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Riverview Bancorp Inc.

11/13/2026 | Press release | Distributed by Public on 11/13/2026 13:48

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

This report contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These measures include net interest income on a fully tax equivalent basis and net interest margin on a fully tax equivalent basis. Management uses these non-GAAP measures in its analysis of the Company's performance. The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets. Management believes that it is a standard practice in the banking industry to present net interest income and net interest margin on a fully tax equivalent basis, and believes that providing these measures may be useful for peer comparison purposes. These disclosures should not be viewed as substitutes for the results determined to be in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Critical Accounting Policies and Estimates

Critical accounting policies and estimates are discussed in our Annual Report on 2026 Form 10-K under Part II. Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates" and Part II. Item 8, "Note 1. Summary of Significant Accounting Policies" in the Notes to the Consolidated Financial Statements." That discussion highlights estimates that the Company makes that involve uncertainty or potential for substantial change. There have not been any material changes in the Company's critical accounting policies and estimates as compared to the disclosures contained in the Company's 2026 Form 10-K.

Executive Overview

As a progressive, community-oriented financial services company, the Company emphasizes local, personalized service to residents and business within its primary market area. The Company considers Clark, Klickitat and Skamania counties in Washington, and Multnomah, Washington and Marion counties in Oregon, to comprise its primary market area. The Company is engaged primarily in attracting deposits from the general public and using such funds within its primary market area to originate commercial business, commercial real estate, multi-family real estate, land, real estate construction, residential real estate and other consumer loans. The Company's loans receivable, net, totaled $1.09 billion at September 30, 2026, compared to $1.08 billion at March 31, 2026.

The Company's strategic plan focuses on five key priorities: employer of choice, profitable growth, digital experience, data empowerment and client experience.

Employer of choice: Riverview's vision is "to be the preferred place to bank and work in the Pacific Northwest." The Company focuses on recruiting, developing, and retaining talent across all areas of the organization.

Profitable growth: The Company seeks to achieve sustainable, well-managed growth that enhances long-term financial performance and competitive position by increasing revenues, deepening existing client relationships, attracting new clients, and maintaining disciplined expense management and prudent risk-management practices.

Digital experience: The Company seeks to provide seamless, intuitive and secure digital banking capabilities designed to enhance client engagement through personalized services, convenient access to banking solutions and efficient transaction processing.

Data empowerment: The Company utilizes data analytics to support informed decision-making, improve operational efficiencies and enhance client experiences through greater insight into client needs and market trends.

Client experience: The Company focuses on delivering consistent, personalized and high-quality service across all client interactions in order to strengthen relationships and build trust within the communities it serves.

The Company targets commercial banking clients within its primary market area for loan originations and deposit growth, including businesses, professionals and wealth-building individuals. In pursuit of these objectives, the Company seeks to

grow its loan portfolio in a manner consistent with its strategic plan, asset/liability management objectives and regulatory capital requirements. This strategy includes growing and maintaining a significant concentration of business banking, commercial business and commercial real estate loans, which generally carry adjustable rates, higher yields and shorter terms, as well as greater credit risk, than traditional fixed-rate real estate one-to-four family loans.

The Company's strategic plan also emphasizes growth in non-interest income, including asset management fees generated through the Trust Company and deposit-related service charges. The strategic plan is intended to enhance earnings, reduce interest rate risk and provide a broader range of financial services to clients and the local communities the Company serves. The Company believes it is positioned to attract new clients and increase market share through its network of 17 branch locations, including 10 branches in Clark County, three branches in the Portland metropolitan area and three lending centers.

Operating Strategy

Fiscal year 2027 marked the 103rd anniversary for Riverview Bank, which opened for business in 1923. Our primary business strategy is to provide comprehensive banking and related financial services within our primary market area. The Company's goal is to deliver returns to shareholders by increasing higher-yielding assets (in particular, commercial real estate and commercial business loans), increasing core deposit balances, managing problem assets, reducing expenses, hiring experienced employees with a commercial lending focus and exploring expansion opportunities. The Company seeks to achieve these results by focusing on the following objectives:

Execution of our Business Plan. The Company remains focused on expanding its loan portfolio, particularly higher-yielding commercial and construction loans, and growing its core deposit base by deepening client relationships throughout its primary market areas. While residential real estate lending was historically a primary focus, the Company has diversified its loan portfolio in recent years through the strategic growth of its commercial and construction loan portfolios. In fiscal year 2021, the Company ceased originating one-to-four family residential real estate loans but continues to purchase such loans consistent with its asset/liability management objectives. At September 30, 2026, commercial and construction loans represented 88.6% of total loans. Commercial lending, including CRE, generally involves greater credit risk than residential lending. However, these risks are often compensated by higher interest margins and fee income, contributing to enhanced loan portfolio profitability. To support its growth and profitability objectives, the Company is committed to a relationship-based banking model designed to strengthen client loyalty, identify new lending opportunities, and improve client-level profitability through cross-selling deposit, treasury management, and other banking services. The Company continues to build its core deposit base by offering competitive products, enhancing digital banking capabilities, and prioritizing high-quality client service. Additionally, the Company seeks to expand its banking franchise through de novo branch development, selective acquisitions of branches or loan portfolios, and whole bank transactions that align with its strategic and financial goals.

Maintaining Strong Asset Quality. The Company believes that strong asset quality is a key to long-term financial success. The Company has actively managed delinquent loans and nonperforming assets by aggressively pursuing the collection of consumer debts, marketing saleable properties upon foreclosure or repossession, and through work-outs of classified assets and loan charge-offs. The Company's approach to credit management uses well defined policies and procedures and disciplined underwriting criteria resulting in our strong asset quality and credit metrics in fiscal year 2027. Although the Company intends to prudently increase the percentage of its assets consisting of higher-yielding commercial real estate, real estate construction and commercial business loans, which offer higher risk-adjusted returns, shorter maturities and more sensitivity to interest rate fluctuations, the Company intends to manage credit exposure through the use of experienced bankers in these areas and a conservative approach to its lending.

