UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): January 23, 2020

RIVERVIEW BANCORP, INC.
(Exact name of registrant as specified in its charter)

 
Washington
 
000-22957
 
91-1838969
 
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)

 
900 Washington Street, Suite 900, Vancouver, Washington
 
98660
 
(Address of principal executive offices)
 
(Zip Code)

Registrant’s telephone number, including area code:  (360) 693-6650

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.
 
[   ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
              (17 CFR 240.14d-2(b))
 
[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
      (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
  
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, Par Value $0.01 per share
 
RVSB
 
The NASDAQ Stock Market LLC


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]


Item 2.02 Results of Operations and Financial Condition.

On January 23, 2020, Riverview Bancorp, Inc. issued its earnings release for the quarter ended December 31, 2019.  A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01  Financial Statements and Exhibits.

(d) Exhibits

The following exhibit is being furnished herewith and this list shall constitute the exhibit index:

99.1 News Release of Riverview Bancorp, Inc. dated January 23, 2020.









SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
RIVERVIEW BANCORP, INC.
 
 
 
 
Date:  January 23, 2020
/S/ David Lam                           
 
David Lam
Chief Financial Officer
(Principal Financial Officer)










Exhibit 99.1

 
 


Contact:
Kevin Lycklama or David Lam
Riverview Bancorp, Inc. 360-693-6650



Riverview Bancorp Reports Earnings of $4.1 Million in Third Quarter of Fiscal Year 2020,
Highlighted by Strong Deposit Growth and Excellent Asset Quality

Vancouver, WA – January 23, 2020 - Riverview Bancorp, Inc. (Nasdaq GSM: RVSB) (“Riverview” or the “Company”) today reported earnings of $4.1 million, or $0.18 per diluted share for the third fiscal quarter ended December 31, 2019, compared to $4.5 million, or $0.20 per diluted share, in the preceding quarter, and $4.4 million, or $0.19 per diluted share, in the third fiscal quarter a year ago. For the first nine months of fiscal 2020, earnings were $12.9 million, or $0.57 per diluted share, compared to $13.1 million, or $0.58 per diluted share, in the first nine months of fiscal 2019.
“We continue to build our momentum, delivering strong financial results for the quarter,” said Kevin Lycklama, president and chief executive officer. “Our reputation for excellent customer service, established by our team of dedicated bankers, continues to drive growth and our ability to attract new clients. We recently announced plans for three new locations in Clark County, Washington, which will be a terrific complement to our existing branch network. In addition to the fall opening of our new location in Ridgefield, we have two new branches  opening this summer in downtown Camas and in the Cascade Park neighborhood of Vancouver.

Third Quarter Highlights (at or for the period ended December 31, 2019)

Net income was $4.1 million, or $0.18 per diluted share.
Net interest margin (NIM) remained healthy at 4.23% for the quarter.
Return on average assets was 1.40% and return on average equity was 11.24% for the third quarter.
Total deposits increased $8.2 million during the quarter to $990.5 million.
Total loans increased $5.2 million during the quarter to $886.5 million.
Asset quality remains strong, with non-performing assets at 0.13% of total assets.
Total risk-based capital ratio was 17.66% and Tier 1 leverage ratio was 12.05%.
Increased its quarterly cash dividend to $0.05 per share, generating a current dividend yield of 2.66% based on the share price at close of market on January 14, 2020.
Income Statement
“We continue to strengthen our franchise, while remaining focused on containing operating expenses and maintaining high credit quality standards,” said Lycklama. Riverview’s return on average assets remained strong at 1.40% in the third quarter of fiscal year 2020 compared to 1.53% in the third quarter of fiscal 2019. Return on average equity and average tangible equity (non-GAAP) remained healthy at 11.24% and 13.89%, respectively, compared to 13.90% and 17.91% for the third fiscal quarter a year ago.
Total net revenues were $14.7 million during the quarter compared to $14.9 million in the prior quarter and $14.5 million in the year ago quarter. Year-to-date, total net revenues increased to $44.1 million from $43.6 million in the same period a year ago.


