Riverview Bancorp, Inc. (Nasdaq GSM:RVSB) (“Riverview” or the
“Company”) today reported net income increased to $3.0 million, or
$0.13 per diluted share, in its fourth fiscal quarter ended March
31, 2018, compared to $2.0 million, or $0.09 per diluted share, in
the fourth fiscal quarter a year ago. In the preceding quarter net
income was $1.5 million, or $0.07 per diluted share. The preceding
quarter’s net income was impacted 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 tax expense of
$1.8 million, or $0.08 per diluted share.
For fiscal year 2018, Riverview’s net income
increased to $10.2 million, or $0.45 per diluted share, compared to
$7.4 million, or $0.33 per diluted share, in fiscal year 2017.
“We are pleased with our financial performance
for the fiscal year,” said Kevin Lycklama, president and chief
executive officer. “Fiscal 2018 was one of our most profitable
years, supported by strong balance sheet growth, the expansion of
our net interest margin and improving operating efficiencies. Our
focus in the coming fiscal year remains on growing the franchise in
our local markets and continuing to improve our profitability.”
Fourth Quarter Highlights (at or for the
period ended March 31, 2018)
- Net income of $3.0 million, or
$0.13 per diluted share.
- Net interest margin (NIM) expanded
by eight basis points to 4.14% compared to the preceding quarter
and expanded 17 basis points compared to the fourth quarter a year
ago.
- Total loans increased $14.0 million
during the quarter to $811.4 million.
- Non-performing assets improved to
0.24% of total assets.
- Tangible book value per share was
$3.93.
- Total risk-based capital ratio was
15.41% and Tier 1 leverage ratio was 10.26%.
- Declared a quarterly cash dividend
of $0.03 per share, generating a current dividend yield of 1.28%
based on the market price on April 25, 2018.
Income
Statement
In the fourth fiscal quarter of 2018, Riverview
generated a return on average assets of 1.08% and a return on
average equity of 10.39%, compared to 0.79% and 7.43%, respectively
in the fourth fiscal quarter of 2017.
Net interest income was $10.7 million in the
fourth fiscal quarter of 2018, a slight decrease compared to $10.8
million in the preceding quarter and a $1.3 million increase
compared to $9.3 million in the fourth fiscal quarter a year ago.
The decrease in net interest income compared to the preceding
quarter is primarily due to the fewer number of days in the current
quarter. In fiscal 2018, net interest income increased $8.9 million
to $42.6 million compared to $33.8 million in fiscal 2017.
Riverview’s fourth fiscal quarter net interest
margin expanded eight basis points to 4.14% compared to the
preceding quarter and increased 17 basis points when compared to
the fourth fiscal quarter a year ago. “We have been successful
managing our net interest margin in this interest rate
environment,” said Lycklama. “The increase in net interest margin
was driven by the continued growth in our loan portfolio, higher
rates on new loan originations and a decrease in our excess cash
balances.” The interest accretion on purchased loans totaled
$199,000 and resulted in an eight basis point increase in the NIM
during the fourth fiscal quarter compared to $175,000 and a six
basis point increase in the NIM in the preceding quarter. In fiscal
year 2018, the NIM increased 29 basis points to 4.08% compared to
3.79% in fiscal 2017.
The weighted average note rate on new loans
originated during the quarter ended March 31, 2018 increased to
5.17% compared to 4.75% for the quarter ended December 31, 2017 and
4.66% for the quarter ended March 31, 2017.
Non-interest income was $2.7 million in the
fourth fiscal quarter compared to $2.9 million the prior quarter
and a modest increase compared to $2.6 million in the same quarter
a year ago. The decrease in the current quarter was partially due
to a lower gain on sale of loans compared to the preceding quarter
as a result of a decline in mortgage related activity. The December
2017 quarter also included an $81,000 gain on the sale of REO
property. For fiscal year 2018, non-interest income increased to
$11.0 million compared to $10.0 million for fiscal 2017.
Asset management fees were $866,000 in the
fourth fiscal quarter of 2018 compared to $911,000 in the preceding
quarter and $730,000 in the fourth fiscal quarter a year ago. For
fiscal 2018, asset management fees grew 15.4% to $3.4 million
compared to $3.0 million a year ago. Riverview Trust Company’s
assets under management were $484.3 million at March 31, 2018
compared to $490.1 million three months earlier and $425.9 million
a year earlier.
