sept. 30, 2016
  
INTEREST INCOME:
                              
Interest and fees on loans receivable
  
$
9,994
    
$
9,789
    
$
7,631
    
$
19,783
    
$
15,071
  
Interest on investment securities - taxable
    
1,079
      
1,133
      
769
      
2,212
      
1,489
  
Interest on investment securities - nontaxable
    
14
      
14
      
-
      
28
      
-
  
Other interest and dividends
    
228
      
87
      
130
      
315
      
232
  
Total interest and dividend income
    
11,315
      
11,023
      
8,530
      
22,338
      
16,792
  
                                         
INTEREST EXPENSE:
                                        
Interest on deposits
    
313
      
322
      
279
      
635
      
560
  
Interest on borrowings
    
277
      
268
      
163
      
545
      
321
  
Total interest expense
    
590
      
590
      
442
      
1,180
      
881
  
Net interest income
    
10,725
      
10,433
      
8,088
      
21,158
      
15,911
  
Provision for loan losses
    
-
      
-
      
-
      
-
      
-
  
                                         
Net interest income after provision for loan losses
    
10,725
      
10,433
      
8,088
      
21,158
      
15,911
  
                                         
NON-INTEREST INCOME:
                                        
Fees and service charges
    
1,490
      
1,407
      
1,188
      
2,897
      
2,511
  
Asset management fees
    
818
      
853
      
727
      
1,671
      
1,549
  
Net gain on sale of loans held for sale
    
157
      
225
      
163
      
382
      
302
  
Bank owned life insurance income
    
204
      
207
      
190
      
411
      
381
  
Other, net
    
44
      
46
      
313
      
90
      
352
  
Total non-interest income
    
2,713
      
2,738
      
2,581
      
5,451
      
5,095
  
                                         
NON-INTEREST EXPENSE:
                                        
Salaries and employee benefits
    
5,251
      
5,422
      
4,531
      
10,673
      
9,171
  
Occupancy and depreciation
    
1,412
      
1,346
      
1,225
      
2,758
      
2,362
  
Data processing
    
580
      
616
      
476
      
1,196
      
971
  
Amortization of core deposit intangible
    
58
      
58
      
-
      
116
      
-
  
Advertising and marketing expense
    
256
      
234
      
252
      
490
      
445
  
FDIC insurance premium
    
136
      
145
      
74
      
281
      
196
  
State and local taxes
    
177
      
154
      
146
      
331
      
285
  
Telecommunications
    
103
      
104
      
76
      
207
      
149
  
Professional fees
    
261
      
415
      
453
      
676
      
711
  
Real estate owned expenses
    
3
      
2
      
35
      
5
      
50
  
Other
    
522
      
678
      
1,129
      
1,200
      
1,872
  
Total non-interest expense
    
8,759
      
9,174
      
8,397
      
17,933
      
16,212
  
                                         
INCOME BEFORE INCOME TAXES
    
4,679
      
3,997
      
2,272
      
8,676
      
4,794
  
PROVISION FOR INCOME TAXES
    
1,620
      
1,343
      
592
      
2,963
      
1,417
  
NET INCOME
  
$
3,059
    
$
2,654
    
$
1,680
    
$
5,713
    
$
3,377
  
                                         
Earnings per common share:
                                        
Basic
  
$
0.14
    
$
0.12
    
$
0.07
    
$
0.25
    
$
0.15
  
Diluted
  
$
0.14
    
$
0.12
    
$
0.07
    
$
0.25
    
$
0.15
  
Weighted average number of common shares outstanding:
                                        
Basic
    
22,518,941
      
22,504,852
      
22,474,019
      
22,511,935
      
22,470,957
  
Diluted
    
22,609,480
      
22,589,440
      
22,530,331
      
22,599,851
      
22,522,544
  
RVSB Reports Second Quarter Fiscal 2018 Profits
October 26, 2017
Page 7
 
                               
(Dollars in thousands)
  