RVSB Reports Third Quarter Fiscal 2020 Results
January 23, 2020
Page 2

Net interest income for the quarter was $11.5 million compared to $11.7 million in both the preceding quarter and the third fiscal quarter a year ago. In the first nine months of fiscal 2020, net interest income was $34.7 million compared to $35.2 million in the first nine months of fiscal 2019. The decrease in net interest income for the nine months ended December 31, 2019 was primarily attributable to an increase in funding costs compared to the same prior year period in addition to $585,000 of non-accrual interest from a prior charged off loan that was collected during the nine months ended December 31, 2018.
Riverview’s third fiscal quarter NIM was 4.23% compared to 4.36% in the prior quarter and 4.41% in the third fiscal quarter a year ago. The accretion on purchased loans totaled $219,000 during the current quarter compared to $78,000 during the preceding quarter and $172,000 in the same period a year ago, resulting in an eight basis point increase in the NIM for the current period compared to a two basis point increase for the preceding quarter and a seven basis point increase for the same period a year ago. Net fees on loan prepayments were $211,000 for the third fiscal quarter of 2020, which added eight basis points to the NIM compared to $112,000 adding four basis point to the NIM in the preceding quarter, and $15,000 adding one basis point to the NIM in the third fiscal quarter a year ago. In the first nine months of fiscal 2020, Riverview’s NIM was 4.31% compared to 4.42% in the same period a year earlier. Net fees on loan prepayments were $355,000 for the nine-month period ended December 31, 2019, which added four basis points to the NIM compared to $297,000 adding three basis points to the NIM in the same nine-month period a year ago.
“Net interest margin remains healthy despite funding costs increasing by ten basis points during the quarter as a result of increased rates on certain deposit products to remain competitive in our market,” said David Lam, executive vice president and chief financial officer. “We anticipate that the three recent decreases in the fed funds rate along with the heightened competition in our market will continue to put pressure on our loan and deposit pricing, as well as the rest of the banking industry.”
Non-interest income was $3.2 million in the both the third and second fiscal quarters compared to $2.7 million in the third fiscal quarter a year ago. In the first nine months of fiscal 2020, non-interest income increased 12.2% to $9.5 million compared to $8.4 million in the same period a year ago. The improvement in non-interest income was primarily driven by service charges and asset management fees.
Asset management fees increased 21.5% compared to the same quarter a year ago. Asset management fees were $1.1 million during the third fiscal quarter compared to $935,000 in the third fiscal quarter a year ago. In the first nine months of fiscal 2020, asset management fees increased 20.1% to $3.4 million compared to $2.8 million in the first nine months of fiscal 2019. Riverview Trust Company’s assets under management increased substantially to $1.2 billion at December 31, 2019 compared to $690.5 million three months earlier, due primarily to a single large client added during the quarter.
In the third quarter of fiscal 2020, non-interest expense increased to $9.2 million compared to $9.0 million in the preceding quarter. Year-to-date, non-interest expense was $27.4 million compared to $26.7 million in the first nine months of fiscal 2019. The increase is attributable to strategic growth initiatives that included investments in our digital product offerings, as well as the addition of several key hires during the current fiscal year. Additionally, the preceding quarter included an $81,000 gain on the disposal of an asset that was recorded in other non-interest expense and decreased overall expense in the second quarter of fiscal 2020. The efficiency ratio was 63.10% for the third fiscal quarter compared to 60.47% in the preceding quarter and 60.87% in the third fiscal quarter a year ago.
For the third fiscal quarter of 2020, income tax expense totaled $1.3 million, for an effective tax rate of 23.7% compared to 23.0% in the second fiscal quarter of 2020 and 22.5% in the third fiscal quarter of 2019.


