EX-99.1 2 riv8k12419exh991.htm EXHIBIT 99.1
Exhibit 99.1
 
 
Contact:        Kevin Lycklama or David Lam
Riverview Bancorp, Inc. 360-693-6650



Riverview Bancorp Earns $4.4 Million in Third Fiscal Quarter 2019
Highlighted by Strong Loan Growth and Expanding Net Interest Margin

Vancouver, WA – January 24, 2019 - Riverview Bancorp, Inc. (Nasdaq GSM: RVSB) ("Riverview" or the "Company") today reported net income increased to $4.4 million, or $0.19 per diluted share, in its third fiscal quarter ended December 31, 2018, compared to $4.2 million, or $0.19 per diluted share, in the preceding quarter and $1.5 million, or $0.07 per diluted share, in the third fiscal quarter a year ago.
"We reported strong third quarter operating results, delivering steady loan growth and solid revenue while expanding our net interest margin," said Kevin Lycklama, president and chief executive officer. "Overall, these factors contributed to a return on average assets of 1.53% and a return on average equity of 13.90% for the quarter. The economic fundamentals in our market are strong and we remain optimistic about the upcoming fiscal year."
Third Quarter Highlights (at or for the period ended December 31, 2018)

·
Net income grew to $4.4 million, or $0.19 per diluted share.
·
Net interest margin (NIM) expanded by six basis points to 4.39% compared to the preceding quarter.
·
Return on average assets increased to 1.53% compared to 1.46% in the preceding quarter.
·
Return on average equity improved to 13.90% compared to 13.68% in the preceding quarter.
·
Total loans increased $18.8 million during the quarter to $868.6 million at December 31, 2018.
·
Cost of deposits remained low at 0.10% for the quarter, the same as the preceding quarter.
·
Non-performing assets improved to 0.14% of total assets.
·
Tangible book value per share (non-GAAP) was $4.43.
·
Total risk-based capital ratio was 16.35% and Tier 1 leverage ratio was 11.22%.
·
Increased its quarterly cash dividend to $0.04 per share, generating a current dividend yield of 2.13% based on the January 18, 2019 share price.
Income Statement
Third quarter net interest income was $11.7 million, a modest increase compared to $11.6 million in the preceding quarter, and an $884,000 increase compared to $10.8 million in the third fiscal quarter a year ago. The increase in net interest income was due to higher rates on earning assets and an increase in outstanding loans. In the first nine months of fiscal 2019, net interest income increased 8.8% to $34.8 million, compared to $32.0 million in the first nine months of fiscal 2018.
"Our robust loan growth, coupled with our low cost of deposits, contributed to the net interest margin expansion during the quarter," said David Lam, executive vice president and chief financial officer. "However, increased competition for loans and deposits and a flattening yield curve remains a challenge."
Riverview's third fiscal quarter net interest margin increased six basis points to 4.39% compared to 4.33% in the second fiscal quarter and increased 33 basis points when compared to 4.06% in the third fiscal quarter a year ago. In the preceding quarter, the collection of $98,000 of non-accrual interest from a prior charged-off loan added four basis points to the NIM. The accretion on purchased loans totaled $172,000 during the current quarter and $152,000 during the linked quarter resulting in a seven basis point increase in the NIM for both periods. In the first nine months of fiscal 2019, Riverview's NIM increased 31 basis points to 4.37%, compared to the same period a year earlier.
 
