Item 8. Financial Statements and Supplementary Data

RIVERVIEW BANCORP, INC. AND SUBSIDIARY

Consolidated Financial Statements for the Years Ended March 31, 2019, 2018 and 2017

Report of Independent Registered Public Accounting Firm

TABLE OF CONTENTS

	Page

Report of Independent Registered Public Accounting Firm	62

Consolidated Balance Sheets as of March 31, 2019 and 2018	64

Consolidated Statements of Income for the Years Ended March 31, 2019, 2018 and 2017	65

Consolidated Statements of Comprehensive Income for the Years Ended March 31, 2019, 2018 and 2017	66

Consolidated Statements of Shareholders' Equity for the Years Ended March 31, 2019, 2018 and 2017	67

Consolidated Statements of Cash Flows for the Years Ended March 31, 2019, 2018 and 2017	68

Notes to Consolidated Financial Statements	69

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of
Riverview Bancorp, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Riverview Bancorp, Inc. and Subsidiary (collectively, "the Company") as of March 31, 2019 and 2018, and the related consolidated statements of income, comprehensive income, shareholders' equity, and cash flows for each of the years in the three-year period ended March 31, 2019, and the related notes (collectively referred to as "the financial statements"). We have also audited the Company's internal control over financial reporting as of March 31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended March 31, 2019, in conformity with accounting principles generally accepted in the United States of America (U.S.). Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO.

Basis for Opinion

The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's financial statements and an opinion on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We have served as the Company's auditor since 2015.

Lake Oswego, Oregon

June 14, 2019

RIVERVIEW BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2019 AND 2018

(In thousands, except share and per share data)	2019			2018
ASSETS
Cash and cash equivalents (including interest-earning accounts of $5,844 and $30,052)	$	22,950		$	44,767
Certificates of deposit held for investment		747			5,967
Loans held for sale		909			210
Investment securities:
Available for sale, at estimated fair value		178,226			213,221
Held to maturity, at amortized cost (estimated fair value of $35 and $43)		35			42
Loans receivable (net of allowance for loan losses of $11,457 and $10,766)		864,659			800,610
Real estate owned ("REO")		-			298
Prepaid expenses and other assets		4,596			3,870
Accrued interest receivable		3,919			3,477
Federal Home Loan Bank ("FHLB") stock, at cost		3,644			1,353
Premises and equipment, net		15,458			15,783
Deferred income taxes, net		4,195			4,813
Mortgage servicing rights, net		296			388
Goodwill		27,076			27,076
Core deposit intangible ("CDI"), net		920			1,103
Bank owned life insurance ("BOLI")		29,291			28,557
TOTAL ASSETS	$	1,156,921		$	1,151,535
LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:
Deposits	$	925,068		$	995,691
Accrued expenses and other liabilities		12,536			9,391
Advance payments by borrowers for taxes and insurance		631			637
FHLB advances		56,586			-
Junior subordinated debentures		26,575			26,484
Capital lease obligation		2,403			2,431
Total liabilities		1,023,799			1,034,634

COMMITMENTS AND CONTINGENCIES (See Note 19)

SHAREHOLDERS' EQUITY:
Serial preferred stock, $.01 par value; 250,000 shares authorized; issued and outstanding: none		-			-
Common stock, $.01 par value; 50,000,000 shares authorized
March 31, 2019 – 22,607,712 shares issued and outstanding		226			226
March 31, 2018 – 22,570,179 shares issued and outstanding
Additional paid-in capital		65,094			64,871
Retained earnings		70,428			56,552
Accumulated other comprehensive loss		(2,626	)		(4,748	)
Total shareholders' equity		133,122			116,901
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,156,921		$	1,151,535

See accompanying notes to consolidated financial statements.

RIVERVIEW BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED MARCH 31, 2019, 2018 AND 2017

(In thousands, except share and per share data)	2019		2018		2017

INTEREST AND DIVIDEND INCOME:
Interest and fees on loans receivable	$	44,187	$	39,659	$	31,609
Interest on investment securities – taxable		4,456		4,648		3,550
Interest on investment securities – nontaxable		146		95		25
Other interest and dividends		329		558		443
Total interest and dividend income		49,118		44,960		35,627

INTEREST EXPENSE:
Interest on deposits		996		1,208		1,151
Interest on borrowings		1,819		1,141		718
Total interest expense		2,815		2,349		1,869
Net interest income		46,303		42,611		33,758
Provision for loan losses		50		-		-
Net interest income after provision for loan losses		46,253		42,611		33,758

NON-INTEREST INCOME:
Fees and service charges		6,699		5,779		5,177
Asset management fees		3,791		3,448		2,988
Net gains on sales of loans held for sale		317		641		656
BOLI		734		819		760
Other, net		317		317		433
Total non-interest income, net		11,858		11,004		10,014

NON-INTEREST EXPENSE:
Salaries and employee benefits		22,320		21,743		19,356
Occupancy and depreciation		5,334		5,454		4,819
Data processing		2,467		2,313		2,111
Amortization of CDI		183		232		27
Advertising and marketing		769		747		754
FDIC insurance premium		326		476		356
State and local taxes		651		605		609
Telecommunications		353		417		317
Professional fees		1,426		1,181		1,628
Litigation settlement		-		-		500
Other		1,870		2,450		2,504
Total non-interest expense		35,699		35,618		32,981

INCOME BEFORE INCOME TAXES		22,412		17,997		10,791
PROVISION FOR INCOME TAXES		5,146		7,755		3,387
NET INCOME	$	17,266	$	10,242	$	7,404

Earnings per common share:
Basic	$	0.76	$	0.45	$	0.33
Diluted		0.76		0.45		0.33
Weighted average number of common shares outstanding:
Basic		22,588,395		22,531,480		22,478,306
Diluted		22,659,594		22,623,455		22,548,340

See accompanying notes to consolidated financial statements.

RIVERVIEW BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED MARCH 31, 2019, 2018 AND 2017

(In thousands)	2019		2018			2017

Net income	$	17,266	$	10,242		$	7,404

Other comprehensive income (loss):
Net unrealized holding gain (loss) from available for sale investment securities arising
during the period, net of tax of ($629), $871 and $1,581, respectively		2,122		(2,719	)		(2,872	)

Reclassification adjustment for other than temporary impairment ("OTTI") of available for
sale investment security included in income, net of tax of $0, $0 and ($85) respectively		-		-			155

Reclassification adjustment of net gain from sale of available for sale investment
securities included in income, net of tax of $0, $0 and $29, respectively		-		-			(53	)
Total other comprehensive income (loss), net		2,122		(2,719	)		(2,770	)

Total comprehensive income, net	$	19,388	$	7,523		$	4,634

See accompanying notes to consolidated financial statements.

RIVERVIEW BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE YEARS ENDED MARCH 31, 2019, 2018 AND 2017

	Common Stock									Unearned Shares Issued to Employee Stock			Accumulated
(In thousands, except share data)	Shares		Amount		Additional Paid-In Capital		Retained Earnings			Ownership Plan ("ESOP")			Other Comprehensive Income (Loss)			Total

Balance April 1, 2016		22,507,890	$	225	$	64,418	$	42,728		$	(181	)	$	1,083		$	108,273

Net income		-		-		-		7,404			-			-			7,404
Cash dividend on common stock ($0.08 per share)		-		-		-		(1,797	)		-			-			(1,797	)
Exercise of stock options		3,000		-		11		-			-			-			11
Earned ESOP shares		-		-		39		-			104			-			143
Other comprehensive loss, net		-		-		-		-			-			(2,770	)		(2,770	)

Balance March 31, 2017		22,510,890		225		64,468		48,335			(77	)		(1,687	)		111,264

Net income		-		-		-		10,242			-			-			10,242
Cash dividend on common stock ($0.105 per share)		-		-		-		(2,367	)		-			-			(2,367	)
Exercise of stock options		59,289		1		244		-			-			-			245
Stock-based compensation expense		-		-		88		-			-			-			88
Reclassification of certain stranded income tax effects as a result of change in federal corporate income tax rate (see Note 1)		-		-		-		342			-			(342	)		-
Earned ESOP shares		-		-		71		-			77			-			148
Other comprehensive loss, net		-		-		-		-			-			(2,719	)		(2,719	)

Balance March 31, 2018		22,570,179		226		64,871		56,552			-			(4,748	)		116,901

Net income		-		-		-		17,266			-			-			17,266
Cash dividend on common stock ($0.15 per share)		-		-		-		(3,390	)		-			-			(3,390	)
Exercise of stock options		37,533		-		179		-			-			-			179
Stock-based compensation expense		-		-		44		-			-			-			44
Other comprehensive income, net		-		-		-		-			-			2,122			2,122

Balance March 31, 2019		22,607,712	$	226	$	65,094	$	70,428		$	-		$	(2,626	)	$	133,122

See accompanying notes to consolidated financial statements.

RIVERVIEW BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED MARCH 31, 2019, 2018 AND 2017

(In thousands)	2019			2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	17,266		$	10,242		$	7,404
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,718			2,917			2,746
Purchased loans amortization (accretion), net		(147	)		(277	)		441
Provisions for loan losses		50			-			-
Provision (benefit) for deferred income taxes		(11	)		3,668			3,103
Expense related to ESOP		-			148			143
Stock-based compensation expense		44			88			-
Increase in deferred loan origination fees, net of amortization		498			498			543
Origination of loans held for sale		(11,105	)		(20,502	)		(21,032	)
Proceeds from sales of loans held for sale		10,579			21,204			21,477
Writedown of REO		-			-			30
Loss on impairment of investment security		-			-			240
Net gains on sales of loans held for sale, sales of investment securities and sale of REO		(682	)		(725	)		(731	)
Income from BOLI		(734	)		(819	)		(760	)
BOLI death benefit in excess of cash surrender value		-			-			(423	)
Changes in certain other assets and liabilities:
Prepaid expenses and other assets		(868	)		(212	)		(369	)
Accrued interest receivable		(442	)		(536	)		(291	)
Accrued expenses and other liabilities		2,988			(3,755	)		5,538
Net cash provided by operating activities		20,154			11,939			18,059

CASH FLOWS FROM INVESTING ACTIVITIES:
Loan repayments (originations), net		(34,427	)		11,156			(37,103	)
Purchases of loans receivable		(29,929	)		(43,016	)		(5,746	)
Principal repayments on investment securities available for sale		26,519			28,569			29,782
Purchases of investment securities available for sale		-			(47,494	)		(92,418	)
Proceeds from calls, maturities, and sales of investment securities available for sale		10,000			950			7,261
Principal repayments on investment securities held to maturity		7			22			11
Purchases of premises and equipment and capitalized software		(1,046	)		(753	)		(598	)
Redemption of certificates of deposit held for investment		5,220			5,075			5,727
Purchases of FHLB stock, net		(2,291	)		(172	)		(121	)
Cash acquired, net of cash consideration paid in business combination		-			-			15,116
Proceeds from death benefit on BOLI		-			-			1,236
Proceeds from sales of REO and premises and equipment		976			81			262
Net cash used in investing activities		(24,971	)		(45,582	)		(76,591	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits		(70,568	)		15,771			69,470
Dividends paid		(3,163	)		(2,140	)		(1,799	)
Proceeds from borrowings		326,956			55,980			23,200
Repayment of borrowings		(270,370	)		(55,980	)		(23,200	)
Net increase (decrease) in advance payments by borrowers for taxes and insurance		(6	)		(56	)		84
Principal payments on capital lease obligation		(28	)		(23	)		(21	)
Proceeds from exercise of stock options		179			245			11
Net cash provided by (used in) financing activities		(17,000	)		13,797			67,745

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(21,817	)		(19,846	)		9,213
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		44,767			64,613			55,400
CASH AND CASH EQUIVALENTS, END OF YEAR	$	22,950		$	44,767		$	64,613
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$	2,686		$	2,176		$	1,655
Income taxes		6,877			3,280			285
NONCASH INVESTING AND FINANCING ACTIVITIES:
Dividends declared and accrued in other liabilities	$	904		$	677		$	450
Other comprehensive income (loss)		2,751			(3,590	)		(4,295	)
Income tax effect related to other comprehensive income (loss)		(629	)		871			1,525
Business combinations (See Note 3)
Fair value of assets acquired		-			-			(145,386	)
Fair value of liabilities assumed		-			-			134,810

See accompanying notes to consolidated financial statements.

