Riverview Bancorp Earns $1.5 Million in Third Fiscal Quarter 2024
Riverview Bancorp, Inc. reported a decrease in earnings, net interest income, and net interest margin in the third fiscal quarter of 2024. Credit quality metrics remained stable, with non-performing assets at 0.01% of total assets. The company's total risk-based capital ratio was 16.67% and Tier 1 leverage ratio was 10.53%.
Positive
Stable credit quality metrics with non-performing assets at 0.01% of total assets
Total risk-based capital ratio of 16.67% and Tier 1 leverage ratio of 10.53%
Negative
Decrease in net income from $15.1 million to $6.8 million in the first nine months of fiscal 2024
Net interest income decreased from $13.7 million to $9.3 million in the third fiscal quarter of 2024
Reviewing Riverview Bancorp's earnings report, a significant year-over-year decline in net income is evident, from $5.2 million in the third fiscal quarter a year ago to $1.5 million in the current reporting period. This decline reflects a challenging interest rate environment that has compressed the net interest margin (NIM) from 3.48% to 2.49% over the same period. The increase in interest expense on deposits and borrowings is a primary driver behind reduced profitability, signaling a cost of funds pressure that investors should monitor closely, as it can impact future earnings potential.
Despite flat loan growth, the bank's asset quality remains robust with non-performing assets at a mere 0.01% of total assets and no provision for credit losses in the current quarter. This indicates a strong credit culture and risk management framework, which is a positive sign for investor confidence. However, the reduced loan pipeline from $62.7 million to $29.3 million could suggest a cautious approach to lending amidst economic uncertainties, potentially limiting revenue growth from this segment.
From a capital management perspective, the maintenance of a 'well capitalized' status and the completion of a stock repurchase program reflect a commitment to shareholder value. However, the decline in total deposits may raise questions about liquidity management, especially in the context of the unused Bank Term Funding Program (BTFP), which could be a strategic reserve for future liquidity needs.
The banking industry is currently navigating a complex interest rate environment, which has led to Riverview Bancorp's net interest income and margin contraction. This trend is not isolated to Riverview but is reflective of broader market dynamics where banks are grappling with the cost of higher interest rates on deposits and borrowings. Investors should compare these metrics to peer institutions to gauge Riverview's performance relative to the market.
While loan growth has moderated, the stability in credit quality metrics suggests that Riverview is prioritizing loan quality over quantity, a prudent strategy in an uncertain economic climate. This conservative lending approach can be a double-edged sword, potentially safeguarding against future credit losses while also limiting interest income growth.
Furthermore, the decrease in non-interest income due to lower fintech referral partnership income could indicate a need for diversification in revenue streams. The bank's efficiency ratio has also deteriorated, suggesting higher costs relative to income, which may warrant operational efficiency improvements to bolster profitability.
The reported figures from Riverview Bancorp reflect macroeconomic headwinds, particularly the impact of monetary policy tightening on the banking sector. The Federal Reserve's interest rate hikes have a direct effect on banks' net interest margins, as seen in Riverview's NIM compression. This economic environment requires banks to adapt their deposit and lending strategies to maintain margins while managing interest rate risk.
Given the current economic indicators, the bank's cautious stance on loan growth and liquidity management appears aligned with a broader anticipation of a potential economic downturn. The bank's positioning with ample liquidity, including unused borrowing capacity from the FHLB and FRB, suggests a defensive posture in preparation for potential market volatility.
Riverview's effective tax rate reduction from 23.1% to 20.6% year-over-year could reflect changes in tax planning or benefits from fiscal policy, which could have a positive effect on net earnings. This is a point of interest for stakeholders analyzing after-tax returns and overall financial health.
01/25/2024 - 04:04 PM
VANCOUVER, Wash., Jan. 25, 2024 (GLOBE NEWSWIRE) -- Riverview Bancorp, Inc. (Nasdaq GSM: RVSB) (“Riverview” or the “Company”) today reported earnings of $1.5 million , or $0.07 per diluted share, in the third fiscal quarter ended December 31, 2023, compared to $2.5 million , or $0.12 per diluted share, in the second fiscal quarter ended September 30, 2023, and $5.2 million , or $0.24 per diluted share, in the third fiscal quarter a year ago.
In the first nine months of fiscal 2024, net income was $6.8 million , or $0.32 per diluted share, compared to $15.1 million , or $0.69 per diluted share, in the first nine months of fiscal 2023.
“We finished the third fiscal quarter of 2024 on solid footing, although the challenging interest rate environment continues to impact net interest income growth with higher interest expense on deposits and borrowings, which affected our operating performance,” stated Dan Cox, Chief Operating Officer, Acting President and Chief Executive Officer. “Quarterly loan growth has moderated, as we remain selective with the loans we are putting on the balance sheet. Additionally, credit quality metrics remain very stable. We are going into the last quarter of our fiscal year with an abundance of caution, as we remain committed to protecting our liquidity and capital position.”