RVSB Reports Third Quarter Fiscal 2019 Results
January 24, 2019
Page 2
 
The weighted average rate on loans originated during the quarter ended December 31, 2018, increased to 6.04% compared to 5.63% for the quarter ended September 30, 2018, and 4.75% for the quarter ended December 31, 2017.
Non-interest income was $2.8 million in the third fiscal quarter compared to $3.0 million in the preceding quarter and $2.9 million in the same quarter a year ago. Year to date, non-interest income was $8.9 million compared to $8.3 million in the same period in the prior year. During the preceding quarter, other non-interest income included a net gain of approximately $70,000 on the sale of deposit accounts associated with the closing of the Company's Longview, WA branch. Additionally, prepayment fees decreased $122,000 to $54,000 for the third fiscal quarter compared to $176,000 in the preceding quarter.
Asset management fees were $935,000 in the third fiscal quarter of 2019 compared to $943,000 in the preceding quarter and $911,000 in the third fiscal quarter a year ago. Riverview Trust Company's assets under management decreased to $570.4 million at December 31, 2018, compared to $614.0 million three months earlier but increased compared to $490.1 million one year earlier. The current quarter decrease was primarily due to the recent stock market volatility.
The efficiency ratio improved to 60.9% for the third fiscal quarter compared to 61.0% in the preceding quarter and 62.5% in the third fiscal quarter a year ago. Non-interest expense decreased to $8.8 million during the third fiscal quarter of 2019 compared to $8.9 million in the preceding quarter, primarily related to a $355,000 gain on sale of the building related to the Longview branch closing. Offsetting this decrease was an increase in salaries and employee benefits and professional fees as the Company continues to invest in employees and technology infrastructure. In the first nine months of fiscal 2019, non-interest expense was $26.7 million compared to $26.5 million in the same period a year earlier.
Riverview's effective tax rate for the first nine months of fiscal year 2019 was 22.4% compared to 47.6% for the same prior year period. The decrease was a result of the passage of the Tax Cuts and Jobs Act in December 2017.
Balance Sheet Review
Riverview's total loans increased $18.8 million during the quarter to $868.6 million at December 31, 2018, an annualized growth rate of 8.8%. The increase was primarily concentrated in commercial construction loans and single purpose commercial real estate facilities. Total loan balances also continue to be impacted by elevated pay downs on existing loans.
The loan pipeline totaled $33.6 million at December 31, 2018 compared to $91.9 million at the end of the prior quarter. Undisbursed construction loans totaled $79.0 million at December 31, 2018 compared to $82.0 million three months earlier. The majority of the undisbursed construction loans are expected to fund over the next several quarters.
"Loan demand remains robust in our market area, and our lending teams are doing an outstanding job of capitalizing on opportunities," said Lycklama. "While we did experience a decrease in our loan pipeline, this was mostly expected due to seasonal conditions as well as the strong loan originations during the quarter."
Total deposits decreased to $943.6 million at December 31, 2018 compared to $982.3 million three months earlier and $972.2 million a year ago. Money market, certificates of deposit and other interest-rate sensitive accounts continue to experience the greatest pressure due to an increase in competition and pricing pressures in our market area.
Shareholders' equity improved to $128.1 million at December 31, 2018, compared to $122.4 million three months earlier and $116.8 million a year earlier. Tangible book value per share (non-GAAP) increased to $4.43 at December 31, 2018, compared to $4.17 at September 30, 2018 and $3.93 at December 31, 2017. A quarterly cash dividend of $0.04 per share was paid on January 22, 2019.
Credit Quality
As a result of improving asset quality and a low level of net charge-offs, Riverview recorded no provision for loan losses during the third fiscal quarter of 2019. This compares to a $250,000 recapture for loan losses in the preceding quarter and no provision for loan losses for the third fiscal quarter a year ago.
 