RIVERVIEW BANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED MARCH 31, 2019, 2018 and 2017

1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation – The accompanying consolidated financial statements include the accounts of Riverview Bancorp, Inc.; its wholly-owned subsidiary, Riverview Community Bank (the "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.

At March 31, 2019 and 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 year ended March 31, 2019 and 2018, the Trust Company incurred $44,000 and $88,000, respectively, of stock-based compensation expense related to these options. No Trust Company stock options were exercised during the years ended March 31, 2019, 2018 and 2017.

On February 17, 2017, Riverview Bancorp, Inc. and 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 accounting principles generally accepted in the United States of America ("generally accepted accounting principles" or "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.

The Company has three subsidiary grantor trusts which were established in connection with the issuance of trust preferred securities (see Note 12). In accordance with GAAP, the accounts and transactions of the trusts are not included in the accompanying consolidated financial statements.

Nature of Operations – The Bank is a community-oriented financial institution which operates 18 branches in rural and suburban communities in southwest Washington State and Multnomah, Washington and Marion counties of Oregon. The Bank is engaged primarily in the business of attracting deposits from the general public and using such funds, together with other borrowings, to make various commercial business, commercial real estate, land, multi-family real estate, real estate construction and consumer loans. Additionally, the Trust Company offers trust and investment services and Riverview Services acts as a trustee for deeds of trust on mortgage loans granted by the Bank and receives a reconveyance fee for each deed of trust.

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, which is included in other non-interest income in the accompanying consolidated statements of income for the year ended March 31, 2019. This purchase and assumption transaction did not include the sale of any loans, or the 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 consolidated statement of income for the year ended March 31, 2019.

Business segments – The Company's operations are managed along two operating segments, consisting of banking operations performed by the Bank and trust and investment services performed by the Trust Company. While the chief operating decision maker uses financial information related to these segments to analyze business performance and allocate resources, the trust and investment services segment does not meet the quantitative threshold under GAAP to be considered a reportable segment. As such, these operating segments are aggregated into a single reportable operating segment in the consolidated financial statements. No revenues are derived from foreign countries.

Use of Estimates in the Preparation of Consolidated Financial Statements – The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of related revenue and expense during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents – Cash and cash equivalents include amounts on hand, due from banks and interest-earning deposits in other banks. Cash and cash equivalents have a maturity of 90 days or less at the time of purchase.

Certificates of Deposit Held for Investment – Certificates of deposit held for investment include amounts invested with financial institutions at a stated interest rate and maturity date. Early withdrawal penalties apply; however, the Company plans to hold these investments to maturity.

Loans Held for Sale – The Company identifies loans held for sale at the time of origination and such loans are carried at the lower of aggregate cost or estimated fair value. Estimated fair values are derived from available market quotations for comparable pools of mortgage loans. Adjustments for unrealized losses, if any, are charged to income.

Gains or losses on sales of loans held for sale are recognized at the time of sale and are determined by the difference between the net sales proceeds and the allocated basis of these loans sold. The Company capitalizes mortgage servicing rights ("MSRs") acquired through the sale of originated mortgage loans or the securitization of mortgage loans with servicing rights retained. Upon sale of mortgage loans held for sale, the total cost of the loans designated for sale is allocated to mortgage loans with and without MSRs based on their relative fair values. The MSRs are included as a component of net gains on sales of loans held for sale. The MSRs are amortized in proportion to and over the estimated period of the net servicing income and such amortization is reflected as a component of loan servicing income and is included in the consolidated statements of income in other non-interest income.

Investment Securities – Investments in debt securities are classified as held to maturity when the Company has the ability and positive intent to hold such securities to maturity. Investments in debt securities held to maturity are carried at amortized cost. Unrealized losses on investments in debt securities held to maturity due to fluctuations in fair value are recognized when it is determined that a credit-related other than temporary decline in value has occurred. Investments in debt securities bought and held principally for the purpose of sale in the near-term are classified as trading securities. Investments in debt securities that the Company intends to hold for an indefinite period, but not necessarily to maturity, are classified as available for sale. Such debt securities may be sold to implement the Company's asset/liability management strategies and in response to changes in interest rates and similar factors. Investments in debt securities available for sale are reported at estimated fair value. Unrealized gains and losses on investment securities available for sale, net of the related deferred tax effect, are included in total comprehensive income and are reported as a net amount in a separate component of shareholders' equity entitled "accumulated other comprehensive income (loss)." Realized gains and losses on sales of investments in debt securities available for sale, determined using the specific identification method, are included in earnings on the trade date. Amortization of premiums and accretion of discounts are recognized in interest income over the period to contractual maturity or expected call, if sooner. The Company's investment portfolio consists of debt securities and does not include any equity securities.

The Company analyzes investments in debt securities for OTTI on a quarterly basis. OTTI is separated into a credit component and noncredit component. Credit component losses are reported in non-interest income when the present value of expected future cash flows is less than the amortized cost. Noncredit component losses are recorded in other comprehensive income (loss) when the Company (1) does not intend to sell the security or (2) is not more likely than not to have to sell the security prior to the security's anticipated recovery. If the Company is likely to sell an investment in a debt security, any noncredit component losses are recognized and are reported in non-interest income.

Loans Receivable – Loans are stated at the amount of unpaid principal, reduced by net deferred loan origination fees and an allowance for loan losses. Interest on loans is accrued daily based on the principal amount outstanding.

Loans are reviewed regularly and it is the Company's general policy that a loan is past due when it is 30 days 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.

Loan origination and commitment fees and certain direct loan origination costs are deferred and amortized as an adjustment of the yield of the related loan.

Acquired Loans – Purchased loans, including loans acquired in business combinations, are recorded at their estimated fair value at the acquisition date. Credit discounts are included in the determination of fair value; therefore, an allowance for

loan losses is 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 excess of the cash flows expected to be collected over a PCI loan's carrying value is considered to be the accretable yield and is recognized as interest income over the estimated life of the PCI loan using the effective yield method. The excess of the undiscounted contractual balances due over the cash flows expected to be collected is considered to be the nonaccretable difference. The nonaccretable difference represents the Company's estimate of the credit losses expected to occur and would be considered in determining the estimated fair value of the loans as of the acquisition date. Subsequent to the acquisition date, any increases in expected cash flows over those expected at the purchase date in excess of fair value are adjusted through a change to the accretable yield on a prospective basis. Any subsequent decreases in expected cash flows attributable to credit deterioration are recognized by recording an allowance for loan losses. The Company had no PCI loans as of March 31, 2019 and 2018.

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.

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 loan 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 loan 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.

A loan is considered impaired when it is probable that the Company will be unable to collect all amounts due (principal and interest) according to the contractual terms of the loan agreement. Typically, factors used in determining if a loan is impaired include, but are not limited to, whether the loan is 90 days or more delinquent, internally designated as substandard or worse, on non-accrual status or represents a troubled debt restructuring ("TDR"). The majority of the Company's impaired loans are considered collateral dependent. When a loan is considered collateral dependent, impairment is measured using the estimated value of the underlying collateral, less any prior liens, and when applicable, less estimated selling costs. For impaired loans that are not collateral dependent, impairment is measured using the present value of expected future cash flows, discounted at the loan's original effective interest rate. When the estimated net realizable value of the impaired loan

is less than the recorded investment in the loan (including accrued interest, net deferred loan fees or costs, and unamortized premium or discount), an impairment is recognized by adjusting an allocation of the allowance for loan losses. Subsequent to the initial allocation of allowance to the individual loan, the Company may conclude that it is appropriate to record a charge-off of the impaired portion of the loan. When a charge-off is recorded, the loan balance is reduced and the specific allowance is eliminated. Generally, when a collateral dependent loan is initially measured for impairment and has not had an appraisal of the collateral in the last six months, the Company obtains an updated market valuation. Subsequently, the Company generally obtains an updated market valuation of the collateral on an annual basis. The collateral valuation may occur more frequently if the Company determines that there is an indication that the market value may have declined.

In accordance with the Company's policy guidelines, unsecured loans are generally charged-off when no payments have been received for three consecutive months unless an alternative action plan is in effect. Consumer installment loans delinquent six months or more that have not received at least 75% of their required monthly payments in the last 90 days are charged-off. In addition, loans discharged in bankruptcy proceedings are charged-off. Loans under bankruptcy protection with no payments received for four consecutive months are charged-off. The outstanding balance of a secured loan that is in excess of the net realizable value of the underlying collateral is generally charged-off if no payments are received for four to five consecutive months. However, charge-offs are postponed if alternative proposals to restructure, obtain additional guarantors, obtain additional assets as collateral or a potential sale of the underlying collateral would result in full repayment of the outstanding loan balance. Once any other potential sources of repayment are exhausted, the impaired portion of the loan is charged-off. Regardless of whether a loan is unsecured or collateralized, once an amount is determined to be a confirmed loan loss it is charged off.

A provision for loan losses is charged against income and is added to the allowance for loan losses based on regular assessments of the loan portfolio. The allowance for loan losses is allocated to certain loan categories based on the relative risk characteristics, asset classifications and actual loss experience of the loan portfolio. While management has allocated the allowance for loan losses to various loan portfolio segments, the allowance is general in nature and is available for the loan portfolio in its entirety.

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.

Allowance for Unfunded Loan Commitments – The allowance for unfunded loan commitments is maintained at a level believed by management to be sufficient to absorb estimated probable losses related to these unfunded credit facilities. The determination of the adequacy of the allowance is based on periodic evaluations of the unfunded credit facilities including an assessment of the probability of commitment usage, credit risk factors for loans outstanding to these same customers, and the terms and expiration dates of the unfunded credit facilities. The allowance for unfunded loan commitments is included in accrued expenses and other liabilities in the consolidated balance sheets, with changes to the balance charged against non-interest expense.