Third Quarter Highlights (at or for the period ended December 31, 2023)
Net income was $1.5 million , or $0.07 per diluted share. Net interest income was $9.3 million for the quarter, compared to $9.9 million in the preceding quarter and $13.7 million in the third fiscal quarter a year ago. Net interest margin (“NIM”) was 2.49% for the quarter, compared to 2.63% in the preceding quarter and 3.48% for the year ago quarter. Return on average assets was 0.37% and return on average equity was 3.75% . Asset quality remained strong, with non-performing assets at $186,000 , or 0.01% of total assets at December 31, 2023. Riverview recorded no provision for credit losses during the current quarter, the preceding quarter, or during the year ago quarter. The allowance for credit losses was $15.4 million , or 1.51% of total loans. Total loans were $1.02 billion at December 31, 2023, September 30, 2023, and at December 31, 2022. Total deposits were $1.22 billion , compared to $1.24 billion three months earlier and $1.37 billion a year earlier. Riverview has approximately $263.0 million in available liquidity at December 31, 2023, including $137.8 million of borrowing capacity from Federal Home Loan Bank of Des Moines (“FHLB”) and $125.2 million from the Federal Reserve Bank of San Francisco (“FRB”). Riverview has access to but has yet to utilize the Federal Reserve Bank’s Bank Term Funding Program ("BTFP"). At December 31, 2023, the Bank had $157.1 million in outstanding FHLB borrowings. The uninsured deposit ratio was 28.4% at December 31, 2023. Total risk-based capital ratio was 16.67% and Tier 1 leverage ratio was 10.53% . Paid a quarterly cash dividend during the quarter of $0.06 per share. Income Statement Review
Riverview’s net interest income was $9.3 million in the current quarter, compared to $9.9 million in the preceding quarter, and $13.7 million in the third fiscal quarter a year ago. The decrease in net interest income compared to the prior quarter was driven primarily by an increase in interest expense on deposits and borrowings due to higher interest rates. In the first nine months of fiscal 2024, net interest income was $29.5 million , compared to $39.8 million in the first nine months of fiscal 2023.
Riverview’s NIM was 2.49% for the third quarter of fiscal 2024, a 14 basis-point decrease compared to 2.63% in the preceding quarter and a 99 basis-point decrease compared to 3.48% in the third quarter of fiscal 2023. “We experienced NIM contraction again during the current quarter, compared to the prior quarter and year ago quarter, as a result of increased interest expense due to higher rates on our deposit products and the interest expense related to our borrowings,” said David Lam, EVP and Chief Financial Officer. In the first nine months of fiscal 2024, the net interest margin was 2.64% compared to 3.30% in the same period a year earlier.
Investment securities totaled $429.1 million at December 31, 2023, compared to $430.0 million at September 30, 2023, and $458.9 million at December 31, 2022. The average securities balances for the quarters ended December 31, 2023, September 30, 2023, and December 31, 2022, were $458.0 million , $466.0 million , and $491.2 million , respectively. The weighted average yields on securities balances for those same periods were 2.01% , 2.00% , and 2.01% , respectively. The duration of the investment portfolio at December 31, 2023 was approximately 4.8 years. The anticipated investment cashflows over the next twelve months is approximately $50.5 million .
Riverview’s yield on loans improved to 4.56% during the third fiscal quarter, compared to 4.51% in the preceding quarter, and 4.50% in the third fiscal quarter a year ago. While loan yields improved during the current quarter, they remain under pressure due to the concentration of fixed-rate loans in the Company’s portfolio. Deposit costs increased to 0.68% during the third fiscal quarter compared to 0.59% in the preceding quarter, and 0.08% in the third fiscal quarter a year ago.
Non-interest income decreased to $3.1 million during the third fiscal quarter compared to $3.4 million in the preceding quarter and increased when compared to $3.0 million in the third fiscal quarter of 2023. The decrease during the current quarter, compared to the immediate prior quarter, was due to lower fees and service charges from a decrease in fintech referral partnership income. In the first nine months of fiscal 2024, non-interest income increased 5.7% to $9.7 million compared to $9.2 million in the same period a year ago.
Asset management fees were $1.3 million during the third fiscal quarter, which were unchanged compared to the preceding quarter, and an increase compared to $1.1 million in the third fiscal quarter a year ago. Riverview Trust Company’s assets under management were $942.4 million at December 31, 2023, compared to $875.7 million at September 30, 2023 and $855.9 million at December 31, 2022.
