Riverview Bancorp, Inc. 360-693-6650

 

Riverview Bancorp Reports Earnings for Third Fiscal Quarter 2018

Pre-Tax Income increases 72% Year-Over-Year

Vancouver, WA – January 25, 2018 - Riverview Bancorp, Inc. (Nasdaq GSM: RVSB) ("Riverview" or the "Company") today reported net income of $1.5 million, or $0.07 per diluted share, in its third fiscal quarter ended December 31, 2017. This compares to net income of $3.1 million, or $0.14 per diluted share, in the preceding quarter and net income of $2.0 million, or $0.09 per diluted share, in the third fiscal quarter a year ago. Net income was impacted during the current quarter due to a valuation adjustment of the Company's net deferred tax asset along with the use of a lower blended tax rate, which resulted in an additional net income tax expense of $1.8 million, or $0.08 per diluted share. Pre-tax income for the third fiscal quarter of 2018 was $5.1 million, which was a $449,000, or 9.6%, increase compared to the preceding quarter and a $2.1 million, or 71.8%, increase from the year ago quarter.

In the first nine months of fiscal year 2018, Riverview's net income increased to $7.2 million, or $0.32 per diluted share, compared to $5.4 million, or $0.24 per diluted share, in the first nine months of fiscal year 2017.

"Riverview had another successful quarter with strong net interest income generation, an expanding net interest margin and continued operating efficiencies," stated Pat Sheaffer, chairman, chief executive officer and president. "With the successful integration of the MBank transaction behind us, our focus remains on expanding our franchise. We will continue to look for growth opportunities in the Portland area and its surrounding markets."

As a result of the Tax Cuts and Jobs Act (the "Tax Act") enacted on December 22, 2017, Riverview revalued its deferred tax assets and liabilities to account for the future impact of lower corporate tax rates and other provisions of the Tax Act. Based on its preliminary analysis, Riverview recorded a one-time net tax charge of $1.8 million related to the lower corporate tax rate adopted in the Tax Act. This increase in income tax expense was reflected in Riverview's operating results for the third fiscal quarter of 2018 and was in addition to the normal provision for income tax related to pre-tax net operating income.

"We recorded an additional net income tax expense of $1.8 million, or $0.08 per diluted share, due to the passage of the Tax Cuts and Jobs Act in the third fiscal quarter of 2018," said Kevin Lycklama, executive vice president and chief operating officer. "Going forward, we expect to fully recoup this additional expense within the next fiscal year, due to the lower corporate tax rate. The effective tax rate for our fourth fiscal quarter of 2018 is expected to be approximately 31.5% due to our use of a blended tax rate for the remainder of this fiscal year. We expect our effective tax rate will decline to approximately 22.5% beginning on April 1, 2018 at the start of our new fiscal year."

Third Quarter Highlights (at or for the period ended December 31, 2017)

 

·	Net interest margin (NIM) expanded by three basis points to 4.06% compared to the preceding quarter and expanded 31 basis points compared to the third quarter a year ago.

·	Total loans increased $13.6 million during the quarter to $797.3 million.

·	Non-performing assets were 0.26% of total assets.

·	Efficiency ratio improved to 62.5%.

·	Tangible book value per share was $3.93.

·	Total risk-based capital ratio was 15.07% and Tier 1 leverage ratio was 9.82%.

·	Declared quarterly cash dividend of $0.03 per share, generating a current dividend yield of 1.28% based on the market price on January 23, 2018.

 

RVSB Reports Third Quarter Fiscal 2018 Results

January 25, 2018

Page 2

Riverview's net interest income was $10.8 million in the third fiscal quarter of 2018, a $71,000 increase compared to $10.7 million in the preceding quarter and a $2.3 million increase compared to $8.5 million in the third fiscal quarter a year ago. In the first nine months of fiscal 2018, net interest income increased $7.5 million to $32.0 million compared to $24.4 million in the first nine months of fiscal 2017.