Real Estate Owned ("REO") – REO consists of properties acquired through foreclosure and is initially recorded at the estimated fair value of the properties, less estimated costs of disposal. At the time of foreclosure, specific charge-offs are taken against the allowance for loan losses based upon a detailed analysis of the fair value of collateral on the underlying loans on which the Company is in the process of foreclosing. Subsequently, the Company performs an evaluation of the properties and records a valuation allowance with an offsetting charge to REO expenses for any declines in value. Management considers third-party appraisals, as well as independent fair market value assessments from realtors or persons involved in selling real estate, in determining the estimated fair value of particular properties. In addition, as certain of these third-party appraisals and independent fair market value assessments are only updated periodically, changes in the values of specific properties may have occurred subsequent to the most recent appraisals. The amounts the Company will ultimately recover and record in the accompanying consolidated financial statements from the disposition of REO may differ from the amounts used in arriving at the net carrying value of these assets because of future market factors beyond the Company's control or because of changes in the Company's strategy for the sale of the property. Costs relating to development and improvement of the properties or assets are capitalized, while costs relating to holding the properties or assets are expensed.

Federal Home Loan Bank Stock – The Bank, as a member of the Federal Home Loan Bank of Des Moines ("FHLB"), is required to maintain a minimum investment in capital stock of the FHLB based on specific percentages of its outstanding FHLB advances. The Company's investment in FHLB stock is carried at cost, which approximates fair value. The Company views its investment in FHLB stock as a long-term investment. Accordingly, when evaluating FHLB stock for impairment, the value is determined based on the ultimate redemption of the par value rather than recognizing temporary declines in value. The determination of whether a decline affects the ultimate redemption value is influenced by criteria such as: (1) the significance of any decline in net assets of the FHLB as compared to the capital stock amount of the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, (3) the impact of legislative and regulatory changes on institutions and, accordingly, the customer base of the FHLB, and (4) the liquidity position of the FHLB. The Company evaluated its investment in FHLB stock for OTTI, consistent with its accounting policy. Based on the Company's evaluation, the Company determined there is not any OTTI on its FHLB stock at March 31, 2019.

Premises and Equipment – Premises and equipment are stated at cost less accumulated depreciation and amortization. Leasehold improvements are amortized over the estimated term of the related lease or the estimated useful life of the improvements, whichever is less. Depreciation is generally computed on the straight-line method over the following estimated useful lives: buildings and improvements – up to 45 years; furniture and equipment – 3 to 20 years; and leasehold improvements – 15 to 25 years, or estimated lease term if shorter. Gains or losses on dispositions are reflected in earnings. The cost of maintenance and repairs is charged to expense as incurred. Assets are reviewed for impairment when events indicate their carrying value may not be recoverable. If management determines impairment exists the asset is reduced by an offsetting charge to expense.

Assets held under the Company's capitalized lease, net of accumulated amortization, are included in premises and equipment. The assets held under the capitalized lease are amortized on a straight-line basis over the lease term and the amortization is included in depreciation and amortization expense.

MSRs – The Company services certain loans that it has originated and sold to the Federal Home Loan Mortgage Corporation ("FHLMC"). Loan servicing includes collecting payments; remitting funds to investors, insurance companies and tax authorities; collecting delinquent payments; and foreclosing on properties when necessary. Fees earned for servicing loans for the FHLMC are reported as income when the related mortgage loan payments are collected. Loan servicing costs are charged to expense as incurred. In addition, the Company has recorded MSRs, which represent the rights to service loans.

The Company records its originated MSRs at fair value in accordance with GAAP, which requires the Company to allocate the total cost of all mortgage loans sold between the MSRs and the loans (without the MSRs) based on their relative fair values if it is practicable to estimate those fair values. The Company stratifies its MSRs based on the predominant characteristics of the underlying financial assets including the coupon interest rate and the contractual maturity of the mortgage. An estimated fair value of MSRs is determined quarterly using a discounted cash flow model. The model estimates the present value of the future net cash flows of the servicing loan portfolio based on various factors, such as servicing costs, servicing income, expected prepayment speeds, discount rate, loan maturity and interest rate. Market sources are used to determine prepayment speeds, ancillary income, servicing cost and pre-tax required yield. The effect of changes in market interest rates on estimated rates of loan prepayments represents the predominant risk characteristic underlying the MSRs portfolio. The Company is amortizing the MSRs in proportion to and over the period of estimated net servicing income.

MSRs are reviewed quarterly for impairment based on their estimated fair value. The estimated fair value of the MSRs, for the purposes of impairment, is measured using the methods described above. Impairment losses are recognized through a valuation allowance for each impaired stratum, with any associated provision recorded as a component of loan servicing income.

Business Combinations, CDI and Goodwill – GAAP requires the total purchase price in a business combination to be allocated to the estimated fair values of assets acquired and liabilities assumed, including certain intangible assets. Subsequent adjustments to the initial allocation of the purchase price may be made related to fair value estimates for which all relevant information has not been obtained, known, or discovered relating to the acquired entity during the allocation period (which is the period of time required to identify and measure the estimated fair values of the assets acquired and liabilities assumed in a business combination). The allocation period is generally limited to one year following consummation of a business combination.

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. The Company recorded CDI of approximately $1.36 million in connection with the assumption of the MBank deposits during the year ended March 31, 2017 (see Note 3). At both March 31, 2019 and 2018, gross CDI was $1.36 million. At March 31, 2019 and 2018, accumulated amortization was $443,000 and $260,000, respectively. The amortization expense for CDI in future years is estimated to be $160,000, $140,000, $125,000, $116,000, $108,000 and $271,000 for the years ended March 31, 2020, 2021, 2022, 2023, 2024 and thereafter, respectively.

Goodwill and certain other intangibles generally arise from business combinations. Goodwill and other intangibles generated from business combinations that are deemed to have indefinite lives are not subject to amortization and are instead tested for impairment not less than annually. The Company performs an annual review in the third quarter of each year, or more frequently if indicators of potential impairment exist, to determine if the recorded goodwill is impaired.

BOLI – BOLI policies are recorded at their cash surrender value less applicable surrender charges. Income from BOLI is recognized when earned.

Advertising and Marketing – Costs incurred for advertising, merchandising, market research, community investment and business development are classified as advertising and marketing expense and are expensed as incurred.

Income Taxes – 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.

Valuation allowances are established to reduce the net carrying amount of deferred tax assets if it is determined to be more likely than not that all or some portion of the potential deferred tax asset will not be realized. The Company files a consolidated federal income tax return. The Bank provides for income taxes separately and remits to the Company amounts currently due.

Transfers of financial assets – Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Trust Assets – Assets held by the Trust Company in a fiduciary or agency capacity for trust customers are not included in the consolidated financial statements because such items are not assets of the Company. Assets totaling $646.0 million and $484.3 million were held in trust as of March 31, 2019 and 2018, respectively.

Earnings Per Share – GAAP requires all companies whose capital structure includes dilutive potential common shares to make a dual presentation of basic and diluted earnings per share for all periods presented. The Company's basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period, excluding restricted stock and unallocated shares owned by the ESOP. The Company's diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised and has been computed after giving consideration to the weighted average diluted effect of the Company's stock options.

Stock-Based Compensation – The Company measures compensation cost for all stock-based awards based on the grant-date fair value of the awards and recognizes compensation cost over the service period of stock-based awards. The fair value of stock options is determined using the Black-Scholes valuation model.

ESOP – The Company sponsors a leveraged ESOP; however, all ESOP debt was fully repaid during the year ended March 31, 2018. As shares were released, compensation expense was recorded equal to the then current market price of the shares and the shares became available for earnings per share calculations. The Company recorded cash dividends on unallocated shares as a reduction of debt and accrued interest. See Note 14 for further discussion.

New Accounting Pronouncements – In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers", which created FASB Accounting Standards Codification ("ASC") Topic 606 ("ASC 606"). ASC 606 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASC 606 was effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2017. The Company adopted ASC 606 on April 1, 2018 using the modified retrospective approach. Therefore, the comparative information for prior periods has not been adjusted and continues to be reported under superseded ASC 605. There was no cumulative effect adjustment as of April 1, 2018, and there were no material changes to the timing or amount of revenue recognized for the year ended March 31, 2019; however, additional disclosures were incorporated in the Notes to the Consolidated Financial Statements upon adoption. The majority of the Company's revenue is comprised of interest income from financial assets, which is explicitly excluded from the scope of ASC 606. The Company elected to apply the practical expedient pursuant to ASC 606 and therefore does not disclose information about remaining performance obligations that have an original expected term of one year or less and allows the Company to expense costs related to obtaining a contract as incurred when the amortization period would have been one year or less. See Note 18 for additional discussion.

In January 2016, the FASB issued ASU 2016-01, "Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"). ASU 2016-01 generally requires equity investments – except those accounted for under the equity method of accounting or those that result in consolidation of the investee – to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. ASU 2016-01 is intended to simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. ASU 2016-01 also eliminates certain disclosures related to the fair value of financial instruments and requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. ASU 2016-01 was effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted this ASU on April 1, 2018. As required by ASU 2016-01, the fair value disclosure for loans receivable was computed using an exit price notion and deposits with no stated maturity are no longer included in the fair value disclosures in Note 17.

In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"). ASU 2016-02 created FASB ASC Topic 842 ("ASC 842") related to leases and is intended to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities in the balance sheet and disclosure of key information about leasing arrangements. The principal change required by ASU 2016-02 relates to lessee accounting, and is that for operating leases, a lessee is required to (1) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position, (2) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term generally on a straight-line basis, and (3) classify all cash payments within operating activities in the statement of cash flows. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. ASU 2016-02 also changes disclosure requirements related to leasing activities and requires certain qualitative disclosures along with specific quantitative disclosures. ASU 2016-02 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Early application of ASU 2016-02 is permitted. In July 2018, the FASB issued ASU 2018-11, "Leases (Topic 842) Targeted Improvements" ("ASU 2018-11"). The amendments in this ASU provide entities with an additional (and optional) transition method to adopt ASU 2016-02. Under this new transition method, an

entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity's reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP. The Company will adopt the provisions of ASC 842 effective April 1, 2019 utilizing the transition method allowed under ASU 2018-11 and will not restate comparative periods. The Company will elect the package of practical expedients permitted under ASC 842's transition guidance, which allows the Company to carryforward its historical lease classifications and its assessment as to whether a contract is or contains a lease. The Company will also elect to not recognize lease assets and lease liabilities for leases with an initial term of 12 months or less. The Company expects the adoption of ASC 842 will result in an increase in other assets and an increase in other liabilities of approximately $5.6 million. The Company does not expect the adoption of ASC 842 to have a material impact on its future consolidated statements of income.