RVSB Reports Third Quarter Fiscal 2019 Results
January 24, 2019
Page 3
 
Non-performing loans improved to $1.6 million, or 0.19% of total loans, at December 31, 2018, compared to $2.3 million, or 0.27% of total loans, three months earlier and $2.7 million, or 0.33% of total loans at December 31, 2017. Riverview had no real estate owned balances at December 31, 2018 and September 30, 2018. Riverview had $298,000 in real estate owned balances as of December 31, 2017.
Net loan charge offs were $11,000 during the third fiscal quarter of 2019 compared to net loan charge offs of $86,000 during the second fiscal quarter of 2019 and net loan recoveries of $250,000 during the third fiscal quarter a year ago.
Classified assets totaled $6.0 million at December 31, 2018, compared to $6.2 million at September 30, 2018, and $6.9 million at December 31, 2017. The classified asset to total capital ratio was 4.4% at December 31, 2018, compared to 4.7% three months earlier and 5.7% a year earlier.
The allowance for loan losses totaled $11.5 million, which was unchanged compared to the preceding quarter end. The allowance for loan losses represented 1.32% of total loans at December 31, 2018, compared to 1.35% of total loans at September 30, 2018. 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 $1.7 million at December 31, 2018, compared to $1.9 million at the end of the prior 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 16.35% and a Tier 1 leverage ratio of 11.22% at December 31, 2018. In addition, at that date the Company's tangible common equity to average tangible assets ratio (non-GAAP) was 8.91%.
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 shareholders' 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. We calculate tangible book value per share by dividing tangible shareholders' equity by the number of common shares outstanding. This non-GAAP financial measure has inherent limitations, is not required to be uniformly applied and is not audited. Further, the non-GAAP financial measure should not be considered in isolation or as a substitute for book value per share or total shareholders' equity determined in accordance with GAAP and may not be comparable to similarly titled measures reported by other companies. Reconciliations of the GAAP and non-GAAP financial measures are presented below.
 
(Dollars in thousands)
  
December 31, 2018
    
September 30, 2018
    
December 31, 2017
    
March 31,
2018
  
                         
Shareholders' equity
  
$
128,094
    
$
122,410
    
$
116,803
    
$
116,901
  
Goodwill
    
27,076
      
27,076
      
27,076
      
27,076
  
Core deposit intangible, net
    
966
      
1,011
      
1,161
      
1,103
  
                                 
Tangible shareholders' equity
  
$
100,052
    
$
94,323
    
$
88,566
    
$
88,722
  
                                 
Total assets
  
$
1,151,225
    
$
1,148,447
    
$
1,128,342
    
$
1,151,535
  
Goodwill
    
27,076
      
27,076
      
27,076
      
27,076
  
Core deposit intangible, net
    
966
      
1,011
      
1,161
      
1,103
  
                                 
Tangible assets
  
$
1,123,183
    
$
1,120,360
    
$
1,100,105
    
$
1,123,356
  
 
RVSB Reports Third Quarter Fiscal 2019 Results
January 24, 2019
Page 4
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 December 31, 2018, it is the parent company of the 95-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 17 branches, including 14 in the Portland-Vancouver area and three lending centers. For the past 5 years, Riverview has been named Best Bank by the readers of The Vancouver Business Journal, The Columbian and The Gresham Outlook.
"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements that are subject to risks and uncertainties, including, but not limited to: the Company's ability to raise common capital; the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in the Company's allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets; changes in general economic conditions, either nationally or in the Company's market areas; changes in the levels of general interest rates, and the relative differences between short and long term interest rates, deposit interest rates, the Company's net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in the Company's market areas; secondary market conditions for loans and the Company's ability to sell loans in the secondary market; results of examinations of us by the Office of Comptroller of the Currency or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase the Company's reserve for loan losses, write-down assets, change Riverview Community Bank's regulatory capital position or affect the Company's ability to borrow funds or maintain or increase deposits, which could adversely affect its liquidity and earnings; legislative or regulatory changes that adversely affect the Company's business including changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules; the Company's ability to attract and retain deposits; further increases in premiums for deposit insurance; the Company's ability to control operating costs and expenses; the use of estimates in determining fair value of certain of the Company's assets, which estimates may prove to be incorrect and result in significant declines in valuation; difficulties in reducing risks associated with the loans on the Company's balance sheet; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect the Company's workforce and potential associated charges; computer systems on which the Company depends could fail or experience a security breach; the Company's ability to retain key members of its senior management team; costs and effects of litigation, including settlements and judgments; the Company's ability to successfully integrate any assets, liabilities, customers, systems, and management personnel it may in the future acquire into its operations and the Company's ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; the Company's ability to pay dividends on its common stock; and interest or principal payments on its junior subordinated debentures; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; other economic, competitive, governmental, regulatory, and technological factors affecting the Company's operations, pricing, products and services and the other risks described from time to time in our filings with the SEC.
Such forward-looking statements may include projections. Any such projections were not prepared in accordance with published guidelines of the American Institute of Certified Public Accountants or the Securities Exchange Commission regarding projections and forecasts nor have such projections been audited, examined or otherwise reviewed by independent auditors of the Company. In addition, such projections are based upon many estimates and inherently subject to significant economic and competitive uncertainties and contingencies, many of which are beyond the control of management of the Company. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by the Company that the projections will prove to be correct.
The Company cautions readers not to place undue reliance on any forward-looking statements. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. The Company does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for fiscal 2019 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 Third Quarter Fiscal 2019 Results
January 24, 2019
Page 5
 
