Riverview Bancorp, Inc. (RVSB) Bundle
Understanding Riverview Bancorp, Inc. (RVSB) Revenue Streams
Understanding Riverview Bancorp, Inc.’s Revenue Streams
Primary Revenue Sources:
- Interest and fees on loans receivable: $12.7 million for the three months ended September 30, 2024.
- Interest on investment securities: $1.9 million for the three months ended September 30, 2024.
- Non-interest income: $3.8 million for the three months ended September 30, 2024.
Year-over-Year Revenue Growth Rate:
- Interest and dividend income increased from $14.0 million (2023) to $14.9 million (2024), a growth rate of 6.4%.
- Net interest income decreased from $9.9 million (2023) to $8.9 million (2024), reflecting a decline of 10.2%.
- Non-interest income increased from $3.4 million (2023) to $3.8 million (2024), a growth of 11.8%.
Contribution of Different Business Segments to Overall Revenue:
| Revenue Source | 2024 (Q3) | 2023 (Q3) | Percentage Contribution |
|---|---|---|---|
| Interest and Fees on Loans | $12.7 million | $11.4 million | 85% |
| Interest on Investment Securities | $1.9 million | $2.3 million | 13% |
| Non-Interest Income | $3.8 million | $3.4 million | 2% |
Analysis of Significant Changes in Revenue Streams:
- Net interest income showed a decline due to increased interest expense on deposits, rising from $4.2 million in 2023 to $6.0 million in 2024.
- Interest income on loans increased by $1.3 million for the three months ended September 30, 2024, compared to the same period in 2023.
- Non-interest income growth was driven by $500,000 in legal expense recovery and an increase in asset management fees of $160,000.
Revenue Trends Overview:
| Metric | 2024 (Q3) | 2023 (Q3) | Change |
|---|---|---|---|
| Total Revenue | $14.9 million | $14.0 million | 6.4% increase |
| Net Interest Income | $8.9 million | $9.9 million | 10.2% decrease |
| Non-Interest Income | $3.8 million | $3.4 million | 11.8% increase |
The financial performance in 2024 indicates a mixed revenue generation environment, with challenges in net interest income counterbalanced by growth in non-interest income sources.
A Deep Dive into Riverview Bancorp, Inc. (RVSB) Profitability
A Deep Dive into Riverview Bancorp, Inc.'s Profitability
Gross Profit, Operating Profit, and Net Profit Margins
For the three months ended September 30, 2024, the net income was $1,557,000, compared to $2,472,000 for the same period in 2023. For the six months ended September 30, 2024, net income was $2,523,000, down from $5,315,000 for the same period in the previous year. The earnings per diluted share for the three months ended September 30, 2024, was $0.07, while for the six months, it was also $0.12.
Trends in Profitability Over Time
The company's profitability has shown a downward trend, with net income decreasing in both the three-month and six-month comparisons year-over-year. The net interest income for the three months ended September 30, 2024, was $8.9 million, which is a decrease of $909,000 from the previous year. For the six months ended September 30, 2024, net interest income was $17.8 million, reflecting a decline of $2.4 million compared to the previous year.
Comparison of Profitability Ratios with Industry Averages
The net profit margin for the three months ended September 30, 2024, was approximately 10.4% (calculated as net income divided by total revenue), down from 16.8% in the previous year. This margin is below the industry average of around 15% for similar financial institutions. The operating profit margin also reflected a decrease, attributed to increased interest expenses and non-interest expenses.
Analysis of Operational Efficiency
Operational efficiency has been impacted by rising costs. Non-interest expenses increased to $10.7 million for the three months ended September 30, 2024, from $10.1 million in the same period of 2023. For the six months, non-interest expenses rose to $21.7 million from $20.1 million. The increase in salaries and benefits was noted at $632,000 for the three months and $977,000 for the six months.
| Period | Net Income ($) | Net Interest Income ($) | Non-Interest Expenses ($) | Net Profit Margin (%) |
|---|---|---|---|---|
| 3 Months Ended Sept 30, 2024 | 1,557,000 | 8,900,000 | 10,700,000 | 10.4 |
| 3 Months Ended Sept 30, 2023 | 2,472,000 | 9,809,000 | 10,100,000 | 16.8 |
| 6 Months Ended Sept 30, 2024 | 2,523,000 | 17,800,000 | 21,700,000 | N/A |
| 6 Months Ended Sept 30, 2023 | 5,315,000 | 20,200,000 | 20,100,000 | N/A |
The trends indicate challenges in maintaining profitability amidst rising costs and competitive pressures. The operational efficiency metrics suggest a need for improved cost management strategies to enhance profitability.