Introduction of New Products and Services. The Company continuously reviews new products and services to provide its clients more financial options. All new technology and services are generally reviewed for business development and cost saving purposes. The Company continues to experience growth in client use of its online banking services, where the Bank provides a full array of traditional cash management products as well as online banking products including mobile banking, mobile deposit, bill pay, e-statements, and new deposit products. The products are tailored to meet the needs of small to medium size businesses and households in the markets we serve. The Company intends to selectively add other products to further diversify revenue sources and to capture more of each client's banking relationship by cross selling loan and deposit products and additional services, including services provided through the Trust Company to increase its

fee income. Assets under management by the Trust Company totaled $941.8 million and $908.1 million at September 30, 2026 and March 31, 2026, respectively. The Company also offers a third-party identity theft product to its clients. The identity theft product assists our clients in monitoring their credit and includes an identity theft restoration service.

Attracting Core Deposits and Other Deposit Products. The Company offers a variety of deposit products, including personal checking, savings, and money market accounts, which generally represent lower-cost and more stable sources of funding compared to certificates of deposit. These core deposits are less sensitive to interest rate fluctuations and play a key role in supporting the Company's funding and liquidity strategy. To strengthen its funding base, the Company continues to prioritize the growth of core deposits over higher-cost funding sources, such as brokered deposits, FHLB advances, and FRB borrowings. This approach supports loan growth while helping to manage interest expense and reduce reliance on more volatile wholesale funding sources. A key element of this strategy is enhancing and deepening client relationships. The Company believes its continued focus on relationship banking will support the expansion of both core deposits and locally sourced retail certificates of deposit. In particular, the Company seeks to increase demand deposits by building business banking relationships, supported by a suite of expanded product offerings tailored to meet the specific needs of its business clients. To further encourage growth in lower-cost deposits, the Company has invested in technology-based solutions designed to improve the client experience and support cash management needs. These include personal financial management tools, business cash management services, and remote deposit capture products, which allow the Company to effectively compete with financial institutions of all sizes. As of September 30, 2026, core branch deposits increased $27.8 million compared to March 31, 2026, reflecting the Company's continued focus on retaining and growing deposits in light of the strong competition within its market area. Core branch deposits represented 98.5% of total deposits at September 30, 2026 compared to 98.4% at March 31, 2026.

Recruiting and Retaining Highly Competent Personnel with a Focus on Commercial Lending. The Company's ability to continue to attract and retain banking professionals with strong community relationships and significant knowledge of its markets will be a key to its success. The Company believes that it enhances its market position and adds profitable growth opportunities by focusing on hiring and retaining experienced bankers focused on owner occupied commercial real estate and commercial lending, and the deposit balances that accompany these relationships. The Company emphasizes to its employees the importance of delivering exemplary client service and seeking opportunities to build further relationships with its clients. The goal is to compete with other financial service providers by relying on the strength of the Company's client service and relationship banking approach. The Company believes that one of its strengths is that its employees are also shareholders through the Company's ESOP and 401(k) plans.

Commercial and Construction Loan Composition

The following tables set forth the composition of the Company's commercial and construction loan portfolios, based on loan purpose, at the dates indicated (in thousands):



	Commercial Business		Commercial Real Estate Mortgage		Real Estate Construction		Commercial and Construction Total
September 30, 2026

Commercial business	$	225,489	$	-	$	-	$	225,489
Commercial construction		-		-		10,938		10,938
Office buildings		-		115,894		-		115,894
Warehouse/industrial		-		114,826		-		114,826
Retail/shopping centers/strip malls		-		89,016		-		89,016
Assisted living facilities		-		337		-		337
Single purpose facilities		-		286,486		-		286,486
Land		-		14,113		-		14,113
Multi-family		-		104,301		-		104,301
One-to-four family construction		-		-		19,832		19,832
Total	$	225,489	$	724,973	$	30,770	$	981,232


March 31, 2026

Commercial business	$	219,846	$	-	$	-	$	219,846
Commercial construction		-		-		13,619		13,619
Office buildings		-		115,462		-		115,462
Warehouse/industrial		-		118,292		-		118,292
Retail/shopping centers/strip malls		-		90,388		-		90,388
Assisted living facilities		-		343		-		343
Single purpose facilities		-		287,149		-		287,149
Land		-		9,143		-		9,143
Multi-family		-		103,614		-		103,614
One-to-four family construction		-		-		10,421		10,421
Total	$	219,846	$	724,391	$	24,040	$	968,277

Comparison of Financial Condition at September 30, 2026 and March 31, 2026

Total assets increased by $22.5 million, or 1.54%, as of September 30, 2026, compared to March 31, 2026. The increase was primarily driven by a $14.9 million rise in loans receivable and an $8.0 million increase in available-for-sale investment securities. These increases were partially offset by a $1.7 million decrease in prepaid expenses and other assets, as well as a $1.1 million decline in cash and cash equivalents.

Cash and cash equivalents, including interest-earning deposits in other banks, totaled $115.8 million at September 30, 2026, compared to $116.9 million at March 31, 2026. The decrease primarily reflects the deployment of liquidity into investment securities and, to a lesser extent, loan growth during the period, partially offset by an increase in deposits. Cash balances typically fluctuate based on funding needs, deposit activity, and investment securities activity.

Investment securities totaled $162.8 million and $154.8 million at September 30, 2026 and March 31, 2026, respectively. The increase was primarily attributable to purchases of investment securities totaling $24.8 million during the period, partially offset by normal principal repayments, calls and maturities. The Company did not sell any securities during the six months ended September 30, 2026. The Company's investment portfolio primarily consists of a combination of securities backed by government agencies (FHLMC, FNMA, SBA or GNMA). At September 30, 2026, the Company determined that none of its investment securities required an ACL. For additional information regarding the Company's investment securities, see Note 5 of the Notes to the Consolidated Financial Statements contained in Item 1 of this Form 10-Q.

