Riverview Bancorp Inc (RVSB, Financial) filed Quarterly Report for the period ended 2008-12-31.
Riverview Bancorp Inc. is a holding company for Riverview Savings Bank. The bank is a community oriented financial institution offering traditional financial services to the residents of its primary market area. The bank is engaged in the business of attracting deposits from the public and using such funds to originate fixed-rate mortgage loans and adjustable rate mortgage loans secured by one- to- four family residential real estate located in its primary market area. The bank is an active originator of residential construction loans and consumer loans. Riverview Bancorp Inc has a market cap of $24.47 million; its shares were traded at around $3.55 with and P/S ratio of 0.35. Riverview Bancorp Inc had an annual average earning growth of 8.8% over the past 10 years. GuruFocus rated Riverview Bancorp Inc the business predictability rank of 4.5-star.
Net loss for the nine months ended December 31, 2008 was $1.9 million, or $0.18 per basic share ($0.18 per diluted share), compared to net income of $7.5 million, or $0.68 per basic share ($0.67 per diluted share) for the nine months ended December 31, 2007.
For the nine months ended December 31, 2008, the Company recorded a provision for loan losses of $11.2 million compared to $1.1 million for the nine months ended December 31, 2007, which reduced our results of operations for the nine months ended December 31, 2008. The Company also recorded net loan charge-offs of $5.6 million for the nine months ended December 31, 2008 compared to $248,000 for the nine months ended December 31, 2007. At December 31, 2008, the Company s total non-performing loans had increased to $28.4 million compared to $1.1 million at December 31, 2007. The operating difficulties of individual borrowers resulting from the weakness in the economy of the Pacific Northwest, in addition to slowing home sales, have been contributing factors to the increase in non-performing loans as well as the increased level of delinquencies. These economic conditions have also contributed to the higher provision for loan losses for the nine months ended December 31, 2008 compared to the same period in prior year.
Investment securities available for sale totaled $9.0 million at December 31, 2008, compared to $7.5 million at March 31, 2008. The $1.5 million increase was attributable to a new $5.0 million agency security purchased, which was offset by maturities, scheduled cash flows and an impairment charge of $3.4 million. The investment security that the Company recognized a non-cash impairment charge on is a trust preferred pooled security issued by other bank holding companies. We review investment securities for the presence of OTTI, taking into consideration current market conditions, the extent and nature of changes in fair value, issuer rating changes and trends, current analysts evaluations, the Company s ability and intent to hold investments until a recovery of fair value, which may be maturity, as well as other factors. During the second quarter of fiscal 2009, the investment rating of the security was lowered from “A1” to “Baa3” by one rating agency, two of the issuers of the security invoked their original contractual right to defer interest payments and one issuer of the security defaulted. Although management believes it is possible that all principal and interest will be received and the Company has the ability and intention to continue to hold the security until there is a recovery in value, general market concerns over these and similar types of securities, as well as the lowering of the investment rating for the security, caused the fair value to decline severely enough during the second quarter to warrant an OTTI charge. Using a discounted cash flow approach, we estimated the security s fair value to be $1.6 million and recognized a $3.4 million OTTI charge.
Loans receivable, net, totaled $805.5 million at December 31, 2008, compared to $756.5 million at March 31, 2008, an increase of $49.0 million. The increase in net loans is attributable to continued loan growth as the Company followed its strategic plan of increasing commercial real estate loan originations. This increase was partially offset by the pay down of several large loans as well as net charge-offs of $5.6 million in loans for the nine months ended December 31, 2008. Commercial real estate loans, excluding land acquisition and development loans, increased $22.2 million during the quarter-ended December 31, 2008. This increase was partially offset by a $7.9 million decrease in one-to-four family construction loans during this same period. A substantial portion of the loan portfolio is secured by real estate, either as primary or secondary collateral, located in the Company s primary market areas. Risks associated with loans secured by real estate include decreasing land and property values, increases in interest rates, deterioration in local economic conditions, reduced sales of homes and land, tightening credit or refinancing markets, and a concentration of loans within any one area. The Company has no sub-prime residential real estate loans in its portfolio.
Deposit accounts totaled $689.8 million at December 31, 2008, compared to $667.0 million at March 31, 2008. Total brokered deposits at December 31, 2008 were $35.8 million, or 5.2% of total deposits, compared to $25.7 million, or 3.9% of total deposits, at March 31, 2008. Non-brokered deposits increased a total of $32.1 million, or 5.2% since September 30, 2008. The increase in deposits resulted from a continued concerted effort by the Company to increase its core deposits. The Company continues to focus deposit growth around customer relationships as opposed to obtaining deposits through the wholesale markets. However, the Company has continued to experience increased competition for customer deposits within its market area. Overall, growth in deposits was dampened by decreases in the average account balances of many of our real estate related customers, reflecting the slowdown of home sales and other transaction closings. As market interest rates have continued to decrease, the Company has seen a shift in customer deposit choices from money market deposit and interest checking accounts into certificates of deposit. As a result, the balance of certificates of deposit increased $42.6 million to $308.3 million at December 31, 2008, compared to $265.7 million at March 31, 2008.
