Company Quick10K Filing
Quick10K
Riverview Bancorp
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$7.58 23 $171
10-Q 2018-12-31 Quarter: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-K 2018-03-31 Annual: 2018-03-31
10-Q 2017-12-31 Quarter: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-K 2017-03-31 Annual: 2017-03-31
10-Q 2016-12-31 Quarter: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-K 2016-03-31 Annual: 2016-03-31
10-Q 2015-12-31 Quarter: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-K 2015-03-31 Annual: 2015-03-31
10-Q 2014-12-31 Quarter: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-K 2014-03-31 Annual: 2014-03-31
10-Q 2013-12-31 Quarter: 2013-12-31
8-K 2019-01-24 Earnings, Exhibits
8-K 2019-01-24 Earnings, Exhibits
8-K 2018-10-25 Earnings, Exhibits
8-K 2018-07-25 Shareholder Vote
8-K 2018-07-24 Earnings, Exhibits
8-K 2018-05-08 Regulation FD, Exhibits
8-K 2018-04-26 Earnings, Exhibits
8-K 2018-03-28 Other Events
8-K 2018-01-25 Earnings, Exhibits
8-K 2018-01-12 Officers, Exhibits
LORL Loral Space & Communications 1,170
CHCT Community Healthcare Trust 661
LKSD LSC Communications 230
ECOR Electrocore 179
NTRP Neurotrope 73
AQXP Aquinox Pharmaceuticals 62
SCX LS Starrett 50
DENR Discovery Energy 0
RLJE RLJ Entertainment 0
NVL Novelis 0
RVSB 2018-12-31
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 riv10q123118exh311.htm
EX-31.2 riv10q123118exh312.htm
EX-32 riv10q123118exh32.htm

Riverview Bancorp Earnings 2018-12-31

RVSB 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 riv10q123118.htm FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 10-Q

[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2018

OR

[  ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 000-22957
 
RIVERVIEW BANCORP, INC. 
(Exact name of registrant as specified in its charter)
 
 
 
Washington
 
91-1838969
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer I.D. Number)
 
 
 
900 Washington St., Ste. 900, Vancouver, Washington
 
98660
(Address of principal executive offices)
 
(Zip Code)
 
 
 
Registrant's telephone number, including area code:
 
(360) 693-6650
                                                                                                                                                                                              

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]  No  [   ] 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      Yes  [X]     No  [  ] 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See definitions of "large accelerated filer", "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ]                                                                             Accelerated filer     [X]                                                                Non-accelerated filer  [   ]
Smaller reporting company  [X]                                                                  Emerging growth company  [   ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  [   ]    No  [X]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:  Common Stock, $.01 par value per share, 22,607,712 shares outstanding as of February 8, 2019.


Form 10-Q

RIVERVIEW BANCORP, INC. AND SUBSIDIARY
INDEX
 
Part I.
Financial InformationPage
Page
 
 
 
Item 1: Financial Statements (Unaudited)
 
 
 
 
 
Consolidated Balance Sheets as of
December 31, 2018 and March 31, 2018
2
 
 
 
 
Consolidated Statements of Income for the
Three and Nine Months Ended December 31, 2018 and 2017
3
 
 
 
 
Consolidated Statements of Comprehensive Income for the
Three and Nine Months Ended December 31, 2018 and 2017
4
 
 
 
 
Consolidated Statements of Equity for the
Nine Months Ended December 31, 2018 and 2017
5
 
 
 
 
Consolidated Statements of Cash Flows for the
Nine Months Ended December 31, 2018 and 2017
6
 
 
 
 
Notes to Consolidated Financial Statements
7
 
 
 
Item 2:
Management's Discussion and Analysis of
Financial Condition and Results of Operations
27
 
 
 
Item 3:  Quantitative and Qualitative Disclosures About Market Risk   42 
     
Item 4:  Controls and Procedures 42 
     
Part II.  Other Information 43-44 
     
Item 1:  Legal Proceedings  
     
Item 1A:  Risk Factors   
     
Item 2:  Unregistered Sales of Equity Securities and Use of Proceeds  
     
Item 3:  Defaults Upon Senior Securities   
     
Item 4: Mine Safety Disclosures   
     
Item 5:  Other Information   
     
Item 6:  Exhibitis   
     
SIGNATURES  45 
     
Certifications    
 
Exhibit 31.1
Exhibit 31.2
Exhibit 32 
 
 
 

Forward-Looking Statements

As used in this Form 10-Q, the terms "we," "our," "us," "Riverview" and "Company" refer to Riverview Bancorp, Inc. and its consolidated subsidiaries, including its wholly-owned subsidiary, Riverview Community Bank, unless the context indicates otherwise.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: When used in this Form 10-Q, the words "believes," "expects," "anticipates," "estimates," "forecasts," "intends," "plans," "targets," "potentially," "probably," "projects," "outlook," or similar expressions or future or conditional verbs such as "may," "will," "should," "would," and "could," or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about future performance. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated, including, but not limited to: 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 our bank subsidiary, Riverview Community Bank, by the Office of the Comptroller of the Currency and of the Company by the Board of Governors of the Federal Reserve System, or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require the Company to increase its allowance for loan losses, write-down assets, reclassify its 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; 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, including as a result of Basel III; the Company's ability to attract and retain deposits; 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 consolidated 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; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions; 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 implement its business strategies; the Company's ability to successfully integrate any assets, liabilities, customers, systems, and management personnel it may 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 standards; 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 Securities and Exchange Commission.

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 included in this report or the reasons why actual results could differ from those contained in such statements, whether as a result of new information or 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 2019 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 consolidated financial condition and consolidated results of operations as well as its stock price performance.
 