"Our net interest margin expanded three basis points in the third quarter of fiscal 2018 compared to the prior linked quarter reflecting a lower balance of cash and liquid assets earning a nominal yield," said Lycklama. The interest accretion on purchased loans totaled $175,000 and resulted in a six basis point increase in the NIM during the third fiscal quarter. Fiscal year-to-date, the NIM increased 33 basis points to 4.06% compared to 3.73% in the first nine months of fiscal 2017.

Non-interest income was $2.9 million in the third fiscal quarter, a $177,000 increase compared to $2.7 million the prior quarter and a $557,000 increase compared to $2.3 million in the same quarter a year ago. In the first nine months of fiscal 2018, non-interest income increased to $8.3 million compared to $7.4 million in the first nine months of fiscal 2017. The nine month year over year increase was primarily due to an increase in fees and service charges and asset management fees.

Asset management fees were $911,000 in the third fiscal quarter of 2018 compared to $818,000 in the preceding quarter and $709,000 in the third fiscal quarter a year ago. Riverview Trust Company's ("RTC") assets under management increased to $490.1 million at December 31, 2017 compared to $461.2 million three months earlier and $403.3 million a year earlier. During the fourth quarter of fiscal 2017, RTC opened a second office in the Portland suburb of Lake Oswego, expanding its footprint and product offerings in the Portland market.

Non-interest expense decreased $201,000 to $8.6 million during the third fiscal quarter of 2018 compared to $8.8 million in the preceding quarter and increased $707,000 from $7.9 million for the same prior year period mainly due to the MBank transaction. There were no transaction related costs from the MBank transaction in the current quarter compared to $177,000 in transaction related costs during the preceding quarter. The efficiency ratio improved to 62.5% for the quarter ended December 31, 2017, compared to 65.2% in the preceding quarter and 72.5% in the third fiscal quarter a year ago. "With all MBank transaction costs behind us, we expect to continue to capitalize on the cost savings and operating efficiencies associated with a larger organization," said Lycklama. "We will continue to look for other opportunities to improve profitability and increase shareholder value."

Total loans increased $13.6 million during the quarter to $797.3 million at December 31, 2017 compared to $783.7 million at September 30, 2017, and increased $133.0 million compared to $664.3 million a year ago. The growth in the loan portfolio was primarily concentrated in commercial business, multi-family and warehouse/industrial loans. Undisbursed construction loans totaled $61.8 million at December 31, 2017, with the majority of the undisbursed construction loans expected to fund over the next several quarters. The commercial loan pipeline totaled $61.6 million at the end of the quarter.

Total deposits increased $131.8 million to $972.2 million at December 31, 2017 compared to $840.4 million a year ago but decreased compared to $990.3 million at September 30, 2017. The decrease compared to the prior quarter end was primarily due to the timing of deposit transactions. Core deposits represent 98.0% of total deposits at December 31, 2017.

Shareholders' equity was $116.8 million at December 31, 2017 compared to $116.7 million three months earlier and $109.4 million a year earlier. Tangible book value per share was $3.93 at both December 31, 2017 and September 30, 2017 and an increase compared to $3.72 at December 31, 2016. A quarterly cash dividend of $0.03 per share was paid on January 23, 2018.

Classified assets totaled $6.9 million at December 31, 2017 compared to $7.1 million at September 30, 2017 and the classified asset to total capital ratio was 5.7% compared to 6.0%, respectively.

 

 

Riverview's non-performing loans were $2.7 million, or 0.33% of total loans, at December 31, 2017 compared to $2.8 million, or 0.35% of total loans, three months earlier. Real estate owned balances of $298,000 at December 31, 2017 were unchanged compared to the preceding quarter end.

The allowance for loan losses totaled $10.9 million, representing 1.36% of total loans at December 31, 2017 compared to $10.6 million and 1.35% of total loans at September 30, 2017. 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 $2.4 million at December 31, 2017 compared to $2.6 million at the end of the prior quarter. Net loan recoveries were $250,000 during the third fiscal quarter of 2018 compared to $20,000 in the preceding quarter.

