Riverview posts third consecutive loss

Vancouver bank shores up bottom line, stock price with sale of high-quality mortgage loans to federal agency

By Gordon Oliver, Columbian business editor

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Riverview Bancorp Inc., Vancouver-based parent to Riverview Community Bank, reported a net loss of $1.8 million in its first fiscal quarter that ended June 30, marking the struggling bank's third consecutive quarterly loss.

Still, a loss that amounted to 8 cents per share was a big improvement for Riverview, which had reported a $16 million loss in its previous quarter and a $31.7 million loss for the entire 2011 fiscal year.

The struggling bank managed to shore up its bottom line this time around through its sale of $31.4 million in single-family mortgage loans to the Federal Home Loan Mortgage Corp. It was able to set aside an additional $4 million to cover loan losses, giving it a loan loss reserve of $21 million. Its nonperforming assets dropped by $3 million to $58.9 million, and the bank increased the size of its capital reserve.

The report bolstered Riverview's long-stalled stock price, which rose by 5 percent to close at $1.40 per share.

Ron Wysaske, Riverview's president and chief operating officer, said Riverview earned a small profit through the sale of its high-quality loans to the Federal Home Loan Mortgage Corp. While the sale eliminates a revenue stream for Riverview, he said, it provided much-needed liquidity and an opportunity to sell new loans with potential for a larger return.

"We had some balance sheet management we had to do," Wysaske said of the loan sale. Riverview will continue to manage the loan portfolio, he said.

Marketing campaign

Riverview last week announced an aggressive effort to market some $100 million in personal and business loans, part of a strategy to replenish its loan portfolio. "We sold our earnings stream, and now we need to get that earning stream back," Wysaske said.

Riverview is also busy promoting itself as Clark County's last home-based bank. Earlier this year First Independent Bank, which also was based in Vancouver, was acquired by Spokane-based Sterling Bank. Sterling completed its integration of former First Independent customers into Sterling's system this week. Both Wysaske and Kim Capeloto, Riverview's executive vice president for marketing and operations, said they expected further migration of former First Independent customers to Riverview as they recognize the difference between a community and a regional bank,

"We are kind of the last man standing and proud to be a community bank," Wysaske said.

Wysaske said he believes "the tide is turning" to better times for his bank, but noted that cost control will remain a high priority. While Riverview has no plans for staff layoffs, he said, "without a doubt, all banks in this environment have to keep an eye on the efficiency side of things."

Riverview's board is focused on improving the bank's financial system and serving the community, and no board member has taken a position that Riverview should market itself for acquisition, Wysaske said.