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Riverview Bancorp Inc. is a holding company for Riverview Savings Bank. The bank is a community oriented financial institution offering traditional financial services to the residents of its primary market area. The bank is engaged in the business of attracting deposits from the public and using such funds to originate fixed-rate mortgage loans and adjustable rate mortgage loans secured by one- to- four family residential real estate located in its primary market area. The bank is an active originator of residential construction loans and consumer loans. Riverview Bancorp Inc has a market cap of $24.47 million; its shares were traded at around $3.55 with and P/S ratio of 0.35. Riverview Bancorp Inc had an annual average earning growth of 8.8% over the past 10 years. GuruFocus rated Riverview Bancorp Inc the business predictability rank of 4.5-star.
Highlight of Business Operations:
Financial Highlights. Net income for the three months ended December 31, 2008 was $1.5 million, or $0.14 per basic share ($0.14 per diluted share), compared to net income of $2.2 million, or $0.21 per basic share ($0.21 per diluted share) for the three months ended December 31, 2007. Net interest income after provision for loan losses decreased $1.0 million to $7.2 million for the three months ended December 31, 2008 compared to $8.2 million for the same quarter last year. Non-interest income and non-interest expense decreased $248,000 and $104,000, respectively, for the three months ended December 31, 2008 compared to the same quarter last year.Net loss for the nine months ended December 31, 2008 was $1.9 million, or $0.18 per basic share ($0.18 per diluted share), compared to net income of $7.5 million, or $0.68 per basic share ($0.67 per diluted share) for the nine months ended December 31, 2007.
For the nine months ended December 31, 2008, the Company recorded a provision for loan losses of $11.2 million compared to $1.1 million for the nine months ended December 31, 2007, which reduced our results of operations for the nine months ended December 31, 2008. The Company also recorded net loan charge-offs of $5.6 million for the nine months ended December 31, 2008 compared to $248,000 for the nine months ended December 31, 2007. At December 31, 2008, the Company s total non-performing loans had increased to $28.4 million compared to $1.1 million at December 31, 2007. The operating difficulties of individual borrowers resulting from the weakness in the economy of the Pacific Northwest, in addition to slowing home sales, have been contributing factors to the increase in non-performing loans as well as the increased level of delinquencies. These economic conditions have also contributed to the higher provision for loan losses for the nine months ended December 31, 2008 compared to the same period in prior year.
Investment securities available for sale totaled $9.0 million at December 31, 2008, compared to $7.5 million at March 31, 2008. The $1.5 million increase was attributable to a new $5.0 million agency security purchased, which was offset by maturities, scheduled cash flows and an impairment charge of $3.4 million. The investment security that the Company recognized a non-cash impairment charge on is a trust preferred pooled security issued by other bank holding companies. We review investment securities for the presence of OTTI, taking into consideration current market conditions, the extent and nature of changes in fair value, issuer rating changes and trends, current analysts evaluations, the Company s ability and intent to hold investments until a recovery of fair value, which may be maturity, as well as other factors. During the second quarter of fiscal 2009, the investment rating of the security was lowered from “A1” to “Baa3” by one rating agency, two of the issuers of the security invoked their original contractual right to defer interest payments and one issuer of the security defaulted. Although management believes it is possible that all principal and interest will be received and the Company has the ability and intention to continue to hold the security until there is a recovery in value, general market concerns over these and similar types of securities, as well as the lowering of the investment rating for the security, caused the fair value to decline severely enough during the second quarter to warrant an OTTI charge. Using a discounted cash flow approach, we estimated the security s fair value to be $1.6 million and recognized a $3.4 million OTTI charge.
Loans receivable, net, totaled $805.5 million at December 31, 2008, compared to $756.5 million at March 31, 2008, an increase of $49.0 million. The increase in net loans is attributable to continued loan growth as the Company followed its strategic plan of increasing commercial real estate loan originations. This increase was partially offset by the pay down of several large loans as well as net charge-offs of $5.6 million in loans for the nine months ended December 31, 2008. Commercial real estate loans, excluding land acquisition and development loans, increased $22.2 million during the quarter-ended December 31, 2008. This increase was partially offset by a $7.9 million decrease in one-to-four family construction loans during this same period. A substantial portion of the loan portfolio is secured by real estate, either as primary or secondary collateral, located in the Company s primary market areas. Risks associated with loans secured by real estate include decreasing land and property values, increases in interest rates, deterioration in local economic conditions, reduced sales of homes and land, tightening credit or refinancing markets, and a concentration of loans within any one area. The Company has no sub-prime residential real estate loans in its portfolio.
Deposit accounts totaled $689.8 million at December 31, 2008, compared to $667.0 million at March 31, 2008. Total brokered deposits at December 31, 2008 were $35.8 million, or 5.2% of total deposits, compared to $25.7 million, or 3.9% of total deposits, at March 31, 2008. Non-brokered deposits increased a total of $32.1 million, or 5.2% since September 30, 2008. The increase in deposits resulted from a continued concerted effort by the Company to increase its core deposits. The Company continues to focus deposit growth around customer relationships as opposed to obtaining deposits through the wholesale markets. However, the Company has continued to experience increased competition for customer deposits within its market area. Overall, growth in deposits was dampened by decreases in the average account balances of many of our real estate related customers, reflecting the slowdown of home sales and other transaction closings. As market interest rates have continued to decrease, the Company has seen a shift in customer deposit choices from money market deposit and interest checking accounts into certificates of deposit. As a result, the balance of certificates of deposit increased $42.6 million to $308.3 million at December 31, 2008, compared to $265.7 million at March 31, 2008.
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