 
1
Part I. Financial Information
Item 1. Financial Statements (Unaudited)

RIVERVIEW BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS AS OF
DECEMBER 31, 2018 AND MARCH 31, 2018
(In thousands, except share and per share data) (Unaudited)
 December 31,
2018
 
March 31,
2018
 
ASSETS
           
Cash and cash equivalents (including interest-earning accounts of $4,641 and $30,052)
 
$
23,394
   
$
44,767
 
Certificates of deposit held for investment
   
747
     
5,967
 
Loans held for sale
   
-
     
210
 
Investment securities:
               
Available for sale, at estimated fair value
   
182,280
     
213,221
 
Held to maturity, at amortized cost (estimated fair value of $37 and $43)
   
36
     
42
 
Loans receivable (net of allowance for loan losses of $11,502 and $10,766)
   
857,134
     
800,610
 
Real estate owned ("REO")
   
-
     
298
 
Prepaid expenses and other assets
   
4,021
     
3,870
 
Accrued interest receivable
   
3,789
     
3,477
 
Federal Home Loan Bank ("FHLB") stock, at cost
   
2,735
     
1,353
 
Premises and equipment, net
   
14,940
     
15,783
 
Deferred income taxes, net
   
4,680
     
4,813
 
Mortgage servicing rights, net
   
325
     
388
 
Goodwill
   
27,076
     
27,076
 
Core deposit intangible ("CDI"), net
   
966
     
1,103
 
Bank owned life insurance ("BOLI")
   
29,102
     
28,557
 
TOTAL ASSETS
 
$
1,151,225
   
$
1,151,535
 
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
                 
LIABILITIES:
               
Deposits
 
$
943,578
   
$
995,691
 
Accrued expenses and other liabilities
   
15,855
     
9,391
 
Advanced payments by borrowers for taxes and insurance
   
192
     
637
 
FHLB advances
   
34,543
     
-
 
Junior subordinated debentures
   
26,553
     
26,484
 
Capital lease obligation
   
2,410
     
2,431
 
Total liabilities
   
1,023,131
     
1,034,634
 
 
COMMITMENTS AND CONTINGENCIES (See Note 15)
 
               
SHAREHOLDERS' EQUITY:
               
Serial preferred stock, $.01 par value; 250,000 authorized; issued and outstanding: none
   
-
     
-
 
Common stock, $.01 par value; 50,000,000 authorized
               
December 31, 2018 – 22,598,712 issued and outstanding
   
226
     
226
 
March 31, 2018 – 22,570,179 issued and outstanding
               
Additional paid-in capital
   
65,056
     
64,871
 
Retained earnings
   
67,126
     
56,552
 
Accumulated other comprehensive loss
   
(4,314
)
   
(4,748
)
Total shareholders' equity
   
128,094
     
116,901
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
$
1,151,225
   
$
1,151,535
 

See accompanying notes to consolidated financial statements.


2
 
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED
DECEMBER 31, 2018 AND 2017
 
   
Three Months Ended
December 31,
     
Nine Months Ended
December 31,
 
(In thousands, except share and per share data) (Unaudited)
    2018        2017        2018        2017  
INTEREST AND DIVIDEND INCOME:                                
Interest and fees on loans receivable
 
$
11,129
   
$
9,978
   
$
32,849
   
$
29,761
 
Interest on investment securities – taxable
   
1,110
     
1,201
     
3,424
     
3,413
 
Interest on investment securities – nontaxable
   
37
     
31
     
110
     
59
 
Other interest and dividends
   
60
     
168
     
271
     
483
 
Total interest and dividend income
   
12,336
     
11,378
     
36,654
     
33,716
 
                                 
INTEREST EXPENSE:
                               
Interest on deposits
   
240
     
298
     
759
     
933
 
Interest on borrowings
   
416
     
284
     
1,126
     
829
 
Total interest expense
   
656
     
582
     
1,885
     
1,762
 
Net interest income
   
11,680
     
10,796
     
34,769
     
31,954
 
Provision for loan losses
   
-
     
-
     
50
     
-
 
Net interest income after provision for loan losses
   
11,680
     
10,796
     
34,719
     
31,954
 
                                 
NON-INTEREST INCOME:
                               
Fees and service charges
   
1,511
     
1,451
     
4,956
     
4,348
 
Asset management fees
   
935
     
911
     
2,804
     
2,582
 
Net gains on sales of loans held for sale
   
82
     
140
     
278
     
522
 
BOLI
   
192
     
207
     
545
     
618
 
Other, net
   
62
     
181
     
267
     
271
 
Total non-interest income, net
   
2,782
     
2,890
     
8,850
     
8,341
 
                                 
NON-INTEREST EXPENSE:
                               
Salaries and employee benefits
   
5,794
     
5,383
     
16,655
     
16,056
 
Occupancy and depreciation
   
1,306
     
1,347
     
4,016
     
4,105
 
Data processing
   
621
     
534
     
1,874
     
1,730
 
Amortization of CDI
   
45
     
58
     
137
     
174
 
Advertising and marketing
   
151
     
137
     
609
     
627
 
FDIC insurance premium
   
85
     
108
     
246
     
389
 
State and local taxes
   
125
     
96
     
475
     
427
 
Telecommunications
   
85
     
102
     
266
     
309
 
Professional fees
   
449
     
250
     
1,120
     
926
 
Other
   
142
     
543
     
1,339
     
1,748
 
Total non-interest expense
   
8,803
     
8,558
     
26,737
     
26,491
 
                                 
INCOME BEFORE INCOME TAXES
   
5,659
     
5,128
     
16,832
     
13,804
 
PROVISION FOR INCOME TAXES
   
1,271
     
3,608
     
3,773
     
6,571
 
NET INCOME
 
$
4,388
   
$
1,520
   
$
13,059
   
$
7,233
 
                                 
Earnings per common share:
                               
Basic
 
$
0.19
   
$
0.07
   
$
0.58
   
$
0.32
 
Diluted
   
0.19
     
0.07
     
0.58
     
0.32
 
Weighted average number of common shares outstanding:
                               
Basic
   
22,598,712
     
22,537,092
     
22,582,956
     
22,520,352
 
Diluted
   
22,663,919
     
22,622,129
     
22,658,153
     
22,608,603
 
 
See accompanying notes to consolidated financial statements.

3
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED
DECEMBER 31, 2018 AND 2017
 
     
Three Months Ended
December 31,
     
Nine Months Ended
December 31,
 
(In thousands) (Unaudited)
    2018        2017        2018        2017  
                                 
Net income
 
$
4,388
   
$
1,520
   
$
13,059
   
$
7,233
 
                                 
Other comprehensive income (loss):
                               
Net unrealized holding gain (loss) from available for sale investment  
                             
 securities arising during the period, net of tax of ($673), $496,
 ($134) and $174, respectively
 
2,188
     
(900
)
   
434
     
(317
)
                                 
Total comprehensive income, net
 
$
6,576
   
$
620
   
$
13,493
   
$
6,916
 
                                 

 
See accompanying notes to consolidated financial statements.
 
