Riverview Bancorp (RVSB) Earns $1.8 Million in Second Fiscal Quarter

Riverview Bancorp, Inc. (Nasdaq: RVSB) (“Riverview” or the “Company”) today reported net income of $1.8 million, or $0.08 per share, in its second fiscal quarter ended September 30, 2012 compared to a net loss of $1.8 million, or $0.08 per share, in the preceding quarter and net income of $181,000, or $0.01 per share, in its second fiscal quarter a year ago.

“Credit quality improved for the second consecutive quarter as we continue to focus on identifying and resolving problem credits,” stated Pat Sheaffer, Chairman and CEO. “Our team’s success in executing this plan has resulted in a profitable quarter and reduction in nonperforming asset balances. 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.”

Highlights (at or for the period ended September 30, 2012)

• Net income was $1.8 million, or $0.08 per diluted share
• The net interest margin was 4.31% compared to 4.22% for June 30, 2012
• Nonperforming loans decreased $8.8 million during the quarter to $28.0 million (23.8% decline)
• Nonperforming assets decreased $6.3 million during the quarter to $52.5 million (10.8% decline)
• Strong core deposits at 96% of total deposits
• Capital levels continue to exceed the regulatory requirements to be categorized as “well capitalized” with a total risk-based capital ratio of 13.41% and a Tier 1 leverage ratio of 9.09%

Credit Quality

“The decrease in the provision for loan losses during the quarter was primarily driven by the improvement in credit quality of the loan portfolio and reduction in loan charge-offs,” said Ron Wysaske, President and COO. Riverview recorded a $500,000 provision for loan losses in the second quarter of fiscal year 2013 compared to $4.0 million in the preceding quarter and $2.2 million in the second quarter of fiscal year 2012. The allowance for loan losses was $20.1 million at September 30, 2012 and represented 3.46% of total loans and 71.85% of nonperforming loans.

“Nonperforming loan balances decreased $8.8 million during the quarter, primarily in the commercial real estate and multi-family loan categories,” added Wysaske. Nonperforming loans decreased to $28.0 million, or 4.81% of total loans, at September 30, 2012, compared to $36.8 million, or 5.95% of total loans, at June 30, 2012. The decrease in nonperforming loans was primarily driven by a reduction in the inflow of new nonperforming loans. New nonperforming loans decreased to $2.9 million during the quarter compared to $10.4 million in the preceding quarter. Loans delinquent 30 – 89 days also decreased to $3.7 million, or 0.64% of total loans, at September 30, 2012 compared to $8.0 million, or 1.29% of total loans, at June 30, 2012. Net charge-offs in the second quarter of fiscal 2013 totaled $1.3 million, compared to $2.9 million in the preceding quarter and $3.6 million in the second fiscal quarter a year ago.

Real estate owned (“REO”) increased $2.4 million during the quarter to $24.5 million due to the transfer of $4.2 million in loans to REO during the quarter. REO sales during the quarter totaled $1.2 million with write-downs of $725,000. Despite the increase in REO during the quarter, the Company remains optimistic that it will be able to decrease REO over the remainder of the year due to accelerating sales during the past several quarters and the continuing improvement in real estate activity in its market area.

Nonperforming assets (“NPAs”) declined to $52.5 million at September 30, 2012 compared to $58.9 million at June 30, 2012. At September 30, 2012, Riverview’s NPAs were 6.49% of total assets compared to 7.22% at the end of the preceding quarter.

Balance Sheet Review

“As laid out in our capital plan that we implemented in May, our initial phase was to shrink the balance sheet while we cleaned up the loan portfolio,” stated Wysaske. “During the first quarter of fiscal year 2013, we took advantage of favorable interest rates by selling $31.4 million in single-family mortgage loans to the Freddie Mac (“FHLMC”) for a $650,000 gain. During the second quarter we further improved our capital position as we continued to reduce the balance sheet. Having achieved profitability, we will begin to focus more on organic growth by building new relationships and expanding the loan portfolio.”