Loans receivable, net, increased to $1.09 billion at September 30, 2026, from $1.08 billion at March 31, 2026. The increase was primarily attributable to growth in real estate construction loans, commercial business loans, land loans, and other installment loans, which increased by $6.7 million, $5.6 million, $5.0 million, and $4.3 million, respectively. This growth was partially offset by declines in commercial real estate loans of $5.1 million and one-to-four family residential real estate loans of $1.9 million.

The Company no longer originates one-to-four family mortgage loans but may periodically purchase such loans consistent with its asset/liability management objectives. In addition, the Company purchases loans originated by third parties outside its primary market area to supplement loan originations and enhance portfolio diversification. Purchased loans totaled $45.2 million at September 30, 2026 compared to $43.6 million at March 31, 2026, representing an increase of $1.6 million. The increase was primarily attributable to consumer loan purchases totaling $9.7 million during the period, partially offset by normal principal paydowns and payoffs. The Company also purchases the guaranteed portion of SBA loans to further diversify the loan portfolio, supplement loan originations, and generate yields that are generally higher than those available on overnight cash or other short-term investments. These SBA loans are originated by financial institutions outside the Company's primary market area and are purchased with servicing retained by the seller. At September 30, 2026, the Company's purchased SBA loan portfolio totaled $40.8 million compared to $42.7 million at March 31, 2026. The decrease was primarily attributable to normal principal repayments.

Deposits increased $27.7 million to $1.28 billion at September 30, 2026, compared to $1.25 billion at March 31, 2026. Increases in non-interest checking accounts, interest checking accounts, and money market accounts of $21.8 million, $9.2 million, and $7.1 million, respectively, were partially offset by decreases in certificates of deposit of $7.0 million and regular savings accounts of $3.4 million. The migration from lower-yielding deposit products to interest checking accounts is consistent with industry trends as depositors seek to maximize returns on their funds in a higher-rate environment. The Company had no wholesale-brokered deposits at September 30, 2026, or March 31, 2026. Core branch deposits represented 98.5% of total deposits at September 30, 2026, compared to 98.4% at March 31, 2026. The Company remains focused on growing core deposits and deepening client relationships while maintaining a limited reliance on wholesale funding sources.

FHLB advances totaled $16.1 million at both September 30, 2026, and March 31, 2026, and were comprised entirely of overnight advances. The Company used FHLB advances as part of its asset/liability management strategy.

Shareholders' equity totaled $138.2 million at September 30, 2026, a decrease of $7.5 million from $145.6 million at March 31, 2026. The decrease primarily reflected a $6.5 million increase in accumulated other comprehensive loss related to unrealized losses on investment securities, net of tax, as well as the repurchase of 730,046 shares of common stock for $4.0 million and cash dividend payments of $795,000. These factors were partially offset by net income of $3.7 million for the six months ended September 30, 2026.

Capital Resources

The Bank is a state-chartered, federally insured institution subject to various regulatory capital requirements administered by the FDIC and Washington State Department of Financial Institutions, Division of Banks. Failure to meet minimum capital requirements can result in the initiation of certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material adverse effect on the Bank's operations and financial condition. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total capital, Tier 1 capital, common equity Tier 1 capital and Tier 1 capital to average tangible assets (leverage ratio), as set forth in the table below. Management believes the Bank met all capital adequacy requirements to which it was subject as of September 30, 2026.

As of September 30, 2026, the Bank was categorized as "well capitalized" under the FDIC's regulatory framework for prompt corrective action. The Bank's actual and required minimum capital amounts and ratios were as follows at the dates indicated (dollars in thousands):


												"Well Capitalized"
							For Capital					Under Prompt
		Actual					Adequacy Purposes					Corrective Action
		Amount			Ratio		Amount			Ratio		Amount			Ratio
September 30, 2026
Total Capital:
(To Risk-Weighted Assets)		$	172,273		15.50	%	$	88,923		8.0	%	$	111,153		10.0	%
Tier 1 Capital:
(To Risk-Weighted Assets)			158,352		14.25			66,692		6.0			88,923		8.0
Common equity tier 1 Capital:
(To Risk-Weighted Assets)			158,352		14.25			50,019		4.5			72,250		6.5
Tier 1 Capital (Leverage):
(To Average Tangible Assets)			158,352		10.88			58,230		4.0			72,788		5.0

March 31, 2026
Total Capital:
(To Risk-Weighted Assets)		$	170,932		15.62	%	$	87,536		8.0	%	$	109,421		10.0	%
Tier 1 Capital:
(To Risk-Weighted Assets)			157,231		14.37			65,652		6.0			87,536		8.0
Common equity tier 1 Capital:
(To Risk-Weighted Assets)			157,231		14.37			49,239		4.5			71,123		6.5
Tier 1 Capital (Leverage):
(To Average Tangible Assets)			157,231		10.60			59,313		4.0			74,141		5.0

In addition to the minimum common equity tier 1 ("CET1"), Tier 1 and total capital ratios, the Bank is required to maintain a capital conservation buffer consisting of additional CET1 capital greater than 2.5% of risk-weighted assets above the required minimum capital levels. Failure to maintain the required buffer could result in limitations on the Bank's ability to pay dividends, repurchase shares, and pay discretionary bonuses, based on specified percentages of eligible retained income. As of September 30, 2026, the Bank's CET1 capital exceeded the required capital conservation buffer by more than the required 2.5% of risk-weighted assets.

For a bank holding company, such as the Company, the capital guidelines apply on a bank only basis. The Federal Reserve expects the holding company's subsidiary banks to be well capitalized under the prompt corrective action regulations. If the Company was subject to regulatory guidelines for bank holding companies at September 30, 2026, the Company would have exceeded all regulatory capital requirements.

