Riverview Bancorp Inc (RVSB, Financial) filed Quarterly Report for the period ended 2012-06-30.
Riverview Bancorp, Inc. has a market cap of $33.5 million; its shares were traded at around $1.38 with and P/S ratio of 0.7.
Focusing on Asset Quality. The Company is focused on monitoring existing performing loans, resolving nonperforming loans and selling foreclosed assets. The Company has aggressively sought to reduce its level of nonperforming assets through write-downs, collections, modifications and sales of nonperforming loans and real estate owned. The Company has taken proactive steps to resolve its nonperforming loans, including negotiating repayment plans, forbearances, loan modifications and loan extensions with borrowers when appropriate, and accepting short payoffs on delinquent loans, particularly when such payoffs result in a smaller loss than foreclosure. In connection with the downturn in real estate markets, the Company applied more conservative and stringent underwriting practices to new loans, including, among other things, increasing the amount of required collateral or equity requirements, reducing loan-to-value ratios and increasing debt service coverage ratios. Nonperforming assets decreased $4.0 million to $58.9 million at June 30, 2012 compared to $62.9 million at March 31, 2012. The Company has continued to reduce its exposure to land development and speculative construction loans. The total land development and speculative construction loan portfolios declined to $34.0 million at June 30, 2012 as compared to $49.6 million at March 31, 2012. However, there can be no assurance that the ongoing economic conditions affecting our borrowers will not result in future increases in nonperforming and classified loans. In recent months, however, statistics reflect an increase in demand and sales of building lots in the Company s primary market area resulting in an increase in the number of closed sales for land and building lots. For the three months ended June 30, 2012, the Company has sold $3.9 million in land and lot REO properties.
Nonperforming assets, consisting of nonperforming loans and REO, totaled $58.9 million or 7.22% of total assets at June 30, 2012 compared to $62.9 million or 7.35% of total assets at March 31, 2012. Nonperforming loans were $36.8 million or 5.95% of total loans at June 30, 2012 compared to $44.2 million or 6.45% of total loans at March 31, 2012. The decline in nonperforming loans during the quarter was a result of a transfer of $8.5 million in loans to REO. This transfer of loans to REO was offset by REO sales of $4.4 million during the quarter. The $36.8 million balance of nonperforming loans consisted of 54 loans to 42 borrowers, which includes 11 commercial business loans totaling $2.1 million, nine commercial real estate loans totaling $16.7 million, seven land acquisition and development loans totaling $4.2 million (the largest of which was $1.1 million), four multi-family real estate loans totaling $7.2 million (the largest of which was $3.2 million), four real estate construction loans totaling $2.0 million and 19 residential real estate loans totaling $4.6 million. All of these loans are to borrowers located in Oregon and Washington with the exception of two commercial real estate loans totaling $3.5 million. One of the commercial real estate loans is to a California borrower who has property located in Southern California and the second loan is to an Oregon borrower who has property located in Idaho.
Net interest income for the three months ended June 30, 2012 was $8.1 million, representing a decrease of $759,000, or 8.6%, from $8.8 million during the same prior year period. Average interest-earning assets to average interest-bearing liabilities increased to 120.75% for the three month periods ended June 30, 2012 compared to 119.51% in the same prior year period. The net interest margin for the three months ended June 30, 2012 was 4.22% compared to 4.66% for the three months ended June 30, 2011.
Provision for Loan Losses. The provision for loan losses for the three months ended June 30, 2012 was $4.0 million compared to $1.6 million for the same period in the prior year. The increase in the provision for loan losses was primarily a result of an increase in the level of delinquent and classified loans compared to prior year, which have remained at higher levels compared to historical trends. Recent appraisals received by the Company have also reflected declines in real estate values. These conditions are primarily the result of a slowdown in residential real estate sales that affected among others, homebuilders and developers. This slowdown in home sales coupled with declining real estate values has significantly affected these borrowers liquidity and ability to repay loans. The slowdown in the economy has also impacted the Bank s commercial business and commercial real estate customers more in recent quarters. Classified commercial real estate loans increased from $35.1 million at March 31, 2012 to $50.8 million at June 30, 2012. Economic factors impacting these borrowers typically lag that of non-commercial business and non-commercial real estate borrowers. The ratio of allowance for loan losses to total loans was 3.39% at June 30, 2012, compared to 2.32% at June 30, 2011.
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Riverview Bancorp, Inc. has a market cap of $33.5 million; its shares were traded at around $1.38 with and P/S ratio of 0.7.