4
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 2018 AND 2017

 
Common Stock
     
Additional  
           
Unearned
Shares
Issued to
Employee
Stock
Ownership
     
Accumulated
Other
       
(In thousands, except share data) (Unaudited)
 
Shares
   
Amount
   
Paid-In
Capital
   
Retained
Earnings
   
Plan
("ESOP")
   
Comprehensive
Loss
   
Total
 
                                           
Balance April 1, 2017
   
22,510,890
   
$
225
   
$
64,468
   
$
48,335
   
$
(77
)
 
$
(1,687
)
 
$
111,264
 
                                                         
Net income
   
-
     
-
     
-
     
7,233
     
-
     
-
     
7,233
 
Cash dividend on common stock ($0.075 per share)
   
-
     
-
     
-
     
(1,690
)
   
-
     
-
     
(1,690
)
Exercise of stock options
   
41,022
     
1
     
164
     
-
     
-
     
-
     
165
 
Earned ESOP shares
   
-
     
-
     
71
     
-
     
77
     
-
     
148
 
Other comprehensive loss, net
   
-
     
-
     
-
     
-
     
-
     
(317
)
   
(317
)
                                                         
Balance December 31, 2017
   
22,551,912
   
$
226
   
$
64,703
   
$
53,878
   
$
-
   
$
(2,004
)
 
$
116,803
 
                                                         
                                                         
Balance April 1, 2018
   
22,570,179
   
$
226
   
$
64,871
   
$
56,552
   
$
-
   
$
(4,748
)
 
$
116,901
 
                                                         
Net income
   
-
     
-
     
-
     
13,059
     
-
     
-
     
13,059
 
Cash dividend on common stock ($0.110 per share)
   
-
     
-
     
-
     
(2,485
)
   
-
     
-
     
(2,485
)
Exercise of stock options
   
28,533
     
-
     
151
     
-
     
-
     
-
     
151
 
Stock-based compensation expense
   
-
     
-
     
34
     
-
     
-
     
-
     
34
 
Other comprehensive income, net
   
-
     
-
     
-
     
-
     
-
     
434
     
434
 
                                                         
Balance December 31, 2018
   
22,598,712
   
$
226
   
$
65,056
   
$
67,126
   
$
-
   
$
(4,314
)
 
$
128,094
 

 
See accompanying notes to consolidated financial statements.
 
 
 
 
 
5

 
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 2018 AND 2017
 
 
Nine Months Ended
December 31,
 
(In thousands) (Unaudited)
 
2018
   
2017
 
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net income
 
$
13,059
   
$
7,233
 
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
   
2,045
     
2,207
 
Purchased loans accretion, net
   
(47
)
   
(209
)
Provision for loan losses
   
50
     
-
 
Provision for deferred income taxes
   
-
     
3,796
 
Expense related to ESOP
   
-
     
148
 
Stock-based compensation expense
   
34
     
-
 
Increase in deferred loan origination fees, net of amortization
   
599
     
238
 
Origination of loans held for sale
   
(8,944
)
   
(16,631
)
Proceeds from sales of loans held for sale
   
9,303
     
17,120
 
Net gains on loans held for sale and sale of REO
   
(644
)
   
(603
)
Income from BOLI
   
(545
)
   
(618
)
Changes in certain other assets and liabilities:
               
Prepaid expenses and other assets
   
(261
)
   
(1,151
)
Accrued interest receivable
   
(312
)
   
(523
)
Accrued expenses and other liabilities
   
6,326
     
(4,070
)
Net cash provided by operating activities
   
20,663
     
6,937
 
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Loan repayments (originations), net
   
(36,726
)
   
14,662
 
Purchases of loans receivable
   
(20,318
)
   
(32,198
)
Principal repayments on investment securities available for sale
   
20,591
     
21,236
 
Purchases of investment securities available for sale
   
-
     
(47,493
)
Proceeds from calls and maturities of investment securities available for sale
   
10,000
     
-
 
Principal repayments on investment securities held to maturity
   
6
     
20
 
Redemption of certificates of deposit held for investment
   
5,220
     
4,079
 
Purchase of FHLB stock
   
(1,382
)
   
(42
)
Purchases of premises and equipment and capitalized software
   
(304
)
   
(364
)
Proceeds from sales of REO and premises and equipment
   
975
     
81
 
Net cash used in investing activities
   
(21,938
)
   
(40,019
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Net decrease in deposits
   
(52,067
)
   
(7,729
)
Dividends paid
   
(2,259
)
   
(1,462
)
Proceeds from borrowings
   
166,255
     
19,675
 
Repayment of borrowings
   
(131,712
)
   
(18,625
)
Net decrease in advance payments by borrowers for taxes and insurance
   
(445
)
   
(433
)
Principal payments on capital lease obligation
   
(21
)
   
(17
)
Proceeds from exercise of stock options
   
151
     
165
 
Net cash used in financing activities
   
(20,098
)
   
(8,426
)
                 
NET DECREASE IN CASH AND CASH EQUIVALENTS
   
(21,373
)
   
(41,508
)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
   
44,767
     
64,613
 
CASH AND CASH EQUIVALENTS, END OF PERIOD
 
$
23,394
   
$
23,105
 
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
               
Cash paid during the period for:
               
Interest
 
$
1,811
   
$
1,640
 
Income taxes
   
5,063
     
3,279
 
                 
NONCASH INVESTING AND FINANCING ACTIVITIES:
               
Dividends declared and accrued in other liabilities
 
$
904
   
$
678
 
Other comprehensive income (loss)
   
568
     
(491
)
Income tax effect related to other comprehensive income (loss)
   
(134
)
   
174
 
See accompanying notes to consolidated financial statements.
6
RIVERVIEW BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)

1.
BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Quarterly Reports on Form 10-Q and, therefore, do not include all disclosures necessary for a complete presentation of financial condition, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America ("GAAP"). However, all adjustments that are, in the opinion of management, necessary for a fair presentation of the interim unaudited consolidated financial statements have been included. All such adjustments are of a normal recurring nature.