At or for the three months ended
    
At or for the six months ended
  
   
Sept. 30, 2017
    
June 30, 2017
    
Sept. 30, 2016
    
Sept. 30, 2017
    
Sept. 30, 2016
  
AVERAGE BALANCES
                              
Average interest–earning assets
  
$
1,056,818
    
$
1,023,196
    
$
867,797
    
$
1,040,098
    
$
853,691
  
Average interest-bearing liabilities
    
749,172
      
745,172
      
632,445
      
747,183
      
629,053
  
Net average earning assets
    
307,646
      
278,024
      
235,352
      
292,915
      
224,638
  
Average loans
    
783,213
      
786,317
      
645,479
      
784,756
      
639,258
  
Average deposits
    
992,111
      
961,421
      
809,384
      
976,850
      
796,178
  
Average equity
    
116,675
      
113,661
      
111,516
      
115,176
      
110,667
  
Average tangible equity (non-GAAP)
    
88,351
      
85,278
      
85,944
      
86,822
      
85,095
  
 
 
ASSET QUALITY
  
Sept. 30, 2017
    
June 30, 2017
    
Sept. 30, 2016
  
                   
Non-performing loans
  
$
2,745
    
$
2,792
    
$
2,360
  
Non-performing loans to total loans
    
0.35
%
    
0.35
%
    
0.36
%
Real estate/repossessed assets owned
  
$
298
    
$
298
    
$
539
  
Non-performing assets
  
$
3,043
    
$
3,090
    
$
2,899
  
Non-performing assets to total assets
    
0.27
%
    
0.27
%
    
0.29
%
Net loan recoveries in the quarter
  
$
(20
)
  
$
(69
)
  
$
(103
)
Net recoveries in the quarter/average net loans
    
(0.01
)%
    
(0.04
)%
    
(0.06
)%
                         
Allowance for loan losses
  
$
10,617
    
$
10,597
    
$
10,063
  
Average interest-earning assets to average
                        
  interest-bearing liabilities
    
141.06
%
    
137.31
%
    
137.21
%
Allowance for loan losses to
                        
  non-performing loans
    
386.78
%
    
379.55
%
    
426.40
%
Allowance for loan losses to total loans
    
1.35
%
    
1.33
%
    
1.55
%
Shareholders' equity to assets
    
10.17
%
    
10.12
%
    
11.28
%
                         
                         
CAPITAL RATIOS
                        
Total capital (to risk weighted assets)
    
15.07
%
    
14.41
%
    
16.05
%
Tier 1 capital (to risk weighted assets)
    
13.82
%
    
13.16
%
    
14.80
%
Common equity tier 1 (to risk weighted assets)
    
13.82
%
    
13.16
%
    
14.80
%
Tier 1 capital (to average tangible assets)
    
9.75
%
    
9.79
%
    
10.95
%
Tangible common equity (to average tangible assets)
    
7.90
%
    
7.80
%
    
8.91
%
 
 
DEPOSIT MIX
  
Sept. 30, 2017
    
June 30, 2017
    
Sept. 30, 2016
    
March 31, 2017
  
                         
Interest checking
  
$
175,127
    
$
171,360
    
$
148,201
    
$
171,152
  
Regular savings
    
134,116
      
126,704
      
104,241
      
126,370
  
Money market deposit accounts
    
274,409
      
274,537
      
249,381
      
289,998
  
Non-interest checking
    
270,678
      
258,223
      
222,218
      
242,738
  
Certificates of deposit
    
135,969
      
142,659
      
114,861
      
149,800
  
Total deposits
  
$
990,299
    
$
973,483
    
$
838,902
    
$
980,058
  
 
 
RVSB Reports Second Quarter Fiscal 2018 Profits
October 26, 2017
Page 8
 
COMPOSITION OF COMMERCIAL AND CONSTRUCTION LOANS
              
                         
         
Other
          
Commercial
  
   
Commercial
    
Real Estate
    
Real Estate
    
& Construction
  
   
Business
    
Mortgage
    
Construction
    
Total
  
September 30, 2017
  
(Dollars in thousands)
  