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). ASU 2016-13 replaces the existing incurred losses methodology for estimating allowances with a current expected credit losses methodology with respect to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held to maturity investment securities and off-balance sheet commitments. In addition, ASU 2016-13 requires credit losses relating to available for sale debt securities to be recorded through an allowance for credit losses rather than as a reduction of carrying amount. ASU 2016-13 also changes the accounting for PCI debt securities and loans. ASU 2016-13 retains many of the current disclosure requirements in GAAP and expands certain disclosure requirements. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Upon adoption, the Company expects a change in the processes and procedures to calculate the allowance for loan losses, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. In addition, the current accounting policy and procedures for other-than-temporary impairment on investment securities available for sale will be replaced with an allowance approach. The Company is reviewing the requirements of ASU 2016-13 and has begun developing and implementing processes and procedures to ensure it is fully compliant with the amendments at the adoption date. At this time, management anticipates the allowance for loan losses will increase as a result of the implementation of ASU 2016-13; however, until its evaluation is complete, the magnitude of the increase will not be known.

In January 2017, the FASB issued ASU 2017-04, "Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"). ASU 2017-04 simplifies the subsequent measurement of goodwill and eliminates Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early application of ASU 2017-04 is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of ASU 2017-04 is not expected to have a material impact on the Company's future consolidated financial statements.

In March 2017, the FASB issued ASU 2017-08, "Receivables – Nonrefundable Fees and Other Costs: Premium Amortization on Purchased Callable Debt Securities" ("ASU 2017-08"). ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium to the earliest call date. ASU 2017-08 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of ASU 2017-08 is not expected to have a material impact on the Company's future consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, "Income Statement – Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"). ASU 2018-02 allows a reclassification from accumulated other comprehensive income ("AOCI") to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (the "Tax Act") (see Note 13). The amount of the reclassification would be calculated on the basis of the difference between the historical and newly enacted tax rates for deferred tax liabilities and assets related to items within AOCI. ASU 2018-02 was effective for fiscal years beginning after December 15, 2018, and early adoption was permitted. ASU 2018-02 should be applied either in the period of adoption or retrospectively to each

period in which the effect of the change in the federal corporate tax rate is recognized. The Company elected to early adopt ASU 2018-02 and, as a result, reclassified $342,000 of stranded tax effects from AOCI to retained earnings in the fourth quarter of the fiscal year ended March 31, 2018.

In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU 2018-13"). ASU 2018-13 modifies the disclosure requirements for fair value measurements. The following disclosure requirements were removed from ASC Topic 820 – Fair Value Measurement: (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; (2) the policy for timing of transfers between levels; and (3) the valuation processes for Level 3 fair value measurements. ASU 2018-13 clarifies that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. In addition, ASU 2018-13 adds new disclosure requirements for Level 3 measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for any removed or modified disclosures. The adoption of ASU 2018-13 is not expected to have a material impact on the Company's future consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" ("ASU 2018-15"). The amendments in ASU 2018-15 broaden the scope of ASC Subtopic 350-40 to include costs incurred to implement a hosting arrangement that is a service contract. The amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The costs are capitalized or expensed depending on the nature of the costs and the project stage during which they are incurred, consistent with the accounting for internal-use software costs. The amendments in ASU 2018-15 result in consistent capitalization of implementation costs of a hosting arrangement that is a service contract and implementation costs incurred to develop or obtain internal use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in ASU 2018-15. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The adoption of ASU 2018-15 is not expected to have a material impact on the Company's future consolidated financial statements.

Reclassifications – 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 shareholders' equity.

2.	RESTRICTED ASSETS

Regulations of the Board of Governors of the Federal Reserve System require that the Bank maintain minimum reserve balances either on hand or on deposit with the Federal Reserve Bank of San Francisco ("FRB") based on a percentage of deposits. The amounts of such balances as of March 31, 2019 and 2018 were $1.8 million and $1.7 million, respectively, which were in compliance with the minimum reserve requirements.

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

The acquired loan portfolio was valued using Level 3 inputs (see Note 17) 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.

The operating results of the Company for the years ended March 31, 2019, 2018 and 2017 included operating results produced by the MBank transaction for the years ended March 31, 2019 and 2018 and the period from February 17, 2017 to March 31, 2017, respectively. Disclosure of the amount of MBank's revenue and net income (excluding integration costs) included in the Company's consolidated statements of income is impracticable due to the integration of the operations and accounting for the transaction.

For illustrative purposes only, the following table presents certain unaudited pro forma information for the years ended March 31, 2017 and 2016. This unaudited estimated pro forma financial information was calculated as if MBank had been acquired as of the beginning of the year prior to the date of acquisition. This unaudited pro forma information combines the historical results of MBank with the Company's consolidated historical results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. The pro forma information is not indicative of what would have occurred had the transaction occurred as of the beginning of the year prior to the acquisition. The unaudited pro forma information does not consider any changes to the provision for credit losses resulting from recording loan assets at fair value. Additionally, the Company expects to achieve further operating cost savings and other business synergies, including revenue growth as a result of the transaction, which are not reflected in the pro forma amounts that follow. As a result, actual amounts would have differed from the unaudited pro forma information presented (in thousands):

	For the Year Ended March 31,
Unaudited Pro Forma	2017		2016

Total revenues (net interest income plus non-interest income)	$	49,290	$	45,261
Net income		9,277		8,260

The following table shows the impact of the acquisition-related expenses related to the MBank transaction for the year ended March 31, 2017 to the various components of noninterest expense (in thousands):

Salaries and employee benefits	$	26
Occupancy and depreciation		6
Data processing		63
Professional fees		653
Total impact of acquisition related costs to noninterest expense	$	748

4.	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
March 31, 2019
Available for sale:
Municipal securities	$	8,885	$	30	$	(34	)	$	8,881
Agency securities		12,426		22		(107	)		12,341
Real estate mortgage investment conduits ⁽¹⁾		40,835		-		(673	)		40,162
Residential mortgage-backed securities ⁽¹⁾		77,402		7		(1,588	)		75,821
Other mortgage-backed securities ⁽²⁾		42,133		12		(1,124	)		41,021
Total available for sale	$	181,681	$	71	$	(3,526	)	$	178,226

Held to maturity:
Residential mortgage-backed securities ⁽³⁾	$	35	$	-	$	-		$	35

⁽¹⁾ Comprised of 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.

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
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 FHLMC, FNMA and GNMA issued securities.
⁽²⁾ Comprised of SBA issued securities and CRE secured securities issued by FNMA.
⁽³⁾ Comprised of FHLMC and FNMA issued securities.

The contractual maturities of investment securities as of March 31, 2019 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	$	4,961	$	4,949	$	-	$	-
Due after one year through five years		8,585		8,505		32		32
Due after five years through ten years		48,050		47,373		-		-
Due after ten years		120,085		117,399		3		3
Total	$	181,681	$	178,226	$	35	$	35

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

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
March 31, 2019

Available for sale:
Municipal securities	$	-	$	-		$	6,554	$	(34	)	$	6,554	$	(34	)
Agency securities		-		-			6,861		(107	)		6,861		(107	)
Real estate mortgage investment conduits ⁽¹⁾		-		-			40,126		(673	)		40,126		(673	)
Residential mortgage-backed securities ⁽¹⁾		-		-			74,288		(1,588	)		74,288		(1,588	)
Other mortgage-backed securities ⁽²⁾		-		-			40,409		(1,124	)		40,409		(1,124	)
Total available for sale	$	-	$	-		$	168,238	$	(3,526	)	$	168,238	$	(3,526	)

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 ⁽¹⁾		50,941		(1,192	)		37,823		(1,523	)		88,764		(2,715	)
Other mortgage-backed securities ⁽²⁾		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, FNMA and GNMA issued securities.
⁽²⁾ Comprised of SBA 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 years ended March 31, 2019 and 2018. Gross realized gains on sales of investment securities available for sale totaled $82,000 for the year ended March 31, 2017 and were recorded in other non-interest income in the 2017 consolidated statement of income. The income tax of $29,000 related to these realized gains was recorded in the provision for income taxes in the consolidated statement of income for the year ended March 31, 2017.

Investment securities available for sale with an amortized cost of $5.8 million and $3.7 million and a fair value of $5.7 million and $3.6 million at March 31, 2019 and 2018, respectively, were pledged as collateral for government public funds held by the Bank.

5.	LOANS RECEIVABLE

Loans receivable at March 31, 2019 and 2018 are reported net of deferred loan fees totaling $4.0 million and $3.6 million, respectively. Loans receivable are also reported net of discounts and premiums, totaling $1.5 million and $1.8 million, respectively, as of March 31, 2019, 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):

	March 31, 2019		March 31, 2018
Commercial and construction
Commercial business	$	162,796	$	137,672
Commercial real estate		461,432		450,597
Land		17,027		15,337
Multi-family		51,570		63,080
Real estate construction		90,882		39,584
Total commercial and construction		783,707		706,270

Consumer
Real estate one-to-four family		84,053		90,109
Other installment ⁽¹⁾		8,356		14,997
Total consumer		92,409		105,106

Total loans		876,116		811,376

Less: Allowance for loan losses		11,457		10,766
Loans receivable, net	$	864,659	$	800,610

⁽¹⁾ Consists primarily of purchased automobile loans totaling $5.8 million and $12.9 million at March 31, 2019 and 2018, respectively.

The Company's loan portfolio includes originated and purchased loans. Originated loans and purchased loans for which there was no evidence of credit deterioration at their acquisition date and for which it was probable that the Company would be able to collect all contractually required payments, are referred to collectively as "loans". The Company originates commercial business, commercial real estate, land, multi-family real estate, real estate construction, residential real estate and other consumer loans. At March 31, 2019 and 2018, the Company had no loans to foreign domiciled businesses or foreign countries, or loans related to highly leveraged transactions. Substantially all of the mortgage loans in the Company's loan portfolio are secured by properties located in Washington and Oregon, and accordingly, the ultimate collectibility of a substantial portion of the Company's loan portfolio is susceptible to changes in the local economic conditions in these markets. Loans and extensions of credit outstanding at one time to one borrower are generally limited by federal regulations to 15% of the Bank's shareholders' equity, excluding AOCI. 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 March 31, 2019, loans carried at $513.3 million were pledged as collateral to the FHLB and FRB for borrowing arrangements.

Aggregate loans to officers and directors, all of which are current, consist of the following for the periods indicated (in thousands):

	Year Ended March 31,
	2019			2018			2017
Beginning balance	$	981		$	859		$	841
Originations		359			526			228
Principal repayments		(562	)		(404	)		(210	)
Ending balance	$	778		$	981		$	859

Loan segment risk characteristics: The Company considers its loan classes to be the same as its loan segments. The following are loan segment risk characteristics of the Company's loan portfolio:

Commercial business – Commercial business loans are primarily made based on the operating cash flows of the borrower or conversion of working capital assets to cash and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers may be volatile and the value of the collateral securing these loans may be difficult to measure. Most commercial business loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and generally include a personal guarantee based on a review of personal financial statements. The Company will extend some short-term loans on an unsecured basis to highly qualified borrowers. Although commercial business loans are often collateralized by equipment, inventory, accounts receivable or other business assets, the liquidation of collateral in the event of a borrower default is often an insufficient source of repayment, because accounts receivable may be uncollectible and inventories and equipment may be obsolete or of limited use. Accordingly, the repayment of a commercial business loan depends primarily on the credit-worthiness of the borrower (and any guarantors), while the liquidation of collateral is a secondary and potentially insufficient source of repayment. The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the management of the business and the credit-worthiness of the borrowers and the guarantors.