The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Riverview Bancorp, Inc. Annual Report on Form 10-K for the year ended March 31, 2018 ("2018 Form 10-K"). The unaudited consolidated results of operations for the nine months ended December 31, 2018 are not necessarily indicative of the results which may be expected for the entire fiscal year ending March 31, 2019.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

On February 17, 2017, Riverview Bancorp, Inc. and Riverview Community Bank (the "Bank") completed a purchase and assumption transaction in which the Bank purchased certain assets and assumed certain liabilities of MBank, the wholly-owned subsidiary of Merchants Bancorp (the "MBank transaction"). In addition, as part of the MBank transaction, Riverview Bancorp, Inc. assumed the obligations of Merchant Bancorp's trust preferred securities. The MBank transaction was accounted for as a business combination pursuant to GAAP. The results of operations of the acquired assets and assumed liabilities have been included in the Company's consolidated financial statements as of and for the periods since the acquisition date. See Note 3 for additional discussion.

Income taxes are accounted for using the asset and liability method. Under this method, a deferred tax asset or liability is determined based on the enacted tax rates which will be in effect when the differences between the financial statement carrying amounts and tax basis of existing assets and liabilities are expected to be reported in the Company's income tax returns. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. The Tax Cuts and Jobs Act (the "Tax Act") was enacted on December 22, 2017, and – among other provisions – lowered the federal corporate income tax rate. As a result, the Company revalued its deferred tax assets and liabilities during the third quarter of the fiscal year ended March 31, 2018. In addition, the Company utilized a blended tax rate for its fiscal year ended March 31, 2018 given the Tax Act lowered the federal corporate tax rate effective January 1, 2018. For the three and nine months ended December 31, 2018 and for the fiscal year ending March 31, 2019, the Company will utilize the enacted federal corporate income tax rate pursuant to the Tax Act.

In September 2018, the Bank completed a purchase and assumption transaction in which all of the Bank's Longview, Washington branch deposits were sold to a community bank headquartered in Longview. The Bank sold approximately $3.2 million of deposits and recognized a gain on sale of these deposits of approximately $70,000 in the fiscal quarter ended September 30, 2018. This gain on sale of deposits is included in other non-interest income in the accompanying unaudited consolidated statements of income. This purchase and assumption transaction did not include the sale of any loans, or exchange of any assets or liabilities other than deposits. The Bank subsequently sold the Longview branch land and building in December 2018 and recognized a $355,000 gain on sale which is included in other non-interest expense in the accompanying unaudited statements of income for the three and nine months ended December 31, 2018.

Certain prior period amounts have been reclassified to conform to the current period presentation; such reclassifications had no effect on previously reported net income or total equity.

2.
PRINCIPLES OF CONSOLIDATION

The accompanying unaudited consolidated financial statements include the accounts of Riverview Bancorp, Inc.; its wholly-owned subsidiary, Riverview Community Bank; and the Bank's wholly-owned subsidiaries, Riverview Services, Inc. and Riverview Trust Company (the "Trust Company") (collectively referred to as the "Company"). All inter-company transactions and balances have been eliminated in consolidation.

7
As of December 31, 2018, the Trust Company had 2,500 Trust Company stock options outstanding which had been granted to the President and Chief Executive Officer of the Trust Company. During the three and nine months ended December 31, 2018, the Trust Company incurred $12,000 and $34,000, respectively, of stock-based compensation expense related to these options. During the year ended March 31, 2018, the Trust Company incurred $88,000 of stock-based compensation expense related to these options. None of the Trust Company stock options were exercised as of December 31, 2018.

3.
BUSINESS COMBINATIONS

On February 17, 2017, the Company acquired certain assets and assumed certain liabilities of Merchants Bancorp and its wholly-owned subsidiary, MBank. MBank provided community banking services to individuals and businesses from banking offices in the Portland, Oregon metropolitan area. As a result of the MBank transaction, the Company has increased its presence in the Portland, Oregon metropolitan area and further diversified its loan, customer and deposit base. Total consideration paid under the MBank transaction consisted of $12.1 million in cash. There were no transfers of common stock or other equity instruments in connection with the MBank transaction, and the Company did not obtain any equity interests in Merchants Bancorp or MBank.

The acquired assets and assumed liabilities were recorded in the Company's consolidated balance sheets at their estimated fair values as of the February 17, 2017 transaction date, and the related results of operations have been included in the Company's consolidated statements of income since the transaction date. The excess of the consideration transferred over the fair value of the identifiable net assets acquired was recorded as goodwill. The goodwill arising from the transaction consists largely of the synergies and economies of scale expected from combining the operations of the Company and the acquired business.

In most instances, determining the estimated fair values of the acquired assets and assumed liabilities required the Company to estimate cash flows expected to result from those assets and liabilities and to discount those cash flows at the appropriate rate of interest. Differences may arise between contractually required payments and the expected cash flows at the acquisition date due to items such as estimated credit losses, prepayments or early withdrawals, and other factors. The most significant of those determinations related to the valuation of acquired loans. For such loans, the excess of cash flows expected at acquisition over the estimated fair value is recognized as interest income over the remaining lives of the loans. In accordance with GAAP, there was no carry-over of MBank's previously established allowance for loan losses. Goodwill is expected to be fully deductible for income tax purposes as, under the terms of the MBank transaction, the Company purchased certain assets and assumed certain liabilities of MBank but did not acquire any equity or other ownership interests.