RVSB Reports Third Quarter Fiscal 2020 Results
January 23, 2020
Page 3

Balance Sheet Review
Total deposits increased $8.2 million during the quarter to $990.5 million compared to $982.3 million three months earlier, and increased $46.9 million compared to $943.6 million a year earlier. Deposit costs increased to 0.38% during the third quarter compared to 0.28% in the preceding quarter, reflecting Riverview’s efforts to remain competitive in its Northwest markets by increasing selective deposit rates.
“Deposit growth was strong compared to a year ago, which helped keep our FHLB borrowings at zero throughout the quarter,” said Lam. “As a result, our loan to deposit ratio is at 89.5% at December 31, 2019 compared to 92.1% a year ago.” A year ago outstanding FHLB advances were $34.5 million.
Riverview’s total loans increased $5.2 million during the quarter to $886.5 million compared to $881.3 million three months earlier and increased $17.9 million compared to $868.6 million a year ago. Total loans continue to be impacted by an elevated level of paydowns on existing loans, however, the loan pipeline remained healthy at $64.5 million at December 31, 2019 compared to $43.8 million at the end of the prior quarter. Undisbursed construction loans totaled $36.0 million at December 31, 2019 compared to $53.3 million three months earlier, with the majority of the undisbursed construction loans expected to fund over the next several quarters.
Shareholders’ equity increased to $145.8 million at December 31, 2019 compared to $143.1 million three months earlier and $128.1 million a year earlier. Tangible book value per share (non-GAAP) increased to $5.18 at December 31, 2019 compared to $5.06 at September 30, 2019 and $4.43 at December 31, 2018. Riverview paid a quarterly cash dividend of $0.05 per share on January 21, 2020 to shareholders of record on January 9, 2020.
Credit Quality
“Our asset quality remains excellent, with non-performing loans, non-performing assets and classified assets continuing to decrease compared to a year ago,” said Lycklama. “Additionally, we continue to have no real estate owned and minimal charge-offs.” As a result of the continued improvement in asset quality, Riverview recorded no provision for loan losses during the past five quarters. Non-performing loans totaled $1.5 million, or 0.17% of total loans, at December 31, 2019, which was unchanged compared to September 30, 2019. Non-performing loans totaled $1.6 million, or 0.19% of total loans at December 31, 2018.
Net loan charge offs were $3,000 during the third fiscal quarter of 2020 compared to $6,000 in the preceding quarter and $11,000 in the third fiscal quarter a year ago.
Classified assets decreased to $3.1 million at December 31, 2019 compared to $4.3 million at September 30, 2019 and $6.0 million at December 31, 2018. The classified asset to total capital ratio was 2.1% at December 31, 2019 compared to 3.0% three months earlier and 4.4% a year earlier.
At December 31, 2019, the allowance for loan losses totaled $11.4 million, which was unchanged compared to three months earlier. The allowance for loan losses represented 1.29% of total loans at December 31, 2019 compared to 1.30% three months earlier. Included in the carrying value of loans are net discounts on the MBank purchased loans, which may reduce the need for an allowance for loan losses on these loans because they are carried at an amount below the outstanding principal balance. The remaining net discount on these purchased loans was $1.1 million at December 31, 2019 compared to $1.3 million at September 30, 2019 and $1.7 million at December 31, 2018.

Capital
Riverview continues to maintain capital levels well in excess of the regulatory requirements to be categorized as “well capitalized” with a total risk-based capital ratio of 17.66% and a Tier 1 leverage ratio of 12.05% at December 31, 2019. Tangible common equity to average tangible assets ratio (non-GAAP) increased to 10.20% at December 31, 2019.


RVSB Reports Third Quarter Fiscal 2020 Results
January 23, 2020
Page 4

Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. We believe that certain non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance; however, readers of this report are urged to review these non-GAAP financial measures in conjunction with GAAP results as reported.
Financial measures that exclude intangible assets are non-GAAP measures. To provide investors with a broader understanding of capital adequacy, Riverview provides non-GAAP financial measures for tangible common equity, along with the GAAP measure. Tangible shareholders’ equity is calculated as shareholders’ equity less goodwill and other intangible assets. In addition, tangible assets are total assets less goodwill and other intangible assets. We calculate tangible book value per share by dividing tangible shareholders’ equity by the number of common shares outstanding. This non-GAAP financial measure has inherent limitations, is not required to be uniformly applied and is not audited. Further, the non-GAAP financial measure should not be considered in isolation or as a substitute for book value per share or total shareholders' equity determined in accordance with GAAP and may not be comparable to similarly titled measures reported by other companies. Reconciliations of the GAAP and non-GAAP financial measures are presented below.

