The parent of Vancouver-based Riverview Community Bank eked out a small second-quarter profit in earnings reported Thursday, but the company disclosed that it had recently laid off “fewer than 10” employees and accepted three retirements as it struggled to contain costs in the face of weak loan demand.
Riverview Bancorp reported earnings of $181,000 for the period ending Sept. 30, marking Riverview’s sixth consecutive profitable quarter, but a significant decline from its $1.1 earnings in the same quarter one year ago.
Riverview also reported that non-performing loans increased to $29.7 million, or 4.7 percent of total loans. That’s down slightly from $35.3 million a year ago but far above the $13.1 million it reported in non-performing loans on June 30. Its portfolio of real estate from foreclosed properties declined slightly from the previous quarter.
On the positive side, Riverview reported an $8.9 million increase in average total deposits during the quarter, and a $4.5 million increase in average loan balances. While Riverview has embarked on an expansion with the planned opening next year of a new branch in Gresham, Ore., the bank has struggled in large part due to the weak economy in its home county, said Ron Wysaske, Riverview’s president and chief operating officer.
“This is a challenging environment for everybody,” Wysaske said. “We’re happy to have another positive quarter.”
The quarterly report makes no mention of layoffs, but Wysaske disclosed in an interview that the bank recently had made its first layoffs since the economy tanked in 2008. He would not disclose the exact number, but said fewer than 10 of Riverview’s approximately 250 employees had lost their jobs, and three others had chosen to retire. The cuts will reduce Riverview’s costs by about $1.5 million annually, he said.
Wysaske said a branch manager job was eliminated when management of two branches was combined into a single job. The bank also laid off loan officers and back-room employees, he said. The employees were eligible for a maximum 10 weeks severance, he said.
The bank’s stock has taken a big hit of late. Stock prices hovered at about $3 a share three months ago, but more recently have averaged at around
$2.40 cents. Shares closed at $2.45 following Wall Street’s big rally Thursday.
One reason for cutting positions, Wysaske said, is to satisfy demands of Wall Street.
“The Street is saying, if you’re not growing revenues, what are you doing about efficiency?” Wysaske said.
Riverview also has launched an internal initiative that rewards employees for ideas to improve efficiency and cut costs. If a cost-savings idea is put into effect, the employee making the suggestion receives 10 percent of the first year savings. So far, the bank has received about 50 ideas, said Kim Capeloto, Riverview’s executive vice president.