 
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
                        
Consolidated Balance Sheets
                        
(In thousands, except share data)  (Unaudited)
 December 31,
2018 
 September 30,
2018 
 December 31,
2017 
  March 31,
2018 
ASSETS
                        
                         
Cash (including interest-earning accounts of $4,641, $12,537 $3,739
  
$
23,394
    
$
27,080
    
$
23,105
    
$
44,767
  
and $30,052)
                                
Certificate of deposits held for investment
    
747
      
3,984
      
6,963
      
5,967
  
Loans held for sale
    
-
      
-
      
351
      
210
  
Investment securities:
                                
Available for sale, at estimated fair value
    
182,280
      
190,792
      
224,931
      
213,221
  
Held to maturity, at amortized cost
    
36
      
38
      
44
      
42
  
Loans receivable (net of allowance for loan losses of $11,502, $11,513
                                
$10,867, and $10,766)
    
857,134
      
838,329
      
786,460
      
800,610
  
Real estate owned
    
-
      
-
      
298
      
298
  
Prepaid expenses and other assets
    
4,021
      
5,104
      
4,843
      
3,870
  
Accrued interest receivable
    
3,789
      
3,671
      
3,464
      
3,477
  
Federal Home Loan Bank stock, at cost
    
2,735
      
1,353
      
1,223
      
1,353
  
Premises and equipment, net
    
14,940
      
15,403
      
15,680
      
15,783
  
Deferred income taxes, net
    
4,680
      
5,352
      
3,988
      
4,813
  
Mortgage servicing rights, net
    
325
      
344
      
399
      
388
  
Goodwill
    
27,076
      
27,076
      
27,076
      
27,076
  
Core deposit intangible, net
    
966
      
1,011
      
1,161
      
1,103
  
Bank owned life insurance
    
29,102
      
28,910
      
28,356
      
28,557
  
                                 
TOTAL ASSETS
  
$
1,151,225
    
$
1,148,447
    
$
1,128,342
    
$
1,151,535
  
                                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                                
                                 
LIABILITIES:
                                
Deposits
  
$
943,578
    
$
982,272
    
$
972,214
    
$
995,691
  
Accrued expenses and other liabilities
    
15,855
      
13,767
      
9,117
      
9,391
  
Advance payments by borrowers for taxes and insurance
    
192
      
1,050
      
260
      
637
  
Federal Home Loan Bank advances
    
34,543
      
-
      
1,050
      
-
  
Junior subordinated debentures
    
26,553
      
26,530
      
26,461
      
26,484
  
Capital lease obligations
    
2,410
      
2,418
      
2,437
      
2,431
  
Total liabilities
    
1,023,131
      
1,026,037
      
1,011,539
      
1,034,634
  
                                 
SHAREHOLDERS' EQUITY:
                                
Serial preferred stock, $.01 par value; 250,000 authorized,
                                
issued and outstanding, none
    
-
      
-
      
-
      
-
  
Common stock, $.01 par value; 50,000,000 authorized,
                                
December 31, 2018 - 22,598,712 issued and outstanding;
                                
September 30, 2018 - 22,598,712 issued and outstanding;
    
226
      
226
      
226
      
226
  
December 31, 2017 - 22,551,912 issued and outstanding;
                                
March 31, 2018 – 22,570,179 issued and outstanding;
                                
Additional paid-in capital
    
65,056
      
65,044
      
64,703
      
64,871
  
Retained earnings
    
67,126
      
63,642
      
53,878
      
56,552
  
Accumulated other comprehensive loss
    
(4,314
)
    