Non-interest expense increased $569,000 to $9.1
million during the fourth fiscal quarter of 2018 compared to $8.6
million in the preceding quarter and increased $209,000 from $8.9
million for the same prior year period. “The increase in operating
expenses during the quarter was primarily due to an increase in
salary related expenses as we built out our lending teams with
additional staff to support loan growth,” said Lycklama. The
efficiency ratio was 68.5% for the quarter ended March 31, 2018
compared to 62.5% in the preceding quarter and 74.8% in the fourth
fiscal quarter a year ago.
The effective tax rate for our fourth fiscal
quarter of 2018 was 28.2%. As a result of the passage of the Tax
Cuts and Jobs Act, the Company expects the tax rate to decrease to
approximately 23.5% beginning April 1, 2018. “While we anticipate a
majority of the savings to flow through to our bottom line, we also
plan to reinvest a portion of these savings into projects designed
to drive continued growth for the Bank including staffing,
technology enhancements and infrastructure improvements,” stated
Lycklama.
Balance Sheet Review
Total loans increased $14.0 million during the
quarter to $811.4 million at March 31, 2018 compared to $797.3
million at December 31, 2017, and increased $31.9 million compared
to $779.4 million a year ago, with a large portion of the increases
concentrated in commercial business and warehouse/industrial loans.
Undisbursed construction loans totaled $74.8 million at March 31,
2018, compared to $62.0 million three months earlier. The increase
is primarily due to the origination of $20.1 million in new
commercial construction loans during the current quarter. The
majority of the undisbursed construction loans are expected to fund
over the next several quarters.
“While loan originations remain strong, total
loan balances continue to be impacted by paydowns on existing
loans,” said Lycklama. The loan pipeline totaled $74.1 million at
the end of the quarter.
Total deposits increased $23.5 million to $995.7
million at March 31, 2018 compared to $972.2 million at December
31, 2017, and increased $15.6 million compared to $980.1 million a
year ago. Checking account balances increased $37.1 million during
the quarter and currently account for 47.4% of total deposits.
Shareholders’ equity was $116.9 million at March
31, 2018 compared to $116.8 million three months earlier and $111.3
million a year earlier. Tangible book value per share (non-GAAP)
was $3.93 at both March 31, 2018 and December 31, 2017 compared to
$3.68 at March 31, 2017. A quarterly cash dividend of $0.03 per
share was paid on April 24, 2018.
Credit Quality
Riverview recorded no provision for loan losses
during the fourth fiscal quarter of 2018 or in the preceding
quarter, primarily as a result of the continued low level of
delinquent, nonperforming and classified loans, as well as the
changes in the volume and mix of loans, which mitigated the
required allowance for loan losses due to loan growth.
Non-performing loans were $2.4 million, or 0.30%
of total loans, at March 31, 2018 compared to $2.7 million, or
0.33% of total loans, three months earlier. Real estate owned
balances of $298,000 at March 31, 2018 were unchanged compared to
the preceding quarter end.
Classified assets totaled $7.7 million at March
31, 2018 compared to $6.9 million at December 31, 2017 and $10.3
million at March 31, 2017. The classified asset to total capital
ratio was 6.2% at March 31, 2018 compared to 5.7% three months
earlier and 9.1% a year earlier.
The allowance for loan losses totaled $10.8
million, representing 1.33% of total loans at March 31, 2018
compared to $10.9 million and 1.36% of total loans at December 31,
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 $2.2 million at March 31,
2018 compared to $2.4 million at the end of the prior quarter.
Net loan charge-offs were $101,000 during the
fourth fiscal quarter of 2018 compared to net loan recoveries of
$250,000 in the preceding quarter. Net charge-offs increased during
the quarter primarily as a result of a decrease in total loan
recoveries due to the Company completing the multi-year collection
of a large prior charge-off during the preceding quarter.
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 15.41%
and a Tier 1 leverage ratio of 10.26% at March 31, 2018. In
addition, at that date the Company’s tangible common equity to
tangible assets ratio (non-GAAP) was 7.90%.
Management Succession
Effective April 2, 2018, Kevin Lycklama was
promoted to president and chief executive officer of the Company
and the Bank, following Patrick Sheaffer’s retirement. Mr. Sheaffer
continues to serve as chairman of the board of both the Company and
the Bank. Additionally, Steven Plambeck was promoted to executive
vice president and chief lending officer following the retirement
of Dick Michalek.
