News Details

VANCOUVER, Wash.--(BUSINESS WIRE)-- Riverview Bancorp, Inc. (Nasdaq:RVSB) (“Riverview” or the “Company”), the parent company of Riverview Community Bank (the “Bank”) today announced that it has increased its provision for loan losses an additional $3.2 million for its fourth fiscal quarter ended March 31, 2012. As a result, the Company’s net loss was $16.0 million, or $0.71 per share, for the quarter ended March 31, 2012, compared to a net loss of $16.6 million, or $0.74 per share in the preceding quarter and net income of $854,000, or $0.04 per share, in its fourth fiscal quarter a year ago. For the fiscal year, Riverview’s net loss was $31.7 million, or $1.42 per share, compared to net income of $4.3 million, or $0.24 per share, for fiscal year 2011.

“The increase in the provision for loan losses was necessary as a result of updated information received by the Bank on three commercial properties as well as the current regulatory guidance for these individual properties,” said Pat Sheaffer, Chairman and CEO. “This additional provision for loan losses increases the Bank’s reserves as we remain diligent in our efforts to reduce our non-performing assets.”

Credit Quality

Riverview’s provision for loan losses totaled $17.5 million for the fourth quarter of fiscal year 2012, compared to $8.1 million in the preceding quarter and $500,000 in the fourth quarter of fiscal year 2011. The allowance for loan losses increased to $19.9 million at March 31, 2012, representing 2.91% of total loans and 45.11% of non-performing loans (NPLs). NPLs decreased to $44.2 million, or 6.45% of total loans at March 31, 2012, as a result of an additional charge-off of $867,000 on a nonperforming commercial real estate loan.

The additional provision for loan losses was primarily related to three individual properties. The first was a $2.7 million commercial real estate property located in Portland, Oregon. The second was a $992,000 commercial real estate loan to a related borrower located in Portland, Oregon. The Company increased its provision for loan losses $926,000 and charged-off a total of $1.9 million for these two properties. Both of these loans have continued to pay as agreed and have not missed any of their required payments. An additional provision of $600,000 was for a land development project located in southwest Washington. The Company also bolstered its general allowance by an additional $1.7 million.

The Company’s non-performing assets totaled to $62.9 million at March 31, 2012. At March 31, 2012, Riverview’s non-performing assets were 7.35% of total assets, compared to 6.11% at the end of the preceding quarter and 4.65% a year ago. Additionally, as previously reported, the Company sold several additional non-performing assets subsequent to March 31, 2012. These asset sales have totaled more than $7 million, resulting in a net loss of $218,000.

Capital and Liquidity

“From a capital standpoint, the Bank remains sound and strong,” said Ron Wysaske, President and COO. “Additionally, the positive movements we have seen in REO and land sales during the last several months should prove beneficial to the Bank over the next several quarters.”

The Bank continues to maintain capital levels in excess of the regulatory requirements to be categorized as “well capitalized” with a total risk-based capital ratio of 12.11% and a Tier 1 leverage ratio of 8.76% at March 31, 2012. To be considered “well capitalized” a bank has to have a total risk-based capital ratio of 10% and a Tier 1 leverage ratio of 5%. Subsequent to March 31, 2012, the Company invested an additional $2.7 million into the Bank, increasing the Bank’s total risk-based capital ratio to approximately 12.78% and its Tier 1 leverage ratio to 9.25%.

At March 31, 2012, the Bank had available total and contingent liquidity of over $500 million, including over $300 million of borrowing capacity from the Federal Home Loan Bank of Seattle and the Federal Reserve Bank of San Francisco, and more than $80 million of cash and short-term investments.

About Riverview

Riverview Bancorp, Inc. (www.riverviewbank.com) is headquartered in Vancouver, Washington – just north of Portland, Oregon on the I-5 corridor. With assets of $856 million, it is the parent company of the 89 year-old Riverview Community Bank, as well as Riverview Asset Management Corp. The Bank offers true community banking services, focusing on providing the highest quality service and financial products to commercial and retail customers. There are 17 branches, including twelve in the Portland-Vancouver area and three lending centers, with a new branch scheduled to open in the rapidly growing metropolitan area of Gresham, Oregon in the summer of 2012.

“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements that are subject to risks and uncertainties, including, but not limited to: the Company’s ability to raise common capital, the amount of capital it intends to raise and its intended use of that capital. 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 loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets; changes in general economic conditions, either nationally or in the Company’s market areas; 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; 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 sell loans in the secondary market; results of examinations of us by the Office of Comptroller of the Currency (OCC) or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase the Company’s reserve for loan losses, write-down assets, change Riverview Community 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; the Company’s compliance with regulatory enforcement actions we have entered into with the OCC as successor to the Office of Thrift Supervision and the possibility that our noncompliance could result in the imposition of additional enforcement actions and additional requirements or restrictions on our operations; legislative or regulatory changes that adversely affect the Company’s business including changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules; the Company’s ability to attract and retain deposits; further increases in premiums for deposit insurance; 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 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; computer systems on which the Company depends could fail or experience a security breach; 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 successfully integrate any assets, liabilities, customers, systems, and management personnel it may in the future acquire into its operations and the Company’s ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; 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; and interest or principal payments on its junior subordinated debentures; adverse changes in the securities markets; 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 methods; 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 filings with the 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 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 2012 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 operating and stock price performance.

Riverview Bancorp, Inc.
Pat Sheaffer or Ron Wysaske, 360-693-6650

Source: Riverview Bancorp, Inc.