Riverview recorded no provision for loan losses during the third fiscal quarter of 2018 or in the preceding quarter, primarily as a result of the lower levels of delinquent, nonperforming and classified loans, elevated levels of net recoveries, as well as stabilizing values in our market areas which mitigated the required allowance for loan losses due to our loan growth.

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 15.07% and a Tier 1 leverage ratio of 9.82% at December 31, 2017. In addition at that date the Company's  tangible common equity to tangible assets ratio was 8.05%.

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 common 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 common 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 stockholders' 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, 2017				September 30, 2017				December 31, 2016				March 31, 2017
Shareholders' equity		$	116,803			$	116,742			$	109,400			$	111,264
Goodwill			27,076				27,076				25,572				27,076
Core deposit intangible, net			1,161				1,219				-				1,335
Tangible shareholders' equity		$	88,566			$	88,447			$	83,828			$	82,853
Total assets		$	1,128,342			$	1,147,680			$	985,669			$	1,133,939
Goodwill			27,076				27,076				25,572				27,076
Core deposit intangible, net			1,161				1,219				-				1,335
Tangible assets		$	1,100,105			$	1,119,385			$	960,097			$	1,105,528

Riverview Bancorp, Inc. (www.riverviewbank.com) is headquartered in Vancouver, Washington – just north of Portland, Oregon on the I-5 corridor. With assets of $1.13 billion at December 31, 2017, it is the parent company of the 94-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 customers. There are 19 branches, including 14 in the Portland-Vancouver area and three lending centers. For the past 4 years, Riverview has been named Best Bank by the readers of The Vancouver Business Journal, The Columbian and The Gresham Outlook.

"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: expected cost savings, synergies and other financial benefits from our recent purchase of certain assets and assumption of certain liabilities of MBank and Merchants Bancorp pursuant to the Purchase and Assumption Agreement (the "Agreement") with Merchants Bancorp and its wholly owned subsidiary MBank (the "transaction") might not be realized within the expected time frames or at all, and costs or difficulties relating to integration matters might be greater than expected; 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 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 2018 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. AND SUBSIDIARY
Consolidated Balance Sheets
(In thousands, except share data)  (Unaudited)		December 31, 2017				September 30, 2017				December 31, 2016				March 31, 2017
ASSETS
Cash (including interest-earning accounts of $3,739, $59,315, $14,302		$	23,105			$	76,245			$	28,262			$	64,613
and $46,245)
Certificate of deposits held for investment			6,963				9,797				11,291				11,042
Loans held for sale			351				347				1,679				478
Investment securities:
Available for sale, at estimated fair value			224,931				200,584				207,271				200,214
Held to maturity, at amortized cost			44				46				67				64
Loans receivable (net of allowance for loan losses of $10,867, $10,617
$10,289, and $10,528)			786,460				773,087				654,053				768,904
Real estate owned			298				298				298				298
Prepaid expenses and other assets			4,843				4,227				4,832				3,815
Accrued interest receivable			3,464				3,111				2,846				2,941
Federal Home Loan Bank stock, at cost			1,223				1,181				1,060				1,181
Premises and equipment, net			15,680				15,740				13,953				16,232
Deferred income taxes, net			3,988				6,167				8,665				7,610
Mortgage servicing rights, net			399				406				390				398
Goodwill			27,076				27,076				25,572				27,076
Core deposit intangible, net			1,161				1,219				-				1,335
Bank owned life insurance			28,356				28,149				25,430				27,738
TOTAL ASSETS		$	1,128,342			$	1,147,680			$	985,669			$	1,133,939
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits		$	972,214			$	990,299			$	840,391			$	980,058
Accrued expenses and other liabilities			9,117				10,838				10,450				13,080
Advance payments by borrowers for taxes and insurance			260				920				288				693
Federal Home Loan Bank advances			1,050				-				-				-
Junior subordinated debentures			26,461				26,438				22,681				26,390
Capital lease obligations			2,437				2,443				2,459				2,454
Total liabilities			1,011,539				1,030,938				876,269				1,022,675
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, 2017 - 22,551,912 issued and outstanding;
September 30, 2017 - 22,533,912 issued and outstanding;			226				225				225				225
December 31, 2016 - 22,510,890 issued and outstanding;
March 31, 2017 – 22,510,890 issued and outstanding;
Additional paid-in capital			64,703				64,612				64,448				64,468
Retained earnings			53,878				53,034				46,750				48,335
Unearned shares issued to employee stock ownership plan			-				(26	)			(103	)			(77	)
Accumulated other comprehensive loss			(2,004	)			(1,103	)			(1,920	)			(1,687	)
Total shareholders' equity			116,803				116,742				109,400				111,264
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	1,128,342			$	1,147,680			$	985,669			$	1,133,939