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) |
|
March 31, 2018 |
|
December 31, 2017 |
March 31, 2017 |
|
|
|
|
|
|
|
Shareholders'
equity |
|
$ |
116,901 |
|
$ |
116,803 |
|
$ |
111,264 |
Goodwill |
|
|
27,076 |
|
|
27,076 |
|
|
27,076 |
Core deposit
intangible, net |
|
|
1,103 |
|
|
1,161 |
|
|
1,335 |
Tangible shareholders'
equity |
|
$ |
88,722 |
|
$ |
88,566 |
|
$ |
82,853 |
|
|
|
|
|
|
|
Total assets |
|
$ |
1,151,535 |
|
$ |
1,128,342 |
|
$ |
1,133,939 |
Goodwill |
|
|
27,076 |
|
|
27,076 |
|
|
27,076 |
Core deposit
intangible, net |
|
|
1,103 |
|
|
1,161 |
|
|
1,335 |
Tangible assets |
|
$ |
1,123,356 |
|
$ |
1,100,105 |
|
$ |
1,105,528 |
|
|
|
|
|
|
|
|
|
|
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 $1.15 billion at March
31, 2018, 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: 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 2019 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.
Contact: |
Kevin
Lycklama |
|
Riverview Bancorp, Inc.
360-693-6650 |
|
|
|
|
|
|
RIVERVIEW
BANCORP, INC. AND SUBSIDIARY |
|
|
|
|
|
Consolidated
Balance Sheets |
|
|
|
|
|
(In thousands, except share data)
(Unaudited) |
March 31, 2018 |
|
December 31, 2017 |
|
March 31, 2017 |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
Cash
(including interest-earning accounts of $30,052, $3,739 and
$46,245) |
$ |
44,767 |
|
|
$ |
23,105 |
|
|
$ |
64,613 |
|
Certificate of deposits held for investment |
|
5,967 |
|
|
|
6,963 |
|
|
|
11,042 |
|
Loans
held for sale |
|
210 |
|
|
|
351 |
|
|
|
478 |
|
Investment securities: |
|
|
|
|
|
Available
for sale, at estimated fair value |
|
213,221 |
|
|
|
224,931 |
|
|
|
200,214 |
|
Held to
maturity, at amortized cost |
|
42 |
|
|
|
44 |
|
|
|
64 |
|
Loans
receivable (net of allowance for loan losses of $10,766,
$10,867 |
|
|
|
|
|
and
$10,528) |
|
800,610 |
|
|
|
786,460 |
|
|
|
768,904 |
|
Real
estate owned |
|
298 |
|
|
|
298 |
|
|
|
298 |
|
Prepaid
expenses and other assets |
|
3,870 |
|
|
|
4,843 |
|
|
|
3,815 |
|
Accrued
interest receivable |
|
3,477 |
|
|
|
3,464 |
|
|
|
2,941 |
|
Federal
Home Loan Bank stock, at cost |
|
1,353 |
|
|
|
1,223 |
|
|
|
1,181 |
|
Premises
and equipment, net |
|
15,783 |
|
|
|
15,680 |
|
|
|
16,232 |
|
Deferred
income taxes, net |
|
4,813 |
|
|
|
3,988 |
|
|
|
7,610 |
|
Mortgage
servicing rights, net |
|
388 |
|
|
|
399 |
|
|
|
398 |
|
Goodwill |
|
27,076 |
|
|
|
27,076 |
|
|
|
27,076 |
|
Core
deposit intangible, net |
|
1,103 |
|
|
|
1,161 |
|
|
|
1,335 |
|
Bank
owned life insurance |
|
28,557 |
|
|
|
28,356 |
|
|
|
27,738 |
|
|
|
|
|
|
|
TOTAL ASSETS |
$ |
1,151,535 |
|
|
$ |
1,128,342 |
|
|
$ |
1,133,939 |
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
Deposits |
$ |
995,691 |
|
|
$ |
972,214 |
|
|
$ |
980,058 |
|
Accrued
expenses and other liabilities |
|
9,391 |
|
|
|
9,117 |
|
|
|
13,080 |
|
Advance
payments by borrowers for taxes and insurance |
|
637 |
|
|
|
260 |
|
|
|
693 |
|
Federal
Home Loan Bank advances |