Non-interest expense was $10.6 million during the third quarter, compared to $10.1 million in the preceding quarter and $9.8 million in the third fiscal quarter a year ago. Salary and employee benefits were up during the current quarter compared to the preceding quarter, when salary and employee benefits were lower as a result of a one-time reversal of certain equity incentives. Occupancy and depreciation costs increased during the quarter due to updates and modernization of Riverview’s facilities. The efficiency ratio was 85.2% for the third fiscal quarter compared to 76.1% in the preceding quarter and 59.1% in the third fiscal quarter a year ago. Year-to-date, non-interest expense was $30.6 million compared to $29.4 million in the first nine months of fiscal 2023.
Return on average assets was 0.37% in the third quarter of fiscal 2024 compared to 0.62% in the preceding quarter. Return on average equity and return on average tangible equity (non-GAAP) were 3.75% and 4.57% , respectively, compared to 6.33% and 7.68% , respectively, for the prior quarter.
Riverview’s effective tax rate for the third quarter of fiscal 2024 was 20.6% , compared to 22.0% for the preceding quarter and 23.1% for the year ago quarter.
Balance Sheet Review
Total loans remained flat at $1.02 billion at December 31, 2023, compared to three months earlier and a year earlier. Riverview’s loan pipeline was $29.3 million at December 31, 2023, compared to $62.7 million at the end of the prior quarter. New loan originations during the quarter totaled $51.3 million , compared to $39.5 million in the preceding quarter and $28.9 million in the third quarter a year ago.
Undisbursed construction loans totaled $63.1 million at December 31, 2023, compared to $49.9 million at September 30, 2023, with the majority of the undisbursed construction loans expected to fund over the next several quarters. Undisbursed homeowner association loans for the purpose of common area maintenance and repairs totaled $20.7 million at December 31, 2023, compared to $16.9 million at September 30, 2023. Revolving commercial business loan commitments totaled $50.4 million at December 31, 2023, compared to $62.2 million three months earlier. Utilization on these loans totaled 11.3% at December 31, 2023, compared to 23.4% at September 30, 2023. The weighted average rate on loan originations during the quarter was 7.14% compared to 7.06% in the preceding quarter.
The office building loan portfolio totaled $115.6 million at December 31, 2023 compared to $117.0 million at September 30, 2023. The average loan balance of this loan portfolio was $1.5 million and had an average loan-to-value ratio of 55.4% and an average debt service coverage ratio of 2.0x.
Total deposits decreased to $1.22 billion at December 31, 2023, compared to $1.24 billion at September 30, 2023, and $1.37 billion a year ago. The decrease during the current quarter was attributed to year end distributions, as well as customers using up deposit balances instead of borrowing due to the rate environment. Non-interest checking and interest checking accounts, as a percentage of total deposits, totaled 51.1% at December 31, 2023, compared to 49.5% at September 30, 2023 and 54.8% at December 31, 2022.
FHLB advances were $157.1 million at December 31, 2023 and were comprised of overnight advances and a short-term borrowing. This compared to $143.2 million at September 30, 2023 and $32.3 million a year earlier. These FHLB advances were utilized to partially offset the decrease in deposit balances and to fund the increase in loans receivable. The BTFP was created by the Federal Reserve to support and make additional funding available to eligible depository institutions to help banks meet the needs of their depositors. Riverview has registered and is eligible to utilize the BTFP. Riverview does not intend to utilize the BTFP, but could do so should the need arise.
Shareholders’ equity was $158.5 million at December 31, 2023, compared to $152.0 million three months earlier and one year earlier. Tangible book value per share (non-GAAP) was $6.21 at December 31, 2023, compared to $5.90 at September 30, 2023, and $5.79 at December 31, 2022. Riverview paid a quarterly cash dividend of $0.06 per share on January 16, 2024, to shareholders of record on January 5, 2024.
Credit Quality
In accordance with changes in generally accepted accounting principles, Riverview adopted the new credit loss accounting standard known as Current Expected Credit Loss (“CECL”) on April 1, 2023. Under CECL, the ACL is based on expected credit losses rather than on incurred losses. Adoption of CECL, which includes the ACL and allowance for unfunded loan commitments, resulted in a cumulative effect after-tax adjustment to stockholders’ equity as of April 1, 2023, of $53,000 , which had no impact on earnings.
Asset quality remained stable, with non-performing loans, excluding SBA and USDA government guaranteed loans (“government guaranteed loans”) (non-GAAP), at $186,000 or 0.02% of total loans as of December 31, 2023, compared to $198,000 , or 0.02% of total loans at September 30, 2023, and $236,000 , or 0.02% of total loans at December 31, 2022. There were no non-performing government guaranteed loans at December 31, 2023 or at September 30, 2023. At December 31, 2022, including government guaranteed loans, non-performing assets were $12.6 million , or 0.79% of total assets. Previously, there were non-performing government guaranteed loans where payments had been delayed due to the servicing transfer of these loans between two third-party servicers and the service transfer has been completed.