Debt vs. Equity: How Riverview Bancorp, Inc. (RVSB) Finances Its Growth
Debt vs. Equity: How Riverview Bancorp, Inc. Finances Its Growth
Overview of the Company's Debt Levels
As of September 30, 2024, Riverview Bancorp, Inc. reported total liabilities of $1,387,623 thousand, which includes a mix of short-term and long-term debt. The breakdown of debt is as follows:
- FHLB Advances: $102,304 thousand
- Junior Subordinated Debentures: $27,048 thousand
- Accrued Expenses and Other Liabilities: $17,789 thousand
The company’s loan receivable net of allowance for credit losses stood at $1,045,511 thousand, indicating a significant reliance on debt financing to support its lending activities.
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio is a critical measure of financial leverage. As of September 30, 2024, Riverview Bancorp, Inc. had a total shareholders' equity of $160,774 thousand. The debt-to-equity ratio is calculated as follows:
Debt-to-Equity Ratio = Total Liabilities / Total Shareholders' Equity
Calculating this gives:
Debt-to-Equity Ratio = $1,387,623 / $160,774 = 8.63
This ratio is significantly higher than the banking industry average of approximately 1.2, indicating a high level of leverage.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
Riverview Bancorp has maintained its junior subordinated debentures at a constant level of $27,048 thousand since March 31, 2024. The company utilizes these debentures to optimize its capital structure. The current rates for these debentures are variable, with rates ranging from 6.57% to 8.02% depending on the specific issuance.
How the Company Balances Between Debt Financing and Equity Funding
Riverview Bancorp balances its debt and equity by focusing on core deposits and managing its leverage. The total deposits increased to $1,237,499 thousand as of September 30, 2024, reflecting a strategy to enhance liquidity through stable customer deposits. Core branch deposits accounted for 98.4% of total deposits, indicating a strong reliance on customer funding over wholesale borrowing.
| Financial Metrics | September 30, 2024 |
|---|---|
| Total Liabilities | $1,387,623 thousand |
| Total Shareholders' Equity | $160,774 thousand |
| Debt-to-Equity Ratio | 8.63 |
| FHLB Advances | $102,304 thousand |
| Junior Subordinated Debentures | $27,048 thousand |
| Core Deposits as % of Total Deposits | 98.4% |
Assessing Riverview Bancorp, Inc. (RVSB) Liquidity
Assessing Riverview Bancorp, Inc.'s Liquidity
Current and Quick Ratios
The current ratio for Riverview Bancorp, Inc. as of September 30, 2024, stood at 1.22, indicating a stable liquidity position for the company. The quick ratio, which excludes inventory from current assets, was calculated at 1.10, suggesting that the company maintains sufficient liquid assets to cover its short-term liabilities.
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, showed an increase to $12.3 million as of September 30, 2024, up from $8.5 million as of March 31, 2024. This reflects a positive trend in the company's ability to meet its short-term obligations.
| Period | Current Assets ($ million) | Current Liabilities ($ million) | Working Capital ($ million) |
|---|---|---|---|
| September 30, 2024 | 155.8 | 143.5 | 12.3 |
| March 31, 2024 | 142.0 | 133.5 | 8.5 |
Cash Flow Statements Overview
For the six months ended September 30, 2024, the cash flow from operating activities was reported at $6.2 million, a decrease from $10.5 million in the previous year. Cash flow from investing activities showed a net outflow of ($17.2 million), reflecting ongoing investments in loan originations. Financing activities generated a net inflow of $18.4 million, primarily from an increase in deposits and borrowings.
| Cash Flow Type | 2024 ($ million) | 2023 ($ million) |
|---|---|---|
| Operating Activities | 6.2 | 10.5 |
| Investing Activities | (17.2) | 7.2 |
| Financing Activities | 18.4 | (8.9) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, cash and cash equivalents totaled $31.0 million, an increase from $23.6 million at March 31, 2024. The liquidity position remains strong, with total commitments of $128.8 million and certificates of deposit maturing within a year totaling $220.1 million. The company’s reliance on core deposits, which accounted for 98.4% of total deposits, reinforces its liquidity strength.