Riverview continues to reduce its exposure to land development and speculative construction loans. The balance of these portfolios declined to $31.4 million at September 30, 2012 compared to $34.0 million three months earlier. Land development and speculative construction loans represented a combined 5.4% of the total loan portfolio at September 30, 2012 compared to 5.5% of the total loan portfolio the prior quarter.

At September 30, 2012, the commercial real estate (“CRE”) loan portfolio totaled $322.1 million, of which 29% was owner-occupied and 71% was investor-owned. The CRE portfolio contained six loans totaling $11.3 million that were nonperforming, representing 3.5% of the total CRE portfolio and 40.4% of total nonperforming loans.

Total deposits were $699.2 million at September 30, 2012 compared to $705.9 million at June 30, 2012 and $729.3 million a year ago. At September 30, 2012, noninterest deposits were $136.7 million, an increase of 3.4% from the previous quarter and 17.2% from a year ago. Core deposits accounted for 96% of total deposits at September 30, 2012.

Net Interest Margin

Riverview’s net interest margin improved nine basis points during the quarter to 4.31% compared to 4.22% for the preceding quarter. The increase in net interest margin was a result of interest income recorded on loans removed from nonaccrual status, as well as the slowdown of new loans placed on nonaccrual status during the quarter and the re-pricing of the Company’s trust preferred debentures. The cost of interest-bearing deposits decreased during the current quarter to 0.49%, a five basis point decline from the preceding quarter and a decrease of 26 basis points from the second fiscal quarter a year ago. These improvements were partially offset by lower yields on the Company’s loan and investment portfolios as a result of the continued low interest rate environment.

Income Statement

Riverview’s net interest income before the provision for loan losses was $7.8 million in the second fiscal quarter compared to $8.1 million in the preceding quarter and $8.4 million in the second fiscal quarter a year ago. Non-interest income was $2.3 million in the second fiscal quarter compared to $2.4 million in the preceding quarter and $1.8 million in the second fiscal quarter a year ago. In the first six months of fiscal year 2013, non-interest income increased 27% to $4.8 million compared to $3.7 million in the same period a year earlier. The increase in non-interest income was due to an increase in service charge income and mortgage banking activity, including the sale of $31.4 million in single-family mortgages to the FHLMC, which resulted in a $650,000 gain on sale of loans during the first quarter of fiscal year 2013.

Non-interest expense declined to $7.8 million in the second fiscal quarter compared to $8.3 million in the preceding quarter and was unchanged from $7.8 million in the second fiscal quarter a year ago. In the first six months of fiscal year 2013, non-interest expense totaled $16.1 million compared to $16.0 million in the same period a year earlier.

In fiscal 2012, the Company established a valuation allowance against its deferred tax asset. At September 30, 2012, the total valuation allowance was $17.1 million. Management will review the deferred tax asset on a quarterly basis to determine the appropriate valuation allowance, if needed. Any future reversals of the deferred tax asset valuation allowance would decrease the Company’s income tax expense and increase its after tax net income in the period of reversal.

Capital and Liquidity

The Bank continues to maintain capital levels in excess of the regulatory requirements to be categorized as “well capitalized” with a total risk-based capital ratio of 13.41% and a Tier 1 leverage ratio of 9.09% at September 30, 2012.

At September 30, 2012, the Bank had available total and contingent liquidity of $500 million, including over $250 million of borrowing capacity from the Federal Home Loan Bank of Seattle and the Federal Reserve Bank of San Francisco. The Bank also has more than $125 million of cash and short-term investments.

Gresham Branch and Mobile Banking

In June 2012, Riverview opened its eighteenth branch and its fourth in Oregon. This new full service branch will fill a long-standing need for community banking in the Gresham market area. Gresham, just east of Portland, is the fourth largest city in Oregon.

Riverview launched its Mobile Banking apps for the iPhone and Android platforms in August 2012. Augmenting the existing browser based systems for smartphones, the apps were adopted quickly by our clients with almost 2,000 downloads in the first sixty days. Currently over 15% of our online customers are using Mobile Banking to check balances, review account history and transfer funds.