At periodic intervals, the Company's banking regulators routinely examine the Company's financial condition and risk management processes as part of their legally prescribed oversight. Based on their examinations, these regulators can direct that the Company's consolidated financial statements be adjusted in accordance with their findings. Examiners may require adjustment to the allowance based on information available to them at the time, which could also have a material adverse impact on the Company's financial condition and results of operations.

Liquidity

Liquidity is essential to our business. The objectives of the Bank's liquidity management are to maintain sufficient cash flows to meet obligations for depositor withdrawals, to fund the borrowing needs of loan clients, and to fund ongoing operations. Core relationship deposits are the primary source of the Bank's liquidity. As such, the Bank focuses on deposit relationships with local consumer and business clients who maintain multiple accounts and services at the Bank.

Liquidity management is both a short and long-term responsibility of management. The Company adjusts its investments in liquid assets based upon management's assessment of (i) expected loan demand, (ii) projected loan sales, (iii) expected deposit flows, (iv) yields available on interest-bearing deposits and (v) asset/liability management objectives. Excess liquidity is invested generally in interest-bearing overnight deposits and other short-term government and agency

obligations. If the Company requires funds beyond those provided through its normal operating activities, it has additional diversified and reliable sources of funds available through the FHLB, the FRB and other wholesale facilities. These sources of funds may be used on a long or short-term basis to compensate for a reduction in other sources of funds or on a long-term basis to support lending activities.

The Company's primary sources of funds are client deposits, proceeds from principal and interest payments on loans, proceeds from the sale of loans, maturing securities, FHLB advances and FRB borrowings. While maturities and scheduled amortization of loans and securities are a predictable source of funds, deposit flows and prepayment of mortgage loans and mortgage-backed securities are greatly influenced by general interest rates, economic conditions and competition. Management believes that its focus on core relationship deposits coupled with access to borrowing through reliable counterparties provides reasonable and prudent assurance that ample liquidity is available. However, depositor or counterparty behavior could change in response to competition, economic or market situations or other unforeseen circumstances, which could have liquidity implications that may require different strategic or operational actions.

The Company must maintain an adequate level of liquidity to ensure the availability of sufficient funds for loan originations, deposit withdrawals and continuing operations, satisfy other financial commitments and take advantage of investment opportunities. During the six months ended September 30, 2026, deposits increased $27.7 million, providing a stable funding base. The Bank uses its funding sources primarily to support lending activities, manage deposit withdrawals, fund investment activities, and meet ongoing operational needs. At September 30, 2026, cash and cash equivalents and available for sale investment securities totaled $278.6 million, or 18.7% of total assets. Management believes that the Company's security portfolio is of high quality and generally marketable. The level of liquid assets is influenced by the Company's operating, financing, lending, and investing activities during any given period. During the six months ended September 30, 2026, net loans increased $14.9 million and investment securities increased $8.0 million, while cash and cash equivalents decreased $1.1 million.

In addition to these primary sources of funds, the Bank has several secondary borrowing sources available to meet potential funding requirements, including FRB borrowings and FHLB advances. At September 30, 2026, the Bank had no advances from the FRB and maintained a credit facility with an available borrowing capacity of $210.0 million, subject to sufficient collateral. FHLB advances totaled $16.1 million at the same date, with additional borrowing capacity of $259.1 million, also subject to adequate collateral and stock investment. At September 30, 2026, the Bank had sufficient unpledged collateral to allow it to utilize its available borrowing capacity from the FRB and the FHLB. Borrowing capacity may, however, fluctuate based on the quality and risk rating of pledged loan collateral, and counterparties may adjust discount rates applied to such collateral at their discretion.

An additional source of wholesale funding includes brokered certificates of deposit. While the Company has used brokered deposits from time to time, the Company historically has not extensively relied on brokered deposits to fund its operations. At September 30, 2026 and March 31, 2026, the Bank had no brokered deposits. The Bank also participates in the Certificate of Deposit Account Registry Services ("CDARS") and Insured Cash Sweep ("ICS") deposit products, which allow the Company to accept deposits in excess of the FDIC insurance limit for each depositor and obtain "pass-through" insurance for the total deposits. The Bank's CDARS and ICS balances were $30.0 million, or 2.34% of total deposits and $30.2 million, or 2.41% of total deposits, at September 30, 2026 and March 31, 2026, respectively.

The combination of all the Bank's funding sources gives the Bank total available liquidity, including available borrowing capacity, of $942.4 million, or 63.4% of total assets at September 30, 2026.

At September 30, 2026, the Company had total commitments of $126.2 million, which included commitments to extend credit of $11.9 million, unused lines of credit totaling $104.6 million, undisbursed construction loans totaling $8.1 million, and standby letters of credit totaling $1.6 million. For further information regarding the Company's off-balance sheet arrangements and other contractual obligations, see Note 13 of the Notes to Consolidated Financial Statements contained in Item 1 of this Form 10-Q. The Company anticipates that it will have sufficient funds available to meet current loan commitments. Certificates of deposit that are scheduled to mature in less than one year from September 30, 2026 totaled $237.6 million. Historically, the Bank has been able to retain a significant amount of its deposits as they mature. Partially offsetting these cash outflows are scheduled loan maturities of less than one year totaling $92.2 million at September 30, 2026.

The Company incurs capital expenditures on an ongoing basis to expand and improve its product offerings, enhance and modernize its technology infrastructure, and to introduce new technology-based products to compete effectively in its markets. The Company evaluates capital expenditure projects based on a variety of factors, including expected strategic impacts (such as forecasted impact on revenue growth, productivity, expenses, service levels and client retention) and its expected return on investment. The amount of capital investment is influenced by, among other things, current and projected demand for its services and products, cash flow generated by operating activities, cash required for other purposes and regulatory considerations. Based on its current capital allocation objectives, during the remainder of fiscal 2027 the Company expects cash expenditures of approximately $1.7 million for capital investment in premises and equipment.