(Dollars in thousands)
 
December 31, 2019
   
September 30, 2019
   
December 31, 2018
   
March 31, 2019
 
                         
Shareholders' equity
 
$
145,806
   
$
143,119
   
$
128,094
   
$
133,122
 
Goodwill
   
27,076
     
27,076
     
27,076
     
27,076
 
Core deposit intangible, net
   
799
     
839
     
966
     
920
 
                                 
Tangible shareholders' equity
 
$
117,931
   
$
115,204
   
$
100,052
   
$
105,126
 
                                 
Total assets
 
$
1,184,100
   
$
1,173,019
   
$
1,151,225
   
$
1,156,921
 
Goodwill
   
27,076
     
27,076
     
27,076
     
27,076
 
Core deposit intangible, net
   
799
     
839
     
966
     
920
 
                                 
Tangible assets
 
$
1,156,225
   
$
1,145,104
   
$
1,123,183
   
$
1,128,925
 


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 $1.18 billion at December 31, 2019, it is the parent company of the 96-year-old Riverview Community Bank, as well as Riverview Trust Company. The Bank offers true community banking services, focusing on providing the highest quality service and financial products to commercial and retail clients through 18 branches, including 14 in the Portland-Vancouver area, and 3 lending centers. For the past 6 years, Riverview has been named Best Bank by the readers of The Vancouver Business Journal, and The Columbian.
“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 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 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


RVSB Reports Third Quarter Fiscal 2020 Results
January 23, 2020
Page 5

liquidity and earnings; 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 SEC.
Such forward-looking statements may include projections. Any such projections were not prepared in accordance with published guidelines of the American Institute of Certified Public Accountants or the Securities Exchange Commission regarding projections and forecasts nor have such projections been audited, examined or otherwise reviewed by independent auditors of the Company. In addition, such projections are based upon many estimates and inherently subject to significant economic and competitive uncertainties and contingencies, many of which are beyond the control of management of the Company. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by the Company that the projections will prove to be correct.
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 2020 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.




RVSB Reports Third Quarter Fiscal 2020 Results
January 23, 2020
Page 6


RIVERVIEW BANCORP, INC. AND SUBSIDIARY
                       
Consolidated Balance Sheets
                       
(In thousands, except share data)  (Unaudited)
 
December 31, 2019
   
September 30, 2019
   
December 31, 2018
   
March 31, 2019
 
ASSETS
                       
                         
Cash (including interest-earning accounts of $48,781, $32,632,
 
$
62,123
   
$
48,888
   
$
23,394
   
$
22,950
 
$4,641 and $5,844)
                               
Certificate of deposits held for investment
   
249
     
249
     
747
     
747
 
Loans held for sale
   
-
     
310
     
-
     
909
 
Investment securities:
                               
Available for sale, at estimated fair value
   
155,757
     
163,682
     
182,280
     
178,226
 
Held to maturity, at amortized cost
   
29
     
31
     
36
     
35
 
Loans receivable (net of allowance for loan losses of $11,433,
                               
$11,436, $11,502, and $11,457)
   
875,100
     
869,880
     
857,134
     
864,659
 
Prepaid expenses and other assets
   
8,330
     
8,136
     
4,021
     
4,596
 
Accrued interest receivable
   
3,729
     
3,827
     
3,789
     
3,919
 
Federal Home Loan Bank stock, at cost
   
1,380
     
1,380
     
2,735
     
3,644
 
Premises and equipment, net
   
16,021
     
15,490
     
14,940
     
15,458
 
Deferred income taxes, net
   
3,416
     
3,296
     
4,680
     
4,195
 
Mortgage servicing rights, net
   
215
     
247
     
325
     
296
 
Goodwill
   
27,076
     
27,076
     
27,076
     
27,076
 
Core deposit intangible, net
   
799
     
839
     
966
     
920
 
Bank owned life insurance
   
29,876
     
29,688
     
29,102
     
29,291
 
                                 
TOTAL ASSETS
 
$
1,184,100
   
$
1,173,019
   
$
1,151,225
   
$
1,156,921
 
                                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                               
                                 
LIABILITIES:
                               
Deposits
 
$
990,464
   
$
982,275
   
$
943,578
   
$
925,068
 
Accrued expenses and other liabilities
   
18,483
     
17,502
     
15,855
     
12,536
 
Advance payments by borrowers for taxes and insurance
   
329
     
1,117
     
192
     
631
 
Federal Home Loan Bank advances
   
-
     
-
     
34,543
     
56,586
 
Junior subordinated debentures
   
26,640
     
26,619
     
26,553
     
26,575
 
Capital lease obligations
   
2,378
     
2,387
     
2,410
     
2,403
 
Total liabilities
   
1,038,294
     
1,029,900
     
1,023,131
     
1,023,799
 
                                 
SHAREHOLDERS' EQUITY:
                               
Serial preferred stock, $.01 par value; 250,000 authorized,
                               
issued and outstanding, none
   
-
     
-
     
-
     
-
 
Common stock, $.01 par value; 50,000,000 authorized,
                               
December 31, 2019 - 22,748,385 issued and outstanding;
                               