Non-GAAP Financial Measures

In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. Riverview believes that certain non-GAAP financial measures provide investors with information useful in understanding the company’s financial performance; however, readers of this report are urged to review these non-GAAP financial measures in conjunction with GAAP results as reported.

Financial measures that exclude intangible assets are non-GAAP measures. To provide investors with a broader understanding of capital adequacy, Riverview provides non-GAAP financial measures for tangible common equity, along with the GAAP measure. Tangible common equity is calculated as shareholders’ equity less goodwill and other intangible assets. In addition, tangible assets are total assets less goodwill and other intangible assets.

The following table provides a reconciliation of ending shareholders’ equity (GAAP) to ending tangible shareholders’ equity (non-GAAP), and ending assets (GAAP) to ending tangible assets (non-GAAP).

				September 30,				June 30,				September 30,				March 31,
(Dollars in thousands)				2012				2012				2011				2012
Shareholders’ equity				$	75,607			$	73,820			$	108,149			$	75,607
Goodwill					25,572				25,572				25,572				25,572
Other intangible assets, net					520				566				511				415
Tangible shareholders’ equity				$	49,515			$	47,682			$	82,066			$	49,620
Total assets				$	809,553			$	814,730			$	873,396			$	855,998
Goodwill					25,572				25,572				25,572				25,572
Other intangible assets, net					520				566				511				415
Tangible assets				$	783,461			$	788,592			$	847,313			$	830,011

About Riverview

Riverview Bancorp, Inc. (www.riverviewbank.com) is headquartered in Vancouver, Washington – just north of Portland, Oregon on the I-5 corridor. With assets of $810 million, it is the parent company of the 89 year-old Riverview Community Bank, as well as Riverview Asset Management Corp. The Bank offers true community banking services, focusing on providing the highest quality service and financial products to commercial and retail customers. There are 18 branches, including thirteen in the Portland-Vancouver area and three lending centers.

“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements that are subject to risks and uncertainties, including, but not limited to: the Company’s ability to raise common capital, the amount of capital it intends to raise and its intended use of that capital. The credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in the Company’s allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets; changes in general economic conditions, either nationally or in the Company’s market areas; changes in the levels of general interest rates, and the relative differences between short and long term interest rates, deposit interest rates, the Company’s net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in the Company’s market areas; secondary market conditions for loans and the Company’s ability to sell loans in the secondary market; results of examinations of us by the Office of Comptroller of the Currency or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase the Company’s reserve for loan losses, write-down assets, change Riverview Community Bank’s regulatory capital position or affect the Company’s ability to borrow funds or maintain or increase deposits, which could adversely affect its liquidity and earnings; the Company’s compliance with regulatory enforcement actions we have entered into with the OCC and the possibility that our noncompliance could result in the imposition of additional enforcement actions and additional requirements or restrictions on our operations; legislative or regulatory changes that adversely affect the Company’s business including changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules; the Company’s ability to attract and retain deposits; further increases in premiums for deposit insurance; the Company’s ability to control operating costs and expenses; the use of estimates in determining fair value of certain of the Company’s assets, which estimates may prove to be incorrect and result in significant declines in valuation; difficulties in reducing risks associated with the loans on the Company’s balance sheet; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect the Company’s workforce and potential associated charges; computer systems on which the Company depends could fail or experience a security breach; the Company’s ability to retain key members of its senior management team; costs and effects of litigation, including settlements and judgments; the Company’s ability to successfully integrate any assets, liabilities, customers, systems, and management personnel it may in the future acquire into its operations and the Company’s ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; the Company’s ability to pay dividends on its common stock; and interest or principal payments on its junior subordinated debentures; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; other economic, competitive, governmental, regulatory, and technological factors affecting the Company’s operations, pricing, products and services and the other risks described from time to time in our filings with the SEC.