Riverview, as a separate legal entity from the Bank, must provide for its own liquidity. Sources of capital and liquidity for Riverview include distributions from the Bank and the issuance of debt or equity securities. Dividends and other capital distributions from the Bank are subject to regulatory notice. Management currently expects to continue the Company's current practice of paying quarterly cash dividends on its common stock subject to the Board of Directors' discretion to modify or terminate this practice at any time and for any reason without prior notice. The current quarterly common stock dividend rate is $0.02 per share, as approved by the Board of Directors, which management believes is a dividend rate per share that enables the Company to balance its multiple objectives of managing and investing in the Bank and returning a substantial portion of the Company's cash to its shareholders. Assuming continued payment during fiscal 2027 at this rate of $0.02 per share, average total dividends paid each quarter would be approximately $395,000 based on the number of the Company's outstanding shares at September 30, 2026. At September 30, 2026, Riverview Bancorp, Inc. had $1.7 million in cash to meet its liquidity needs.

Asset Quality

Nonperforming assets were $8.6 million or 0.58% of total assets at September 30, 2026, compared to $7.8 million or 0.53% of total assets at March 31, 2026. The increase in nonperforming assets was primarily due to an increase in nonaccrual commercial real estate loans during the six months ended, September 30, 2026. The Company had recoveries totaling $462,000 for the six months ended September 30, 2026, compared to net charge-offs of $1.3 million during fiscal year 2026.

The following table sets forth information regarding the Company's nonperforming loans, consisting of nonaccrual loans at the dates indicated (dollars in thousands):


		September 30, 2026					March 31, 2026
		Number of					Number of
		Loans		Balance			Loans		Balance

Commercial business		4		$	515		4		$	645
Commercial real estate		4			8,062		4			7,112
Consumer		-			-		1			7
Total		8		$	8,577		9		$	7,764

The ACL for loans was $15.7 million or 1.42% of total loans at September 30, 2026, and $15.2 million or 1.40% of total loans at March 31, 2026. The Company did not record a provision for credit losses for the six months ended September 30, 2026 or September 30, 2025. At September 30, 2026, the Company's allowance for credit losses equaled 183.16% of nonperforming loans, compared to 196.39% at March 31, 2026. The allowance for collectively evaluated loans was 1.43% at September 30, 2026 and 1.41% at March 31, 2026.

Management considers the ACL for loans and unfunded loan commitments to be adequate at September 30, 2026 based on an evaluation of various factors affecting the loan portfolio. The Company believes the ACL has been established in accordance with GAAP; however, material increases may be required if economic conditions worsen, regulatory outcomes change, or other relevant factors emerge. Significant increases in the ACL may also be necessary if borrower credit quality deteriorates or collateral values decline. Such an increase could negatively impact the Company's future financial condition and results of operations. For further information regarding the Company's individually evaluated loans and ACL for loans, see Note 6 of the Notes to Consolidated Financial Statements contained in Item 1 of this Form 10-Q.

The following table sets forth information regarding the Company's nonperforming assets at the dates indicated (dollars in thousands):



		September 30, 2026			March 31, 2026

Loans accounted for on a non-accrual basis:
Commercial business		$	515		$	645
Commercial real estate			8,062			7,112
Consumer			-			7
Total nonperforming loans			8,577			7,764
Real estate owned ("REO")			-			-
Total nonperforming assets		$	8,577		$	7,764

Foregone interest on non-accrual loans		$	279		$	240

(1)

Six months ended September 30, 2026 and year ended March 31, 2026.

The following tables set forth information regarding the Company's nonperforming assets by loan type and geographical area at the dates indicated (in thousands):


		Northwest			Southwest
		Oregon			Washington		Total
September 30, 2026

Commercial business		$	103		$	412	$	515
Commercial real estate			8,037			25		8,062
Total nonperforming assets		$	8,140		$	437	$	8,577


		Northwest			Southwest
		Oregon			Washington			Total

March 31, 2026

Commercial business		$	126		$	519		$	645
Commercial real estate			7,077			35			7,112
Consumer			-			7			7
Total nonperforming assets		$	7,203		$	561		$	7,764

At September 30, 2026, loans delinquent 30-89 days totaled $16.9 million, or 1.53% of total loans, compared to $6.5 million, or 0.60% of total loans, at March 31, 2026. The increase was primarily driven by four CRE loans totaling $14.3 million at September 30, 2026. Three of those loans were 30-89 days past due at June 30, 2026, the largest of which had an outstanding balance of $6.5 million. The Company continues to monitor these loans and work with the borrowers to address repayment and credit-related matters. The Company had no accruing loans that were 90 days or more delinquent at September 30, 2026 and March 31, 2026.

At September 30, 2026, CRE loans represented the largest portion of the loan portfolio at 54.8% of total loans and commercial business loans represented 20.4% of total loans.

Goodwill Valuation

The Company performed its annual goodwill impairment test as of October 31, 2025, and determined that no impairment of goodwill existed. The Company also evaluated whether events or circumstances indicated that goodwill may be impaired as of September 30, 2026, and concluded that it is more likely than not that the fair value of the Bank reporting unit, exceeds its carrying amount at that date. Accordingly, no goodwill impairment was recognized.

Future impairment charges could occur if adverse events or changes in circumstances arise, including, but not limited to: (i) a sustained decline in the Company's stock price or that of peer institutions, (ii) revenue declines beyond current forecasts, or (iii) significant adverse changes in the operating environment for the financial industry. Changes in circumstances at or after the measurement date, or changes in the assumptions and estimates used in assessing goodwill, could also result in a partial or full impairment.

While any such impairment charge would adversely affect the Company's financial condition and results of operations, it would not impact the Company's liquidity, operations, or regulatory capital ratios.