(6,502
)
    
(2,004
)
    
(4,748
)
Total shareholders' equity
    
128,094
      
122,410
      
116,803
      
116,901
  
                                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  
$
1,151,225
    
$
1,148,447
    
$
1,128,342
    
$
1,151,535
  
 
RVSB Reports Third Quarter Fiscal 2019 Results
January 24, 2019
Page 6
 
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
                              
Consolidated Statements of Income
                              
   
Three Months Ended
    
Nine Months Ended
  
(In thousands, except share data)   (Unaudited)
  Dec. 31, 2018   Sept. 30, 2018   Dec. 31, 2017   Dec. 31, 2018   Dec. 31, 2017 
INTEREST INCOME:
                              
Interest and fees on loans receivable
  
$
11,129
    
$
10,943
    
$
9,978
    
$
32,849
    
$
29,761
  
Interest on investment securities - taxable
    
1,110
      
1,116
      
1,201
      
3,424
      
3,413
  
Interest on investment securities - nontaxable
    
37
      
36
      
31
      
110
      
59
  
Other interest and dividends
    
60
      
118
      
168
      
271
      
483
  
Total interest and dividend income
    
12,336
      
12,213
      
11,378
      
36,654
      
33,716
  
                                         
INTEREST EXPENSE:
                                        
Interest on deposits
    
240
      
259
      
298
      
759
      
933
  
Interest on borrowings
    
416
      
352
      
284
      
1,126
      
829
  
Total interest expense
    
656
      
611
      
582
      
1,885
      
1,762
  
Net interest income
    
11,680
      
11,602
      
10,796
      
34,769
      
31,954
  
Provision for loan losses
    
-
      
250
      
-
      
50
      
-
  
                                         
Net interest income after provision for loan losses
    
11,680
      
11,352
      
10,796
      
34,719
      
31,954
  
                                         
NON-INTEREST INCOME:
                                        
Fees and service charges
    
1,511
      
1,690
      
1,451
      
4,956
      
4,348
  
Asset management fees
    
935
      
943
      
911
      
2,804
      
2,582
  
Net gain on sale of loans held for sale
    
82
      
44
      
140
      
278
      
522
  
Bank owned life insurance
    
192
      
174
      
207
      
545
      
618
  
Other, net
    
62
      
165
      
181
      
267
      
271
  
Total non-interest income, net
    
2,782
      
3,016
      
2,890
      
8,850
      
8,341
  
                                         
NON-INTEREST EXPENSE:
                                        
Salaries and employee benefits
    
5,794
      
5,283
      
5,383
      
16,655
      
16,056
  
Occupancy and depreciation
    
1,306
      
1,351
      
1,347
      
4,016
      
4,105
  
Data processing
    
621
      
622
      
534
      
1,874
      
1,730
  
Amortization of core deposit intangible
    
45
      
46
      
58
      
137
      
174
  
Advertising and marketing
    
151
      
266
      
137
      
609
      
627
  
FDIC insurance premium
    
85
      
85
      
108
      
246
      
389
  
State and local taxes
    
125
      
182
      
96
      
475
      
427
  
Telecommunications
    
85
      
88
      
102
      
266
      
309
  
Professional fees
    
449
      
387
      
250
      
1,120
      
926
  
Other
    
142
      
605
      
543
      
1,339
      
1,748
  
Total non-interest expense
    
8,803
      
8,915
      
8,558
      
26,737
      
26,491
  
                                         
INCOME BEFORE INCOME TAXES
    
5,659
      
5,453
      
5,128
      
16,832
      
13,804
  
PROVISION FOR INCOME TAXES
    
1,271
      
1,224
      
3,608
      
3,773
      
6,571
  
NET INCOME
  
$
4,388
    
$
4,229
    
$
1,520
    
$
13,059
    
$
7,233
  
                                         
Earnings per common share:
                                        
Basic
  
$
0.19
    
$
0.19
    
$
0.07
    
$
0.58
    
$
0.32
  
Diluted
  
$
0.19
    
$
0.19
    
$
0.07
    
$
0.58
    
$
0.32
  
Weighted average number of common shares outstanding:
                                        