|
- |
|
|
|
1,050 |
|
|
|
- |
|
Junior
subordinated debentures |
|
26,484 |
|
|
|
26,461 |
|
|
|
26,390 |
|
Capital
lease obligation |
|
2,431 |
|
|
|
2,437 |
|
|
|
2,454 |
|
Total
liabilities |
|
1,034,634 |
|
|
|
1,011,539 |
|
|
|
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, |
|
|
|
|
|
March 31, 2018 – 22,570,179 issued and outstanding; |
|
226 |
|
|
|
226 |
|
|
|
225 |
|
December 31, 2017 - 22,551,912 issued and outstanding; |
|
|
|
|
|
March 31, 2017 – 22,510,890 issued and outstanding; |
|
|
|
|
|
Additional paid-in capital |
|
64,871 |
|
|
|
64,703 |
|
|
|
64,468 |
|
Retained
earnings |
|
56,552 |
|
|
|
53,878 |
|
|
|
48,335 |
|
Unearned
shares issued to employee stock ownership plan |
|
- |
|
|
|
- |
|
|
|
(77 |
) |
Accumulated other comprehensive loss |
|
(4,748 |
) |
|
|
(2,004 |
) |
|
|
(1,687 |
) |
Total
shareholders’ equity |
|
116,901 |
|
|
|
116,803 |
|
|
|
111,264 |
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY |
$ |
1,151,535 |
|
|
$ |
1,128,342 |
|
|
$ |
1,133,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RIVERVIEW
BANCORP, INC. AND SUBSIDIARY |
|
|
|
|
|
|
Consolidated
Statements of Income |
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
(In thousands, except share data)
(Unaudited) |
March 31, 2018 |
Dec. 31, 2017 |
March 31, 2017 |
|
March 31, 2018 |
March 31, 2017 |
INTEREST INCOME: |
|
|
|
|
|
|
Interest
and fees on loans receivable |
$ |
9,898 |
$ |
9,978 |
$ |
8,655 |
|
$ |
39,659 |
$ |
31,609 |
Interest
on investment securities - taxable |
|
1,235 |
|
1,201 |
|
1,115 |
|
|
4,648 |
|
3,550 |
Interest
on investment securities - nontaxable |
|
36 |
|
31 |
|
14 |
|
|
95 |
|
25 |
Other
interest and dividends |
|
75 |
|
168 |
|
99 |
|
|
558 |
|
443 |
Total
interest and dividend income |
|
11,244 |
|
11,378 |
|
9,883 |
|
|
44,960 |
|
35,627 |
|
|
|
|
|
|
|
INTEREST EXPENSE: |
|
|
|
|
|
|
Interest
on deposits |
|
275 |
|
298 |
|
314 |
|
|
1,208 |
|
1,151 |
Interest
on borrowings |
|
312 |
|
284 |
|
224 |
|
|
1,141 |
|
718 |
Total
interest expense |
|
587 |
|
582 |
|
538 |
|
|
2,349 |
|
1,869 |
Net interest
income |
|
10,657 |
|
10,796 |
|
9,345 |
|
|
42,611 |
|
33,758 |
Provision for loan
losses |
|
- |
|
- |
|
- |
|
|
- |
|
- |
|
|
|
|
|
|
|
Net interest income
after provision for loan losses |
|
10,657 |
|
10,796 |
|
9,345 |
|
|
42,611 |
|
33,758 |
|
|
|
|
|
|
|
NON-INTEREST
INCOME: |
|
|
|
|
|
|
Fees and
service charges |
|
1,431 |
|
1,451 |
|
1,362 |
|
|
5,779 |
|
5,177 |
Asset
management fees |
|
866 |
|
911 |
|
730 |
|
|
3,448 |
|
2,988 |
Net gains
on sales of loans held for sale |
|
119 |
|
140 |
|
163 |
|
|
641 |
|
656 |
Bank
owned life insurance |
|
201 |
|
207 |
|
194 |
|
|
819 |
|
760 |
Other,
net |
|
46 |
|
181 |
|
137 |
|
|
317 |
|
433 |
Total
non-interest income, net |
|
2,663 |
|
2,890 |
|
2,586 |
|
|
11,004 |
|
10,014 |
|
|
|
|
|
|
|
NON-INTEREST
EXPENSE: |
|
|
|
|
|
|
Salaries
and employee benefits |
|
5,687 |
|
5,383 |
|
5,335 |
|
|
21,743 |