 

 

RIVERVIEW BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Income
		Three Months Ended												Nine Months Ended
(In thousands, except share data)   (Unaudited)		Dec. 31, 2017				Sept. 30, 2017				Dec. 31, 2016				Dec. 31, 2017				Dec. 31, 2016
INTEREST INCOME:
Interest and fees on loans receivable		$	9,978			$	9,994			$	7,883			$	29,761			$	22,954
Interest on investment securities - taxable			1,201				1,079				946				3,413				2,435
Interest on investment securities - nontaxable			31				14				11				59				11
Other interest and dividends			168				228				112				483				344
Total interest and dividend income			11,378				11,315				8,952				33,716				25,744
INTEREST EXPENSE:
Interest on deposits			298				313				277				933				837
Interest on borrowings			284				277				173				829				494
Total interest expense			582				590				450				1,762				1,331
Net interest income			10,796				10,725				8,502				31,954				24,413
Provision for loan losses			-				-				-				-				-
Net interest income after provision for loan losses			10,796				10,725				8,502				31,954				24,413
NON-INTEREST INCOME:
Fees and service charges			1,451				1,490				1,304				4,348				3,815
Asset management fees			911				818				709				2,582				2,258
Net gain on sale of loans held for sale			140				157				191				522				493
Bank owned life insurance			207				204				185				618				566
Other, net			181				44				(56	)			271				296
Total non-interest income			2,890				2,713				2,333				8,341				7,428
NON-INTEREST EXPENSE:
Salaries and employee benefits			5,383				5,251				4,850				16,056				14,021
Occupancy and depreciation			1,347				1,412				1,158				4,105				3,520
Data processing			534				580				562				1,730				1,533
Amortization of core deposit intangible			58				58				-				174				-
Advertising and marketing expense			137				256				163				627				608
FDIC insurance premium			108				136				77				389				273
State and local taxes			96				177				170				427				455
Telecommunications			102				103				75				309				224
Professional fees			250				261				355				926				1,066
Real estate owned expenses			3				3				2				8				52
Other			540				522				439				1,740				2,311
Total non-interest expense			8,558				8,759				7,851				26,491				24,063
INCOME BEFORE INCOME TAXES			5,128				4,679				2,984				13,804				7,778
PROVISION FOR INCOME TAXES			3,608				1,620				991				6,571				2,408
NET INCOME		$	1,520			$	3,059			$	1,993			$	7,233			$	5,370
Earnings per common share:
Basic		$	0.07			$	0.14			$	0.09			$	0.32			$	0.24
Diluted		$	0.07			$	0.14			$	0.09			$	0.32			$	0.24
Weighted average number of common shares outstanding:
Basic			22,537,092				22,518,941				22,490,433				22,520,352				22,477,473
Diluted			22,622,129				22,609,480				22,563,712				22,608,603				22,537,663

(Dollars in thousands)		At or for the three months ended												At or for the nine months ended
		Dec. 31, 2017				Sept. 30, 2017				Dec. 31, 2016				Dec. 31, 2017				Dec. 31, 2016
AVERAGE BALANCES
Average interest–earning assets		$	1,055,600			$	1,056,818			$	900,542			$	1,045,283			$	869,364
Average interest-bearing liabilities			744,431				749,172				652,195				746,262				636,795
Net average earning assets			311,169				307,646				248,347				299,021				232,569
Average loans			785,264				783,213				658,212				784,926				645,598
Average deposits			988,558				992,111				839,588				980,766				810,700
Average equity			118,831				116,675				112,444				116,399				111,261
Average tangible equity (non-GAAP)			90,562				88,351				86,872				88,074				85,689