Basic
    
22,598,712
      
22,579,839
      
22,537,092
      
22,582,956
      
22,520,352
  
Diluted
    
22,663,919
      
22,658,737
      
22,622,129
      
22,658,153
      
22,608,603
  
 

RVSB Reports Third Quarter Fiscal 2019 Results
January 24, 2019
Page 7
 
 
(Dollars in thousands)
  
At or for the three months ended
   At or for the nine months ended 
   
Dec. 31,
2018
    
Sept. 30,
2018
    
Dec. 31,
2017
    
Dec. 31,
2018
    
Dec. 31,
2017
  
AVERAGE BALANCES
                              
Average interest–earning assets
  
$
1,057,199
    
$
1,064,386
    
$
1,055,600
    
$
1,056,750
    
$
1,045,283
  
Average interest-bearing liabilities
    
707,618
      
717,085
      
744,431
      
716,890
      
746,262
  
Net average earning assets
    
349,581
      
347,301
      
311,169
      
339,860
      
299,021
  
Average loans
    
854,368
      
839,497
      
785,264
      
835,697
      
784,926
  
Average deposits
    
967,246
      
986,948
      
988,558
      
975,295
      
980,766
  
Average equity
    
125,252
      
122,630
      
118,831
      
122,298
      
116,399
  
Average tangible equity (non-GAAP)
    
97,182
      
94,515
      
90,562
      
94,182
      
88,074
  
 
 
ASSET QUALITY
  
Dec. 31,
2018
    
Sept. 30,
2018
    
Dec. 31,
2017
  
                   
Non-performing loans
  
$
1,612
    
$
2,283
    
$
2,656
  
Non-performing loans to total loans
    
0.19
%
    
0.27
%
    
0.33
%
Real estate/repossessed assets owned
  
$
-
    
$
-
    
$
298
  
Non-performing assets
  
$
1,612
    
$
2,283
    
$
2,954
  
Non-performing assets to total assets
    
0.14
%
    
0.20
%
    
0.26
%
Net loan charge-offs (recoveries) in the quarter
  
$
11
    
$
86
    
$
(250
)
Net charge-offs (recoveries) in the quarter/average net loans
    
0.01
%
    
0.04
%
    
(0.13
)%
                         
Allowance for loan losses
  
$
11,502
    
$
11,513
    
$
10,867
  
Average interest-earning assets to average
                        
  interest-bearing liabilities
    
149.40
%
    
148.43
%
    
141.80
%
Allowance for loan losses to
                        
  non-performing loans
    
713.52
%
    
504.29
%
    
409.15
%
Allowance for loan losses to total loans
    
1.32
%
    
1.35
%
    
1.36
%
Shareholders' equity to assets
    
11.13
%
    
10.66
%
    
10.35
%
                         
                         
CAPITAL RATIOS
                        
Total capital (to risk weighted assets)
    
16.35
%
    
15.82
%
    
15.07
%
Tier 1 capital (to risk weighted assets)
    
15.10
%
    
14.54
%
    
13.82
%
Common equity tier 1 (to risk weighted assets)
    
15.10
%
    
14.54
%
    
13.82
%
Tier 1 capital (to average tangible assets)
    
11.22
%
    
10.72
%
    
9.82
%
Tangible common equity (to average tangible assets) (non-GAAP)
    
8.91
%
    
8.42
%
    
8.05
%
 
 
DEPOSIT MIX
  
Dec. 31,
2018
    
Sept. 30,
2018
    
Dec. 31,
2017
    
March 31,
2018
  
                         
Interest checking
  
$
183,426
    
$
182,947
    
$
170,151
    
$
192,989
  
Regular savings
    
137,323
      
138,082
      
136,249
      
134,931
  
Money market deposit accounts
    
242,081
      
252,738
      
270,193
      
265,661
  
Non-interest checking
    
284,939
      
300,659
      
264,728
      
278,966
  
Certificates of deposit
    
95,809
      
107,846
      
130,893
      
123,144
  
Total deposits
  
$
943,578
    
$
982,272
    
$
972,214
    
$
995,691
  
 