September 30, 2019 - 22,748,385 issued and outstanding;
   
227
     
227
     
226
     
226
 
December 31, 2018 - 22,598,712 issued and outstanding;
                               
March 31, 2019 – 22,607,712 issued and outstanding;
                               
Additional paid-in capital
   
65,637
     
65,559
     
65,056
     
65,094
 
Retained earnings
   
80,103
     
77,112
     
67,126
     
70,428
 
Accumulated other comprehensive income (loss)
   
(161
)
   
221
     
(4,314
)
   
(2,626
)
Total shareholders’ equity
   
145,806
     
143,119
     
128,094
     
133,122
 
                                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
$
1,184,100
   
$
1,173,019
   
$
1,151,225
   
$
1,156,921
 



RVSB Reports Third Quarter Fiscal 2020 Results
January 23, 2020
Page 7

RIVERVIEW BANCORP, INC. AND SUBSIDIARY
                             
Consolidated Statements of Income
                             
   
Three Months Ended
   
Nine Months Ended
 
(In thousands, except share data)   (Unaudited)
 
Dec. 31, 2019
   
Sept. 30, 2019
   
Dec. 31, 2018
   
Dec. 31, 2019
   
Dec. 31, 2018
 
INTEREST INCOME:
                             
Interest and fees on loans receivable
 
$
11,699
   
$
11,893
   
$
11,182
   
$
35,146
   
$
33,261
 
Interest on investment securities - taxable
   
851
     
860
     
1,110
     
2,589
     
3,424
 
Interest on investment securities - nontaxable
   
27
     
36
     
37
     
100
     
110
 
Other interest and dividends
   
189
     
93
     
60
     
369
     
271
 
Total interest and dividend income
   
12,766
     
12,882
     
12,389
     
38,204
     
37,066
 
                                         
INTEREST EXPENSE:
                                       
Interest on deposits
   
942
     
660
     
240
     
1,953
     
759
 
Interest on borrowings
   
332
     
503
     
416
     
1,570
     
1,126
 
Total interest expense
   
1,274
     
1,163
     
656
     
3,523
     
1,885
 
Net interest income
   
11,492
     
11,719
     
11,733
     
34,681
     
35,181
 
Provision for loan losses
   
-
     
-
     
-
     
-
     
50
 
                                         
Net interest income after provision for, recapture of, loan losses
   
11,492
     
11,719
     
11,733
     
34,681
     
35,131
 
                                         
NON-INTEREST INCOME:
                                       
Fees and service charges
   
1,661
     
1,752
     
1,458
     
5,050
     
4,544
 
Asset management fees
   
1,136
     
1,090
     
935
     
3,369
     
2,804
 
Net gain on sale of loans held for sale
   
68
     
46
     
82
     
210
     
278
 
Bank owned life insurance
   
188
     
204
     
192
     
585
     
545
 
Other, net
   
110
     
77
     
62
     
254
     
267
 
Total non-interest income, net
   
3,163
     
3,169
     
2,729
     
9,468
     
8,438
 
                                         
NON-INTEREST EXPENSE:
                                       
Salaries and employee benefits
   
5,941
     
5,697
     
5,794
     
17,353
     
16,655
 
Occupancy and depreciation
   
1,461
     
1,277
     
1,306
     
4,058
     
4,016
 
Data processing
   
637
     
669
     
621
     
1,986
     
1,874
 
Amortization of core deposit intangible
   
40
     
41
     
45
     
121
     
137
 
Advertising and marketing
   
181
     
298
     
151
     
689
     
609
 
FDIC insurance premium
   
-
     
-
     
85
     
81
     
246
 
State and local taxes
   
126
     
174
     
125
     
495
     
475
 
Telecommunications
   
84
     
76
     
85
     
246
     
266
 
Professional fees
   
267
     
263
     
449
     
855
     
1,120
 
Other
   
511
     
508
     
142
     
1,561
     
1,339
 
Total non-interest expense
   
9,248
     
9,003
     
8,803
     
27,445
     
26,737
 
                                         
INCOME BEFORE INCOME TAXES
   
5,407
     
5,885
     
5,659
     
16,704
     
16,832
 
PROVISION FOR INCOME TAXES
   
1,279
     
1,351
     
1,271
     
3,850
     
3,773
 
NET INCOME
 
$
4,128
   
$
4,534
   
$
4,388
   
$
12,854
   
$
13,059
 
                                         
Earnings per common share:
                                       
