Riverview Bancorp, Inc. (RVSB) is a community banking institution that has been serving the Pacific Northwest region for over a century. Founded in 1923, the company has established a strong foothold in its local markets, catering to the financial needs of businesses and individuals alike. As the holding company for Riverview Bank, Riverview Bancorp has navigated the ever-evolving banking landscape, adapting to industry changes and positioning itself for long-term success.
Company History and Focus
Riverview Bancorp’s history is marked by a commitment to community-centric banking, fostering deep relationships with its customers and contributing to the growth and development of the areas it serves. The company’s focus on personalized service and local decision-making has been a hallmark of its approach, setting it apart in an industry increasingly dominated by larger, nationwide institutions.
Over the years, Riverview Bancorp has strategically expanded its footprint, both organically and through selective acquisitions. The company’s network of 17 branches spans across Clark, Klickitat, and Skamania counties in Washington, as well as Multnomah, Washington, and Marion counties in Oregon. This expansion has allowed Riverview Bancorp to tap into the economic vitality of these thriving markets. The company’s diversified loan portfolio, which emphasizes commercial and real estate lending, has been a key driver of its growth, complementing its core deposit-gathering capabilities.
Overcoming Challenges
Riverview Bancorp has faced its share of challenges throughout its history. During the financial crisis of the late 2000s and early 2010s, the company, like many banks, encountered difficulties. However, Riverview Bancorp demonstrated resilience by successfully navigating these turbulent waters. The company focused on improving asset quality, reducing non-performing loans, and strengthening its capital position, emerging as a more robust institution.
Recent Developments
In recent years, Riverview Bancorp has continued to evolve and adapt to changing market conditions. The company has invested in technology to enhance its product offerings and improve the customer experience. Additionally, Riverview Bancorp has expanded its commercial banking and wealth management capabilities, diversifying its revenue streams and positioning itself for future growth. As of now, the company has grown to approximately $1.5 billion in assets, offering a full suite of banking, lending, and wealth management services to businesses and individuals throughout its primary market area.
Financials
Financially, Riverview Bancorp has demonstrated resilience. For the fiscal year ended March 31, 2024, the company reported revenue of $48.33 million and net income of $3.80 million, or $0.18 per diluted share. While this represented a decline from the previous year’s net income of $18.07 million, or $0.83 per diluted share, the company’s performance was impacted by factors such as the low-interest-rate environment and increased competitive pressures. The company’s operating cash flow for fiscal year 2024 was $12.75 million, with free cash flow of $7.14 million.
In the second quarter of fiscal 2025, Riverview Bancorp reported revenue of $14.94 million and net income of $1.56 million, or $0.05 per diluted share, compared to $2.8 million, or $0.13 per diluted share, in the same period a year earlier. This represents a year-over-year revenue growth of 6.30%, but a 36.84% decrease in net income, primarily due to increased interest expense on deposits. The company’s operating cash flow for Q2 2025 was $764,000, with free cash flow of -$1.44 million.
The company’s net interest margin remained under pressure, declining to 2.46% from 2.71% in the first quarter of the prior fiscal year, as rising deposit costs outpaced the increase in asset yields. Nonetheless, Riverview Bancorp has maintained a well-capitalized position, with a total risk-based capital ratio of 16.32% as of March 31, 2024, well above the regulatory minimum of 10%.
Liquidity
Riverview Bancorp maintains a solid liquidity position. As of September 30, 2024, the company had $30.96 million in cash and a debt-to-equity ratio of 0.805. The company’s current ratio and quick ratio both stand at 0.062. Additionally, the Bank has a credit line with the Federal Home Loan Bank (FHLB) equal to 45% of total assets, limited by available collateral. As of September 30, 2024, based on collateral values, the Bank had additional borrowing capacity of $167.50 million from the FHLB.
To address ongoing challenges, Riverview Bancorp has taken proactive steps to enhance its operational efficiency and profitability. The company has implemented strategic initiatives to grow its core deposit base, diversify its revenue streams, and optimize its lending portfolio. These efforts have included leveraging technology to improve customer experience, expanding its commercial and business banking capabilities, and strengthening its wealth management and trust services through the Riverview Trust Company subsidiary.
Business Overview and Product Segments
Riverview Bancorp’s primary business strategy is to provide comprehensive banking and related financial services within its primary market area, focusing on commercial and real estate construction lending. The company’s loan portfolio is divided into several key segments:
Consumer Lending: The consumer loan portfolio, which includes real estate one-to-four family and other installment loans, totaled $113.1 million as of September 30, 2024. This segment represented the remaining 10.7% of the total loan portfolio. The company has shifted its focus away from originating residential real estate loans, though it will selectively purchase these loans to supplement its lending activities and diversify the portfolio.
Deposits: Total deposits increased $5.8 million to $1.24 billion as of September 30, 2024, compared to $1.23 billion at March 31, 2024. This growth was driven by a $38.2 million increase in certificates of deposit and an $18.3 million increase in money market accounts, partially offset by declines in interest-bearing accounts, regular savings accounts, and non-interest-bearing accounts. Core branch deposits represented 98.4% of total deposits, reflecting the company’s focus on building customer relationships and growing its lower-cost core deposit base.
Trust and Asset Management: Through its Riverview Trust Company subsidiary, RVSB provides trust and asset management services. Assets under management totaled $871.6 million as of September 30, 2024, compared to $961.8 million at March 31, 2024. This segment generates fee-based income, which increased 12.6% and 12.8% for the three and six months ended September 30, 2024, respectively, compared to the prior year periods.
Geographic Markets
Riverview Bancorp primarily operates in the states of Washington and Oregon, serving communities in Clark, Klickitat, and Skamania counties in Washington, as well as Multnomah, Washington, and Marion counties in Oregon.
Leadership Changes
Recently, Riverview Bancorp announced the appointment of Nicole Sherman as its new President and Chief Executive Officer, effective July 1, 2024. Sherman, a seasoned banking executive with over 25 years of experience, is poised to lead the company into its next chapter, drawing on her expertise in driving growth and building high-performance banking cultures.
It’s worth noting that in August 2023, the company’s former CEO Kevin Lycklama was terminated “without cause” after being placed on administrative leave pending an internal investigation.
Future Outlook
Looking ahead, Riverview Bancorp faces a mix of opportunities and challenges. The company’s strategic focus on commercial and real estate lending, as well as its commitment to serving the needs of small and medium-sized businesses, positions it well to capitalize on the economic growth in its core markets. However, the company must also navigate the ongoing pressures of a potentially slowing economy, rising interest rates, and heightened competition from both traditional and non-traditional financial service providers.
To mitigate these risks, Riverview Bancorp is leveraging its strong customer relationships, adapting its product and service offerings, and optimizing its operational efficiency. The company’s diversified revenue streams, which include fee-based businesses such as wealth management and trust services, provide a degree of stability and additional avenues for growth.
Riverview Bancorp’s long-standing presence in the Pacific Northwest, its deep-rooted community ties, and its dedication to serving the needs of its customers have been the foundation of its success. As the company navigates the evolving banking landscape, its ability to balance prudent risk management with strategic growth initiatives will be crucial in driving long-term shareholder value.
The company’s overall strategy is centered on growing its higher-yielding commercial and construction loan portfolio, maintaining strong asset quality, introducing new products and services, attracting core deposits, and recruiting experienced commercial lending personnel. Riverview Bancorp’s focus on total relationship banking and building customer relationships in its primary market areas remains a key part of its operating strategy as it moves forward in a challenging banking environment.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.