The following table summarizes the fair value of consideration transferred, the estimated fair values of assets acquired and liabilities assumed as of the acquisition date, and the resulting goodwill relating to the transaction (in thousands):

   
At February 17, 2017
 
   
Book
Value
   
Fair Value
Adjustment
   
Estimated
Fair Value
 
                   
Cash consideration transferred
             
$
12,080
 
                     
Recognized amounts of identifiable assets acquired and liabilities assumed
                   
Identifiable assets acquired
                   
Cash and cash equivalents
 
$
27,196
   
$
-
   
$
27,196
 
Loans receivable
   
115,283
     
(3,258
)
   
112,025
 
CDI
   
-
     
1,363
     
1,363
 
Premises and equipment
   
1,769
     
399
     
2,168
 
BOLI
   
2,113
     
-
     
2,113
 
Accrued interest receivable and other assets
   
431
     
90
     
521
 
Total identifiable assets acquired
   
146,792
     
(1,406
)
   
145,386
 
                         
Liabilities assumed
                       
Deposits
   
130,572
     
235
     
130,807
 
Junior subordinated debentures
   
5,155
     
(1,468
)
   
3,687
 
Accrued expenses and other liabilities
   
293
     
23
     
316
 
Total liabilities assumed
   
136,020
     
(1,210
)
   
134,810
 
Total identifiable net assets acquired
 
$
10,772
   
$
(196
)
   
10,576
 
Goodwill recognized
                 
$
1,504
 

8
The acquired loan portfolio was valued using Level 3 inputs (see Note 12) and included the use of present value techniques (including cash flow estimates) and incorporated assumptions that the Company believes marketplace participants would use in estimating fair values. Credit discounts were included in the determination of the fair value of the loans acquired; therefore, an allowance for loan losses was not recorded at the acquisition date. Acquired loans are evaluated upon acquisition and classified as either purchased credit-impaired ("PCI") or purchased non-credit-impaired. PCI loans reflect credit deterioration since origination such that it is probable at acquisition that the Company will be unable to collect all contractually required payments. The Company determined there were no PCI loans acquired in connection with the MBank transaction.

For purchased non-credit-impaired loans, the difference between the fair value and unpaid principal balance of the loan at the acquisition date is amortized or accreted to interest income over the life of the loans. Any subsequent deterioration in credit quality is recognized by recording an allowance for loan losses.

CDI represents the value assigned to demand, interest checking, money market and savings accounts acquired as part of an acquisition. CDI represents the future economic benefit of the potential cost savings from acquiring core deposits as part of an acquisition compared to the cost of alternative funding sources. CDI is amortized to non-interest expense using an accelerated method based on an estimated runoff of related deposits over a period of ten years. CDI is evaluated for impairment and recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable, with any changes in estimated useful life accounted for prospectively over the revised remaining life.

4.
STOCK PLANS AND STOCK-BASED COMPENSATION

In July 1998, shareholders of the Company approved the adoption of the 1998 Stock Option Plan ("1998 Plan"). The 1998 Plan was effective in October 1998 and expired in October 2008. In addition, in July 2003, shareholders of the Company approved the adoption of the 2003 Stock Option Plan ("2003 Plan"). The 2003 Plan was effective in July 2003 and expired in July 2013. Accordingly, no further option awards may be granted under the 1998 Plan or the 2003 Plan; however, any awards granted prior to their respective expiration dates remain outstanding subject to their terms. Each option granted under the 1998 Plan or the 2003 Plan has an exercise price equal to the fair market value of the Company's common stock on the date of the grant, a maximum term of ten years and a vesting period from zero to five years.

In July 2017, the shareholders of the Company approved the 2017 Equity Incentive Plan ("2017 Plan"). The 2017 Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock and restricted stock units. The Company has reserved 1,800,000 shares of its common stock for issuance under the 2017 Plan, none of which have been awarded.

The 1998 Plan, the 2003 Plan and the 2017 Plan are collectively referred to as "the Stock Option Plans".

The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes stock option valuation model. There were no stock options granted under the Stock Option Plans during the three and nine months ended December 31, 2018 and 2017.

As of December 31, 2018, all outstanding stock options were fully vested and there was no remaining unrecognized compensation expense under the Stock Option Plans. There was no stock-based compensation expense related to stock options for the three and nine months ended December 31, 2018 and 2017 under the Stock Option Plans.

The following table presents the activity related to stock options under the Stock Option Plans for the periods shown:

   
Nine Months Ended
December 31, 2018
   
Nine Months Ended
December 31, 2017
 
   
Number of
Shares
   
Weighted
Average
Exercise
Price
   
Number of
Shares
   
Weighted
Average
Exercise
Price
 
Balance, beginning of period
   
141,365
   
$
3.77
     
220,654
   
$
4.74
 
Options exercised
   
(28,533
)
   
5.30
     
(41,022
)
   
4.01
 
Expired
   
(2,500
)
   
8.12
     
(33,000
)
   
8.49
 
Balance, end of period
   
110,332
   
$
3.27
     
146,632
   
$
4.10
 

9
The following table presents information on stock options outstanding under the Stock Option Plans as of December 31, 2018 and 2017, less estimated forfeitures:

   
2018
   
2017
 
Stock options fully vested and expected to vest:
           
Number
   
110,332
     
146,632
 
Weighted average exercise price
 
$
3.27
   
$
4.10
 
Aggregate intrinsic value (1)
 
$
442,000
   
$
678,000
 
Weighted average contractual term of options (years)
   
2.44
     
2.93
 
Stock options fully vested and currently exercisable:
               
Number
   
110,332
     
146,632
 
Weighted average exercise price
 
$
3.27
   
$
4.10
 
Aggregate intrinsic value (1)
 
$
442,000
   
$
678,000
 
Weighted average contractual term of options (years)
   
2.44
     
2.93
 
                 
       (1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price) that would have been received by the option holders had all option holders exercised. This amount changes based on changes in the market value of the Company's stock.
 

The total intrinsic value of stock options exercised under the Stock Option Plans was $118,000 and $170,000 for the nine months ended December 31, 2018 and 2017, respectively.

5.
EARNINGS PER SHARE

Basic earnings per share ("EPS") is computed by dividing net income or loss applicable to common stock by the weighted average number of common shares outstanding during the period, without considering any dilutive items. Diluted EPS is computed by dividing net income or loss applicable to common stock by the weighted average number of common shares and common stock equivalents for items that are dilutive, net of shares assumed to be repurchased using the treasury stock method at the average share price for the Company's common stock during the period. Common stock equivalents arise from the assumed exercise of outstanding stock options. Shares owned by the Company's ESOP that have not been allocated are not considered to be outstanding for the purpose of computing basic and diluted EPS. As of December 31, 2018 and 2017, all shares under the Company's ESOP were allocated. For the three and nine months ended December 31, 2018, there were no stock options excluded in computing diluted EPS. For the three and nine months ended December 31, 2017, stock options for 5,000 shares and 12,000 shares, respectively, of common stock were excluded in computing diluted EPS because they were antidilutive.