Commercial real estate – The Company originates commercial real estate loans within its primary market areas secured by properties such as office buildings, warehouse/industrial, retail, assisted living, single purpose facilities, and other commercial properties. These are cash flow loans that share characteristics of both real estate and commercial business loans. The primary source of repayment is cash flow from the operation of the collateral property and secondarily through liquidation of the collateral. These loans are generally higher risk than other classifications of loans in that they typically involve higher loan amounts, are dependent on the management experience of the owners, and may be adversely affected by conditions in the real estate market or the economy. Owner-occupied commercial real estate loans are generally of lower credit risk than non-owner occupied commercial real estate loans as the borrowers' businesses are likely dependent on the properties. Underwriting for these loans is primarily dependent on the repayment capacity derived from the operation of the occupying business rather than rents paid by third-parties. The Company attempts to mitigate these risks by generally limiting the maximum loan-to-value ratio to 65%-80% depending on the property type and scrutinizing the financial condition of the borrower, the quality of the collateral and the management of the property securing the loan.

Land – The Company has historically originated loans for the acquisition of raw land upon which the purchaser can then build or make improvements necessary to build or sell as improved lots. Currently, the Company is originating new land loans on a limited basis. Loans secured by undeveloped land or improved lots involve greater risks than one-to-four family residential mortgage loans because these loans are more difficult to evaluate. If the estimate of value proves to be inaccurate, in the event of default or foreclosure, the Company may incur a loss. The Company attempts to minimize this risk by generally limiting the maximum loan-to-value ratio on raw land loans to 65% and on improved land loans to 75%.

Multi-family – The Company originates loans secured by multi-family dwelling units (more than four units). These loans involve a greater degree of risk than one-to-four family residential mortgage loans as these loans are usually greater in amount, dependent on the cash flow capacity of the project, and are more difficult to evaluate and monitor. Repayment of loans secured by multi-family properties typically depends on the successful operation and management of the properties. Consequently, repayment of such loans may be affected by adverse conditions in the real estate market or economy. The Company attempts to mitigate these risks by thoroughly evaluating the global financial condition of the borrower, the management experience of the borrower, and the quality of the collateral property securing the loan.

Real estate construction- – The Company originates construction loans for one-to-four family residential, multi-family, and commercial real estate properties. The one-to-four family residential construction loans include construction of consumer custom homes whereby the home buyer is the borrower as well as speculative and presold loans for home builders. Speculative one-to four-family construction loans are loans for which the home builder does not have, at the time of the loan origination, a signed contract with a home buyer who has a commitment for permanent financing with the Company or another lender for the finished home. The home buyer may be identified either during or after the construction period. Multi-family construction loans are originated to construct apartment buildings and condominium projects. Commercial construction loans are originated to construct properties such as office buildings, retail rental space and mini-storage facilities, and assisted living facilities. All construction loans are short-term and generally the rate is variable in nature. Construction lending can involve a higher level of risk than other types of lending because funds are advanced based on a prospective value of the project at completion, the total estimated construction cost of the project, and the borrowers' equity at risk. Additionally, the repayment of the loan is conditional on the success of the ultimate project which is subject to interest rate changes, governmental regulations, general economic conditions and the ability of the borrower to sell or lease the property or refinance the indebtedness. If the Company's estimate of the value of a project at completion proves to be overstated, it may have inadequate security for repayment of the loan and may incur a loss if the borrower does not repay the loan. Projects may also be jeopardized by disagreements between borrowers and builders and by the failure of builders to pay subcontractors. Loans to construct homes for which no purchaser has been identified carry more risk because the payoff for the loan depends on the builder's ability to sell the property prior to the time that the construction loan is due. Although the nature of real estate construction loans is such that they are generally more difficult to evaluate and monitor, the Company attempts to closely monitor the construction project by on-site inspections. The Company also attempts to mitigate the risks of construction lending by adhering to its underwriting policies, disbursement procedures and monitoring practices.

Real estate one-to-four family – The Company originates both fixed-rate and adjustable-rate loans secured by one- to-four family residences located in its primary market areas. The majority of the fixed-rate one-to-four family loans are sold in the secondary market for asset/liability management purposes and to generate non-interest income. The Company's lending policies generally limit the maximum loan-to-value on one-to-four family loans to 80% of the lesser of the appraised value or the purchase price. However, the Company usually obtains private mortgage insurance on the portion of the principal amount that exceeds 80% of the appraised value of the property. Terms of maturity typically range from 15 to 30 years. The Company also originates home equity lines of credit and second mortgage loans. Home equity lines of credit and second mortgage loans have a greater credit risk than one-to-four family residential mortgage loans because they are secured by mortgages subordinated to the existing first mortgage on the property, which may or may not be held by the Company. The Company attempts to mitigate residential lending risks by adhering to its underwriting policies in evaluating the collateral and the credit-worthiness of the borrower.

Other installment – The Company originates other consumer loans, which include automobile, boat, motorcycle, recreational vehicle, savings account and unsecured loans. As of March 31, 2019 and 2018, other installment loans primarily consist of purchased automobile loans. These purchased automobile loans were originated through a single dealership group located outside the Company's primary market area. The collateral for these purchased automobile loans is comprised of a mix of used automobiles. These loans were purchased with servicing retained by the seller. Other consumer loans generally have shorter terms to maturity than mortgage loans. Other consumer loans generally involve a greater degree of risk than do residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by rapidly depreciating assets such as automobiles. In such cases, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the credit-worthiness of the borrower.

6.	ALLOWANCE FOR LOAN LOSSES

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

March 31, 2019	Commercial Business		Commercial Real Estate			Land		Multi- Family			Real Estate Construction		Consumer			Unallocated			Total

Beginning balance	$	1,668	$	4,914		$	220	$	822		$	618	$	1,809		$	715		$	10,766
Provision for (recapture of) loan losses		139		(685	)		34		(94	)		839		(178	)		(5	)		50
Charge-offs		-		-			-		-			-		(291	)		-			(291	)
Recoveries		1		824			-		-			-		107			-			932
Ending balance	$	1,808	$	5,053		$	254	$	728		$	1,457	$	1,447		$	710		$	11,457

March 31, 2018

Beginning balance	$	1,418	$	5,084		$	228		$	297	$	714		$	2,099		$	688	$	10,528
Provision for (recapture of) loan losses		10		(156	)		(301	)		525		(96	)		(9	)		27		-
Charge-offs		-		(68	)		-			-		-			(340	)		-		(408	)
Recoveries		240		54			293			-		-			59			-		646
Ending balance	$	1,668	$	4,914		$	220		$	822	$	618		$	1,809		$	715	$	10,766

March 31, 2017

Beginning balance	$	1,048		$	4,273		$	325		$	712		$	416	$	2,403		$	708		$	9,885
Provision for (recapture of) loan losses		(121	)		926			(558	)		(415	)		298		(110	)		(20	)		-
Charge-offs		(1	)		(117	)		-			-			-		(340	)		-			(458	)
Recoveries		492			2			461			-			-		146			-			1,101
Ending balance	$	1,418		$	5,084		$	228		$	297		$	714	$	2,099		$	688		$	10,528

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
March 31, 2019	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total

Commercial business	$	-	$	1,808	$	1,808	$	160	$	162,636	$	162,796
Commercial real estate		-		5,053		5,053		2,482		458,950		461,432
Land		-		254		254		728		16,299		17,027
Multi-family		-		728		728		1,598		49,972		51,570
Real estate construction		-		1,457		1,457		-		90,882		90,882
Consumer		22		1,425		1,447		697		91,712		92,409
Unallocated		-		710		710		-		-		-
Total	$	22	$	11,435	$	11,457	$	5,665	$	870,451	$	876,116

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

Changes in the allowance for unfunded loan commitments were as follows for the years indicated (in thousands):

	Year Ended March 31,
	2019			2018		2017
Beginning balance	$	480		$	388	$	324
Net change in allowance for unfunded loan commitments		(11	)		92		64
Ending balance	$	469		$	480	$	388

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

March 31, 2019	30-89 Days Past Due		90 Days and Greater Past Due		Non-accrual		Total Past Due and Non- accrual		Current		Total Loans Receivable

Commercial business	$	-	$	-	$	225	$	225	$	162,571	$	162,796
Commercial real estate		-		-		1,081		1,081		460,351		461,432
Land		-		-		-		-		17,027		17,027
Multi-family		-		-		-		-		51,570		51,570
Real estate construction		-		-		-		-		90,882		90,882
Consumer		345		3		210		558		91,851		92,409
Total	$	345	$	3	$	1,516	$	1,864	$	874,252	$	876,116

March 31, 2018

Commercial business	$	7	$	-	$	178	$	185	$	137,487	$	137,672
Commercial real estate		-		-		1,200		1,200		449,397		450,597
Land		-		-		763		763		14,574		15,337
Multi-family		-		-		-		-		63,080		63,080
Real estate construction		-		-		-		-		39,584		39,584
Consumer		513		-		277		790		104,316		105,106
Total	$	520	$	-	$	2,418	$	2,938	$	808,438	$	811,376

Interest income foregone on non-accrual loans was $94,000, $102,000 and $81,000 for the years ended March 31, 2019, 2018 and 2017, respectively.

Credit quality indicators: The Company monitors credit risk in its loan portfolio using a risk rating system (on a scale of one to nine) for all commercial (non-consumer) loans. The risk rating system is a measure of the credit risk of the borrower based on their historical, current and anticipated future financial characteristics. The Company assigns a risk rating to each commercial loan at origination and subsequently updates these ratings, as necessary, so that the risk rating continues to reflect the appropriate risk characteristics of the loan. Application of appropriate risk ratings is key to management of loan portfolio risk. In determining the appropriate risk rating, the Company considers the following factors: delinquency, payment history, quality of management, liquidity, leverage, earnings trends, alternative funding sources, geographic risk, industry risk, cash flow adequacy, account practices, asset protection and extraordinary risks. Consumer loans, including custom construction loans, are not assigned a risk rating but rather are grouped into homogeneous pools with similar risk characteristics. When a consumer loan is delinquent 90 days, it is placed on non-accrual status and assigned a substandard risk rating. Loss factors are assigned to each risk rating and homogeneous pool based on historical loss experience for similar loans. This historical loss experience is adjusted for qualitative factors that are likely to cause the estimated credit losses to differ from the Company's historical loss experience. The Company uses these loss factors to estimate the general component of its allowance for loan losses.