Basic
 
$
0.18
   
$
0.20
   
$
0.19
   
$
0.57
   
$
0.58
 
Diluted
 
$
0.18
   
$
0.20
   
$
0.19
   
$
0.57
   
$
0.58
 
Weighted average number of common shares outstanding:
                                       
Basic
   
22,665,712
     
22,643,103
     
22,598,712
     
22,642,883
     
22,582,956
 
Diluted
   
22,718,255
     
22,702,696
     
22,663,919
     
22,701,415
     
22,658,153
 



RVSB Reports Third Quarter Fiscal 2020 Results
January 23, 2020
Page 8


(Dollars in thousands)
 
At or for the three months ended
   
At or for the nine months ended
 
   
Dec. 31, 2019
   
Sept. 30, 2019
   
Dec. 31, 2018
   
Dec. 31, 2019
   
Dec. 31, 2018
 
AVERAGE BALANCES
                             
Average interest–earning assets
 
$
1,082,229
   
$
1,069,209
   
$
1,057,199
   
$
1,072,584
   
$
1,056,750
 
Average interest-bearing liabilities
   
726,294
     
708,846
     
707,618
     
721,345
     
716,890
 
Net average earning assets
   
355,935
     
360,363
     
349,581
     
351,239
     
339,860
 
Average loans
   
878,656
     
889,208
     
854,368
     
881,779
     
835,697
 
Average deposits
   
987,056
     
952,283
     
967,246
     
953,418
     
975,295
 
Average equity
   
146,090
     
142,195
     
125,252
     
141,644
     
122,298
 
Average tangible equity (non-GAAP)
   
118,192
     
114,256
     
97,182
     
113,706
     
94,182
 

ASSET QUALITY
 
Dec. 31, 2019
 
Sept. 30, 2019
 
Dec. 31, 2018
                   
Non-performing loans
 
$
1,517
   
$
1,485
   
$
1,612
 
Non-performing loans to total loans
   
0.17
%
   
0.17
%
   
0.19
%
Real estate/repossessed assets owned
 
$
-
   
$
-
   
$
-
 
Non-performing assets
 
$
1,517
   
$
1,485
   
$
1,612
 
Non-performing assets to total assets
   
0.13
%
   
0.13
%
   
0.14
%
Net loan charge-offs in the quarter
 
$
3
   
$
6
   
$
11
 
Net charge-offs in the quarter/average net loans
   
0.00
%
   
0.00
%
   
0.01
%
                         
Allowance for loan losses
 
$
11,433
   
$
11,436
   
$
11,502
 
Average interest-earning assets to average
                       
  interest-bearing liabilities
   
149.01
%
   
150.84
%
   
149.40
%
Allowance for loan losses to
                       
  non-performing loans
   
753.66
%
   
770.10
%
   
713.52
%
Allowance for loan losses to total loans
   
1.29
%
   
1.30
%
   
1.32
%
Shareholders’ equity to assets
   
12.31
%
   
12.20
%
   
11.13
%
                         
                         
CAPITAL RATIOS
                       
Total capital (to risk weighted assets)
   
17.66
%
   
17.27
%
   
16.35
%
Tier 1 capital (to risk weighted assets)
   
16.41
%
   
16.02
%
   
15.10
%
Common equity tier 1 (to risk weighted assets)
   
16.41
%
   
16.02
%
   
15.10
%
Tier 1 capital (to average tangible assets)
   
12.05
%
   
11.79
%
   
11.22
%
Tangible common equity (to average tangible assets) (non-GAAP)
   
10.20
%
   
10.06
%
   
8.91
%


DEPOSIT MIX
 
Dec. 31, 2019
   
Sept. 30, 2019
   
Dec. 31, 2018
   
March 31, 2019
 
                         
Interest checking
 
$
179,447
   
$
178,854
   
$
183,426
   
$
183,388
 
Regular savings
   
217,004
     
196,340
     
137,323
     
137,503
 
Money market deposit accounts
   
183,076
     
186,842
     
242,081
     
233,317
 
Non-interest checking
   
279,564
     
299,062
     
284,939
     
284,854
 
Certificates of deposit
   
131,373
     
121,177
     
95,809
     
86,006
 
Total deposits
 
$
990,464
   
$
982,275
   
$
943,578
   
$
925,068
 



RVSB Reports Third Quarter Fiscal 2020 Results
January 23, 2020
Page 9


COMPOSITION OF COMMERCIAL AND CONSTRUCTION LOANS
             
                         
         