The following table presents a reconciliation of the components used to compute basic and diluted EPS for the periods indicated:

   
Three Months Ended
December 31,
   
Nine Months Ended
December 31,
 
   
2018
   
2017
   
2018
   
2017
 
Basic EPS computation:
                       
Numerator-net income
 
$
4,388,000
   
$
1,520,000
   
$
13,059,000
   
$
7,233,000
 
Denominator-weighted average common shares
   outstanding
   
22,598,712
     
22,537,092
     
22,582,956
     
22,520,352
 
Basic EPS
 
$
0.19
   
$
0.07
   
$
0.58
   
$
0.32
 
Diluted EPS computation:
                               
Numerator-net income
 
$
4,388,000
   
$
1,520,000
   
$
13,059,000
   
$
7,233,000
 
Denominator-weighted average common shares
   outstanding
   
22,598,712
     
22,537,092
     
22,582,956
     
22,520,352
 
Effect of dilutive stock options
   
65,207
     
85,037
     
75,197
     
88,251
 
Weighted average common shares and common stock
   equivalents
   
22,663,919
     
22,622,129
     
22,658,153
     
22,608,603
 
Diluted EPS
 
$
0.19
   
$
0.07
   
$
0.58
   
$
0.32
 


10
6.
INVESTMENT SECURITIES

The amortized cost and approximate fair value of investment securities consisted of the following at the dates indicated (in thousands):
   
Amortized
Cost
   
Gross
Unrealized
Gains
   
Gross
Unrealized
Losses
   
Estimated
Fair Value
 
December 31, 2018
                       
Available for sale:
                       
Municipal securities
 
$
8,924
   
$
2
   
$
(247
)
 
$
8,679
 
Agency securities
   
12,423
     
3
     
(246
)
   
12,180
 
Real estate mortgage investment conduits (1)
   
42,561
     
1
     
(1,111
)
   
41,451
 
Residential mortgage-backed securities (1)
   
80,390
     
2
     
(2,565
)
   
77,827
 
Other mortgage-backed securities (2)
   
43,620
     
5
     
(1,482
)
   
42,143
 
Total available for sale
 
$
187,918
   
$
13
   
$
(5,651
)
 
$
182,280
 
                                 
Held to maturity:
                               
Residential mortgage-backed securities (3)
 
$
36
   
$
1
   
$
-
   
$
37
 
                                 
March 31, 2018
                               
Available for sale:
                               
Municipal securities
 
$
9,041
   
$
-
   
$
(309
)
 
$
8,732
 
Agency securities
   
22,412
     
1
     
(311
)
   
22,102
 
Real estate mortgage investment conduits (1)
   
48,310
     
-
     
(1,355
)
   
46,955
 
Residential mortgage-backed securities (1)
   
91,786
     
3
     
(2,715
)
   
89,074
 
Other mortgage-backed securities (2)
   
47,878
     
1
     
(1,521
)
   
46,358
 
Total available for sale
 
$
219,427
   
$
5
   
$
(6,211
)
 
$
213,221
 
                                 
Held to maturity:
                               
Residential mortgage-backed securities (3)
 
$
42
   
$
1
   
$
-
   
$
43
 
   
(1) Comprised of Federal Home Loan Mortgage Corporation ("FHLMC"), Federal National Mortgage Association ("FNMA") and Ginnie Mae ("GNMA") issued securities.
 
(2) Comprised of U.S. Small Business Administration ("SBA") issued securities and commercial real estate ("CRE") secured securities issued by FNMA.
 
(3) Comprised of FHLMC and FNMA issued securities.
 

The contractual maturities of investment securities as of December 31, 2018 are as follows (in thousands):
 
   
Available for Sale
   
Held to Maturity
 
   
Amortized
Cost
   
Estimated
Fair Value
   
Amortized
Cost
   
Estimated
Fair Value
 
Due in one year or less
 
$
5,138
   
$
5,111
   
$
-
   
$
-
 
Due after one year through five years
   
8,392
     
8,269
     
33
     
33
 
Due after five years through ten years
   
50,031
     
48,689
     
-
     
-
 
Due after ten years
   
124,357
     
120,211
     
3
     
4
 
Total
 
$
187,918
   
$
182,280
   
$
36
   
$
37
 

Expected maturities of investment securities may differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties.

11
The fair value of temporarily impaired investment securities, the amount of unrealized losses and the length of time these unrealized losses existed are as follows at the dates indicated (in thousands):

   
Less than 12 months
   
12 months or longer
   
Total
 
   
Estimated
Fair Value
   
Unrealized
Losses
   
Estimated
Fair Value
   
Unrealized
Losses
   
Estimated
Fair Value
   
Unrealized
Losses
 
December 31, 2018
                                   
                                     
Available for sale:
                                   
Municipal securities
 
$
1,103
   
$
(41
)
 
$
6,415
   
$
(206
)
 
$
7,518
   
$
(247
)
Agency securities
   
1,001
     
(2
)
   
9,164
     
(244
)
   
10,165
     
(246
)
Real estate mortgage investment conduits (2)
   
2,126
     
(11
)
   
39,284
     
(1,100
)
   
41,410
     
(1,111
)
Residential mortgage-backed securities (2)
   
4,273
     
(64
)
   
73,365
     
(2,501
)
   
77,638
     
(2,565
)
Other mortgage-backed securities (3)
   
977
     
(14
)
   
40,547
     
(1,468
)
   
41,524
     
(1,482
)
Total available for sale
 
$
9,480
   
$
(132
)
 
$
168,775
   
$
(5,519
)
 
$
178,255
   
$
(5,651
)
   
March 31, 2018
                                               
                                                 
Available for sale:
                                               
Municipal securities
 
$
6,626
   
$
(236
)
 
$
2,106
   
$
(73
)
 
$
8,732
   
$
(309
)
Agency securities
   
5,301
     
(112
)
   
15,797
     
(199
)
   
21,098
     
(311
)
Real estate mortgage investment conduits (1)
   
31,922
     
(774
)
   
14,983
     
(581
)
   
46,905
     
(1,355
)
Residential mortgage-backed securities (2)
   
50,941
     
(1,192
)
   
37,823
     
(1,523
)
   
88,764
     
(2,715
)
Other mortgage-backed securities (3)
   
16,355
     
(382
)
   
29,351
     
(1,139
)
   
45,706
     
(1,521
)
Total available for sale
 
$
111,145
   
$
(2,696
)
 
$
100,060
   
$
(3,515
)
 
$
211,205
   
$
(6,211
)
                                                 
(1) Comprised of FHLMC and FNMA issued securities.
 
