VANCOUVER, Wash.--(BUSINESS WIRE)--April 2, 2003--Riverview
Bancorp, Inc., (Nasdaq:RVSB) the parent company of Riverview Community
Bank, announced today that it expects to record a non-cash charge to
earnings of approximately $1.5 million after tax, or $0.35 per share,
for its fiscal fourth quarter ended March 31, 2003, in connection with
securities the Bank holds for liquidity and income purposes.
The charge is for the impairment of floating rate preferred stock
of the Federal Home Loan Mortgage Corporation (FHLMC), and the Federal
National Mortgage Association (FNMA). The Bank owns two issues of the
preferred stock with a combined cost of $15.0 million and a combined
market value of approximately $12.7 million at March 31, 2003. The two
issues of the preferred stock pay dividends based on the two-year
constant maturity treasury interest rates, and the amount of the
dividend payment adjusts every two years.
"These securities are part of our interest rate risk management
process," said Ron Wysaske, Executive Vice President and Chief
Financial Officer of the Company and the Bank. "We balance the
interest rate risk of holding fixed rate loans and investments by
holding floating rate assets, which include loans and investments such
as these. The problems in the U.S. economy, the conflict in the Middle
East, and negative consumer sentiment have continued to weigh heavily
on U.S. debt and equity markets. These factors have resulted in a
precipitous and continued decline in market interest rates. The
dividends paid by and the value of these securities depend on interest
rates, and as a result the market value of these securities have
fallen."
"As part of our continuing assessment and realignment of the
investment portfolio, we concluded that these securities were impaired
because they had suffered an 'other-than-temporary' decline in value,
one that is not expected to recover in the near term," added Wysaske.
"As part of our ongoing asset liability management we will continue to
monitor the value of these securities and take additional charges if
considered appropriate."
These securities are accounted for in accordance with Statement of
Financial Accounting Standards (SFAS) No. 115. In accordance with SFAS
115, the determination of "other-than-temporary" impairment considers
both the length of time and the extent to which the value of a
security has declined. These write-downs are non-cash charges, which
are recorded as realized losses in Riverview's income statement, with
a corresponding reduction in unrealized losses in shareholders'
equity, even though there were no sales of the securities. Any
previous market value losses have already been reflected in the
equity, or book value, of the Company. The Company plans to announce
its March 31, 2003 quarterly and fiscal year financial results on May
5, 2003.
Riverview Bancorp, Inc. (www.riverviewbank.com) is the parent
company for Riverview Community Bank, headquartered in Vancouver,
Washington. On Tuesday, April 1, 2003, Riverview Bancorp, Inc. closed
the trading day at $16.60 per share.
Forward-Looking Statements
This news release contains certain forward-looking statements.
These statements include statements regarding anticipated future
performance, developments or events, expectations for earnings, growth
and market forecasts, and any other guidance on future periods,
constitute forward-looking statements, which are subject to a number
of risks and uncertainties that are beyond the Company's control and
might cause actual results to differ materially from the expectations
and stated objectives. Forward-looking statements can be identified by
the fact that they do not relate strictly to historical or current
facts. They often include words like "believe," "expect,"
"anticipate," "estimate," and "intend" or future or conditional verbs
such as "will," "would," "should," "could" or "may." Certain factors
that could cause actual results to differ materially from expected
results include changes in the interest rate environment, changes in
general economic conditions, changes in accounting requirements;
changes in tax laws, legislative and regulatory changes that adversely
affect the business in which Riverview Bancorp is engaged, and changes
in the securities markets. Additional factors that could cause actual
results to differ materially are disclosed in Riverview Bancorp's
recent filings with the SEC, including but not limited to Annual
Reports on Form 10-K, quarterly reports on Form 10-Q and current
reports on Form 8-K. Riverview Bancorp undertakes no responsibility to
update or revise any forward-looking statement.
CONTACT: Riverview Bancorp, Inc.Patrick Sheaffer or Ron Wysaske, 360/693-6650
SOURCE: Riverview Bancorp, Inc.