|
19,356 |
Occupancy
and depreciation |
|
1,349 |
|
1,347 |
|
1,299 |
|
|
5,454 |
|
4,819 |
Data
processing |
|
583 |
|
534 |
|
578 |
|
|
2,313 |
|
2,111 |
Amortization of core deposit intangible |
|
58 |
|
58 |
|
27 |
|
|
232 |
|
27 |
Advertising and marketing |
|
120 |
|
137 |
|
146 |
|
|
747 |
|
754 |
FDIC
insurance premium |
|
87 |
|
108 |
|
83 |
|
|
476 |
|
356 |
State and
local taxes |
|
178 |
|
96 |
|
154 |
|
|
605 |
|
609 |
Telecommunications |
|
108 |
|
102 |
|
93 |
|
|
417 |
|
317 |
Professional fees |
|
255 |
|
250 |
|
562 |
|
|
1,181 |
|
1,628 |
Real
estate owned |
|
4 |
|
3 |
|
2 |
|
|
12 |
|
54 |
Other |
|
698 |
|
540 |
|
639 |
|
|
2,438 |
|
2,950 |
Total
non-interest expense |
|
9,127 |
|
8,558 |
|
8,918 |
|
|
35,618 |
|
32,981 |
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES |
|
4,193 |
|
5,128 |
|
3,013 |
|
|
17,997 |
|
10,791 |
PROVISION FOR INCOME
TAXES |
|
1,184 |
|
3,608 |
|
979 |
|
|
7,755 |
|
3,387 |
NET INCOME |
$ |
3,009 |
$ |
1,520 |
$ |
2,034 |
|
$ |
10,242 |
$ |
7,404 |
|
|
|
|
|
|
|
Earnings per common
share: |
|
|
|
|
|
|
Basic |
$ |
0.13 |
$ |
0.07 |
$ |
0.09 |
|
$ |
0.45 |
$ |
0.33 |
Diluted |
$ |
0.13 |
$ |
0.07 |
$ |
0.09 |
|
$ |
0.45 |
$ |
0.33 |
Weighted average number
of common shares outstanding: |
|
|
|
|
|
|
Basic |
|
22,565,483 |
|
22,537,092 |
|
22,489,336 |
|
|
22,531,480 |
|
22,478,306 |
Diluted |
|
22,639,908 |
|
22,622,129 |
|
22,585,976 |
|
|
22,618,330 |
|
22,548,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands) |
|
At or for the three months ended |
|
At or for the twelve months ended |
|
|
March 31, 2018 |
|
Dec. 31, 2017 |
|
March 31, 2017 |
|
March 31, 2018 |
|
March 31, 2017 |
AVERAGE
BALANCES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
interest–earning assets |
|
$ |
1,043,755 |
|
|
$ |
1,055,600 |
|
|
$ |
955,957 |
|
|
$ |
1,044,907 |
|
$ |
890,716 |
Average
interest-bearing liabilities |
|
|
735,592 |
|
|
|
744,431 |
|
|
|
710,266 |
|
|
|
743,630 |
|
|
654,911 |
Net average earning
assets |
|
|
308,163 |
|
|
|
311,169 |
|
|
|
245,691 |
|
|
|
301,277 |
|
|
235,805 |
Average loans |
|
|
802,275 |
|
|
|
785,264 |
|
|
|
716,452 |
|
|
|
789,204 |
|
|
663,069 |
Average deposits |
|
|
969,916 |
|
|
|
988,558 |
|
|
|
894,284 |
|
|
|
978,090 |
|
|
831,310 |
Average equity |
|
|
117,495 |
|
|
|
118,831 |
|
|
|
111,054 |
|
|
|
116,669 |
|
|
111,210 |
Average tangible equity
(non-GAAP) |
|
|
89,282 |
|
|
|
90,562 |
|
|
|
85,450 |
|
|
|
88,371 |
|
|
85,630 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET
QUALITY |
|
March 31, 2018 |
|
Dec. 31, 2017 |
|
March 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing
loans |
|
$ |
2,418 |
|
|
$ |
2,656 |
|
|
$ |
2,749 |
|
|
|
|
|
Non-performing loans to
total loans |
|
|
0.30 |
% |
|
|
0.33 |
% |
|
|
0.35 |
% |
|
|
|
|
Real estate/repossessed
assets owned |
|
$ |
298 |
|
|
$ |
298 |
|
|
$ |
298 |
|
|
|
|
|
Non-performing
assets |
|
$ |
2,716 |
|
|
$ |
2,954 |
|
|
$ |
3,047 |
|
|
|
|
|