Comparison of Operating Results for the Three and Six Months Ended September 30, 2026 and 2025

Net Income. Net income was $2.0 million, or $0.10 per diluted share, for the three months ended September 30, 2026, compared to $1.1 million, or $0.05 per diluted share, for the same period in the prior year. Net income for the six months ended September 30, 2026 and 2025 was $3.7 million or $0.18 per diluted share and $2.3 million or $0.11 per diluted share, respectively. The increases in net income for three and six months ended September 30, 2026 were primarily due to increases in net interest income of $2.0 million and $3.6 million, respectively, partially offset by increases in non-interest expense of $713,000 and $1.9 million, respectively. The increases in net interest income reflected higher interest and dividend income of $1.5 million and $2.5 million, and decreases in interest expense on borrowings of $609,000 and $1.8 million, partially offset by increases in interest expense on deposits of $45,000 and $632,000, respectively.

Net Interest Income. The Company's profitability depends primarily on its net interest income, which is the difference between the income it receives on interest-earning assets and the interest paid on deposits and borrowings. When the rate earned on interest-earning assets equals or exceeds the rate paid on interest-bearing liabilities, a positive interest rate spread will generate net interest income. The Company's results of operations are also significantly affected by general economic and competitive conditions, particularly changes in market interest rates, government legislation and regulation, and monetary and fiscal policies.

Net interest income for the three and six months ended September 30, 2026, was $11.8 million and $23.2 million respectively, representing an increase of $2.1 million and $3.6 million compared to the same periods in the prior year. The increase was primarily attributable to higher interest and fee income on loans receivable and other interest and dividends, and lower interest expense on borrowings, partially offset by increased interest expense on deposits. Net interest margin for the three and six months ended September 30, 2026 was 3.40% and 3.37%, respectively, compared to 2.76% and 2.77% for the same periods in the prior year. The improvement in net interest margin was driven by increases in interest income on loans and interest-earning deposits in other banks, reflecting both volume and rate effects, and lower interest expense, primarily resulting from reduced average balances of FHLB advances, partially offset by higher interest expense on deposits.

Interest and Dividend Income. Interest and dividend income for the three and six months ended September 30, 2026 was $16.9 million and $33.2 million, compared to $15.4 million and $30.7 million for the same periods in the prior year, respectively. The increase was primarily attributable to increases in interest income on loans receivable of $1.1 million and $2.0 million respectively, when compared to the same periods in 2025, due to both increases in the average balance of net loans and improved yields.

The average yield on loans increased to 5.30% and 5.27% for the three and six months ended September 30, 2026, compared to 5.11% and 5.08% for the same periods in 2025. Mortgage loan yields increased to 5.33% and 5.30% for the three and six months ended September 30, 2026, up from 5.13% and 5.09%, while non-mortgage loan yields increased to 5.22% and 5.18%, compared to 5.06% and 5.04% for the same periods in the prior year. The average balance of net loans increased to $1.10 billion for both the three and six months periods ended September 30, 2026, compared to $1.06 billion for the same periods in the prior year. The average balance of mortgage loans increased $32.1 million and $29.1 million to $819.8 million and $818.4 million, respectively, for the three and six months ended September 30, 2026, while the average balance of non-mortgage loans increased $10.7 million and $6.1 million to $283.6 million and $278.5 million, respectively compared to the same periods last year.

Interest income earned on investment securities decreased $136,000 and $573,000 for the three and six months ended September 30, 2026, compared to the same periods in the prior year, reflecting a decrease in the average balance of investment securities. The average balance of investment securities decreased $129.6 million and $138.1 million to $199.5 million and $195.0 million for the three and six months ended September 30, 2026, compared to $329.1 million and $333.1 million for the same periods in the prior year, respectively. The decrease in the average balance of investment securities was primarily attributable to a strategic balance sheet optimization that included the sale of $149.3 million of lower-yielding investment securities, at book value, in the fourth quarter of fiscal year 2026. The average yield on investment securities was 2.66% and 2.71% for the three and six months ended September 30, 2026, compared to 1.78% and 1.94% for the same periods in the prior year, reflecting higher yields on securities purchased as part of the strategic balance sheet optimization.

Interest Expense. Interest expense totaled $5.0 million and $10.0 million for the three and six months ended September 30, 2026, compared to $5.6 million and $11.1 million for the three and six months ended September 30, 2025, respectively. The decreases were primarily attributable to lower interest expense on FHLB advances, driven by both lower average balances and lower rates, partially offset by higher interest expense on deposits.

Interest expense on deposits increased $45,000 and $632,000 to $4.4 million and $8.8 million for the three and six months ended September 30, 2026, compared to the same periods in the prior year. The increases were primarily driven by higher average balances and higher rates paid on money market accounts, together with higher average balances of interest checking accounts. These increases were partially offset by lower rates paid on certificates of deposit.

The average rate on money market accounts increased 15 basis points and nine basis points for the three and six months ended September 30, 2026, respectively, while the average balance increased $12.7 million and $5.3 million compared to the same periods in the prior year. The average rate on interest checking accounts increased three basis points and 14 basis points to 1.31% and 1.30%, respectively, with the average balance increasing $38.8 million and $49.8 million for the same periods. These increases contributed to the higher interest expense on deposits. Certificates of deposit experienced a decrease in average rates of 31 basis points and 21 basis points for the three and six months ended September 30, 2026, respectively, while the average balances decreased $366,000 for the three-month period and increased $12.6 million for the six-month period compared to the same periods in the prior year. Additionally, the average balance of regular savings accounts decreased by $7.7 million and $10.1 million to $150.9 million and $151.2 million for the three and six months ended September 30, 2026, compared to $158.6 million and $161.3 million for the same periods in 2025.

Interest expense on borrowings decreased $609,000 and $1.8 million for the three and six months ended September 30, 2026, compared to the same periods in the prior year, primarily due to lower average balances and rates on FHLB advances. The average FHLB balance was $16.1 million for both the three and six months ended September 30, 2026, compared to $63.3 million and $86.7 million for the same periods in the prior year. In addition, the average rate on FHLB advances decreased to 4.02% and 3.96% for the three and six months ended September 30, 2026, respectively, compared to 4.57% and 4.58 % for the same periods the prior year.