Such forward-looking statements may include projections. Any such projections were not prepared in accordance with published guidelines of the American Institute of Certified Public Accountants or the Securities Exchange Commission regarding projections and forecasts nor have such projections been audited, examined or otherwise reviewed by independent auditors of the Company. In addition, such projections are based upon many estimates and inherently subject to significant economic and competitive uncertainties and contingencies, many of which are beyond the control of management of the Company. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by the Company that the projections will prove to be correct.

The Company cautions readers not to place undue reliance on any forward-looking statements. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. The Company does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for fiscal 2013 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us, and could negatively affect the Company’s operating and stock price performance.

RIVERVIEW BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(In thousands, except share data) (Unaudited)				September 30, 2012			June 30, 2012			September 30, 2011			March 31, 2012
ASSETS
Cash (including interest-earning accounts of $83,642, $58,539, $32,955 and $33,437)				$ 98,367			$ 71,362			$ 50,148			$ 46,393
Certificate of deposits				41,797			40,975			23,847			41,473
Loans held for sale				1,289			100			264			480
Investment securities held to maturity, at amortized cost				–			487			499			493
Investment securities available for sale, at fair value				6,278			6,291			6,707			6,314
Mortgage-backed securities held to maturity, at amortized				164			168			181			171
Mortgage-backed securities available for sale, at fair value				679			813			1,341			974
Loans receivable (net of allowance for loan losses of $20,140, $20,972, $14,672, and $19,921)				562,058			597,138			680,838			664,888
Real estate and other pers. property owned				24,481			22,074			25,585			18,731
Prepaid expenses and other assets				3,894			4,550			6,020			6,362
Accrued interest receivable				1,958			2,084			2,402			2,158
Federal Home Loan Bank stock, at cost				7,285			7,350			7,350			7,350
Premises and equipment, net				17,745			17,887			16,568			17,068
Deferred income taxes, net				616			612			9,307			603
Mortgage servicing rights, net				420			448			334			278
Goodwill				25,572			25,572			25,572			25,572
Core deposit intangible, net				100			118			177			137
Bank owned life insurance				16,850			16,701			16,256			16,553
TOTAL ASSETS				$ 809,553			$ 814,730			$ 873,396			$ 855,998
LIABILITIES AND EQUITY
LIABILITIES:
Deposit accounts				$ 699,227			$ 705,892			$ 729,259			$ 744,455
Accrued expenses and other liabilities				7,926			8,675			9,459			9,398
Advance payments by borrowers for taxes and insurance				1,060			605			797			800
Junior subordinated debentures				22,681			22,681			22,681			22,681
Capital lease obligation				2,477			2,495			2,544			2,513
Total liabilities				733,371			740,348			764,740			779,847
EQUITY:
Shareholders’ equity
Serial preferred stock, $.01 par value; 250,000 authorized, issued and outstanding, none				–			–			–			–
Common stock, $.01 par value; 50,000,000 authorized,
September 30, 2012 – 22,471,890 issued and outstanding;				–			–			–			–
June 30, 2012 – 22,471,890 issued and outstanding;				225			225			225			225
September 30, 2011 – 22,471,890 issued and outstanding;				–			–			–			–
March 31, 2012 – 22,471,890 issued and outstanding;				–			–			–			–
Additional paid-in capital				65,576			65,593			65,626			65,610
Retained earnings				11,543			9,756			44,088			11,536
Unearned shares issued to employee stock ownership trust				(541)			(567)			(644)			(593)
Accumulated other comprehensive loss				(1,196)			(1,187)			(1,146)			(1,171)
Total shareholders’ equity				75,607			73,820			108,149			75,607
Noncontrolling interest				575			562			507			544
Total equity				76,182			74,382			108,656			76,151
TOTAL LIABILITIES AND EQUITY				$ 809,553			$ 814,730			$ 873,396			$ 855,998