 

 

ASSET QUALITY		Dec. 31, 2017				Sept. 30, 2017				Dec. 31, 2016
Non-performing loans		$	2,656			$	2,745			$	2,787
Non-performing loans to total loans			0.33	%			0.35	%			0.42	%
Real estate/repossessed assets owned		$	298			$	298			$	298
Non-performing assets		$	2,954			$	3,043			$	3,085
Non-performing assets to total assets			0.26	%			0.27	%			0.31	%
Net recoveries in the quarter		$	(250	)		$	(20	)		$	(226	)
Net recoveries in the quarter/average net loans			(0.13	)%			(0.01	)%			(0.14	)%
Allowance for loan losses		$	10,867			$	10,617			$	10,289
Average interest-earning assets to average
interest-bearing liabilities			141.80	%			141.06	%			138.08	%
Allowance for loan losses to
non-performing loans			409.15	%			386.78	%			369.18	%
Allowance for loan losses to total loans			1.36	%			1.35	%			1.55	%
Shareholders' equity to assets			10.35	%			10.17	%			11.10	%
CAPITAL RATIOS
Total capital (to risk weighted assets)			15.07	%			15.07	%			15.93	%
Tier 1 capital (to risk weighted assets)			13.82	%			13.82	%			14.68	%
Common equity tier 1 (to risk weighted assets)			13.82	%			13.82	%			14.68	%
Tier 1 capital (to average tangible assets)			9.82	%			9.75	%			10.81	%
Tangible common equity (to average tangible assets)			8.05	%			7.90	%			8.73	%

 

 

DEPOSIT MIX		Dec. 31, 2017				Sept. 30, 2017				Dec. 31, 2016				March 31, 2017
Interest checking		$	170,151			$	175,127			$	167,522			$	171,152
Regular savings			136,249				134,116				109,629				126,370
Money market deposit accounts			270,193				274,409				250,900				289,998
Non-interest checking			264,728				270,678				202,080				242,738
Certificates of deposit			130,893				135,969				110,260				149,800
Total deposits		$	972,214			$	990,299			$	840,391			$	980,058

 

 

COMPOSITION OF COMMERCIAL AND CONSTRUCTION LOANS
						Other								Commercial
		Commercial				Real Estate				Real Estate				& Construction
		Business				Mortgage				Construction				Total
December 31, 2017		(Dollars in thousands)
Commercial business		$	130,960			$	-			$	-			$	130,960
Commercial construction			-				-				25,384				25,384
Office buildings			-				122,281				-				122,281
Warehouse/industrial			-				83,829				-				83,829
Retail/shopping centers/strip malls			-				67,751				-				67,751
Assisted living facilities			-				2,982				-				2,982
Single purpose facilities			-				165,060				-				165,060
Land			-				12,469				-				12,469
Multi-family			-				61,851				-				61,851
One-to-four family construction			-				-				15,359				15,359
Total		$	130,960			$	516,223			$	40,743			$	687,926
March 31, 2017
Commercial business		$	107,371			$	-			$	-			$	107,371
Commercial construction			-				-				27,050				27,050
Office buildings			-				121,983				-				121,983
Warehouse/industrial			-				74,671				-				74,671
Retail/shopping centers/strip malls			-				78,757				-				78,757
Assisted living facilities			-				3,686				-				3,686
Single purpose facilities			-				167,974				-				167,974
Land			-				15,875				-				15,875
Multi-family			-				43,715				-				43,715
One-to-four family construction			-				-				19,107				19,107
Total		$	107,371			$	506,661			$	46,157			$	660,189

 

 

 