The following tables set forth, for the periods indicated, information regarding average balances of assets and liabilities as well as the total dollar amounts of interest income earned on average interest-earning assets and interest expense paid on average interest-bearing liabilities, resultant yields, interest rate spread, ratio of interest-earning assets to interest-bearing liabilities and net interest margin (dollars in thousands):


		Three Months Ended September 30,
		2026								2025
					Interest								Interest
		Average			and					Average			and
		Balance			Dividends			Yield/Cost		Balance			Dividends			Yield/Cost

Interest-earning assets:
Mortgage loans		$	819,797		$	11,018		5.33	%	$	787,649		$	10,188		5.13	%
Non-mortgage loans			283,648			3,735		5.22			272,994			3,479		5.06
Total net loans ⁽¹⁾			1,103,445			14,753		5.30			1,060,643			13,667		5.11

Investment securities ⁽²⁾			199,488			1,337		2.66			329,063			1,480		1.78
Interest-earning deposits in other banks			78,847			737		3.71			14,307			150		4.16
Other earning assets			2,467			50		8.04			4,589			95		8.21
Total interest-earning assets			1,384,247			16,877		4.84			1,408,602			15,392		4.34

Non-interest-earning assets:
Office properties and equipment, net			21,507								22,908
Other non-interest-earning assets			60,295								65,840
Total assets		$	1,466,049							$	1,497,350

Interest-bearing liabilities:
Regular savings accounts		$	150,925			43		0.11		$	158,582			60		0.15
Interest checking accounts			326,495			1,074		1.31			287,695			969		1.34
Money market accounts			237,592			1,297		2.17			224,955			1,144		2.02
Certificates of deposit			243,794			1,991		3.24			244,160			2,187		3.55
Total interest-bearing deposits			958,806			4,405		1.82			915,392			4,360		1.89

Junior subordinated debentures			27,209			424		6.18			27,121			464		6.79
FHLB advances			16,100			163		4.02			63,315			729		4.57
Other interest-bearing liabilities			1,987			35		6.99			2,073			38		7.08
Total interest-bearing liabilities			1,004,102			5,027		1.99			1,007,901			5,591		2.20

Non-interest-bearing liabilities:
Non-interest-bearing deposits			305,643								312,185
Other liabilities			12,264								13,852
Total liabilities			1,322,009								1,333,938
Shareholders' equity			144,040								163,412
Total liabilities and shareholders' equity		$	1,466,049							$	1,497,350
Net interest income					$	11,850							$	9,801
Interest rate spread								2.85	%							2.14	%
Net interest margin								3.40	%							2.76	%

Ratio of average interest-earning assets to average interest-bearing liabilities								137.86	%							139.76	%

Tax equivalent adjustment ⁽³⁾					$	13							$	20


		Six Months Ended September 30,
		2026								2025
					Interest								Interest
		Average			and					Average			and
		Balance			Dividend			Yield/Cost		Balance			Dividends			Yield/Cost

Interest-earning assets:
Mortgage loans		$	818,443		$	21,761		5.30	%	$	789,375		$	20,133		5.09	%
Non-mortgage loans			278,501			7,233		5.18			272,413			6,886		5.04
Total net loans (1)			1,096,944			28,994		5.27			1,061,788			27,019		5.08

Investment securities (2)			195,010			2,645		2.71			333,102			3,233		1.94
Interest-earning deposits in other banks			82,602			1,523		3.68			13,921			291		4.17
Other earning assets			2,467			96		7.76			5,640			245		8.66
Total interest-earning assets			1,377,023			33,258		4.82			1,414,451			30,788		4.34

Non-interest-earning assets:
Office properties and equipment, net			21,680								23,095
Other non-interest-earning assets			60,969								65,634
Total assets		$	1,459,672							$	1,503,180

Interest-bearing liabilities:
Regular savings accounts		$	151,157			90		0.12		$	161,259			104		0.13
Interest checking accounts			325,187			2,120		1.30			275,411			1,601		1.16
Money market accounts			232,574			2,469		2.12			227,231			2,312		2.03
Certificates of deposit			247,515			4,087		3.29			234,914			4,117		3.50
Total interest-bearing deposits			956,433			8,766		1.83			898,815			8,134		1.80

Junior subordinated debentures			27,198			841		6.17			27,111			925		6.81
FHLB advances			16,100			320		3.96			86,684			1,991		4.58
Other interest-bearing liabilities			1,998			72		7.19			2,106			75		7.10
Total interest-bearing liabilities			1,001,729			9,999		1.99			1,014,716			11,125		2.19

Non-interest-bearing liabilities:
Non-interest-bearing deposits			300,570								312,867
Other liabilities			12,159								13,093
Total liabilities			1,314,458								1,340,676
Shareholders' equity			145,214								162,504
Total liabilities and shareholders' equity		$	1,459,672							$	1,503,180
Net interest income					$	23,259							$	19,663
Interest rate spread								2.83	%							2.15	%
Net interest margin								3.37	%							2.77	%

Ratio of average interest-earning assets to average interest-bearing liabilities								137.46	%							139.39	%

Tax equivalent adjustment (3)					$	26							$	41

(1)	Includes non-accrual loans.

(2)	For purposes of the computation of average yield on investment securities available for sale, historical cost balances were utilized; therefore, the yield information does not give effect to changes in fair value that are reflected as a component of shareholders' equity.

(3)	Tax-equivalent adjustment relates to non-taxable investment interest income calculated based on a combined federal and state tax rate of 24% for the two periods.

The following table sets forth the effects of changing rates and volumes on net interest income of the Company for the three and six months ended September 30, 2026, compared to the three and six months ended September 30, 2025. Variances that were insignificant have been allocated based upon the percentage relationship of changes in volume and changes in rate to the total net change (in thousands).