RIVERVIEW BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Income
				Three Months Ended													Six Months Ended
(In thousands, except share data) (Unaudited)				Sept. 30, 2012				June 30, 2012					Sept. 30, 2011				Sept. 30, 2012				Sept. 30, 2011
INTEREST INCOME:
Interest and fees on loans receivable				$	8,468			$	9,045				$	9,815			$	17,513			$	20,095
Interest on investment securities-taxable					38				53					36				91				81
Interest on investment securities-non taxable					7				8					12				15				24
Interest on mortgage-backed securities					7				8					13				15				29
Other interest and dividends					128				129					89				257				164
Total interest income					8,648				9,243					9,965				17,891				20,393
INTEREST EXPENSE:
Interest on deposits					699				823					1,158				1,522				2,388
Interest on borrowings					162				349					372				511				740
Total interest expense					861				1,172					1,530				2,033				3,128
Net interest income					7,787				8,071					8,435				15,858				17,265
Less provision for loan losses					500				4,000					2,200				4,500				3,750
Net interest income after provision for loan losses					7,287				4,071					6,235				11,358				13,515
NON-INTEREST INCOME:
Fees and service charges					1,331				1,057					1,078				2,388				2,120
Asset management fees					504				604					570				1,108				1,195
Gain on sale of loans held for sale					152				727					21				879				44
Bank owned life insurance income					148				149					153				297				304
Other					179				(97	)				10				82				73
Total non-interest income					2,314				2,440					1,832				4,754				3,736
NON-INTEREST EXPENSE:
Salaries and employee benefits					3,609				3,793					3,514				7,402				8,025
Occupancy and depreciation					1,236				1,234					1,166				2,470				2,329
Data processing					292				314					542				606				830
Amortization of core deposit intangible					18				19					20				37				42
Advertising and marketing expense					269				219					283				488				528
FDIC insurance premium					394				287					286				681				559
State and local taxes					137				148					81				285				260
Telecommunications					116				121					108				237				215
Professional fees					281				421					298				702				637
Real estate owned expenses					891				939					756				1,830				1,186
Other					569				781					791				1,350				1,391
Total non-interest expense					7,812				8,276					7,845				16,088				16,002
INCOME BEFORE INCOME TAXES					1,789				(1,765	)				222				24				1,249
PROVISION FOR INCOME TAXES					2				15					41				17				354
NET INCOME				$	1,787			$	(1,780	)			$	181			$	7			$	895
Earnings per common share:
Basic				$	0.08			$	(0.08	)			$	0.01				0.00			$	0.04
Diluted				$	0.08			$	(0.08	)			$	0.01				0.00			$	0.04
Weighted average number of shares outstanding:
Basic					22,339,487				22,333,329					22,314,854				22,336,425				22,311,792
Diluted					22,339,487				22,333,329					22,314,854				22,336,425				22,311,792

(Dollars in thousands)				At or for the three months ended															At or for the six months ended
				Sept. 30, 2012					June 30, 2012					Sept. 30, 2011					Sept. 30, 2012				Sept. 30, 2011
AVERAGE BALANCES
Average interest-earning assets				$	716,932				$	768,156				$	770,719				$	742,403			$	765,983
Average interest-bearing liabilities					591,460					636,132					640,605					613,674				638,754
Net average earning assets					125,472					132,024					130,114					128,729				127,229
Average loans					605,382					671,798					695,941					638,408				693,680
Average deposits					699,243					732,812					724,473					715,936				720,066
Average equity					76,008					76,483					109,729					76,244				109,453
Average tangible equity					49,886					50,506					83,614					50,194				83,312
ASSET QUALITY				Sept. 30, 2012					June 30, 2012					Sept. 30, 2011
Non-performing loans					28,031					36,782					29,680
Non-performing loans to total loans					4.81	%				5.95	%				4.27	%
Real estate/repossessed assets owned					24,481					22,074					25,585
Non-performing assets					52,512					58,856					55,265
Non-performing assets to total assets					6.49	%				7.22	%				6.33	%
Net loan charge-offs in the quarter					1,332					2,949					3,587
Net charge-offs in the quarter/average net loans					0.87	%				1.76	%				2.04	%
Allowance for loan losses					20,140					20,972					14,672
Average interest-earning assets to average interest-bearing liabilities					121.21	%				120.75	%				120.31	%
Allowance for loan losses to non-performing loans					71.85	%				57.02	%				49.43	%
Allowance for loan losses to total loans					3.46	%				3.39	%				2.11	%
Shareholders’ equity to assets					9.34	%				9.06	%				12.38	%
CAPITAL RATIOS
Total capital (to risk weighted assets)					13.41	%				13.18	%				14.29	%
Tier 1 capital (to risk weighted assets)					12.13	%				11.91	%				13.03	%
Tier 1 capital (to leverage assets)					9.09	%				9.35	%				10.79	%
Tangible common equity (to tangible assets)					6.32	%				6.05	%				9.69	%
DEPOSIT MIX				Sept. 30, 2012					June 30, 2012					Sept. 30, 2011					March 31, 2012
Interest checking				$	80,634				$	81,064				$	92,006				$	106,904
Regular savings					49,813					47,596					40,871					45,741
Money market deposit accounts					228,236					230,695					227,095					244,919
Non-interest checking					136,661					132,231					116,645					116,882
Certificates of deposit					203,883					214,306					252,642					230,009
Total deposits				$	699,227				$	705,892				$	729,259				$	744,455

