Vancouver’s Riverview Bancorp, parent of Riverview Community Bank, said Friday it expects to report a loss of $4.5 million to $5.6 million in its fiscal third quarter, largely due to its decision to increase its loan loss reserve from $2.2 million to as much as $8 million.
In a news release, Riverview said its loan loss provision increase is primarily due to lower-than-expected real estate appraisals it received on five loans categorized as impaired. Riverview said it will record $5.7 million in reduced value on these five loans.
With the increase, the loan loss reserve will represent between 2.17 percent and 2.27 percent of total loans. Riverview also expects to record write-downs of approximately $2.5 million on bank-owned real estate properties for the quarter, which ended Dec. 31. These write-downs were primarily the result of a recent appraisal on one bank-owned property and a pending sale on a second property, it said.
“Recognizing the valuation declines and bolstering our loan loss reserves will help position Riverview for recovery and financial growth over the long term,” said Pat Sheaffer, chairman and CEO. “We continue to have success in our core operations with strong deposit flows, a solid net interest margin, and a growing customer base.”