RVSB Reports Third Quarter Fiscal 2019 Results
January 24, 2019
Page 8
 
 
COMPOSITION OF COMMERCIAL AND CONSTRUCTION LOANS
              
                         
         
Other
          
Commercial
  
   
Commercial
    
Real Estate
    
Real Estate
    & Construction 
   
Business
    
Mortgage
    
Construction
    
Total
  
December 31, 2018
  
(Dollars in thousands)
  
Commercial business
  
$
154,360
    
$
-
    
$
-
    
$
154,360
  
Commercial construction
    
-
      
-
      
58,197
      
58,197
  
Office buildings
    
-
      
119,850
      
-
      
119,850
  
Warehouse/industrial
    
-
      
90,167
      
-
      
90,167
  
Retail/shopping centers/strip malls
    
-
      
64,317
      
-
      
64,317
  
Assisted living facilities
    
-
      
2,790
      
-
      
2,790
  
Single purpose facilities
    
-
      
191,237
      
-
      
191,237
  
Land
    
-
      
18,506
      
-
      
18,506
  
Multi-family
    
-
      
54,930
      
-
      
54,930
  
One-to-four family construction
    
-
      
-
      
18,321
      
18,321
  
  Total
  
$
154,360
    
$
541,797
    
$
76,518
    
$
772,675
  
                                 
March 31, 2018
                                
Commercial business
  
$
137,672
    
$
-
    
$
-
    
$
137,672
  
Commercial construction
    
-
      
-
      
23,158
      
23,158
  
Office buildings
    
-
      
124,000
      
-
      
124,000
  
Warehouse/industrial
    
-
      
89,442
      
-
      
89,442
  
Retail/shopping centers/strip malls
    
-
      
68,932
      
-
      
68,932
  
Assisted living facilities
    
-
      
2,934
      
-
      
2,934
  
Single purpose facilities
    
-
      
165,289
      
-
      
165,289
  
Land
    
-
      
15,337
      
-
      
15,337
  
Multi-family
    
-
      
63,080
      
-
      
63,080
  
One-to-four family construction
    
-
      
-
      
16,426
      
16,426
  
  Total
  
$
137,672
    
$
529,014
    
$
39,584
    
$
706,270
  
 
 
LOAN MIX
  
Dec. 31,
2018
    
Sept. 30,
2018
    
Dec. 31,
2017
    
March 31,
2018
  
   
(Dollars in thousands)
  
Commercial and construction
                        
  Commercial business
  
$
154,360
    
$
155,487
    
$
130,960
    
$
137,672
  
  Other real estate mortgage
    
541,797
      
533,258
      
516,223
      
529,014
  
  Real estate construction
    
76,518
      
62,795
      
40,743
      
39,584
  
    Total commercial and construction
    
772,675
      
751,540
      
687,926
      
706,270
  
Consumer
                                
  Real estate one-to-four family
    
86,240
      
86,950
      
91,752
      
90,109
  
  Other installment
    
9,721
      
11,352
      
17,649
      
14,997
  
    Total consumer
    
95,961
      
98,302
      
109,401
      
105,106
  
                                 
Total loans
    
868,636
      
849,842
      
797,327
      
811,376
  
                                 
Less:
                                
  Allowance for loan losses
    
11,502
      
11,513
      
10,867
      
10,766
  
  Loans receivable, net
  
$
857,134
    
$
838,329
    
$
786,460
    
$
800,610
  

 
RVSB Reports Third Quarter Fiscal 2019 Results
January 24, 2019
Page 9
 

DETAIL OF NON-PERFORMING ASSETS
                        
                         
   
Other
    
Southwest
              
   
Oregon
    
Washington
    
Other
    
Total
  
December 31, 2018
  
(dollars in thousands)
  
                         
Commercial business
  
$
-
    
$
163
    
$
105
    
$
268
  
Commercial real estate
    
924
      
188
      
-
      
1,112
  
Consumer
    
-
      
173
      
59
      
232
  
                                 
Total non-performing loans
  
$
924
    
$
524
    
$
164
    
$
1,612
  
 
 