Commercial business
  
$
118,444
    
$
-
    
$
-
    
$
118,444
  
Commercial construction
    
-
      
-
      
35,923
      
35,923
  
Office buildings
    
-
      
122,826
      
-
      
122,826
  
Warehouse/industrial
    
-
      
77,026
      
-
      
77,026
  
Retail/shopping centers/strip malls
    
-
      
69,512
      
-
      
69,512
  
Assisted living facilities
    
-
      
3,026
      
-
      
3,026
  
Single purpose facilities
    
-
      
168,165
      
-
      
168,165
  
Land
    
-
      
13,745
      
-
      
13,745
  
Multi-family
    
-
      
46,082
      
-
      
46,082
  
One-to-four family construction
    
-
      
-
      
17,955
      
17,955
  
  Total
  
$
118,444
    
$
500,382
    
$
53,878
    
$
672,704
  
                                 
March 31, 2017
                                
Commercial business
  
$
107,371
    
$
-
    
$
-
    
$
107,371
  
Commercial construction
    
-
      
-
      
27,050
      
27,050
  
Office buildings
    
-
      
121,983
      
-
      
121,983
  
Warehouse/industrial
    
-
      
74,671
      
-
      
74,671
  
Retail/shopping centers/strip malls
    
-
      
78,757
      
-
      
78,757
  
Assisted living facilities
    
-
      
3,686
      
-
      
3,686
  
Single purpose facilities
    
-
      
167,974
      
-
      
167,974
  
Land
    
-
      
15,875
      
-
      
15,875
  
Multi-family
    
-
      
43,715
      
-
      
43,715
  
One-to-four family construction
    
-
      
-
      
19,107
      
19,107
  
  Total
  
$
107,371
    
$
506,661
    
$
46,157
    
$
660,189
  

LOAN MIX
  
Sept. 30, 2017
    
June 30, 2017
    
Sept. 30, 2016
    
March 31, 2017
  
Commercial and construction
                        
  Commercial business
  
$
118,444
    
$
125,732
    
$
64,176
    
$
107,371
  
  Other real estate mortgage
    
500,382
      
513,360
      
423,729
      
506,661
  
  Real estate construction
    
53,878
      
43,186
      
45,059
      
46,157
  
    Total commercial and construction
    
672,704
      
682,278
      
532,964
      
660,189
  
Consumer
                                
  Real estate one-to-four family
    
90,764
      
91,898
      
86,321
      
92,865
  
  Other installment
    
20,236
      
23,334
      
31,651
      
26,378
  
    Total consumer
    
111,000
      
115,232
      
117,972
      
119,243
  
                                 
Total loans
    
783,704
      
797,510
      
650,936
      
779,432
  
                                 
Less:
                                
  Allowance for loan losses
    
10,617
      
10,597
      
10,063
      
10,528
  
  Loans receivable, net
  
$
773,087
    
$
786,913
    
$
640,873
    
$
768,904
  
 
RVSB Reports Second Quarter Fiscal 2018 Profits
October 26, 2017
Page 9
 
DETAIL OF NON-PERFORMING ASSETS
                              
                               
   
Other
    
Southwest
    
Other
              
   
Oregon
    
Washington
    
Washington
    
Other
    
Total
  
September 30, 2017
  
(dollars in thousands)
  
Non-performing assets
                              
                               
Commercial business
  
$
-
    
$
290
    
$
-
    
$
-
    
$
290
  
Commercial real estate
    
1,095
      
209
      
-
      
-
      
1,304
  
Land
    
780
      
-
      
-
      
-
      
780
  
    Consumer
    
-
      
300
      
-
      
71
      
371
  
Total non-performing loans
    
1,875
      
799
      
-
      
71
      
2,745
  
                                         
    REO
    
-
      
-
      
298
      
-
      
298
  
                                         
Total non-performing assets
  
$
1,875
    
$
799
    
$
298
    
$
71
    
$
3,043
  
 
 
