Key Highlights

  • The earnings screen showed EPS of $0.10 against an estimate of $0.07 for the fiscal second quarter, a surprise of 42.86% as screened.
  • June-quarter net income was $1.694 million, or $0.08 per diluted share, versus a loss of $8.042 million in the March quarter.
  • Net interest margin was 3.34% in the June quarter, up from 2.92% in the March quarter.
  • Nonperforming loans were $8.739 million, or 0.80% of loans, up from 0.71%.
  • Tangible book value per share was $5.86 and the quarterly dividend is $0.02.

Riverview Bancorp Earnings: What Do the Latest Figures Say About the Margin Rebound?

Riverview Bancorp (NASDAQ:RVSB) screened with fiscal second-quarter EPS of $0.10 against an estimate of $0.07, a surprise of 42.86% as screened. The screen figure is the headline reference for the September 30 quarter, and the last full set of company-reported results covers the June 30 quarter, when diluted EPS was $0.08.

Riverview is the holding company for Riverview Bank, which serves Washington and Oregon with commercial, commercial real estate, multifamily, construction and residential lending, and runs Riverview Trust Company. Its June-quarter result was the highest net income in 11 quarters, according to the chief executive.

RVSB Balance Sheet Optimization: Why Did Net Interest Margin Jump 42 Basis Points?

Net interest income was $11.396 million in the June quarter, up from $10.181 million, and net interest margin was 3.34% versus 2.92% and 2.78% a year earlier. Loan yield rose to 5.24% from 5.12%. The company said its March 25 securities restructuring added about 26 basis points to margin and $0.04 to diluted EPS.

In that restructuring Riverview moved its held-to-maturity portfolio to available-for-sale and sold $149.3 million of lower-yielding securities, taking an $11.35 million pre-tax loss. That drove the March-quarter GAAP loss of $8.042 million, or $0.39 per share. Excluding the restructuring, March net income was $656,000, or $0.03.

Total loans were $1.093 billion and deposits $1.262 billion, with noninterest and interest checking at 50.8% of deposits. The loan pipeline rose to $93.9 million from $56.4 million, while originations were $33.7 million.

Nonperforming Loans and Expenses: Where Are the Pressure Points?

Nonperforming loans rose to $8.739 million, or 0.80% of loans, from $7.764 million, mainly on one commercial real estate loan under active monitoring. Classified assets rose to $29.9 million from $12.7 million after three relationship downgrades, which management described as borrower-specific. The allowance was $15.336 million, or 1.40% of loans, and the provision was zero.

Noninterest expense rose to $12.885 million from $11.508 million on technology and personnel investments, with salaries and benefits at $8.0 million versus $6.9 million. The efficiency ratio was 85.82%. Noninterest income was $3.618 million.

Capital Return and Reporting Date: What Should Riverview Investors Track Next?

Tangible common equity to tangible assets was 8.18%, the CET1 ratio 14.39% and the total risk-based ratio 15.64%. Book value per share was $7.20 and tangible book value per share $5.86. Shareholders' equity was $145.255 million.

Riverview had repurchased 438,865 shares at an average of $5.51 under a $4.0 million program, and a quarterly dividend of $0.02 was paid on July 21. Watch the company's full fiscal second-quarter release for the margin, nonperforming loan ratio, classified assets and expense trend against these June benchmarks. A chief lending officer retirement on October 30 is another item to follow.