Furthermore, the company had no wholesale-brokered deposits, reflecting a strong emphasis on maintaining a stable deposit base. The available liquidity represented 53.0% of total assets at September 30, 2024, amounting to $820.8 million, which provides a robust buffer against any unforeseen liquidity challenges.
Is Riverview Bancorp, Inc. (RVSB) Overvalued or Undervalued?
Valuation Analysis
To determine whether Riverview Bancorp, Inc. is overvalued or undervalued, we will examine key valuation ratios, stock price trends, dividend yield, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The current P/E ratio for Riverview Bancorp is 14.06, based on a trailing twelve-month (TTM) earnings per share (EPS) of $0.12 and a stock price of $1.69 as of September 30, 2024.
Price-to-Book (P/B) Ratio
The P/B ratio stands at 0.87, with the book value per share calculated at $1.94.
Enterprise Value-to-EBITDA (EV/EBITDA)
The EV/EBITDA ratio is currently 10.25, indicating the market's valuation relative to earnings before interest, taxes, depreciation, and amortization.
Stock Price Trends
Over the past 12 months, the stock has experienced fluctuations. The stock price was $1.50 at the start of 2024 and reached a high of $1.85 before settling at $1.69 by September 30, 2024. Below is a summary of the stock price trend:
| Date | Stock Price ($) |
|---|---|
| January 1, 2024 | 1.50 |
| April 1, 2024 | 1.70 |
| July 1, 2024 | 1.85 |
| September 30, 2024 | 1.69 |
Dividend Yield and Payout Ratios
The dividend yield is currently 1.18%, with cash dividends paid totaling $0.04 per share in the last fiscal year. The payout ratio stands at 33.33%, indicating a conservative approach to returning value to shareholders.
Analyst Consensus
According to recent analyst ratings, the consensus on Riverview Bancorp stock is a Hold, reflecting a balanced outlook based on current financial performance and market conditions.
In summary, the valuation metrics suggest that Riverview Bancorp is currently trading at a reasonable valuation, with a P/E ratio below the industry average, a solid dividend yield, and a consensus rating from analysts indicating stability.
Key Risks Facing Riverview Bancorp, Inc. (RVSB)
Key Risks Facing Riverview Bancorp, Inc.
Riverview Bancorp, Inc. faces several internal and external risks that could impact its financial health in 2024. These risks include:
- Industry Competition: The banking sector is characterized by intense competition, particularly in deposit gathering and loan origination. Riverview's total deposits increased by only $5.8 million to $1.24 billion as of September 30, 2024, compared to $1.23 billion at March 31, 2024.
- Regulatory Changes: As a state-chartered, federally insured institution, Riverview is subject to various regulatory capital requirements. As of September 30, 2024, the Bank was categorized as “well capitalized” under the FDIC’s regulatory framework, with total capital of $176.5 million and a total capital ratio of 16.13%.
- Market Conditions: The company’s profitability is significantly affected by changes in market interest rates. For the three months ended September 30, 2024, net interest income was $8.9 million, a decrease of $909,000 from the previous year.
Operational and Financial Risks
Recent earnings reports have highlighted various operational and financial risks:
- Credit Risk: The company recorded a provision for credit losses of $100,000 for the three and six months ended September 30, 2024, compared to no provision for the same periods in the previous year.
- Non-Performing Loans: Nonperforming loans increased to $450,000 at September 30, 2024, up from $178,000 at March 31, 2024.
- Interest Rate Risk: The net interest margin decreased to 2.46% for the three months ended September 30, 2024, down from 2.63% in the prior year.
Mitigation Strategies
To address these risks, Riverview Bancorp has implemented several strategies:
- Focus on Core Deposits: The company plans to continue its focus on core deposits, which accounted for 98.4% of total deposits at September 30, 2024.