 
 
 
DETAIL OF LAND DEVELOPMENT AND SPECULATIVE CONSTRUCTION LOANS
        
                         
   
Northwest
    
Other
    
Southwest
        
   
Oregon
    
Oregon
    
Washington
    
Total
  
September 30, 2017
  
(dollars in thousands)
  
                         
Land development
  
$
490
    
$
911
    
$
12,344
    
$
13,745
  
    Speculative construction
    
376
      
401
      
14,573
      
15,350
  
                                 
Total land development and speculative construction
  
$
866
    
$
1,312
    
$
26,917
    
$
29,095
  

 
 
RVSB Reports Second Quarter Fiscal 2018 Profits
October 26, 2017
Page 10
 
   
At or for the three months ended
    
At or for the six months ended
  
SELECTED OPERATING DATA
  
Sept. 30, 2017
    
June 30, 2017
    
Sept. 30, 2016
    
Sept. 30, 2017
    
Sept. 30, 2016
  
                               
Efficiency ratio (4)
    
65.18
%
    
69.65
%
    
78.70
%
    
67.39
%
    
77.18
%
Coverage ratio (6)
    
122.45
%
    
113.72
%
    
96.32
%
    
117.98
%
    
98.14
%
Return on average assets (1)
    
1.06
%
    
0.96
%
    
0.70
%
    
1.01
%
    
0.72
%
Return on average equity (1)
    
10.40
%
    
9.37
%
    
5.98
%
    
9.89
%
    
6.09
%
                                         
NET INTEREST SPREAD
                                        
Yield on loans
    
5.06
%
    
4.99
%
    
4.69
%
    
5.03
%
    
4.70
%
Yield on investment securities
    
2.14
%
    
2.21
%
    
1.96
%
    
2.18
%
    
1.91
%
    Total yield on interest-earning assets
    
4.25
%
    
4.32
%
    
3.90
%
    
4.29
%
    
3.92
%
                                         
Cost of interest-bearing deposits
    
0.17
%
    
0.18
%
    
0.18
%
    
0.18
%
    
0.18
%
Cost of FHLB advances and other borrowings
    
3.81
%
    
3.69
%
    
2.55
%
    
3.75
%
    
2.54
%
    Total cost of interest-bearing liabilities
    
0.31
%
    
0.32
%
    
0.28
%
    
0.31
%
    
0.28
%
                                         
Spread (7)
    
3.94
%
    
4.00
%
    
3.62
%
    
3.98
%
    
3.64
%
Net interest margin
    
4.03
%
    
4.09
%
    
3.70
%
    
4.06
%
    
3.72
%
                                         
PER SHARE DATA
                                        
Basic earnings per share (2)
  
$
0.14
    
$
0.12
    
$
0.07
    
$
0.25
    
$
0.15
  
Diluted earnings per share (3)
    
0.14
      
0.12
      
0.07
      
0.25
      
0.15
  
Book value per share (5)
    
5.18
      
5.06
      
4.93
      
5.18
      
4.93
  
Tangible book value per share (5) (non-GAAP)
    
3.93
      
3.80
      
3.79
      
3.93
      
3.79
  
Market price per share:
                                        
  High for the period
  
$
8.48
    
$
7.47
    
$
5.41
    
$
8.48
    
$
5.41
  
  Low for the period
    
6.64
      
6.51
      
4.69
      
6.51
      
4.30
  
  Close for period end
    
8.40
      
6.64
      
5.38
      
8.40
      
5.38
  
Cash dividends declared per share
    
0.0225
      
0.0225
      
0.0200
      
0.0450
      
0.0400
  
                                         
Average number of shares outstanding:
                                        
  Basic (2)
    
22,518,941
      
22,504,852
      
22,474,019
      
22,511,935
      
22,470,957
  
  Diluted (3)
    
22,609,480
      
22,589,440
      
22,530,331
      
22,599,851
      
22,522,544
  


(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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