COMPOSITION OF COMMERCIAL AND CONSTRUCTION LOANS
								Commercial								Commercial
								Real Estate				Real Estate				& Construction
				Commercial				Mortgage				Construction				Total
September 30, 2012				(Dollars in thousands)
Commercial				$	74,953			$	–			$	–			$	74,953
Commercial construction					–				–				12,585				12,585
Office buildings					–				87,692				–				87,692
Warehouse/industrial					–				46,837				–				46,837
Retail/shopping centers/strip malls					–				73,771				–				73,771
Assisted living facilities					–				23,213				–				23,213
Single purpose facilities					–				90,568				–				90,568
Land					–				27,262				–				27,262
Multi-family					–				36,372				–				36,372
One-to-four family					–				–				4,335				4,335
Total				$	74,953			$	385,715			$	16,920			$	477,588
March 31, 2012				(Dollars in thousands)
Commercial				$	87,238			$	–			$	–			$	87,238
Commercial construction					–				–				13,496				13,496
Office buildings					–				94,541				–				94,541
Warehouse/industrial					–				48,605				–				48,605
Retail/shopping centers/strip malls					–				80,595				–				80,595
Assisted living facilities					–				35,866				–				35,866
Single purpose facilities					–				93,473				–				93,473
Land					–				38,888				–				38,888
Multi-family					–				42,795				–				42,795
One-to-four family					–				–				12,295				12,295
Total				$	87,238			$	434,763			$	25,791			$	547,792
LOAN MIX				Sept. 30, 2012				June 30, 2012				Sept. 30, 2011				March 31, 2012
Commercial and construction
Commercial				$	74,953			$	79,795			$	88,017			$	87,238
Other real estate mortgage					385,715				415,320				455,153				434,763
Real estate construction					16,920				15,447				30,221				25,791
Total commercial and construction					477,588				510,562				573,391				547,792
Consumer
Real estate one-to-four family					102,473				105,298				119,805				134,975
Other installment					2,137				2,250				2,314				2,042
Total consumer					104,610				107,548				122,119				137,017
Total loans					582,198				618,110				695,510				684,809
Less:
Allowance for loan losses					20,140				20,972				14,672				19,921
Loans receivable, net				$	562,058			$	597,138			$	680,838			$	664,888