Pass – These loans have a risk rating between 1 and 4 and are to borrowers that meet normal credit standards. Any deficiencies in satisfactory asset quality, liquidity, debt servicing capacity and coverage are offset by strengths in other areas. The borrower currently has the capacity to perform according to the loan terms. Any concerns about risk factors such as stability of margins, stability of cash flows, liquidity, dependence on a single product/supplier/customer, depth of management, etc. are offset by strengths in other areas. Typically, these loans are secured by the operating assets of the borrower and/or real estate. The borrower's management is considered competent. The borrower has the ability to repay the debt in the normal course of business.

Watch – These loans have a risk rating of 5 and are included in the "pass" rating. However, there would typically be some reason for additional management oversight, such as the borrower's recent financial setbacks and/or deteriorating financial position, industry concerns and failure to perform on other borrowing obligations. Loans with this rating are monitored closely in an effort to correct deficiencies.

Special mention – These loans have a risk rating of 6 and are rated in accordance with regulatory guidelines. These loans have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the credit position at some future date. These loans pose elevated risk but their weakness does not yet justify a "substandard" classification.

Substandard – These loans have a risk rating of 7 and are rated in accordance with regulatory guidelines, for which the accrual of interest may or may not be discontinued. By definition under regulatory guidelines, a "substandard" loan has defined weaknesses which make payment default or principal exposure likely but not yet certain. Repayment of such loans is likely to be dependent upon collateral liquidation, a secondary source of repayment, or an event outside of the normal course of business.

Doubtful – These loans have a risk rating of 8 and are rated in accordance with regulatory guidelines. Such loans are placed on non-accrual status and repayment may be dependent upon collateral which has value that is difficult to determine or upon some near-term event which lacks certainty.

Loss – These loans have a risk rating of 9 and are rated in accordance with regulatory guidelines. Such loans are charged-off or charged-down when payment is acknowledged to be uncertain or when the timing or value of payments cannot be determined. "Loss" is not intended to imply that the loan or some portion of it will never be paid, nor does it in any way imply that there has been a forgiveness of debt.

The following tables present an analysis of loans by credit quality indicators at the dates indicated (in thousands):

March 31, 2019	Pass		Special Mention		Substandard		Doubtful		Loss		Total Loans Receivable

Commercial business	$	159,997	$	840	$	1,959	$	-	$	-	$	162,796
Commercial real estate		454,013		4,030		3,389		-		-		461,432
Land		16,299		-		728		-		-		17,027
Multi-family		51,093		457		20		-		-		51,570
Real estate construction		90,882		-		-		-		-		90,882
Consumer		92,199		-		210		-		-		92,409
Total	$	864,483	$	5,327	$	6,306	$	-	$	-	$	876,116

March 31, 2018

Commercial business	$	132,309	$	1,976	$	3,387	$	-	$	-	$	137,672
Commercial real estate		440,123		7,489		2,985		-		-		450,597
Land		14,574		-		763		-		-		15,337
Multi-family		60,879		2,190		11		-		-		63,080
Real estate construction		39,584		-		-		-		-		39,584
Consumer		104,829		-		277		-		-		105,106
Total	$	792,298	$	11,655	$	7,423	$	-	$	-	$	811,376

Impaired loans: The following tables present the total and average recorded investment in impaired loans at the dates and for the years indicated (in thousands):

March 31, 2019	Recorded Investment with No Specific Valuation Allowance		Recorded Investment with Specific Valuation Allowance		Total Recorded Investment		Unpaid Principal Balance		Related Specific Valuation Allowance

Commercial business	$	160	$	-	$	160	$	182	$	-
Commercial real estate		2,482		-		2,482		3,424		-
Land		728		-		728		766		-
Multi-family		1,598		-		1,598		1,709		-
Consumer		281		416		697		807		22
Total	$	5,249	$	416	$	5,665	$	6,888	$	22
March 31, 2018
Commercial business	$	1,004	$	-	$	1,004	$	1,062	$	-
Commercial real estate		2,883		-		2,883		3,816		-
Land		763		-		763		790		-
Multi-family		1,644		-		1,644		1,765		-
Consumer		294		1,134		1,428		1,544		69
Total	$	6,588	$	1,134	$	7,722	$	8,977	$	69

	Year ended March 31, 2019				Year ended March 31, 2018				Year ended March 31, 2017
	Average Recorded Investment		Interest Recognized on Impaired Loans		Average Recorded Investment		Interest Recognized on Impaired Loans		Average Recorded Investment		Interest Recognized on Impaired Loans

Commercial business	$	334	$	-	$	930	$	41	$	255	$	10
Commercial real estate		2,607		64		4,185		101		8,823		337
Land		742		7		781		-		801		-
Multi-family		1,620		88		1,668		90		1,710		93
Consumer		992		45		1,452		62		1,529		62
Total	$	6,295	$	204	$	9,016	$	294	$	13,118	$	502

The cash basis interest income on impaired loans was not materially different than the interest recognized on impaired loans as shown in the above table.

TDRs are loans for which the Company, for economic or legal reasons related to the borrower's financial condition, has granted a concession to the borrower that it would otherwise not consider. A TDR typically involves a modification of terms such as a reduction of the stated interest rate or face amount of the loan, a reduction of accrued interest, and/or an extension of the maturity date(s) at a stated interest rate lower than the current market rate for a new loan with similar risk. TDRs are considered impaired loans and as such, impairment is measured as described for impaired loans in Note 1 – Summary of Significant Accounting Policies – Allowance for Loan Losses.

The following table presents TDRs by interest accrual status at the dates indicated (in thousands):

	March 31, 2019						March 31, 2018
	Accrual		Nonaccrual		Total		Accrual		Nonaccrual		Total

Commercial business	$	-	$	160	$	160	$	826	$	178	$	1,004
Commercial real estate		1,401		1,081		2,482		1,683		1,200		2,883
Land		728		-		728		-		763		763
Multi-family		1,598		-		1,598		1,644		-		1,644
Consumer		697		-		697		1,428		-		1,428
Total	$	4,424	$	1,241	$	5,665	$	5,581	$	2,141	$	7,722

At March 31, 2019, the Company had no commitments to lend additional funds on these loans. At March 31, 2019, all of the Company's TDRs were paying as agreed.

There were no new TDRs for the years ended March 31, 2019 and 2018. There was one new TDR for the year ended March 31, 2017 consisting of a commercial business loan with a pre-modification outstanding recorded investment balance of $116,000 and a post-modification outstanding recorded investment balance of $107,000. This loan was repaid in full during the year ended March 31, 2018. There were no loans that were modified as a TDR within the previous twelve months that subsequently defaulted in the twelve months ended March 31, 2019.

7.	REAL ESTATE OWNED

The following table is a summary of the activity in REO for the years indicated (in thousands):

	Year Ended March 31,
	2019			2018		2017
Balance at beginning of year, net	$	298		$	298	$	595
Additions		-			-		-
Dispositions		(298	)		-		(267	)
Writedowns		-			-		(30	)
Balance at end of year, net	$	-		$	298	$	298

At March 31, 2019, there was one single family property for which formal foreclosure proceedings were in process with a carrying amount of $106,000.

8.	PREMISES AND EQUIPMENT

Premises and equipment consisted of the following at the dates indicated (in thousands):

	March 31,
	2019			2018

Land	$	4,531		$	4,710
Buildings and improvements		15,349			15,281
Leasehold improvements		1,666			1,666
Furniture and equipment		10,694			10,783
Building under capitalized lease		2,956			2,956
Construction in progress		733			720
Total		35,929			36,116
Less accumulated depreciation and amortization		(20,471	)		(20,333	)
Premises and equipment, net	$	15,458		$	15,783

Depreciation and amortization expense was $1.1 million, $1.2 million and $1.1 million for the years ended March 31, 2019, 2018 and 2017, respectively.

The Company has a capital lease for the shell of the building constructed as the Company's operations center which expires in November 2039. For each of the years ended March 31, 2019, 2018 and 2017, the Company recorded $77,000 in amortization expense related to this capital lease. At March 31, 2019 and 2018, accumulated amortization for the capital lease totaled $1.4 million and $1.3 million, respectively.

In March 2010, the Company sold two of its branch locations. The Company maintains a substantial continuing involvement in the locations through various non-cancellable operating leases that contain certain renewal options. The resulting gain on sale of $2.1 million was deferred and is being amortized over the lives of the respective leases. At March 31, 2019, the remaining deferred gain was $697,000 and is included in accrued expenses and other liabilities in the accompanying 2019 consolidated balance sheets.

The Company is obligated under various noncancellable lease agreements for land and buildings that require future minimum rental payments, exclusive of taxes and other charges. The following is a schedule of future minimum lease payments under the Company's capital lease together with the present value of net minimum lease payments and the future minimum rental payments required under operating leases that have initial or noncancellable lease terms in excess of one year as of March 31, 2019 (in thousands):

Year Ending March 31:	Operating Leases		Capital Lease
2020	$	1,492	$	205
2021		905		208
2022		677		212
2023		527		215
2024		535		219
Thereafter		1,453		3,622
Total minimum lease payments	$	5,589		4,681
Less amount representing interest				(2,278	)
Present value of net minimum lease payments			$	2,403

Rent expense was $2.0 million, $2.1 million and $1.8 million for the years ended March 31, 2019, 2018 and 2017, respectively.

GOODWILL

Goodwill and certain other intangibles generally arise from business combinations accounted for under the purchase method of accounting. Goodwill and other intangibles deemed to have indefinite lives generated from business combinations are not subject to amortization and are instead tested for impairment not less than annually. The Company has two reporting units, the Bank and the Trust Company, for purposes of evaluating goodwill for impairment. All of the Company's goodwill has been allocated to the Bank reporting unit.

The Company performed an impairment assessment as of October 31, 2018 and determined that no impairment of goodwill exists. The goodwill impairment test involves a two-step process. The first step is a comparison of the reporting unit's fair value to its carrying value. If the reporting unit's fair value is less than its carrying value, the Company would be required to progress to the second step. In the second step, the Company calculates the implied fair value of goodwill and compares the implied fair value of goodwill to the carrying amount of goodwill in the Company's consolidated balance sheet. If the carrying amount of the goodwill is greater than the implied fair value of that goodwill, an impairment loss must be recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as goodwill recognized in a business combination. The results of the Company's step one test indicated that the reporting unit's fair value was greater than its carrying value, and, therefore, a step two analysis was not required; however, no assurance can be given that the Company's goodwill will not be written down in future periods.

An interim impairment test was not deemed necessary as of March 31, 2019 due to the amount by which the fair value of the reporting unit exceeded the carrying value as of the most recent valuation, and because the Company determined that, based on an analysis of events that have occurred and circumstances that have changed since the most recent valuation date, the likelihood that a current estimated fair value determination would be less than the current carrying amount of the reporting unit is remote.

