On Thursday, Shares of Riverview Bancorp, Inc. (NASDAQ: RVSB) declined -3.03% to $8.64. The stock opened its trade at $8.92 and after floating in a price range of $8.60 to $8.92; the stock grabbed the investor’s attention and traded 73,939 shares as compared to its average daily volume of 63.85K shares. The stock’s institutional ownership stands at 62.10%.
Riverview Bancorp, Inc. (RVSB) recently stated net income of $1.50M, or $0.07 per diluted share, in its third fiscal quarter ended December 31, 2017. This compares to net income of $3.10M, or $0.14 per diluted share, in the preceding quarter and net income of $2.00M, or $0.09 per diluted share, in the third fiscal quarter a year ago. Net income was influenced during the current quarter because of a valuation adjustment of the Company’s net deferred tax asset together with the use of a lower blended tax rate, which resulted in an additional net income tax expense of $1.80M, or $0.08 per diluted share. Pre-tax income for the third fiscal quarter of 2018 was $5.10M, which was a $449,000, or 9.6%, increase contrast to the preceding quarter and a $2.10M, or 71.8%, increase from the year ago quarter.
In the first nine months of fiscal year 2018, Riverview’s net income increased to $7.20M, or $0.32 per diluted share, contrast to $5.40M, or $0.24 per diluted share, in the first nine months of fiscal year 2017.
Riverview’s net interest income was $10.80M in the third fiscal quarter of 2018, a $71,000 increase contrast to $10.70M in the preceding quarter and a $2.30M increase contrast to $8.50M in the third fiscal quarter a year ago. In the first nine months of fiscal 2018, net interest income increased $7.50M to $32.00M contrast to $24.40M in the first nine months of fiscal 2017.
Non-interest income was $2.90M in the third fiscal quarter, a $177,000 increase contrast to $2.70M the prior quarter and a $557,000 increase contrast to $2.30M in the same quarter a year ago. In the first nine months of fiscal 2018, non-interest income increased to $8.30M contrast to $7.40M in the first nine months of fiscal 2017. The nine month year over year increase was mainly because of a boost in fees and service charges and asset management fees.
Asset management fees were $911.0K in the third fiscal quarter of 2018 contrast to $818.0K in the preceding quarter and $709.0K in the third fiscal quarter a year ago. Riverview Trust Company’s (“RTC”) assets under management increased to $490.10M at December 31, 2017 contrast to $461.20M three months earlier and $403.30M 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 reduced $201,000 to $8.60M during the third fiscal quarter of 2018 contrast to $8.80M in the preceding quarter and increased $707,000 from $7.90M for the same prior year period mainly because of the MBank transaction. There were no transaction related costs from the MBank transaction in the current quarter contrast 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, contrast 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.”
Balance Sheet Review
Total loans increased $13.60M during the quarter to $797.30M at December 31, 2017 contrast to $783.70M at September 30, 2017, and increased $133.00M contrast to $664.30M a year ago. The growth in the loan portfolio was mainly concentrated in commercial business, multi-family and warehouse/industrial loans. Undisbursed construction loans totaled $61.80M 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 $61.60M at the end of the quarter.
Total deposits increased $131.80M to $972.20M at December 31, 2017 contrast to $840.40M a year ago but reduced contrast to $990.30M at September 30, 2017. The decrease contrast to the prior quarter end was mainly because of the timing of deposit transactions. Core deposits represent 98.0% of total deposits at December 31, 2017.
Shareholders’ equity was $116.80M at December 31, 2017 contrast to $116.70M three months earlier and $109.40M a year earlier. Tangible book value per share was $3.93 at both December 31, 2017 and September 30, 2017 and a boost contrast 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 $6.90M at December 31, 2017 contrast to $7.10M at September 30, 2017 and the classified asset to total capital ratio was 5.7% contrast to 6.0%, respectively.
Riverview’s non-performing loans were $2.70M, or 0.33% of total loans, at December 31, 2017 contrast to $2.80M, or 0.35% of total loans, three months earlier. Real estate owned balances of $298,000 at December 31, 2017 were unchanged contrast to the preceding quarter end.
The allowance for loan losses totaled $10.90M, representing 1.36% of total loans at December 31, 2017 contrast to $10.60M 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 $2.40M at December 31, 2017 contrast to $2.60M at the end of the prior quarter. Net loan recoveries were $250,000 during the third fiscal quarter of 2018 contrast to $20,000 in the preceding quarter.
RVSB has a market value of $194.05M while its EPS was booked as $0.49 in the last 12 months. The stock has 22.46M shares outstanding. In the profitability analysis, the company has net profit margin of 21.30%. Beta value of the company was 0.42; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 2.00.
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