DETAIL OF NON-PERFORMING ASSETS
				Northwest				Other				Southwest				Other
				Oregon				Oregon				Washington				Washington				Other				Total
September 30, 2012				(dollars in thousands)
Non-performing assets
Commercial				$	88			$	182			$	1,675			$	–			$	–			$	1,945
Commercial real estate					2,322				–				8,714				298				–				11,334
Land					–				800				2,944				–				–				3,744
Multi-family					–				3,081				2,981				–				–				6,062
Commercial construction					–				–				–				–				–				–
One-to-four family construction					904				562				17				–				–				1,483
Real estate one-to-four family					349				413				2,411				290				–				3,463
Consumer					–				–				–				–				–				–
Total non-performing loans					3,663				5,038				18,742				588				–				28,031
REO					4,227				6,729				9,625				2,745				1,155				24,481
Total non-performing assets				$	7,890			$	11,767			$	28,367			$	3,333			$	1,155			$	52,512
DETAIL OF SPEC CONSTRUCTION AND LAND DEVELOPMENT LOANS
				Northwest				Other				Southwest				Other
				Oregon				Oregon				Washington				Washington				Other				Total
September 30, 2012				(dollars in thousands)
Land and Spec Construction Loans
Land Development Loans				$	4,960			$	2,413			$	19,889			$	–			$	–			$	27,262
Spec Construction Loans					904				563				2,474				244				–				4,185
Total Land and Spec Construction				$	5,864			$	2,976			$	22,363			$	244			$	–			$	31,447

				At or for the three months ended															At or for the six months ended
SELECTED OPERATING DATA				Sept. 30, 2012					June 30, 2012					Sept. 30, 2011					Sept. 30, 2012					Sept. 30, 2011
Efficiency ratio (4)					77.34	%				78.74	%				76.41	%				78.05	%				76.20	%
Coverage ratio (6)					99.68	%				97.52	%				107.52	%				98.57	%				107.89	%
Return on average assets (1)					0.88	%				-0.85	%				0.08	%				0.00	%				0.21	%
Return on average equity (1)					9.33	%				-9.33	%				0.65	%				0.02	%				1.63	%
NET INTEREST SPREAD
Yield on loans					5.55	%				5.40	%				5.59	%				5.47	%				5.78	%
Yield on investment securities					2.38	%				3.04	%				2.59	%				2.74	%				2.74	%
Total yield on interest earning assets					4.79	%				4.83	%				5.13	%				4.81	%				5.31	%
Cost of interest bearing deposits					0.49	%				0.54	%				0.75	%				0.52	%				0.78	%
Cost of FHLB advances and other borrowings					2.57	%				5.56	%				5.86	%				4.05	%				5.85	%
Total cost of interest bearing liabilities					0.58	%				0.74	%				0.95	%				0.66	%				0.98	%
Spread (7)					4.21	%				4.09	%				4.18	%				4.15	%				4.33	%
Net interest margin					4.31	%				4.22	%				4.35	%				4.26	%				4.50	%
PER SHARE DATA
Basic earnings per share (2)				$	0.08				$	(0.08	)			$	0.01				$	–				$	0.04
Diluted earnings per share (3)				$	0.08				$	(0.08	)			$	0.01				$	–				$	0.04
Book value per share (5)					3.36					3.28					4.81					3.36					4.81
Tangible book value per share (5)					2.20					2.12					3.65					2.20					3.65
Market price per share:
High for the period				$	1.49				$	2.29				$	3.12				$	2.29				$	3.18
Low for the period					1.24					1.08					2.20					1.08					2.20
Close for period end					1.37					1.25					2.40					1.37					2.40
Cash dividends declared per share					–					–					–					–					–
Average number of shares outstanding:
Basic (2)					22,339,487					22,333,329					22,314,854					22,336,425					22,311,792
Diluted (3)					22,339,487					22,333,329					22,314,854					22,336,425					22,311,792
(1) Amounts for the quarterly periods are annualized.
(2) Amounts exclude ESOP shares not committed to be released.
(3) Amounts exclude ESOP shares not committed to be released and include common stock equivalents.
(4) Non-interest expense divided by net interest income and non-interest income.
(5) Amounts calculated based on shareholders’ equity and include ESOP shares not committed to be released.
(6) Net interest income divided by non-interest expense.
(7) Yield on interest-earning assets less cost of funds on interest bearing liabilities.