The following table presents the changes in the carrying amount of goodwill for the years indicated (in thousands):

	Year Ended March 31,
	2019			2018			2017
Net carrying value at beginning of period		$	27,076		$	27,076		$	25,572
MBank Transaction (see Note 3)			-			-			1,504
Net carrying value at the end of period		$	27,076		$	27,076		$	27,076

10.

DEPOSITS

Deposit accounts consisted of the following at the dates indicated (in thousands):

Account Type	March 31, 2019		March 31, 2018
Non-interest-bearing	$	284,854	$	278,966
Interest-bearing checking		183,388		192,989
Money market		233,317		265,661
Savings accounts		137,503		134,931
Certificates of deposit		86,006		123,144
Total	$	925,068	$	995,691

Individual certificates of deposit in amounts of $250,000 or more totaled $10.5 million and $10.8 million at March 31, 2019 and 2018, respectively.

Scheduled maturities of certificates of deposit for future years ending March 31 are as follows (in thousands):

Year Ending March 31:
2020	$	59,487
2021		14,072
2022		5,201
2023		1,552
2024		3,157
Thereafter		2,537
Total	$	86,006

Interest expense by deposit type was as follows for the years indicated (in thousands):

	Year Ended March 31,
	2019		2018		2017
Interest-bearing checking	$	101	$	100	$	98
Money market		302		335		309
Savings accounts		145		133		110
Certificates of deposit		448		640		634
Total	$	996	$	1,208	$	1,151

11.	FEDERAL HOME LOAN BANK ADVANCES

FHLB advances – which consist of overnight borrowings – are summarized as follows (dollars in thousands):

	March 31, 2019			March 31, 2018
FHLB advances	$	56,586		$	-
Weighted average interest rate on FHLB advances ⁽¹⁾		2.58	%		1.60	%
⁽¹⁾Computed based on the borrowing activity for the years ending March 31, 2019 and 2018, respectively.

The Bank has a credit line with the FHLB equal to 45% of total assets, limited by available collateral. At March 31, 2019, based on collateral values, the Bank had additional borrowing capacity of $186.8 million from the FHLB.

FHLB advances are collateralized with the FHLB by certain investment and mortgage-backed securities, FHLB stock owned by the Bank, deposits with the FHLB, and certain mortgages on deeds of trust securing such properties as provided in the agreements with the FHLB. At March 31, 2019, loans carried at $402.7 million were pledged as collateral to the FHLB.

12.	JUNIOR SUBORDINATED DEBENTURES

The Company has wholly-owned subsidiary grantor trusts that were established for the purpose of issuing trust preferred securities and common securities. The trust preferred securities accrue and pay distributions periodically at specified annual rates as provided in each trust agreement. The trusts used the net proceeds from each of the offerings to purchase a like amount of junior subordinated debentures (the "Debentures") of the Company. The Debentures are the sole assets of the trusts. The Company's obligations under the Debentures and related documents, taken together, constitute a full and unconditional guarantee by the Company of the obligations of the trusts. The trust preferred securities are mandatorily redeemable upon maturity of the Debentures or upon earlier redemption as provided in the indentures. The Company has the right to redeem the Debentures in whole or in part on or after specific dates, at a redemption price specified in the indentures governing the Debentures plus any accrued but unpaid interest to the redemption date. The Company also has the right to defer the payment of interest on each of the Debentures for a period not to exceed 20 consecutive quarters, provided that the deferral period does not extend beyond the stated maturity. During such deferral period, distributions on the corresponding trust preferred securities will also be deferred and the Company may not pay cash dividends to the holders of shares of the Company's common stock.

The Debentures issued by the Company to the grantor trusts, totaling $26.6 million and $26.5 million at March 31, 2019 and 2018, respectively, are reported as "junior subordinated debentures" in the consolidated balance sheets. The common securities issued by the grantor trusts were purchased by the Company, and the Company's investment in the common securities of $836,000 at both March 31, 2019 and 2018, is included in prepaid expenses and other assets in the consolidated balance sheets. The Company records interest expense on the Debentures in the consolidated statements of income.

The following table is a summary of the terms and the amounts outstanding of the Debentures at March 31, 2019 (dollars in thousands):

Issuance Trust	Issuance Date		Amount Outstanding			Rate Type	Initial Rate			Current Rate			Maturity Date

Riverview Bancorp Statutory Trust I		12/2005	$	7,217		Variable ⁽¹⁾		5.88	%		3.97	%		3/2036
Riverview Bancorp Statutory Trust II		06/2007		15,464		Variable ⁽²⁾		7.03	%		3.96	%		9/2037
Merchants Bancorp Statutory Trust I ⁽⁴⁾		06/2003		5,155		Variable ⁽³⁾		4.16	%		5.71	%		6/2033
				27,836
Fair value adjustment ⁽⁴⁾				(1,261	)
Total Debentures			$	26,575

⁽¹⁾The trust preferred securities reprice quarterly based on the three-month LIBOR plus 1.36%.
⁽²⁾ The trust preferred securities reprice quarterly based on the three-month LIBOR plus 1.35%.
⁽³⁾The trust preferred securities reprice quarterly based on the three-month LIBOR plus 3.10%.
⁽⁴⁾Amount, net of accretion, attributable to the MBank transaction. See Note 3.

13.	INCOME TAXES

Provision for income taxes consisted of the following for the periods indicated (in thousands):

	Year Ended March 31
	2019			2018		2017
Current	$	5,157		$	4,087	$	284
Deferred		(11	)		3,668		3,103
Total	$	5,146		$	7,755	$	3,387

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are as follows at the dates indicated (in thousands):

	March 31, 2019		March 31, 2018
Deferred tax assets:
Deferred compensation	$	45	$	77
Allowance for loan losses		2,862		2,643
Accrued expenses		131		127
Accumulated depreciation and amortization		797		753
Deferred gain on sale		167		201
Purchase accounting		141		150
Net unrealized loss on investment securities available for sale		829		1,458
Other		242		236
Total deferred tax assets		5,214		5,645

Deferred tax liabilities:
FHLB stock dividend		(97	)		(95	)
Prepaid expenses		(148	)		(109	)
Loan fees/costs		(774	)		(628	)
Total deferred tax liabilities		(1,019	)		(832	)
Deferred tax assets, net	$	4,195		$	4,813

A reconciliation of the Company's effective income tax rate with the federal statutory tax rate is as follows for the years indicated:

	Year Ended March 31,
	2019		2018		2017
Statutory federal income tax rate	21.0	%	30.8	%	34.0	%
State and local income tax rate	3.0		2.5		1.5
Revaluation of net deferred tax assets due to Tax Act	-		11.4		-
ESOP market value adjustment	(0.1)		-		(0.1	)
BOLI	(0.8)		(1.5	)	(3.8	)
Other, net	(0.1)		(0.1	)	(0.2	)
Effective federal income tax rate	23.0	%	43.1	%	31.4	%

On December 22, 2017, the federal government enacted the Tax Act. The Tax Act made significant changes to the U.S. tax law including, among other things: a reduction in the federal corporate income tax rate from a maximum of 35.0% to 21.0%

effective January 1, 2018; changes to the tax treatment of net operating loss carryforwards and carrybacks; and a repeal of the corporate alternative minimum tax. The Tax Act reduced the Company's federal corporate income tax rate from 34.0% to a blended federal corporate income tax rate of 30.8% for the fiscal year ended March 31, 2018. As a result of using a blended tax rate, the Company recognized a $422,000 benefit for income taxes during the quarter ended December 31, 2017. Also as a result of the Tax Act, the reduction of the corporate tax rate required the Company to remeasure its deferred tax assets and liabilities based upon the lower federal tax rate. Accordingly, during the year ended March 31, 2018, the Company recorded a one-time $2.1 million charge to the provision for income taxes in conjunction with remeasuring its net deferred tax asset to account for the future impact of the decrease in the federal corporate income tax rate. In addition, the Company has made an adjustment between retained earnings and AOCI related to the stranded tax effects due to the change in the federal corporate tax rate applied to the net unrealized losses on available for sale investment securities (see discussion of ASU 2018-02 in Note 1). Beginning in fiscal year 2019, the Company utilized a federal corporate income tax rate of 21.0%.

The Bank's retained earnings at both March 31, 2019 and 2018 include a base year allowance for loan losses, which amounted to $2.2 million, for which no federal income tax liability has been recognized. The related unrecognized deferred tax liability at both March 31, 2019 and 2018 was $517,000. This represents the balance of the allowance for loan losses created for tax purposes as of December 31, 1987. These amounts are subject to recapture in the unlikely event that the Company's banking subsidiaries (1) make distributions in excess of current and accumulated earnings and profits, as calculated for federal tax purposes, (2) redeem their stock, or (3) liquidate. Management does not expect this temporary difference to reverse in the foreseeable future.

At March 31, 2019 and 2018, the Company had no unrecognized tax benefits or uncertain tax positions. In addition, the Company had no accrued interest or penalties related to income tax matters as of March 31, 2019 or 2018. It is the Company's policy to recognize potential accrued interest and penalties related to income tax matters as a component of provision for income taxes. The Company is subject to U.S. federal and State of Oregon income taxes. The years 2016 to 2019 remain open to examination for federal income taxes, and the years 2015 to 2019 remain open to State of Oregon examination.

14.	EMPLOYEE BENEFIT PLANS

Retirement Plan - The Riverview Bancorp, Inc. Employees' Savings and Profit Sharing Plan (the "Plan") is a defined contribution profit-sharing plan incorporating the provisions of Section 401(k) of the Internal Revenue Code. Company expenses related to the Plan for the years ended March 31, 2019, 2018 and 2017 were $527,000, $547,000 and $489,000, respectively.

Directors' and Executive Officers' Deferred Compensation Plan ("Deferred Compensation Plan") – The Deferred Compensation Plan is a nonqualified deferred compensation plan. Directors may elect to defer their monthly directors' fees until retirement with no income tax payable by the director until retirement benefits are received. The Chairman, President, and Executive and Senior Vice Presidents of the Company may also defer salary into the Deferred Compensation Plan. The Company accrues annual interest on the unfunded liability under the Deferred Compensation Plan based upon a formula relating to gross revenues, which was 4.28%, 3.99% and 3.68% for the years ended March 31, 2019, 2018 and 2017, respectively. The estimated liability under the Deferred Compensation Plan is accrued as earned by the participants. At March 31, 2019 and 2018, the Company's aggregate liability under the Deferred Compensation Plan was $186,000 and $330,000, respectively, which is recorded in accrued expenses and other liabilities in the accompanying consolidated balance sheets.

Stock Option Plans - 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 Riverview Bancorp, Inc. 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. The fair value of all awards is amortized on a straight-line basis over the requisite service periods, which are generally the vesting periods. The expected life of options granted represents the period of time that they are expected to be outstanding. The expected life is determined based on historical experience with similar options, giving consideration to the contractual terms and vesting schedules. Expected volatility is estimated at the date of grant based on the historical volatility of the Company's common stock. Expected dividends are based on dividend trends and the market value of the Company's common stock at the time of grant. The risk-free interest rate for periods within the contractual life of the options is based on the U.S. Treasury yield curve in effect at the time of the grant. There were no stock options granted during the years ended March 31, 2019, 2018 and 2017 under the Stock Option Plans.