		Three Months Ended September 30,									Six Months Ended September 30,
		2026 vs 2025									2026 vs 2025
		Increase (Decrease) Due to									Increase (Decrease) Due to
								Total									Total
								Increase									Increase
		Volume			Rate			(Decrease)			Volume			Rate			(Decrease)
Interest Income:
Mortgage loans		$	425		$	405		$	830		$	768		$	860		$	1,628
Non-mortgage loans			142			114			256			155			192			347
Investment securities ⁽¹⁾			(707)			571			(136)			(1,607)			1,034			(573)
Interest-earning deposits in other banks			605			(18)			587			1,270			(38)			1,232
Other earning assets			(43)			(2)			(45)			(126)			(23)			(149)
Total interest income			422			1,070			1,492			460			2,025			2,485

Interest Expense:
Regular savings accounts			(3)			(15)			(18)			(7)			(7)			(14)
Interest checking accounts			128			(23)			105			311			208			519
Money market accounts			66			87			153			54			103			157
Certificates of deposit			(3)			(193)			(196)			219			(249)			(30)
Junior subordinated debentures			2			(42)			(40)			3			(87)			(84)
FHLB advances			(487)			(79)			(566)			(1,433)			(238)			(1,671)
Other interest-bearing liabilities			(2)			-			(2)			(4)			1			(3)
Total interest expense			(299)			(265)			(564)			(857)			(269)			(1,126)
Net interest income		$	721		$	1,335		$	2,056		$	1,317		$	2,294		$	3,611

(1)	Interest is presented on a fully tax-equivalent basis.

Provision for Credit Losses. The Company recorded no provision for credit losses for the three and six months ended September 30, 2026 and 2025. The absence of a provision in the current periods reflected the continued adequacy of the allowance for credit losses, as determined through management's evaluation of economic forecast assumptions and other qualitative and quantitative factors. Expected loss estimates incorporated borrower and portfolio-level factors, including client-specific information, changes in risk ratings, projected delinquencies, and the potential impact of economic conditions on borrowers' ability to repay. While the provision for credit losses remained unchanged, the Company did see an increase in nonperforming assets which was primarily due to an increase in nonaccrual commercial real estate loans during the six months ended, September 30, 2026. Net recoveries totaled $374,000 and $462,000 for the three and six months ended September 30, 2026, respectively, compared to net recoveries of $1,000 and $53,000 for the same periods in 2025.

At September 30, 2026, the ACL totaled $15.7 million, or 1.42% of total loans, compared to $15.2 million, or 1.40% of total loans, at March 31, 2026. The ACL remained relatively stable year over year, reflecting the continued strength of the loan portfolio and management's assessment of expected credit losses. The ACL to nonperforming loans coverage ratio was 183.16% at September 30, 2026, compared to 196.39% at March 31, 2026. The decline in the coverage ratio primarily reflected an increase in nonperforming loans relative to the ACL rather than any deterioration in the overall adequacy of the allowance. Management continues to closely monitor the identified credit relationships and does not currently anticipate losses beyond those already reflected in the ACL.

Non-Interest Income. Non-interest income totaled $3.6 million and $7.2 million for the three and six months ended September 30, 2026, respectively, compared to $3.8 million and $7.3 million for the corresponding periods in 2025. The decreases of $226,000 and $34,000 were primarily attributable to approximately $294,000 of employee retention credit income recognized in other non-interest income during the prior-year periods that did not recur in 2026. Partially offsetting these decreases were increases in asset management fee income of $66,000 and $148,000 for the three and six months ended September 30, 2026, respectively, primarily reflecting growth in Trust Company assets under management, and

increases in gains on the sale of REO of $55,000 for both periods. Fees and service charges decreased $90,000 and $21,000 for the three and six month periods ended September 30, 2026, respectively, compared to the same periods the prior year.

Non-Interest Expense. Non-interest expense increased $713,000 and $1.9 million to $12.9 million and $25.8 million for the three and six months ended September 30, 2026, respectively, compared to the same periods in the prior year. The increase was primarily attributable to higher salaries and employee benefits expense, which increased $845,000 and $1.6 million for the three and six months ended September 30, 2026, respectively, primarily due to increased compensation and employee benefit costs associated with strategic investments in the Company's leadership structure and growth initiatives, as well as higher insurance premiums. Data processing expense increased $119,000 and $289,000 for the three and six months ended September 30, 2026, respectively, compared to the same periods in the prior year, reflecting continued investment in technology to support the Company's growth initiatives. State and local taxes increased by $113,000 and $231,000 for the three and six months ended September 30, 2026, respectively, primarily due to higher business and occupation taxes resulting from changes in state tax requirements and increased sales tax activity related to projects supporting the Company's strategic initiatives. Partially offsetting these increases was a decrease in other non-interest expense of $313,000 and $378,000 for the three and six months ended September 30, 2026, respectively, compared to the same periods in the prior year. The decrease was primarily attributable to a one-time business and occupation tax accrual of $248,000 recorded during the quarter ended September 30, 2025, and lower fraud-related losses, which totaled $24,000 during the six months ended September 30, 2026, compared to $193,000 during the corresponding prior-year period.

Income Taxes. The provision for income taxes was $539,000 and $974,000 for the three and six months ended September 30, 2026, respectively, compared to $296,000 and $618,000 for the corresponding periods in the prior year. The increase in income tax expense was primarily attributable to higher pre-tax income. The Company's effective tax rate was 21.5% and 21.0% for the three and six months ended September 30, 2026, respectively, compared to 21.2% and 21.0% for the corresponding periods ended September 30, 2025. Management continues to believe that the Company's deferred tax assets are fully realizable; therefore, no valuation allowance was required as of September 30, 2026. Net deferred tax assets totaled $14.2 million at September 30, 2026, compared to $12.1 million at March 31, 2026.

Riverview Bancorp Inc. published this content on November 13, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 13, 2026 at 19:48 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]

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Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)