Riverview recorded net loan recoveries of $15,000 during the third fiscal quarter. This compared to net loan recoveries of $3,000 for the preceding quarter. Riverview recorded no provision for credit losses for the third fiscal quarter, or for the preceding quarter.
Classified assets decreased to $215,000 at December 31, 2023, compared to $1.1 million at September 30, 2023 and $6.2 million at December 31, 2022. The classified asset to total capital ratio was 0.1% at December 31, 2023, compared to 0.6% at September 30, 2023 and 3.5% a year earlier. Criticized assets increased to $37.2 million at December 31, 2023, compared to $35.1 million at September 30, 2023 and $3.5 million at December 31, 2022. The increase in criticized assets during the current quarter was mainly due to one relationship downgrade that had plans in place to payoff outstanding loans or meet certain loan covenants, which was partially offset by some existing criticized loan payoffs. The Company does not believe this is a systemic credit issue.
The allowance for credit losses was $15.4 million at December 31, 2023, compared to $15.3 million at September 30, 2023, and $14.6 million one year earlier. The allowance for credit losses represented 1.51% of total loans at December 31, 2023 and at September 30, 2023, compared to 1.43% a year earlier. The allowance for credit losses to loans, net of government guaranteed loans (non-GAAP), was 1.59% at December 31, 2023, compared to 1.60% at September 30, 2023, and 1.52% a year earlier.
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 16.67% and a Tier 1 leverage ratio of 10.53% at December 31, 2023. Tangible common equity to average tangible assets ratio (non-GAAP) was 8.39% at December 31, 2023.
Stock Repurchase Program
In November 2022, Riverview announced that its Board of Directors authorized the repurchase of up to $2.5 million of the Company’s outstanding shares in the open market, based on prevailing market prices, or in privately negotiated transactions, over a period beginning on November 28, 2022, and continuing until the earlier of the completion of the repurchase or May 28, 2023, depending upon market conditions. During the first fiscal quarter of fiscal year 2024, the Company repurchased 109,162 shares at an average price of $5.29 per share. As of May 5, 2023, Riverview had completed the full $2.5 million authorized, repurchasing 394,334 shares at an average price of $6.34 per share.
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. Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in Riverview's core operations reflected in the current quarter's results and facilitate the comparison of our performance with the performance of our peers. However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP. Where applicable, comparable earnings information using GAAP financial measures is also presented. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies. For a reconciliation of these non-GAAP financial measures, see the tables below.
Tangible shareholders' equity to tangible assets and tangible book value per share: (Dollars in thousands) December 31, 2023 September 30, 2023 December 31, 2022 March 31, 2023 Shareholders' equity (GAAP) $ 158,472 $ 152,039 $ 152,025 $ 155,239 Exclude: Goodwill (27,076 ) (27,076 ) (27,076 ) (27,076 ) Exclude: Core deposit intangible, net (298 ) (325 ) (408 ) (379 ) Tangible shareholders' equity (non-GAAP) $ 131,098 $ 124,638 $ 124,541 $ 127,784 Total assets (GAAP) $ 1,590,623 $ 1,583,733 $ 1,598,734 $ 1,589,712 Exclude: Goodwill (27,076 ) (27,076 ) (27,076 ) (27,076 ) Exclude: Core deposit intangible, net (298 ) (325 ) (408 ) (379 ) Tangible assets (non-GAAP) $ 1,563,249 $ 1,556,332 $ 1,571,250 $ 1,562,257 Shareholders' equity to total assets (GAAP) 9.96 % 9.60 % 9.51 % 9.77 % Tangible common equity to tangible assets (non-GAAP) 8.39 % 8.01 % 7.93 % 8.18 % Shares outstanding 21,111,043 21,125,889 21,496,335 22,221,960 Book value per share (GAAP) $ 7.51 $ 7.20 $ 7.07 $ 7.32 Tangible book value per share (non-GAAP) $ 6.21 $ 5.90 $ 5.79 $ 6.02 Pre-tax, pre-provision income Three Months Ended Nine Months Ended (Dollars in thousands) December 31, 2023 September 30, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net income (GAAP) $ 1,452 $ 2,472 $ 5,240 $ 6,767 $ 15,086 Include: Provision for income taxes 377 697 1,575 1,897 4,508 Include: Provision for credit losses - - - - - Pre-tax, pre-provision income (non-GAAP) $ 1,829 $ 3,169 $ 6,815 $ 8,664 $ 19,594 Allowance for credit losses reconciliation, excluding Government Guaranteed loans (Dollars in thousands) December 31, 2023 September 30, 2023 December 31, 2022 March 31, 2023 Allowance for credit losses $ 15,361 $ 15,346 $ 14,558 $ 15,309 Loans receivable (GAAP) $ 1,018,199 $ 1,015,625 $ 1,016,513 $ 1,008,856 Exclude: Government Guaranteed loans (51,809 ) (53,572 ) (57,102 ) (55,488 ) Loans receivable excluding Government Guaranteed loans (non-GAAP) $ 966,390 $ 962,053 $ 959,411 $ 953,368 Allowance for credit losses to loans receivable (GAAP) 1.51 % 1.51 % 1.43 % 1.52 % Allowance for credit losses to loans receivable excluding Government Guaranteed loans (non-GAAP) 1.59 % 1.60 % 1.52 % 1.61 % Non-performing loans reconciliation, excluding Government Guaranteed Loans Three Months Ended (Dollars in thousands) December 31, 2023 September 30, 2023 December 31, 2022 Non-performing loans (GAAP) $ 186 $ 198 $ 12,613 Less: Non-performing Government Guaranteed loans - - (12,377 ) Adjusted non-performing loans excluding Government Guaranteed loans (non-GAAP) $ 186 $ 198 $ 236 Non-performing loans to total loans (GAAP) 0.02 % 0.02 % 1.24 % Non-performing loans, excluding Government Guaranteed loans to total loans (non-GAAP) 0.02 % 0.02 % 0.02 % Non-performing loans to total assets (GAAP) 0.01 % 0.01 % 0.79 % Non-performing loans, excluding Government Guaranteed loans to total assets (non-GAAP) 0.01 % 0.01 % 0.01 %
Riverview Bancorp, Inc. (www.riverviewbank.com) is headquartered in Vancouver, Washington – just north of Portland, Oregon, on the I-5 corridor. With assets of $1.59 billion at December 31, 2023, it is the parent company of the 100-year-old Riverview 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 clients through 17 branches, including 13 in the Portland-Vancouver area, and 3 lending centers. For the past 10 years, Riverview has been named Best Bank by the readers of The Vancouver Business Journal and The Columbian .
“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements which include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions, future economic performance and projections of financial items. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated or implied by our forward-looking statements, including, but not limited to: potential adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company's business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession, the failure of the U.S. Congress to increase the debt ceiling, or slowed economic growth caused by increasing political instability from acts of war including Russia’s invasion of Ukraine, as well as supply chain disruptions, recent bank failures and any governmental or societal responses thereto; 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 credit losses and provision for credit losses that may be impacted by deterioration in the housing and commercial real estate markets; 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; the transition away from London Interbank Offered Rate toward new interest rate benchmarks; 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 originate loans for sale and sell loans in the secondary market; results of examinations of the Bank by the Federal Deposit Insurance Corporation and the Washington State Department of Financial Institutions, Division of Banks, and of the Company by the Board of Governors of the Federal Reserve System, or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require the Company to increase its allowance for credit losses, write-down assets, reclassify its assets, change the 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 banking, securities and tax law, and in regulatory policies and principles, or the interpretation of regulatory capital or other rules; the Company’s ability to attract and retain deposits; the unexpected outflow of uninsured deposits that may require us to sell investment securities at a loss; 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 consolidated 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; disruptions, security breaches or other adverse events, failures or interruptions in or attacks on our information technology systems or on the third-party vendors who perform several of our critical processing functions; 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 implement its business strategies; the Company's ability to successfully integrate any assets, liabilities, customers, systems, and management personnel it may acquire into its operations and the Company's ability to realize related revenue synergies and cost savings within expected time frames; future goodwill impairment due to changes in Riverview’s business, changes in market conditions, or other factors; 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; the quality and composition of our securities portfolio and the impact of and adverse changes in the securities markets, including market liquidity; 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 standards; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business; and 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 reports filed with and furnished to the U.S. 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 included in this report or the reasons why actual results could differ from those contained in such statements, whether as a result of new information or 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 2024 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 consolidated financial condition and consolidated results of operations as well as its stock price performance.