Highlight of Business Operations:
During the quarter ended June 30, 2012, unemployment in the Company s market decreased in both Clark County, Washington and Portland, Oregon. According to the Washington State Employment Security Department, unemployment in Clark County decreased to 11.2% at May 2012 compared to 11.5% at March 2012 and 12.5% at June 2011. According to the Oregon Employment Department, unemployment in Portland decreased to 7.5% at May 2012 compared to 7.7% at March 2012 and 8.5% at June 2011. Home values at June 2012 in the Company s market area have increased slightly compared to home values a year ago, however, they remain lower compared to 2010 and 2009, due in large part to an increase in volume of foreclosures and short sales. According to the Regional Multiple Listing Services (“RMLS”), inventory levels in Portland, Oregon have decreased to 3.9 months at June 2012 compared to 5.0 months at March 2012 and 6.0 months at June 2011. Inventory levels in Clark County have decreased to 5.4 months at June 2012 compared to 6.4 months at March 2012 and 6.8 months at June 2011. According to RMLS, closed home sales in Clark County increased 17.0% and decreased 1.6% at June 2012 compared to March 2012 and June 2011, respectively. Closed home sales in Portland increased 32.5% and 14.6% at June 30, 2012 compared to March 2012 and June 2011, respectively. Commercial real estate leasing activity in the Portland/Vancouver area has performed better than the residential real estate market, but it is generally affected by a slow economy later than other indicators. According to Norris Beggs Simpson, commercial vacancy rates in Clark County and Portland, Oregon were approximately 16.6% and 22.8%, respectively, as of June 30, 2012 compared to 20.7% and 23.9%, respectively, at June 2011. The Company believes there are indications that increased loan delinquencies and defaults may remain elevated for the foreseeable future.Focusing on Asset Quality. The Company is focused on monitoring existing performing loans, resolving nonperforming loans and selling foreclosed assets. The Company has aggressively sought to reduce its level of nonperforming assets through write-downs, collections, modifications and sales of nonperforming loans and real estate owned. The Company has taken proactive steps to resolve its nonperforming loans, including negotiating repayment plans, forbearances, loan modifications and loan extensions with borrowers when appropriate, and accepting short payoffs on delinquent loans, particularly when such payoffs result in a smaller loss than foreclosure. In connection with the downturn in real estate markets, the Company applied more conservative and stringent underwriting practices to new loans, including, among other things, increasing the amount of required collateral or equity requirements, reducing loan-to-value ratios and increasing debt service coverage ratios. Nonperforming assets decreased $4.0 million to $58.9 million at June 30, 2012 compared to $62.9 million at March 31, 2012. The Company has continued to reduce its exposure to land development and speculative construction loans. The total land development and speculative construction loan portfolios declined to $34.0 million at June 30, 2012 as compared to $49.6 million at March 31, 2012. However, there can be no assurance that the ongoing economic conditions affecting our borrowers will not result in future increases in nonperforming and classified loans. In recent months, however, statistics reflect an increase in demand and sales of building lots in the Company s primary market area resulting in an increase in the number of closed sales for land and building lots. For the three months ended June 30, 2012, the Company has sold $3.9 million in land and lot REO properties.
Nonperforming assets, consisting of nonperforming loans and REO, totaled $58.9 million or 7.22% of total assets at June 30, 2012 compared to $62.9 million or 7.35% of total assets at March 31, 2012. Nonperforming loans were $36.8 million or 5.95% of total loans at June 30, 2012 compared to $44.2 million or 6.45% of total loans at March 31, 2012. The decline in nonperforming loans during the quarter was a result of a transfer of $8.5 million in loans to REO. This transfer of loans to REO was offset by REO sales of $4.4 million during the quarter. The $36.8 million balance of nonperforming loans consisted of 54 loans to 42 borrowers, which includes 11 commercial business loans totaling $2.1 million, nine commercial real estate loans totaling $16.7 million, seven land acquisition and development loans totaling $4.2 million (the largest of which was $1.1 million), four multi-family real estate loans totaling $7.2 million (the largest of which was $3.2 million), four real estate construction loans totaling $2.0 million and 19 residential real estate loans totaling $4.6 million. All of these loans are to borrowers located in Oregon and Washington with the exception of two commercial real estate loans totaling $3.5 million. One of the commercial real estate loans is to a California borrower who has property located in Southern California and the second loan is to an Oregon borrower who has property located in Idaho.
Net interest income for the three months ended June 30, 2012 was $8.1 million, representing a decrease of $759,000, or 8.6%, from $8.8 million during the same prior year period. Average interest-earning assets to average interest-bearing liabilities increased to 120.75% for the three month periods ended June 30, 2012 compared to 119.51% in the same prior year period. The net interest margin for the three months ended June 30, 2012 was 4.22% compared to 4.66% for the three months ended June 30, 2011.
Provision for Loan Losses. The provision for loan losses for the three months ended June 30, 2012 was $4.0 million compared to $1.6 million for the same period in the prior year. The increase in the provision for loan losses was primarily a result of an increase in the level of delinquent and classified loans compared to prior year, which have remained at higher levels compared to historical trends. Recent appraisals received by the Company have also reflected declines in real estate values. These conditions are primarily the result of a slowdown in residential real estate sales that affected among others, homebuilders and developers. This slowdown in home sales coupled with declining real estate values has significantly affected these borrowers liquidity and ability to repay loans. The slowdown in the economy has also impacted the Bank s commercial business and commercial real estate customers more in recent quarters. Classified commercial real estate loans increased from $35.1 million at March 31, 2012 to $50.8 million at June 30, 2012. Economic factors impacting these borrowers typically lag that of non-commercial business and non-commercial real estate borrowers. The ratio of allowance for loan losses to total loans was 3.39% at June 30, 2012, compared to 2.32% at June 30, 2011.
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