Non-performing assets
to total assets |
|
|
0.24 |
% |
|
|
0.26 |
% |
|
|
0.27 |
% |
|
|
|
|
Net charge-offs
(recoveries) in the quarter |
|
$ |
101 |
|
|
$ |
(250 |
) |
|
$ |
(239 |
) |
|
|
|
|
Net charge-offs
(recoveries) in the quarter/average net loans |
|
|
0.05 |
% |
|
|
(0.13 |
)% |
|
|
(0.14 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses |
|
$ |
10,766 |
|
|
$ |
10,867 |
|
|
$ |
10,528 |
|
|
|
|
|
Average
interest-earning assets to average |
|
|
|
|
|
|
|
|
|
|
interest-bearing
liabilities |
|
|
141.89 |
% |
|
|
141.80 |
% |
|
|
134.59 |
% |
|
|
|
|
Allowance for loan
losses to |
|
|
|
|
|
|
|
|
|
|
non-performing
loans |
|
|
445.24 |
% |
|
|
409.15 |
% |
|
|
382.98 |
% |
|
|
|
|
Allowance for loan
losses to total loans |
|
|
1.33 |
% |
|
|
1.36 |
% |
|
|
1.35 |
% |
|
|
|
|
Shareholders’ equity to
assets |
|
|
10.15 |
% |
|
|
10.35 |
% |
|
|
9.81 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS |
|
|
|
|
|
|
|
|
|
|
Total capital (to risk
weighted assets) |
|
|
15.41 |
% |
|
|
15.07 |
% |
|
|
14.06 |
% |
|
|
|
|
Tier 1 capital (to risk
weighted assets) |
|
|
14.16 |
% |
|
|
13.82 |
% |
|
|
12.81 |
% |
|
|
|
|
Common equity tier 1
(to risk weighted assets) |
|
|
14.16 |
% |
|
|
13.82 |
% |
|
|
12.81 |
% |
|
|
|
|
Tier 1 capital (to
average tangible assets) |
|
|
10.26 |
% |
|
|
9.82 |
% |
|
|
10.21 |
% |
|
|
|
|
Tangible common equity
(to average tangible assets) |
|
|
7.90 |
% |
|
|
8.05 |
% |
|
|
7.49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
MIX |
|
March 31, 2018 |
|
Dec. 31, 2017 |
|
March 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
|
$ |
192,989 |
|
|
$ |
170,151 |
|
|
$ |
171,152 |
|
|
|
|
|
Regular savings |
|
|
134,931 |
|
|
|
136,249 |
|
|
|
126,370 |
|
|
|
|
|
Money market deposit
accounts |
|
|
265,661 |
|
|
|
270,193 |
|
|
|
289,998 |
|
|
|
|
|
Non-interest
checking |
|
|
278,966 |
|
|
|
264,728 |
|
|
|
242,738 |
|
|
|
|
|
Certificates of
deposit |
|
|
123,144 |
|
|
|
130,893 |
|
|
|
149,800 |
|
|
|
|
|
Total
deposits |
|
$ |
995,691 |
|
|
$ |
972,214 |
|
|
$ |
980,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPOSITION OF COMMERCIAL AND CONSTRUCTION
LOANS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
Commercial |
|
|
Commercial |
|
Real Estate |
|
Real Estate |
|
& Construction |
|
|
Business |
|
Mortgage |
|
Construction |
|
Total |
March 31, 2018 |
|
(Dollars in thousands) |
Commercial
business |
|
$ |
137,672 |
|
$ |
- |
|
$ |
- |
|
$ |
137,672 |
Commercial
construction |
|
|
- |
|
|
- |
|
|
23,158 |
|
|
23,158 |
Office buildings |
|
|
- |
|
|
124,000 |
|
|
- |
|
|
124,000 |
Warehouse/industrial |
|
|
- |
|
|
89,442 |
|
|
- |
|
|
89,442 |
Retail/shopping
centers/strip malls |
|
|
- |
|
|
68,932 |
|
|
- |
|
|
68,932 |
Assisted living
facilities |
|
|
- |
|
|
2,934 |
|
|
- |
|
|
2,934 |
Single purpose
facilities |
|
|
- |
|
|
165,289 |
|
|
- |
|
|
165,289 |
Land |
|
|
- |
|
|
15,337 |
|
|
- |
|
|
15,337 |
Multi-family |
|
|
- |
|
|
63,080 |
|
|
- |
|
