Riverview Bancorp Inc Reports Operating Results (10-K)
Riverview Bancorp Inc has a market cap of $33.6 million; its shares were traded at around $3.08 with and P/S ratio of 0.6.
Highlight of Business Operations:As a progressive, community-oriented financial services company, the Company emphasizes local, personal service to residents of its primary market area. The Company considers Clark, Cowlitz, Klickitat and Skamania counties of Washington and Multnomah, Clackamas and Marion counties of Oregon as its primary market area. The Company is engaged predominantly in the business of attracting deposits from the general public and using such funds in its primary market area to originate commercial, commercial real estate, multi-family real estate, real estate construction, residential real estate and other consumer loans. Commercial, commercial real estate and real estate construction loans have increased to 87.6% of the loan portfolio at March 31, 2010 increasing the risk profile of the total loan portfolio. The Company s recent strategy is to control balance sheet growth in order to improve its regulatory capital ratios, including the targeted reduction of residential construction related loans. Speculative construction loans represented $30.6 million, or 86.4% of the residential construction portfolio at March 31, 2010. These loan balances decreased 47.0% from a year ago. Land acquisition and development loans were $74.8 million at March 31, 2010 compared to $91.9 million a year ago, which represents a decline of 18.6%.
Weak economic conditions and ongoing strains in the financial and housing markets which accelerated throughout 2008 and generally continued into 2010 presenting an unusually challenging environment for banks. This has resulted in an increase in loan delinquencies and foreclosure rates, primarily in our residential construction and land development loan portfolios. Foreclosures and delinquencies are also being driven by investor speculation in many states, while job losses and depressed economic conditions have resulted in the higher levels of delinquent loans. The continued economic downturn, and more specifically the slowdown in residential real estate sales, has resulted in further uncertainty in the financial markets. This has been particularly evident in the Company s need to provide for credit losses during these periods at significantly higher levels than its historical experience and has also affected its net interest income and other operating revenue and expenses. During the quarter-ended March 31, 2010, unemployment in Clark County increased during the quarter ended March 31, 2010, unemployment in Portland, Oregon decreased during this same time period. In addition, several other indicators, including home values and housing inventory levels have shown improvements during the quarter ended March 31, 2010. According to the Washington State Employment Security Department, unemployment in Clark County increased to 14.6% in March 2010 compared to 13.7% at December 2009, 12.7% in September 2009 and 12.6% in June 2009. According to the Oregon Employment Department, unemployment in Portland decreased to 10.1% in March 2010 compared to 10.4% in December 2009, 11.3% in September 2009 and 11.6% in June 2009. Home values at March 31, 2010 in the Company s market area remained lower than home values in 2009 and 2008, due in large part to an increase in volume of foreclosures and short sales. However, as noted above, home values have begun to stabilize in the past quarter after decreasing during the past fiscal year. According to the Regional Multiple Listing Services (RMLS), inventory levels in Portland, Oregon have fallen to 7.8 months at March 2010, compared to 12.0 months at March 2009. Inventory levels in Clark County have fallen to 7.7 months at March 2010, compared to 11.7 months at March 2009. Closed home sales in Clark County increased 30.9% in March 2010 compared to March 2009. Closed home sales in Portland increased 51.9% during the same time period. 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. Accordingly to Norris Beggs Simpson, commercial vacancy rates in Clark County and Portland Oregon were approximately 18% and 22%, respectively as of March 31, 2010. During the past 24 months, the Company has experienced a decline in the values of real estate collateral underlying its loans, including certain of its construction real estate and land acquisition and development loans, has experienced increased loan delinquencies and defaults, and believes there are indications of potential further increased loan delinquencies and defaults. In addition, competition among financial institutions for deposits has also continued to increase, making it more expensive to attract core deposits.
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