(2) Comprised of FHLMC, FNMA and GNMA issued securities.
 
(3) Comprised of SBA issued and CRE secured securities issued by FNMA.
 

The unrealized losses on the Company's investment securities were primarily attributable to increases in market interest rates subsequent to their purchase by the Company. The Company expects the fair value of these securities to recover as the securities approach their maturity dates or sooner if market yields for such securities decline. The Company does not believe that these securities are other than temporarily impaired because of their credit quality or related to any issuer or industry specific event. Based on management's evaluation and intent, the unrealized losses related to the investment securities in the above tables are considered temporary.

The Company had no sales and realized no gains or losses on sales of investment securities for the three and nine months ended December 31, 2018 and 2017. Investment securities available for sale with an amortized cost of $6.0 million and $3.7 million and a fair value of $5.8 million and $3.6 million at December 31, 2018 and March 31, 2018, respectively, were pledged as collateral for government public funds held by the Bank.

7.
LOANS RECEIVABLE

Loans receivable as of December 31, 2018 and March 31, 2018 are reported net of deferred loan fees totaling $4.2 million and $3.6 million, respectively. Loans receivable are also reported net of discounts and premiums totaling $1.7 million and $1.8 million as of December 31, 2018, respectively, compared to $2.2 million and $2.0 million, respectively, as of March 31, 2018. Loans receivable, excluding loans held for sale, consisted of the following at the dates indicated (in thousands):


   
December 31,
2018
   
March 31,
2018
 
Commercial and construction
           
Commercial business
 
$
154,360
   
$
137,672
 
Commercial real estate
   
468,361
     
450,597
 
Land
   
18,506
     
15,337
 
Multi-family
   
54,930
     
63,080
 
Real estate construction
   
76,518
     
39,584
 
Total commercial and construction
   
772,675
     
706,270
 
                 
Consumer
               
Real estate one-to-four family
   
86,240
     
90,109
 
Other installment (1)
   
9,721
     
14,997
 
Total consumer
   
95,961
     
105,106
 
                 
Total loans
   
868,636
     
811,376
 
Less:  Allowance for loan losses
   
11,502
     
10,766
 
Loans receivable, net
 
$
857,134
   
$
800,610
 
                 
      (1) Consists primarily of purchased automobile loans totaling $7.2 million and $12.9 million at December 31, 2018 and March 31, 2018, respectively.
 

12
The Company considers its loan portfolio to have very little exposure to sub-prime mortgage loans since the Company has not historically engaged in this type of lending. At December 31, 2018, loans carried at $520.0 million were pledged as collateral to the Federal Home Loan Bank of Des Moines ("FHLB") and Federal Reserve Bank of San Francisco ("FRB") pursuant to borrowing agreements.

Most of the Bank's business activities are with customers located in the states of Washington and Oregon. Loans and extensions of credit outstanding at one time to one borrower are generally limited by federal regulation to 15% of the Bank's shareholders' equity, excluding accumulated other comprehensive income (loss). As of December 31, 2018 and March 31, 2018, the Bank had no loans to any one borrower in excess of the regulatory limit.

8.
ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is maintained at a level sufficient to provide for estimated loan losses based on evaluating known and inherent risks in the loan portfolio. The allowance is provided based upon management's ongoing quarterly assessment of the pertinent factors underlying the quality of the loan portfolio. These factors include changes in the size and composition of the loan portfolio, delinquency levels, actual loan loss experience, current economic conditions and detailed analysis of individual loans for which full collectability may not be assured. The detailed analysis includes techniques to estimate the fair value of loan collateral and the existence of potential alternative sources of repayment. The allowance consists of specific, general and unallocated components.

The specific component relates to loans that are considered impaired. For loans that are classified as impaired, an allowance is established when the discounted cash flows or collateral value (less estimated selling costs, if applicable) of the impaired loan is lower than the carrying value of that loan.

The general component covers non-impaired loans based on the Company's risk rating system and historical loss experience adjusted for qualitative factors. The Company calculates its historical loss rates using the average of the last four quarterly 24-month periods. The Company calculates and applies its historical loss rates by individual loan types in its loan portfolio. These historical loss rates are adjusted for qualitative and environmental factors.

An unallocated component is maintained to cover uncertainties that the Company believes have resulted in incurred losses that have not yet been allocated to specific elements of the general and specific components of the allowance for loan losses. Such factors include uncertainties in economic conditions, uncertainties in identifying triggering events that directly correlate to subsequent loss rates, changes in appraised value of underlying collateral, risk factors that have not yet manifested themselves in loss allocation factors and historical loss experience data that may not precisely correspond to the current portfolio or economic conditions. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. The appropriate allowance level is estimated based upon factors and trends identified by the Company as of the date of the filing of the consolidated financial statements.

When available information confirms that specific loans or portions thereof are uncollectible, identified amounts are charged against the allowance for loan losses. The existence of some or all of the following criteria will generally confirm that a loss has been incurred: the loan is significantly delinquent and the borrower has not demonstrated the ability or intent to bring the loan current; the Company has no recourse to the borrower, or if it does, the borrower has insufficient assets to pay the debt; and/or the estimated fair value of the loan collateral is significantly below the current loan balance, and there is little or no near-term prospect for improvement.

Management's evaluation of the allowance for loan losses is based on ongoing, quarterly assessments of the known and inherent risks in the loan portfolio. Loss factors are based on the Company's historical loss experience with additional consideration and adjustments made for changes in economic conditions, changes in the amount and composition of the loan portfolio, delinquency rates, changes in collateral values, seasoning of the loan portfolio, duration of the current business cycle, a detailed analysis of impaired loans and other factors as deemed appropriate. These factors are evaluated on a quarterly basis. Loss rates used by the Company are affected as changes in these factors increase or decrease from quarter to quarter. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company's allowance for loan losses and may require the Company to make additions to the allowance based on their judgment about information available to them at the time of their examinations.

