Riverview Bancorp in Vancouver, Wash., is projecting a loss of up to $5.6 million in the quarter that ended Dec. 30 after determining that five previously performing real estate loans are now considered to be impaired.
The $873 million-asset company said after the stock market closed Friday that it expects to set aside between $7.3 million and $8 million for potential loan losses for its fiscal- year third quarter, compared to a loss provision of $2.2 million in its fiscal-year second quarter.
In a news release, Riverview said that it determined it needed to increase its provision for loan losses after recent real estate appraisals identified the five loans as impaired. The company also said that it will take a write-down of roughly $2.5 million on foreclosed properties as a result of a recent appraisal on one property and a pending sale on a second.
Riverview's asset quality deteriorated sharply in the second half of 2011. Though the company turned a modest profit in the quarter that ended Sept. 30, its total nonperforming loans more than doubled from just three months earlier, to $29.7 million.
In all, Riverview expects to report a loss of between $4.5 million and $5.6 million in the recently completed quarter and a loss of between $3.8 million and $4.7 million for the first nine months of its 2012 fiscal year, which ends March 31. The company said that even with the loss and the potential impairment of goodwill it expects to remain well capitalized.
In early trading Tuesday Riverview's shares were down 7%, to $2.27.