|
63,080 |
One-to-four family
construction |
|
|
- |
|
|
- |
|
|
16,426 |
|
|
16,426 |
Total |
|
$ |
137,672 |
|
$ |
529,014 |
|
$ |
39,584 |
|
$ |
706,270 |
|
|
|
|
|
|
|
|
|
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 |
|
March 31, 2018 |
|
Dec. 31, 2017 |
|
March 31, 2017 |
|
|
|
|
(Dollars in Thousands) |
|
|
Commercial and
construction |
|
|
|
|
|
|
|
|
Commercial
business |
|
$ |
137,672 |
|
$ |
130,960 |
|
$ |
107,371 |
|
|
Other real
estate mortgage |
|
|
529,014 |
|
|
516,223 |
|
|
506,661 |
|
|
Real estate
construction |
|
|
39,584 |
|
|
40,743 |
|
|
46,157 |
|
|
Total commercial
and construction |
|
|
706,270 |
|
|
687,926 |
|
|
660,189 |
|
|
Consumer |
|
|
|
|
|
|
|
|
Real estate
one-to-four family |
|
|
90,109 |
|
|
91,752 |
|
|
92,865 |
|
|
Other
installment |
|
|
14,997 |
|
|
17,649 |
|
|
26,378 |
|
|
Total
consumer |
|
|
105,106 |
|
|
109,401 |
|
|
119,243 |
|
|
|
|
|
|
|
|
|
|
|
Total loans |
|
|
811,376 |
|
|
797,327 |
|
|
779,432 |
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
Allowance for
loan losses |
|
|
10,766 |
|
|
10,867 |
|
|
10,528 |
|
|
Loans
receivable, net |
|
$ |
800,610 |
|
$ |
786,460 |
|
$ |
768,904 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DETAIL OF NON-PERFORMING ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
Southwest |
|
Other |
|
|
|
|
|
|
|
|
Oregon |
|
Washington |
|
Washington |
|
Other |
|
Total |
March 31, 2018 |
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
business |
|
$ |
- |
|
$ |
178 |
|
$ |
- |
|
$ |
- |
|
$ |
178 |
|
Commercial
real estate |
|
|
997 |
|
|
203 |
|
|
- |
|
|
- |
|
|
1,200 |
|
Land |
|
|
763 |
|
|
- |
|
|
- |
|
|
- |
|
|
763 |
|
Consumer |
|
|
- |
|
|
206 |
|
|
- |
|
|
71 |
|
|
277 |
|
Total
non-performing loans |
|
|
1,760 |
|
|
587 |
|
|
- |
|
|
71 |
|
|
2,418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REO |
|
|
- |
|
|
- |
|
|
298 |
|
|
- |
|
|
298 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
non-performing assets |
|
$ |
1,760 |
|
$ |
587 |
|
$ |
298 |
|
$ |
71 |
|
$ |
2,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DETAIL OF LAND DEVELOPMENT AND SPECULATIVE CONSTRUCTION
LOANS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northwest |
|
Other |
|
Southwest |
|
|
|
|
|
|
|
|
Oregon |
|
Oregon |
|
Washington |
|
Total |
|
|
March 31, 2018 |
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
development |
|
$ |
482 |
|
$ |
881 |
|
$ |
13,974 |
|
$ |
15,337 |
|
|
|
Speculative
construction |
|
|
400 |
|
|
421 |
|
|
12,596 |
|
|
13,417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total land
development and speculative construction |
|
$ |
882 |
|
$ |
1,302 |
|
$ |
26,570 |
|
$ |
28,754 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or for the three months ended |
|
At or for the twelve months ended |
SELECTED OPERATING
DATA |
March 31, 2018 |
Dec. 31, 2017 |
March 31, 2017 |
|
March 31, 2018 |
March 31, 2017 |
|
|
|
|
|
|
|
Efficiency ratio
(4) |
|
68.52 |
% |
|