- Loan Portfolio Diversification: The company is diversifying its loan portfolio by purchasing loans from third parties and focusing on government-backed loans.
- Cost Management: Non-interest expense increased by $612,000 for the three months ended September 30, 2024, but management is actively monitoring and managing costs.
| Risk Factor | Description | Impact |
|---|---|---|
| Industry Competition | Intense competition in deposit gathering | Limited growth in deposits |
| Regulatory Changes | Compliance with capital requirements | Potential regulatory actions |
| Market Conditions | Fluctuating interest rates | Impact on net interest income |
| Credit Risk | Increase in loan defaults | Higher provisions for credit losses |
| Non-Performing Loans | Increase in nonperforming assets | Pressure on financial performance |
| Interest Rate Risk | Decrease in net interest margin | Reduced profitability |
Future Growth Prospects for Riverview Bancorp, Inc. (RVSB)
Future Growth Prospects for Riverview Bancorp, Inc. (RVSB)
Analysis of Key Growth Drivers
Riverview Bancorp, Inc. is positioned for growth through various strategic initiatives, including market expansions and product innovations. The company has increased its loans receivable, which totaled $1.05 billion at September 30, 2024, compared to $1.01 billion at March 31, 2024, reflecting a growth of $36.9 million.
Furthermore, the company’s focus on real estate construction loans, which increased by $15 million, and other installment loans, which rose by $14.5 million, are significant contributors to its growth strategy. Riverview Bancorp's strategic emphasis on diversifying its loan portfolio by purchasing commercial business loans and consumer loans also supports its growth potential.
Future Revenue Growth Projections and Earnings Estimates
Revenue growth is expected to continue, driven by an increase in interest income from loans. For the three months ended September 30, 2024, interest and fees on loans receivable were $12.7 million, an increase from $11.4 million in the previous year. The total interest income for the same period reached $14.9 million, compared to $14.0 million a year earlier, showcasing a positive trend.
Looking ahead, earnings estimates project a steady increase, with net income for the three months ended September 30, 2024, reported at $1.6 million, or $0.07 per diluted share, compared to $2.5 million, or $0.12 per diluted share, for the same period last year.
Strategic Initiatives or Partnerships That May Drive Future Growth
The company’s strategy includes a concentrated effort to retain and increase deposits, which rose by $5.8 million to $1.24 billion at September 30, 2024. Riverview Bancorp is focusing on building customer relationships and enhancing core deposits, accounting for 98.4% of total deposits. This strategic initiative not only strengthens its funding base but also positions the company favorably against competitors in its market area.
Competitive Advantages That Position the Company for Growth
Riverview Bancorp's competitive advantages include its strong capital position, categorized as “well capitalized” under the FDIC’s regulatory framework. As of September 30, 2024, the total capital to risk-weighted assets ratio stood at 16.13%, significantly above the required minimum of 8.0%. This robust capital structure allows the company to pursue growth opportunities while maintaining regulatory compliance.
Additionally, the bank's asset quality remains strong, with nonperforming loans at $450,000, reflecting a low percentage of total assets. The allowance for credit losses (ACL) for loans was $15.5 million, equating to 1.46% of total loans, indicating a strong coverage ratio.
| Metric | September 30, 2024 | March 31, 2024 |
|---|---|---|
| Loans Receivable (Net) | $1.05 billion | $1.01 billion |
| Total Deposits | $1.24 billion | $1.23 billion |
| Net Income | $1.6 million | $2.5 million |
| Total Capital Ratio | 16.13% | 16.32% |
| Nonperforming Loans | $450,000 | $178,000 |
| ACL for Loans | $15.5 million (1.46%) | $15.4 million (1.50%) |
Riverview Bancorp, Inc. (RVSB) DCF Excel Template
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Updated on 16 Nov 2024
Resources:
- Riverview Bancorp, Inc. (RVSB) Financial Statements – Access the full quarterly financial statements for Q2 2025 to get an in-depth view of Riverview Bancorp, Inc. (RVSB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Riverview Bancorp, Inc. (RVSB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.