LOAN MIX		Dec. 31, 2017				Sept. 30, 2017				Dec. 31, 2016				March 31, 2017
		(Dollars in thousands)
Commercial and construction
Commercial business		$	130,960			$	118,444			$	64,401			$	107,371
Other real estate mortgage			516,223				500,382				432,782				506,661
Real estate construction			40,743				53,878				52,707				46,157
Total commercial and construction			687,926				672,704				549,890				660,189
Consumer
Real estate one-to-four family			91,752				90,764				85,956				92,865
Other installment			17,649				20,236				28,496				26,378
Total consumer			109,401				111,000				114,452				119,243
Total loans			797,327				783,704				664,342				779,432
Less:
Allowance for loan losses			10,867				10,617				10,289				10,528
Loans receivable, net		$	786,460			$	773,087			$	654,053			$	768,904

 

 

DETAIL OF NON-PERFORMING ASSETS
		Other				Southwest				Other
		Oregon				Washington				Washington				Other				Total
December 31, 2017		(dollars in thousands)
Commercial business		$	-			$	289			$	-			$	-			$	289
Commercial real estate			1,084				207				-				-				1,291
Land			770				-				-				-				770
Consumer			-				207				-				99				306
Total non-performing loans			1,854				703				-				99				2,656
REO			-				-				298				-				298
Total non-performing assets		$	1,854			$	703			$	298			$	99			$	2,954

 

 

DETAIL OF LAND DEVELOPMENT AND SPECULATIVE CONSTRUCTION LOANS
		Northwest				Other				Southwest
		Oregon				Oregon				Washington				Total
December 31, 2017		(dollars in thousands)
Land development		$	486			$	896			$	11,087			$	12,469
Speculative construction			-				371				12,335				12,706
Total land development and speculative construction		$	486			$	1,267			$	23,422			$	25,175

 

 

 

		At or for the three months ended												At or for the nine months ended
SELECTED OPERATING DATA		Dec. 31, 2017				Sept. 30, 2017				Dec. 31, 2016				Dec. 31, 2017				Dec. 31, 2016
Efficiency ratio (4)			62.53	%			65.18	%			72.46	%			65.74	%			75.57	%
Coverage ratio (6)			126.15	%			122.45	%			108.29	%			120.62	%			101.45	%
Return on average assets (1)			0.53	%			1.06	%			0.80	%			0.85	%			0.75	%
Return on average equity (1)			5.07	%			10.40	%			7.03	%			8.25	%			6.41	%
NET INTEREST SPREAD
Yield on loans			5.04	%			5.06	%			4.75	%			5.03	%			4.72	%
Yield on investment securities			2.24	%			2.14	%			2.06	%			2.20	%			1.96	%
Total yield on interest-earning assets			4.28	%			4.25	%			3.95	%			4.29	%			3.93	%
Cost of interest-bearing deposits			0.17	%			0.17	%			0.18	%			0.17	%			0.18	%
Cost of FHLB advances and other borrowings			3.89	%			3.81	%			2.73	%			3.80	%			2.61	%
Total cost of interest-bearing liabilities			0.31	%			0.31	%			0.27	%			0.31	%			0.28	%
Spread (7)			3.97	%			3.94	%			3.68	%			3.98	%			3.65	%
Net interest margin			4.06	%			4.03	%			3.75	%			4.06	%			3.73	%
PER SHARE DATA
Basic earnings per share (2)		$	0.07			$	0.14			$	0.09			$	0.32			$	0.24
Diluted earnings per share (3)			0.07				0.14				0.09				0.32				0.24
Book value per share (5)			5.18				5.18				4.86				5.18				4.86
Tangible book value per share (5) (non-GAAP)			3.93				3.93				3.72				3.93				3.72
Market price per share:
High for the period		$	9.45			$	8.48			$	7.61			$	9.45			$	7.61
Low for the period			8.44				6.64				5.23				6.51				4.30
Close for period end			8.67				8.40				7.00				8.67				7.00
Cash dividends declared per share			0.0300				0.0225				0.0200				0.0750				0.0600
Average number of shares outstanding:
Basic (2)			22,537,092				22,518,941				22,490,433				22,520,352				22,477,473
Diluted (3)			22,622,129				22,609,480				22,563,712				22,608,603				22,537,663

 

 

(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.

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