62.53 |
% |
|
74.75 |
% |
|
|
66.43 |
% |
|
75.35 |
% |
Coverage ratio (6) |
|
116.76 |
% |
|
126.15 |
% |
|
104.79 |
% |
|
|
119.63 |
% |
|
102.36 |
% |
Return on average
assets (1) |
|
1.08 |
% |
|
0.53 |
% |
|
0.79 |
% |
|
|
0.90 |
% |
|
0.76 |
% |
Return on average
equity (1) |
|
10.39 |
% |
|
5.07 |
% |
|
7.43 |
% |
|
|
8.78 |
% |
|
6.66 |
% |
|
|
|
|
|
|
|
NET INTEREST
SPREAD |
|
|
|
|
|
|
Yield on loans |
|
5.00 |
% |
|
5.04 |
% |
|
4.90 |
% |
|
|
5.03 |
% |
|
4.77 |
% |
Yield on investment
securities |
|
2.32 |
% |
|
2.24 |
% |
|
2.23 |
% |
|
|
2.23 |
% |
|
2.04 |
% |
Total yield on
interest-earning assets |
|
4.37 |
% |
|
4.28 |
% |
|
4.20 |
% |
|
|
4.31 |
% |
|
4.00 |
% |
|
|
|
|
|
|
|
Cost of
interest-bearing deposits |
|
0.16 |
% |
|
0.17 |
% |
|
0.19 |
% |
|
|
0.17 |
% |
|
0.18 |
% |
Cost of FHLB advances
and other borrowings |
|
3.99 |
% |
|
3.89 |
% |
|
3.19 |
% |
|
|
3.85 |
% |
|
2.76 |
% |
Total cost of
interest-bearing liabilities |
|
0.32 |
% |
|
0.31 |
% |
|
0.31 |
% |
|
|
0.32 |
% |
|
0.28 |
% |
|
|
|
|
|
|
|
Spread (7) |
|
4.05 |
% |
|
3.97 |
% |
|
3.89 |
% |
|
|
3.99 |
% |
|
3.72 |
% |
Net interest
margin |
|
4.14 |
% |
|
4.06 |
% |
|
3.97 |
% |
|
|
4.08 |
% |
|
3.79 |
% |
|
|
|
|
|
|
|
PER SHARE DATA |
|
|
|
|
|
|
Basic earnings per
share (2) |
$ |
0.13 |
|
$ |
0.07 |
|
$ |
0.09 |
|
|
$ |
0.45 |
|
$ |
0.33 |
|
Diluted earnings per
share (3) |
|
0.13 |
|
|
0.07 |
|
|
0.09 |
|
|
|
0.45 |
|
|
0.33 |
|
Book value per share
(5) |
|
5.18 |
|
|
5.18 |
|
|
4.94 |
|
|
|
5.18 |
|
|
4.94 |
|
Tangible book value per
share (5) (non-GAAP) |
|
3.93 |
|
|
3.93 |
|
|
3.68 |
|
|
|
3.93 |
|
|
3.68 |
|
Market price per
share: |
|
|
|
|
|
|
High for the
period |
$ |
9.68 |
|
$ |
9.45 |
|
$ |
7.90 |
|
|
$ |
9.68 |
|
$ |
7.90 |
|
Low for the
period |
|
8.45 |
|
|
8.44 |
|
|
6.87 |
|
|
|
6.51 |
|
|
4.30 |
|
Close for period
end |
|
9.34 |
|
|
8.67 |
|
|
7.15 |
|
|
|
9.34 |
|
|
7.15 |
|
Cash dividends declared
per share |
|
0.03000 |
|
|
0.03000 |
|
|
0.02000 |
|
|
|
0.10500 |
|
|
0.08000 |
|
|
|
|
|
|
|
|
Average number of
shares outstanding: |
|
|
|
|
|
|
Basic (2) |
|
22,565,483 |
|
|
22,537,092 |
|
|
22,489,336 |
|
|
|
22,531,480 |
|
|
22,478,306 |
|
Diluted (3) |
|
22,639,908 |
|
|
22,622,129 |
|
|
22,585,976 |
|
|
|
22,618,330 |
|
|
22,548,340 |
|
|
|
|
|
|
|
|
- Amounts for the quarterly periods are annualized.
- Amounts exclude ESOP shares not committed to be released.
- Amounts exclude ESOP shares not committed to be released and
include common stock equivalents.
- Non-interest expense divided by net interest income and
non-interest income.
- Amounts calculated based on shareholders’ equity and include
ESOP shares not committed to be released.
- Net interest income divided by non-interest expense.
- Yield on interest-earning assets less cost of funds on
interest-bearing liabilities.
Note: Transmitted on Globe Newswire on April 26,
2018, at 1:00 p.m. PDT.
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