DETAIL OF LAND DEVELOPMENT AND SPECULATIVE CONSTRUCTION LOANS
        
                         
   
Northwest
    
Other
    
Southwest
        
   
Oregon
    
Oregon
    
Washington
    
Total
  
December 31, 2018
  
(dollars in thousands)
  
                         
Land development
  
$
2,187
    
$
1,927
    
$
14,392
    
$
18,506
  
Speculative construction
    
1,098
      
81
      
14,226
      
15,405
  
                                 
Total land development and speculative  construction
  
$
3,285
    
$
2,008
    
$
28,618
    
$
33,911
  
 
 
RVSB Reports Third Quarter Fiscal 2019 Results
January 24, 2019
Page 10
 
   
At or for the three months ended
   At or for the nine months ended 
SELECTED OPERATING DATA
  
Dec. 31,
2018
    
Sept. 30,
2018
    
Dec. 31,
2017
    
Dec. 31,
2018
    
Dec. 31,
2017
  
                               
Efficiency ratio (4)
    
60.87
%
    
60.99
%
    
62.53
%
    
61.30
%
    
65.74
%
Coverage ratio (6)
    
132.68
%
    
130.14
%
    
126.15
%
    
130.04
%
    
120.62
%
Return on average assets (1)
    
1.53
%
    
1.46
%
    
0.53
%
    
1.52
%
    
0.85
%
Return on average equity (1)
    
13.90
%
    
13.68
%
    
5.07
%
    
14.17
%
    
8.25
%
                                         
NET INTEREST SPREAD
                                        
Yield on loans
    
5.17
%
    
5.17
%
    
5.04
%
    
5.22
%
    
5.03
%
Yield on investment securities
    
2.38
%
    
2.27
%
    
2.24
%
    
2.32
%
    
2.20
%
    Total yield on interest-earning assets
    
4.63
%
    
4.56
%
    
4.28
%
    
4.61
%
    
4.29
%
                                         
Cost of interest-bearing deposits
    
0.14
%
    
0.15
%
    
0.17
%
    
0.15
%
    
0.17
%
Cost of FHLB advances and other borrowings
    
4.35
%
    
4.82
%
    
3.89
%
    
4.49
%
    
3.80
%
    Total cost of interest-bearing liabilities
    
0.37
%
    
0.34
%
    
0.31
%
    
0.35
%
    
0.31
%
                                         
Spread (7)
    
4.26
%
    
4.22
%
    
3.97
%
    
4.26
%
    
3.98
%
Net interest margin
    
4.39
%
    
4.33
%
    
4.06
%
    
4.37
%
    
4.06
%
                                         
PER SHARE DATA
                                        
Basic earnings per share (2)
  
$
0.19
    
$
0.19
    
$
0.07
    
$
0.58
    
$
0.32
  
Diluted earnings per share (3)
    
0.19
      
0.19
      
0.07
      
0.58
      
0.32
  
Book value per share (5)
    
5.67
      
5.42
      
5.18
      
5.67
      
5.18
  
Tangible book value per share (5) (non-GAAP)
    
4.43
      
4.17
      
3.93
      
4.43
      
3.93
  
Market price per share:
                                        
  High for the period
  
$
8.75
    
$
9.91
    
$
9.45
    
$
9.91
    
$
9.45
  
  Low for the period
    
7.03
      
8.47
      
8.44
      
7.03
      
6.51
  
  Close for period end
    
7.28
      
8.84
      
8.67
      
7.28
      
8.67
  
Cash dividends declared per share
    
0.0400
      
0.0350
      
0.0300
      
0.1100
      
0.0750
  
                                         
Average number of shares outstanding:
                                        
  Basic (2)
    
22,598,712
      
22,579,839
      
22,537,092
      
22,582,956
      
22,520,352
  
  Diluted (3)
    
22,663,919
      
22,658,737
      
22,622,129
      
22,658,153
      
22,608,603
  
                                         
 
(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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