Riverview Bancorp Reports Fourth Quarter and Fiscal Year 2020 Results; Highlighted by Strong Loan and Deposit Growth
VANCOUVER, Wash., May 07, 2020 (GLOBE NEWSWIRE) — Riverview Bancorp, Inc. (Nasdaq GSM: RVSB) (“Riverview” or the “Company”) today reported earnings of $2.9 million, or $0.13 per diluted share for the fourth fiscal quarter ended March 31, 2020, compared to $4.1 million, or $0.18 per diluted share, in the preceding quarter, and $4.2 million, or $0.19 per diluted share, in the fourth fiscal quarter a year ago. For fiscal 2020, earnings were $15.7 million, or $0.69 per diluted share, compared to $17.3 million, or $0.76 per diluted share, in fiscal 2019.
“The COVID-19 pandemic has proven to be an unprecedented time globally, nationally and in the market areas we serve,” stated Kevin Lycklama, president and chief executive officer. “Our team achieved solid operating results in fiscal 2020, driven by organic loan growth, excellent asset quality and improved operating efficiencies. Our fourth quarter earnings reflect the early impact of the pandemic and its effect on our communities.”“Above all else, the safety of our customers and employees is our top priority and we began implementing our pandemic response plan in early March to reduce the risk of exposure and spread of COVID-19,” noted Lycklama. “In mid-March, our lobby access was restricted at all branches and we actively encouraged the use of drive-up services, ATMs, online banking and call center operations. Approximately 40% of our staff is working remotely, and we will continue with this structure until the mandated Stay-At-Home orders have been lifted by the States of Washington and Oregon.” Below are some of the impacts of the pandemic related to Riverview’s operations: Industry Exposure: The governors of both Washington and Oregon have ordered all non-essential businesses to close, mandated Stay-at-Home orders, and closed schools and universities. While the economic impact of these steps is widespread, some industries will be more acutely affected by the current business decline. Riverview’s loan portfolio exposure to industries most affected by these mandates include: Hotel/Motel ($108.3 million, 11.9% of total loans), Retail Strip Centers ($80.8 million, 8.9% of total loans), Gas Station/Auto Repair ($41.3 million, 4.5% of total loans) and Restaurants/Fast Food ($14.9 million, 1.6%). Loans to these customers are generally secured by real estate and had strong performance heading into the current pandemic. The weighted average loan-to-value and debt service coverage ratio for these portfolios were as follows: Hotel/Motel (54% and 1.93), Retail Strip Centers (52% and 1.63), Gas Station/Auto Repair (52% and 2.55), and Restaurants/Fast Food (57% and 1.46). Riverview also performed a refresh of the stress test on its commercial loan portfolio.Loan Accommodations: As of May 5, 2020, Riverview had approved payment deferrals for 53 commercial loans that were impacted by the COVID-19 pandemic totaling $125.4 million. In general, the payment deferral period for these loans was 90 days. Depending on economic conditions, extensions to the initial payment deferral periods may be necessary. Riverview has received an additional 46 commercial loan modification requests totaling $72.8 million that it is in the process of completing. In addition, 60 consumer and mortgage loans totaling $16.0 million were approved for payment deferrals. Since all of these loans were performing loans that were current on their payments prior to COVID-19, these loan modifications are not considered to be troubled debt restructurings pursuant to provisions contained within the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).Loan Loss Reserve: Riverview’s asset quality remained stable during the quarter; however, management determined a $1.3 million provision for loan losses for the quarter ended March 31, 2020 was warranted. The current quarter’s provision for loan losses was due primarily to economic uncertainties associated with the COVID-19 pandemic. The allowance for loan losses was $12.6 million, or 1.38% of total loans, at March 31, 2020.Paycheck Protection Program (“PPP”). On March 27, 2020, Congress passed the CARES Act providing financial relief and support to the economy, including funding for the Small Business Association’s (“SBA”) PPP. Riverview began processing PPP loan applications immediately after the program was available and as of May 5th, Riverview had obtained approval for 751 loans totaling approximately $115.1 million with an average loan size of $153,000. Of the 751 approved loans, 72% were for loans under $100,000 and over 91% for loans under $350,000. This also included funding for nearly 50 local non-profit organizations.
“The response to the rollout of this program by our staff has been tremendous,” said Lycklama. “I would like to thank our employees who worked days, nights and weekends the last several weeks to provide this critical lifeline to our local business and communities. Their efforts secured funding to support nearly 12,000 jobs. As a 96-year-old community bank, we are deeply rooted in our communities and we take considerable pride in serving small businesses, which are at the heart of our mission as a community bank.”
“Community banks across the nation stepped up when our communities and neighbors needed help,” said Lycklama. “Banks under $10 billion in assets approved approximately 60% of the loans in the first round of the PPP. I am proud of Riverview’s performance and our ability to handle as many applications as we did. This program has really highlighted the core values and spirit of a community bank. We were able to be flexible, respond quickly and provide the personal attention that our local business partners deserve and have come to expect from Riverview.”
Liquidity Resources: Riverview is well positioned with adequate levels of cash and liquid assets as of March 31, 2020. In addition to the on-balance sheet liquidity, Riverview has over $300 million of available liquidity through the Federal Home Loan Bank and the Federal Reserve Bank.Fourth Quarter Highlights (at or for the period ended March 31, 2020)Net income was $2.9 million, or $0.13 per diluted share.Net interest margin (NIM) remained healthy at 4.10% for the quarter.Return on average assets was 0.99% and return on average equity was 7.77% for the fourth quarter.Provision for loan losses was $1.3 million for the fourth quarter.Total loans increased $25.0 million during the quarter to $911.5 million. Loan balances increased 4.0% over the last fiscal year.Total deposits were $990.4 million at quarter end. Deposit balances increased 7.1% over the last fiscal year.Asset quality remains strong, with non-performing assets at 0.12% of total assets.Total risk-based capital ratio was 17.01% and Tier 1 leverage ratio was 11.78%.Paid a quarterly cash dividend of $0.05 per share, generating a current dividend yield of 4.19% based on the share price at close of market on the payment date of April 22, 2020.Riverview completed its share repurchase program on April 17, 2020, repurchasing 500,000 shares totaling $2.5 million.Income Statement