Other
         
Commercial
 
   
Commercial
   
Real Estate
   
Real Estate
   
& Construction
 
   
Business
   
Mortgage
   
Construction
   
Total
 
December 31, 2019
 
(Dollars in thousands)
 
Commercial business
 
$
165,526
   
$
-
   
$
-
   
$
165,526
 
Commercial construction
   
-
     
-
     
79,034
     
79,034
 
Office buildings
   
-
     
109,517
     
-
     
109,517
 
Warehouse/industrial
   
-
     
99,167
     
-
     
99,167
 
Retail/shopping centers/strip malls
   
-
     
67,874
     
-
     
67,874
 
Assisted living facilities
   
-
     
1,075
     
-
     
1,075
 
Single purpose facilities
   
-
     
192,530
     
-
     
192,530
 
Land
   
-
     
15,163
     
-
     
15,163
 
Multi-family
   
-
     
57,792
     
-
     
57,792
 
One-to-four family construction
   
-
     
-
     
9,838
     
9,838
 
  Total
 
$
165,526
   
$
543,118
   
$
88,872
   
$
797,516
 
                                 
March 31, 2019
                               
Commercial business
 
$
162,796
   
$
-
   
$
-
   
$
162,796
 
Commercial construction
   
-
     
-
     
70,533
     
70,533
 
Office buildings
   
-
     
118,722
     
-
     
118,722
 
Warehouse/industrial
   
-
     
91,787
     
-
     
91,787
 
Retail/shopping centers/strip malls
   
-
     
64,934
     
-
     
64,934
 
Assisted living facilities
   
-
     
2,740
     
-
     
2,740
 
Single purpose facilities
   
-
     
183,249
     
-
     
183,249
 
Land
   
-
     
17,027
     
-
     
17,027
 
Multi-family
   
-
     
51,570
     
-
     
51,570
 
One-to-four family construction
   
-
     
-
     
20,349
     
20,349
 
  Total
 
$
162,796
   
$
530,029
   
$
90,882
   
$
783,707
 
                                 
                                 
                                 
                                 
LOAN MIX
 
Dec. 31, 2019
   
Sept. 30, 2019
   
Dec. 31, 2018
   
March 31, 2019
 
Commercial and construction
                               
  Commercial business
 
$
165,526
   
$
167,782
   
$
154,360
   
$
162,796
 
  Other real estate mortgage
   
543,118
     
541,715
     
541,797
     
530,029
 
  Real estate construction
   
88,872
     
83,174
     
76,518
     
90,882
 
    Total commercial and construction
   
797,516
     
792,671
     
772,675
     
783,707
 
Consumer
                               
  Real estate one-to-four family
   
83,978
     
82,578
     
86,240
     
84,053
 
  Other installment
   
5,039
     
6,067
     
9,721
     
8,356
 
    Total consumer
   
89,017
     
88,645
     
95,961
     
92,409
 
                                 
Total loans
   
886,533
     
881,316
     
868,636
     
876,116
 
                                 
Less:
                               
  Allowance for loan losses
   
11,433
     
11,436
     
11,502
     
11,457
 
  Loans receivable, net
 
$
875,100
   
$
869,880
   
$
857,134
   
$
864,659
 


RVSB Reports Third Quarter Fiscal 2020 Results
January 23, 2020
Page 10


DETAIL OF NON-PERFORMING ASSETS
                       
                         
   
Other
   
Southwest
             
   
Oregon
   
Washington
   
Other
   
Total
 
December 31, 2019
                       
                         
Commercial business
 
$
-
   
$
299
   
$
-
   
$
299
 
Commercial real estate
   
851
     
168
     
-
     
1,019
 
Consumer
   
-
     
179
     
20
     
199
 
                                 
Total non-performing assets
 
$
851
   
$
646
   
$
20
   
$
1,517
 



DETAIL OF LAND DEVELOPMENT AND SPECULATIVE CONSTRUCTION LOANS
       
                         
   