RIVERVIEW BANCORP, INC. AND SUBSIDIARY Consolidated Balance Sheets (In thousands, except share data) (Unaudited) December 31, 2023 September 30, 2023 December 31, 2022 March 31, 2023 ASSETS Cash (including interest-earning accounts of $23,717 , $18,147 , $ 37,553 $ 30,853 $ 24,337 $ 22,044 $8,897 and $10,397) Certificate of deposits held for investment - - 249 249 Investment securities: Available for sale, at estimated fair value 196,461 193,984 211,706 211,499 Held to maturity, at amortized cost 232,659 236,018 247,147 243,843 Loans receivable (net of allowance for credit losses of $15,361 , $15,346 , $14,558 , and $15,309) 1,002,838 1,000,279 1,001,955 993,547 Prepaid expenses and other assets 14,486 14,481 12,546 15,950 Accrued interest receivable 5,248 4,882 5,727 4,790 Federal Home Loan Bank stock, at cost 8,026 7,643 3,309 6,867 Premises and equipment, net 22,270 22,707 20,220 20,119 Financing lease right-of-use assets 1,221 1,240 1,298 1,278 Deferred income taxes, net 10,033 12,002 11,166 10,286 Goodwill 27,076 27,076 27,076 27,076 Core deposit intangible, net 298 325 408 379 Bank owned life insurance 32,454 32,243 31,590 31,785 TOTAL ASSETS $ 1,590,623 $ 1,583,733 $ 1,598,734 $ 1,589,712 LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES: Deposits $ 1,218,892 $ 1,239,766 $ 1,365,997 $ 1,265,217 Accrued expenses and other liabilities 26,740 18,735 18,966 15,730 Advance payments by borrowers for taxes and insurance 299 878 343 625 Junior subordinated debentures 26,982 26,961 26,896 26,918 Federal Home Loan Bank advances 157,054 143,154 32,264 123,754 Finance lease liability 2,184 2,200 2,243 2,229 Total liabilities 1,432,151 1,431,694 1,446,709 1,434,473 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, 2023 – 21,111,043 issued and outstanding; September 30, 2023 – 21,125,889 issued and outstanding; 211 211 214 212 December 31, 2022 – 21,496,335 issued and outstanding; March 31, 2023 – 21,221,960 issued and outstanding; Additional paid-in capital 54,982 54,963 57,252 55,511 Retained earnings 120,734 120,556 116,117 117,826 Accumulated other comprehensive loss (17,455 ) (23,691 ) (21,558 ) (18,310 ) Total shareholders’ equity 158,472 152,039 152,025 155,239 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,590,623 $ 1,583,733 $ 1,598,734 $ 1,589,712
RIVERVIEW BANCORP, INC. AND SUBSIDIARY Consolidated Statements of Income Three Months Ended Nine Months Ended (In thousands, except share data) (Unaudited) Dec. 31, 2023 Sept. 30, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022 INTEREST INCOME: Interest and fees on loans receivable $ 11,645 $ 11,433 $ 11,531 $ 34,288 $ 33,496 Interest on investment securities - taxable 2,231 2,261 2,397 6,826 6,403 Interest on investment securities - nontaxable 65 65 66 196 197 Other interest and dividends 331 276 449 954 1,629 Total interest and dividend income 14,272 14,035 14,443 42,264 41,725 INTEREST EXPENSE: Interest on deposits 2,059 1,832 289 5,264 897 Interest on borrowings 2,889 2,352 454 7,466 1,036 Total interest expense 4,948 4,184 743 12,730 1,933 Net interest income 9,324 9,851 13,700 29,534 39,792 Provision for credit losses - - - - - Net interest income after provision for credit losses 9,324 9,851 13,700 29,534 39,792 NON-INTEREST INCOME: Fees and service charges 1,533 1,738 1,502 4,871 4,903 Asset management fees 1,266 1,273 1,137 3,920 3,459 Bank owned life insurance ("BOLI") 211 258 194 669 626 Other, net 46 138 130 288 235 Total non-interest income, net 3,056 3,407 2,963 9,748 9,223 NON-INTEREST EXPENSE: Salaries and employee benefits 6,091 5,845 5,982 17,979 17,819 Occupancy and depreciation 1,698 1,649 1,536 4,930 4,600 Data processing 712 710 705 2,096 2,184 Amortization of core deposit intangible 27 27 29 81 87 Advertising and marketing 282 355 202 950 694 FDIC insurance premium 178 175 116 530 351 State and local taxes 355 233 225 814 634 