13
The following tables present a reconciliation of the allowance for loan losses for the periods indicated (in thousands):

Three months ended
December 31, 2018
 
Commercial
Business
   
Commercial
Real Estate
   
Land
   
Multi-
Family
   
Real Estate Construction
   
Consumer
   
Unallocated
   
Total
 
                                                 
Beginning balance
 
$
1,858
   
$
5,361
   
$
237
   
$
696
   
$
1,007
   
$
1,641
   
$
713
   
$
11,513
 
Provision for (recapture of)
  loan losses
   
84
     
(80
)
   
31
     
19
     
186
     
(177
)
   
(63
)
   
-
 
Charge-offs
   
-
     
-
     
-
     
-
     
-
     
(52
)
   
-
     
(52
)
Recoveries
   
-
     
-
     
-
     
-
     
-
     
41
     
-
     
41
 
Ending balance
 
$
1,942
   
$
5,281
   
$
268
   
$
715
   
$
1,193
   
$
1,453
   
$
650
   
$
11,502
 

Nine months ended
December 31, 2018
                                               
                                                 
Beginning balance
 
$
1,668
   
$
4,914
   
$
220
   
$
822
   
$
618
   
$
1,809
   
$
715
   
$
10,766
 
Provision for (recapture of)
  loan losses
   
274
     
(456
)
   
48
     
(107
)
   
575
     
(219
)
   
(65
)
   
50
 
Charge-offs
   
-
     
-
     
-
     
-
     
-
     
(236
)
   
-
     
(236
)
Recoveries
   
-
     
823
     
-
     
-
     
-
     
99
     
-
     
922
 
Ending balance
 
$
1,942
   
$
5,281
   
$
268
   
$
715
   
$
1,193
   
$
1,453
   
$
650
   
$
11,502
 

Three months ended
December 31, 2017
                                               
                                                 
Beginning balance
 
$
1,340
   
$
5,116
   
$
196
   
$
504
   
$
840
   
$
1,890
   
$
731
   
$
10,617
 
Provision for (recapture of)
  loan losses
   
(186
)
   
(26
)
   
(19
)
   
295
     
(206
)
   
81
     
61
     
-
 
Charge-offs
   
-
     
-
     
-
     
-
     
-
     
(46
)
   
-
     
(46
)
Recoveries
   
220
     
65
     
-
     
-
     
-
     
11
     
-
     
296
 
Ending balance
 
$
1,374
   
$
5,155
   
$
177
   
$
799
   
$
634
   
$
1,936
   
$
792
   
$
10,867
 

Nine months ended
December 31, 2017
                                               
                                                 
Beginning balance
 
$
1,418
   
$
5,084
   
$
228
   
$
297
   
$
714
   
$
2,099
   
$
688
   
$
10,528
 
Provision for (recapture of)
  loan losses
   
(270
)
   
40
     
(344
)
   
502
     
(80
)
   
48
     
104
     
-
 
Charge-offs
   
-
     
-
     
-
     
-
     
-
     
(257
)
   
-
     
(257
)
Recoveries
   
226
     
31
     
293
     
-
     
-
     
46
     
-
     
596
 
Ending balance
 
$
1,374
   
$
5,155
   
$
177
   
$
799
   
$
634
   
$
1,936
   
$
792
   
$
10,867
 

The following tables present an analysis of loans receivable and the allowance for loan losses, based on impairment methodology, at the dates indicated (in thousands):
 
   
Allowance for loan losses
   
Recorded investment in loans
 
December 31, 2018
 
Individually
Evaluated for
Impairment
   
Collectively
Evaluated for
Impairment
   
Total
   
Individually
Evaluated for
Impairment
   
Collectively
Evaluated for
Impairment
   
Total
 
                                     
Commercial business
 
$
-
   
$
1,942
   
$
1,942
   
$
163
   
$
154,197
   
$
154,360
 
Commercial real estate
   
-
     
5,281
     
5,281
     
2,523
     
465,838
     
468,361
 
Land
   
-
     
268
     
268
     
731
     
17,775
     
18,506
 
Multi-family
   
-
     
715
     
715
     
1,606
     
53,324
     
54,930
 
Real estate construction
   
-
     
1,193
     
1,193
     
-
     
76,518
     
76,518
 
Consumer
   
25
     
1,428
     
1,453
     
705
     
95,256
     
95,961
 
Unallocated
   
-
     
650
     
650
     
-
     
-
     
-
 
Total
 
$
25
   
$
11,477
   
$
11,502
   
$
5,728
   
$
862,908
   
$
868,636
 

March 31, 2018
                                     
Commercial business
 
$
-
   
$
1,668
   
$
1,668
   
$
1,004
   
$
136,668
   
$
137,672
 
Commercial real estate
   
-
     
4,914
     
4,914
     
2,883
     
447,714
     
450,597
 
Land
   
-
     
220
     
220
     
763
     
14,574
     
15,337
 
Multi-family
   
-
     
822
     
822
     
1,644
     
61,436
     
63,080
 
Real estate construction
   
-
     
618
     
618
     
-
     
39,584
     
39,584
 
Consumer
   
69
     
1,740
     
1,809
     
1,428
     
103,678
     
105,106
 
Unallocated
   
-
     
715
     
715
     
-
     
-
     
-
 
Total
 
$
69
   
$
10,697
   
$
10,766
   
$
7,722
   
$
803,654
   
$
811,376
 

14
Non-accrual loans:  Loans are reviewed regularly and it is the Company's general policy that a loan is past due when it is 30 to 89 days delinquent. In general, when a loan is 90 days delinquent or when collection of principal or interest appears doubtful, it is placed on non-accrual status, at which time the accrual of interest ceases and a reserve for unrecoverable accrued interest is established and charged against operations. As a general practice, payments received on non-accrual loans are applied to reduce the outstanding principal balance on a cost recovery method. Also, as a general practice, a loan is not removed from non-accrual status until all delinquent principal, interest and late fees have been brought current and the borrower has demonstrated a history of performance based upon the contractual terms of the note. A history of repayment performance generally would be a minimum of six months. Interest income foregone on non-accrual loans was $75,000 and $78,000 during the nine months ended December 31, 2018 and 2017, respectively.

The following tables present an analysis of loans by aging category at the dates indicated (in thousands):

December 31, 2018
 
30-89 Days