Northwest
   
Other
   
Southwest
       
   
Oregon
   
Oregon
   
Washington
   
Total
 
December 31, 2019
 
(dollars in thousands)
 
                         
Land development
 
$
2,175
   
$
1,852
   
$
11,136
   
$
15,163
 
Speculative construction
   
278
     
-
     
9,496
     
9,774
 
                                 
Total land development and speculative construction
 
$
2,453
   
$
1,852
   
$
20,632
   
$
24,937
 








RVSB Reports Third Quarter Fiscal 2020 Results
January 23, 2020
Page 11


                               
   
At or for the three months ended
   
At or for the nine months ended
 
SELECTED OPERATING DATA
 
Dec. 31, 2019
 
Sept. 30, 2019
 
Dec. 31, 2018
 
Dec. 31, 2019
 
Dec. 31, 2018
                               
Efficiency ratio (4)
   
63.10
%
   
60.47
%
   
60.87
%
   
62.16
%
   
61.30
%
Coverage ratio (6)
   
124.26
%
   
130.17
%
   
133.28
%
   
126.37
%
   
131.58
%
Return on average assets (1)
   
1.40
%
   
1.55
%
   
1.53
%
   
1.47
%
   
1.52
%
Return on average equity (1)
   
11.24
%
   
12.68
%
   
13.90
%
   
12.08
%
   
14.17
%
Return on average tangible equity (1) (non-GAAP)
   
13.89
%
   
15.79
%
   
17.91
%
   
15.05
%
   
18.40
%
                                         
NET INTEREST SPREAD
                                       
Yield on loans
   
5.30
%
   
5.32
%
   
5.19
%
   
5.30
%
   
5.28
%
Yield on investment securities
   
2.21
%
   
2.15
%
   
2.38
%
   
2.15
%
   
2.32
%
    Total yield on interest-earning assets
   
4.70
%
   
4.80
%
   
4.65
%
   
4.74
%
   
4.66
%
                                         
Cost of interest-bearing deposits
   
0.54
%
   
0.40
%
   
0.14
%
   
0.39
%
   
0.15
%
Cost of FHLB advances and other borrowings
   
4.55
%
   
3.72
%
   
4.35
%
   
3.71
%
   
4.49
%
    Total cost of interest-bearing liabilities
   
0.70
%
   
0.65
%
   
0.37
%
   
0.65
%
   
0.35
%
                                         
Spread (7)
   
4.00
%
   
4.15
%
   
4.28
%
   
4.09
%
   
4.31
%
Net interest margin
   
4.23
%
   
4.36
%
   
4.41
%
   
4.31
%
   
4.42
%
                                         
PER SHARE DATA
                                       
Basic earnings per share (2)
 
$
0.18
   
$
0.20
   
$
0.19
   
$
0.57
   
$
0.58
 
Diluted earnings per share (3)
   
0.18
     
0.20
     
0.19
     
0.57
     
0.58
 
Book value per share (5)
   
6.41
     
6.29
     
5.67
     
6.41
     
5.67
 
Tangible book value per share (5) (non-GAAP)
   
5.18
     
5.06
     
4.43
     
5.18
     
4.43
 
Market price per share:
                                       
  High for the period
 
$
8.45
   
$
8.55
   
$
8.75
   
$
8.55
   
$
9.91
 
  Low for the period
   
6.94
     
6.87
     
7.03
     
6.87
     
7.03
 
  Close for period end
   
8.21
     
7.38
     
7.28
     
8.21
     
7.28
 
Cash dividends declared per share
   
0.0500
     
0.0450
     
0.0400
     
0.1400
     
0.1100
 
                                         
Average number of shares outstanding:
                                       
  Basic (2)
   
22,665,712
     
22,643,103
     
22,598,712
     
22,642,883
     
22,582,956
 
  Diluted (3)
   
22,718,255
     
22,702,696
     
22,663,919
     
22,701,415
     
22,658,153
 


(1)
Amounts for the quarterly periods are annualized.
(2)
Amounts exclude ESOP shares not committed to be released.
(3)
Amounts exclude ESOP shares not committed to be released and include common stock equivalents.
(4)
Non-interest expense divided by net interest income and non-interest income.
(5)
Amounts calculated based on shareholders’ equity and include ESOP shares not committed to be released.
(6)
Net interest income divided by non-interest expense.
(7)
Yield on interest-earning assets less cost of funds on interest-bearing liabilities.