Telecommunications 56 52 48 161 153 Professional fees 353 265 343 961 924 Other 799 778 662 2,116 1,975 Total non-interest expense 10,551 10,089 9,848 30,618 29,421 INCOME BEFORE INCOME TAXES 1,829 3,169 6,815 8,664 19,594 PROVISION FOR INCOME TAXES 377 697 1,575 1,897 4,508 NET INCOME $ 1,452 $ 2,472 $ 5,240 $ 6,767 $ 15,086 Earnings per common share: Basic $ 0.07 $ 0.12 $ 0.24 $ 0.32 $ 0.69 Diluted $ 0.07 $ 0.12 $ 0.24 $ 0.32 $ 0.69 Weighted average number of common shares outstanding: Basic 21,113,464 21,190,987 21,504,903 21,146,888 21,717,959 Diluted 21,113,464 21,191,309 21,513,617 21,148,679 21,726,552
(Dollars in thousands) At or for the three months ended At or for the nine months ended Dec. 31, 2023 Sept. 30, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022 AVERAGE BALANCES Average interest–earning assets $ 1,494,341 $ 1,492,805 $ 1,564,143 $ 1,494,443 $ 1,605,166 Average interest-bearing liabilities 1,028,817 1,022,044 986,198 1,021,532 1,023,944 Net average earning assets 465,524 470,761 577,945 472,911 581,222 Average loans 1,015,741 1,008,363 1,017,214 1,008,429 1,005,104 Average deposits 1,209,524 1,245,382 1,445,049 1,235,032 1,488,404 Average equity 153,901 155,443 150,106 155,264 153,945 Average tangible equity (non-GAAP) 126,511 128,026 122,606 127,847 126,417 ASSET QUALITY Dec. 31, 2023 Sept. 30, 2023 Dec. 31, 2022 Non-performing loans $ 186 $ 198 $ 12,613 Non-performing loans excluding SBA Government Guarantee (non-GAAP) 186 198 236 Non-performing loans to total loans 0.02 % 0.02 % 1.24 % Non-performing loans to total loans excluding SBA Government Guarantee (non-GAAP) 0.02 % 0.02 % 0.02 % Real estate/repossessed assets owned $ - $ - $ - Non-performing assets $ 186 $ 198 $ 12,613 Non-performing assets excluding SBA Government Guarantee (non-GAAP) 186 198 236 Non-performing assets to total assets 0.01 % 0.01 % 0.79 % Non-performing assets to total assets excluding SBA Government Guarantee (non-GAAP) 0.01 % 0.01 % 0.01 % Net loan charge-offs (recoveries) in the quarter $ (15 ) $ (3 ) $ (6 ) Net charge-offs (recoveries) in the quarter/average net loans (0.01 )% 0.00 % 0.00 % Allowance for credit losses $ 15,361 $ 15,346 $ 14,558 Average interest-earning assets to average interest-bearing liabilities 145.25 % 146.06 % 158.60 % Allowance for credit losses to non-performing loans 8258.60 % 7750.51 % 115.42 % Allowance for credit losses to total loans 1.51 % 1.51 % 1.43 % Shareholders’ equity to assets 9.96 % 9.60 % 9.51 % CAPITAL RATIOS Total capital (to risk weighted assets) 16.67 % 16.91 % 16.71 % Tier 1 capital (to risk weighted assets) 15.42 % 15.66 % 15.46 % Common equity tier 1 (to risk weighted assets) 15.42 % 15.66 % 15.46 % Tier 1 capital (to average tangible assets) 10.53 % 10.74 % 10.10 % Tangible common equity (to average tangible assets) (non-GAAP) 8.39 % 8.01 % 7.93 % DEPOSIT MIX Dec. 31, 2023 Sept. 30, 2023 Dec. 31, 2022 March 31, 2023 Interest checking $ 272,019 $ 237,789 $ 277,101 $ 254,522 Regular savings 199,911 222,578 290,137 255,147 Money market deposit accounts 225,727 249,580 240,849 221,778 Non-interest checking 350,744 375,780 471,776 404,937 Certificates of deposit 170,491 154,039 86,134 128,833 Total deposits $ 1,218,892 $ 1,239,766 $ 1,365,997 $ 1,265,217
COMPOSITION OF COMMERCIAL AND CONSTRUCTION LOANS Other Commercial Commercial Real Estate Real Estate & Construction Business Mortgage Construction Total December 31, 2023 (Dollars in thousands) Commercial business $ 229,249 $ - $ - $ 229,249 Commercial construction - - 26,396 26,396 Office buildings - 115,645 - 115,645 Warehouse/industrial - 107,966 - 107,966 Retail/shopping centers/strip malls - 90,389 - 90,389 Assisted living facilities - 382 - 382 Single purpose facilities - 258,693 - 258,693 Land - 8,690 - 8,690 Multi-family - 67,017 - 67,017 One-to-four family construction - - 15,771 15,771 Total $ 229,249 $ 648,782 $ 