Riverview Bancorp Inc. delivered good news to its investors Wednesday for the first time in a year, reporting a net income of $1.8 million, or 8 cents per diluted share, for the fiscal quarter ending Sept. 30.
It was the first quarterly profit after a string of three consecutive losses for the Vancouver-based corporate parent of Riverview Community Bank. Riverview had reported a $1.8 million loss in the previous quarter, the first of its 2012 fiscal year, and a $31.7 loss for the 2011 fiscal year. Its profit for the year is a miniscule $7,000 or so, said Ron Wysaske, Riverview’s president and chief operations officer
“We’re glad to be back in the black,” he said. The bank, with $810 million in assets, has some $100 million in cash, giving it the liquidity it needs for loans that will help it grow, Wysaske said.
Riverview’s stock closed on the New York Stock Exchange at $1.80 per share Wednesday, a one-day increase of more than 12 percent.
Pat Sheaffer, Riverview’s chairman and CEO, attributed the bank’s improved bottom line to an aggressive effort to shrink the size of its troubled loan portfolio.
“Credit quality improved for the second consecutive quarter as we continue to focus on identifying and resolving problem credits,” Sheaffer said in a news release. “While we will continue to pull from every resource to reduce problem assets, we can also now focus on responsible profitable growth that supports lending in the communities we serve.”
The bank reported a drop of nearly 24 percent, or $8.8 million, in non-performing loans as fewer existing loans — primarily in commercial real estate and multi-family loan categories — went bad. Its non performing assets dropped by $6.3 million, a decline of almost 11 percent. Because of those improvements, the bank was able to shrink its set-aside for loan losses, which strengthened its bottom line.
Riverview did report a $2.4 million increase in real estate owned, or REO, properties during the quarter as it transferred $4.2 million in loans into bank ownership of property. It said that it expects to decrease its property holdings over the remainder of the year due to a steady improvement in the real estate market.
The bank’s commercial real estate portfolio stands at $322.1 million, of which 29 percent is owner-occupied and 71 percent is owned by investors. Its deposits stand at $699 million, down from $729 million one year ago.
Wysaske said nearly all deposits were from customers rather than investors, and that he was proud of having maintained a strong core of local depositors. Still, Wysaske said Riverview did not attract a significant number of new customers following Spokane-based Sterling Bank’s acquisition of First Independent Bank, which had been the only other locally based bank in Clark County.
Riverview has 18 branches, including four in Oregon. Its newest branch, in Gresham, Ore., opened in June. Wysaske said the bank has no immediate plans for adding branches, although he said it does want to increase its presence in the Portland metro area. Riverview launched its mobile banking apps in August.
In July, the bank announced the launch of an aggressive campaign to market some $100 million in personal and business loans, part of a strategy to replenish its loan portfolio. The earnings report made no mention of that initiative, but Wysaske said the bank so far has marketed some $25 million in new loans since that July announcement.