42,167 $ 920,198 March 31, 2023 Commercial business $ 232,868 $ - $ - $ 232,868 Commercial construction - - 29,565 29,565 Office buildings - 117,045 - 117,045 Warehouse/industrial - 106,693 - 106,693 Retail/shopping centers/strip malls - 82,700 - 82,700 Assisted living facilities - 396 - 396 Single purpose facilities - 257,662 - 257,662 Land - 6,437 - 6,437 Multi-family - 55,836 - 55,836 One-to-four family construction - - 18,197 18,197 Total $ 232,868 $ 626,769 $ 47,762 $ 907,399 LOAN MIX Dec. 31, 2023 Sept. 30, 2023 Dec. 31, 2022 March 31, 2023 Commercial and construction (Dollars in thousands) Commercial business $ 229,249 $ 242,041 $ 238,740 $ 232,868 Other real estate mortgage 648,782 624,606 623,818 626,769 Real estate construction 42,167 50,785 51,153 47,762 Total commercial and construction 920,198 917,432 913,711 907,399 Consumer Real estate one-to-four family 96,266 96,351 101,122 99,673 Other installment 1,735 1,842 1,680 1,784 Total consumer 98,001 98,193 102,802 101,457 Total loans 1,018,199 1,015,625 1,016,513 1,008,856 Less: Allowance for credit losses 15,361 15,346 14,558 15,309 Loans receivable, net $ 1,002,838 $ 1,000,279 $ 1,001,955 $ 993,547 DETAIL OF NON-PERFORMING ASSETS Southwest Washington Total December 31, 2023 (Dollars in thousands) Commercial business $ 63 $ 63 Commercial real estate 85 85 Consumer 38 38 Total non-performing assets $ 186 $ 186
At or for the three months ended At or for the nine months ended SELECTED OPERATING DATA Dec. 31, 2023 Sept. 30, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022 Efficiency ratio (4) 85.23 % 76.10 % 59.10 % 77.94 % 60.02 % Coverage ratio (6) 88.37 % 97.64 % 139.11 % 96.46 % 135.25 % Return on average assets (1) 0.37 % 0.62 % 1.27 % 0.57 % 1.19 % Return on average equity (1) 3.75 % 6.33 % 13.85 % 5.80 % 13.01 % Return on average tangible equity (1) (non-GAAP) 4.57 % 7.68 % 16.96 % 7.04 % 15.84 % NET INTEREST SPREAD Yield on loans 4.56 % 4.51 % 4.50 % 4.53 % 4.42 % Yield on investment securities 2.01 % 2.00 % 2.01 % 2.02 % 1.89 % Total yield on interest-earning assets 3.81 % 3.75 % 3.67 % 3.77 % 3.46 % Cost of interest-bearing deposits 0.98 % 0.85 % 0.12 % 0.82 % 0.12 % Cost of FHLB advances and other borrowings 5.83 % 5.84 % 5.88 % 5.77 % 4.64 % Total cost of interest-bearing liabilities 1.91 % 1.63 % 0.30 % 1.66 % 0.25 % Spread (7) 1.90 % 2.12 % 3.37 % 2.11 % 3.21 % Net interest margin 2.49 % 2.63 % 3.48 % 2.64 % 3.30 % PER SHARE DATA Basic earnings per share (2) $ 0.07 $ 0.12 $ 0.24 $ 0.32 $ 0.69 Diluted earnings per share (3) 0.07 0.12 0.24 0.32 0.69 Book value per share (5) 7.51 7.20 7.07 7.51 7.07 Tangible book value per share (5) (non-GAAP) 6.21 5.90 5.79 6.21 5.79 Market price per share: High for the period $ 6.48 $ 5.97 $ 7.96 $ 6.48 $ 7.96 Low for the period 5.35 5.04 6.25 4.17 6.09 Close for period end 6.40 5.56 7.68 6.40 7.68 Cash dividends declared per share 0.0600 0.0600 0.0600 0.1800 0.1800 Average number of shares outstanding: Basic (2) 21,113,464 21,190,987 21,504,903 21,146,888 21,717,959 Diluted (3) 21,113,464 21,191,309 21,513,617 21,148,679 21,726,552
(1) Amounts for the periods shown are annualized.
Contact: Dan Cox or David Lam Riverview Bancorp, Inc. 360-693-6650
What was Riverview Bancorp, Inc.'s net interest income in the third fiscal quarter of 2024?
Riverview Bancorp's net interest income was $9.3 million in the third fiscal quarter of 2024.
What were Riverview Bancorp, Inc.'s total loans at December 31, 2023?
Riverview Bancorp's total loans were $1.02 billion at December 31, 2023.
What was Riverview Bancorp, Inc.'s net income in the first nine months of fiscal 2024?
Riverview Bancorp's net income was $6.8 million in the first nine months of fiscal 2024.
What was Riverview Bancorp, Inc.'s total risk-based capital ratio at December 31, 2023?
Riverview Bancorp's total risk-based capital ratio was 16.67% at December 31, 2023.