As of March 31, 2019, 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 years ended March 31, 2019, 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 years indicated:

	Year Ended March 31,
	2019					2018					2017
	Number of Shares			Weighted Average Exercise Price		Number of Shares			Weighted Average Exercise Price		Number of Shares			Weighted Average Exercise Price
Balance, beginning of year		141,365		$	3.77		220,654		$	4.74		223,654		$	4.73
Options exercised		(37,533	)		4.84		(59,289	)		4.13		(3,000	)		3.84
Options expired		(2,500	)		8.12		(20,000	)		13.42		-			-
Balance, end of year		101,332		$	3.26		141,365		$	3.77		220,654		$	4.74

Additional information regarding stock options outstanding as of March 31, 2019 is as follows:

				Options Outstanding				Options Exercisable
		Weighted Avg				Weighted				Weighted
		Remaining				Average				Average
Range of		Contractual				Exercise				Exercise
Exercise Price		Life (years)		Number		Price		Number		Price

$	1.00 - $3.00		3.88		51,332	$	2.70		51,332	$	2.70
$	3.01 - $5.00		0.48		50,000		3.84		50,000		3.84
			2.20		101,332	$	3.26		101,332	$	3.26

The following table presents information on stock options outstanding as of March 31, 2019 and 2018, less estimated forfeitures:

	March 31, 2019		March 31, 2018
Stock options fully vested and expected to vest:
Number		101,332		141,365
Weighted average exercise price	$	3.26	$	3.77
Aggregate intrinsic value ⁽¹⁾	$	410,000	$	788,000
Weighted average contractual term of options (years)		2.20		2.78
Stock options fully vested and currently exercisable:
Number		101,332		141,365
Weighted average exercise price	$	3.26	$	3.77
Aggregate intrinsic value ⁽¹⁾	$	410,000	$	788,000
Weighted average contractual term of options (years)		2.20		2.78

⁽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 was $153,000, $257,000 and $5,000 for the years ended March 31, 2019, 2018 and 2017, respectively.

Employee Stock Ownership Plan - The Company sponsors an ESOP that covers all employees with at least one year and 1,000 hours of service who are over the age of 21. Shares were released and allocated to participant accounts on or about December 31 of each year through December 2017, at which point all available shares had been released and allocated. ESOP compensation expense included in salaries and employee benefits was $148,000 and $143,000 for the years ended March 31, 2018 and 2017, respectively.

ESOP share activity is summarized in the following table:

	Estimated Fair Value of Unreleased Shares		Unreleased ESOP Shares			Allocated and Released Shares		Total

Balance, March 31, 2016	$	207,000		49,266			913,318		962,584
Allocation December 31, 2016				(24,633	)		24,633		-
Balance, March 31, 2017	$	176,000		24,633			937,951		962,584
Allocation December 31, 2017				(24,633	)		24,633		-
Balance, March 31, 2018	$	-		-			962,584		962,584

For the fiscal year ended March 31, 2019, the Bank purchased 25,000 shares of common stock on the open market and contributed such shares to the ESOP as a discretionary employer contribution. The Company recorded employee benefits expense of $197,000 for this contribution which represented the fair value of the related common stock. Shares held by the ESOP at March 31, 2019 totaled 441,966.

15.	SHAREHOLDERS' EQUITY AND REGULATORY CAPITAL REQUIREMENTS

The Bank is subject to various regulatory capital requirements administered by the Office of the Comptroller of the Currency ("OCC"). 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 direct material effect on the Bank's financial statements. 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 and tier I capital to risk-weighted assets, core capital to total assets and tangible capital to tangible assets (set forth in the table below). Management believes the Bank met all capital adequacy requirements to which it was subject to as of March 31, 2019.

As of March 31, 2019, the most recent notification from the OCC categorized the Bank as "well capitalized" under the 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):

	Actual					For Capital Adequacy Purposes					"Well Capitalized" Under Prompt Corrective Action
	Amount		Ratio			Amount		Ratio			Amount		Ratio
March 31, 2019
Total Capital:
(To Risk-Weighted Assets)	$	140,062		16.88	%	$	66,379		8.0	%	$	82,974		10.0	%
Tier 1 Capital:
(To Risk-Weighted Assets)		129,671		15.63			49,784		6.0			66,379		8.0
Common equity tier 1 Capital:
(To Risk-Weighted Assets)		129,671		15.63			37,338		4.5			53,933		6.5
Tier 1 Capital (Leverage):
(To Average Tangible Assets)		129,671		11.56			44,874		4.0			56,092		5.0

	Actual					For Capital Adequacy Purposes					"Well Capitalized" Under Prompt Corrective Action
March 31, 2018	Amount		Ratio			Amount		Ratio			Amount		Ratio

Total Capital:
(To Risk-Weighted Assets)	$	123,061		15.41	%	$	63,868		8.0	%	$	79,835		10.0	%
Tier 1 Capital:
(To Risk-Weighted Assets)		113,066		14.16			47,901		6.0			63,868		8.0
Common equity tier 1 Capital:
(To Risk-Weighted Assets)		113,066		14.16			35,926		4.5			51,893		6.5
Tier 1 Capital (Leverage):
(To Average Tangible Assets)		113,066		10.26			44,093		4.0			55,116		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 in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. The capital conservation buffer is required to be an amount greater than 2.5% of risk-weighted assets. As of March 31, 2019, the Bank's CET1 capital exceeded the required capital conservation buffer at an amount greater than 2.5%.

For a savings and loan 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 March 31, 2019, the Company would have exceeded all regulatory capital requirements.

At periodic intervals, the OCC and the FDIC routinely examine the Bank'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. A future examination by the OCC or the FDIC could include a review of certain transactions or other amounts reported in the Company's 2019 consolidated financial statements. The Company did not repurchase any shares of common stock for the years ended March 31, 2019, 2018 or 2017.

16.	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 March 31, 2019 and 2018, all shares under the Company's ESOP were allocated. For the year ended March 31, 2019, there were no stock options excluded in computing diluted EPS. For the years ended March 31, 2018 and 2017, stock options for 8,000 and 59,000 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 years indicated:

		Year Ended March 31,
(Dollars and share data in thousands, except per share data)		2019		2018		2017
	P
Basic EPS computation:
Numerator-net income		$	17,266	$	10,242	$	7,404
Denominator-weighted average common shares outstanding			22,588		22,531		22,478
Basic EPS		$	0.76	$	0.45	$	0.33
Diluted EPS computation:
Numerator-net income		$	17,266	$	10,242	$	7,404
Denominator-weighted average common shares outstanding			22,588		22,531		22,478
Effect of dilutive stock options			72		92		70
Weighted average common shares and common stock
equivalents			22,660		22,623		22,548
Diluted EPS		$	0.76	$	0.45	$	0.33

17.	FAIR VALUE MEASUREMENTS

Fair value is defined under GAAP as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. GAAP requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. GAAP also establishes a fair value hierarchy which prioritizes the valuation inputs into three broad levels. Based on the underlying inputs, each fair value measurement in its entirety is reported in one of three levels. These levels are:

Quoted prices in active markets for identical assets (Level 1): Inputs that are quoted unadjusted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Other observable inputs (Level 2): Inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets and inputs derived principally from or corroborated by observable market data by correlation or other means.

Significant unobservable inputs (Level 3): Inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances.

Financial instruments are presented in the tables that follow by recurring or nonrecurring measurement status. Recurring assets are initially measured at fair value and are required to be remeasured at fair value in the consolidated financial statements at each reporting date. Assets measured on a nonrecurring basis are assets that, as a result of an event or circumstance, were required to be remeasured at fair value after initial recognition in the consolidated financial statements at some time during the reporting period.

The following tables present assets that are measured at estimated fair value on a recurring basis at the dates indicated (in thousands):

			Estimated Fair Value Measurements Using
March 31, 2019	Total Estimated Fair Value		Level 1		Level 2		Level 3

Investment securities available for sale:
Municipal securities	$	8,881	$	-	$	8,881	$	-
Agency securities		12,341		-		12,341		-
Real estate mortgage investment conduits		40,162		-		40,162		-
Residential mortgage-backed securities		75,821		-		75,821		-
Other mortgage-backed securities		41,021		-		41,021		-
Total assets measured at fair value on a recurring basis	$	178,226	$	-	$	178,226	$	-

			Estimated Fair Value Measurements Using
March 31, 2018	Total Estimated Fair Value		Level 1		Level 2		Level 3

Investment securities available for sale:
Municipal securities	$	8,732	$	-	$	8,732	$	-
Agency securities		22,102		-		22,102		-
Real estate mortgage investment conduits		46,955		-		46,955		-
Residential mortgage-backed securities		89,074		-		89,074		-
Other mortgage-backed securities		46,358		-		46,358		-
Total assets measured at fair value on a recurring basis	$	213,221	$	-	$	213,221	$	-

There were no transfers of assets into or out of Levels 1, 2 or 3 during the years ended March 31, 2019 and 2018.

The following methods were used to estimate the fair value of investment securities in the above table:

Investment securities are included within Level 1 of the hierarchy when quoted prices in an active market for identical assets are available. The Company uses a third-party pricing service to assist the Company in determining the fair value of its Level 2 securities, which incorporates pricing models and/or quoted prices of investment securities with similar characteristics. Investment securities are included within Level 3 of the hierarchy when there are significant unobservable inputs.

For Level 2 securities, the independent pricing service provides pricing information by utilizing evaluated pricing models supported with market data information. Standard inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data from market research publications. The Company's third-party pricing service has established processes for the Company to submit inquiries regarding the estimated fair value. In such cases, the Company's third-party pricing service will review the inputs to the evaluation in light of any new market data presented by the Company. The Company's third-party pricing service may then affirm the original estimated fair value or may update the evaluation on a go-forward basis.

Management reviews the pricing information received from the third-party pricing service through a combination of procedures that include an evaluation of methodologies used by the pricing service, analytical reviews and performance analysis of the prices against statistics and trends. Based on this review, management determines whether the current placement of the security in the fair value hierarchy is appropriate or whether transfers may be warranted. As necessary, management compares prices received from the pricing service to discounted cash flow models or by performing independent valuations of inputs and assumptions similar to those used by the pricing service in order to help ensure prices represent a reasonable estimate of fair value.

The following tables present assets that are measured at estimated fair value on a nonrecurring basis at the dates indicated (in thousands):

			Estimated fair value measurements using
	Total estimated fair value		Level 1		Level 2		Level 3
March 31, 2019
Impaired loans	$	394	$	-	$	-	$	394

March 31, 2018

Impaired loans	$	2,143	$	-	$	-	$	2,143

The following table presents quantitative information about Level 3 inputs for financial instruments measured at fair value on a nonrecurring basis at March 31, 2019 and 2018:

For information regarding the Company's method for estimating the fair value of impaired loans, see Note 1 – Summary of Significant Accounting Policies – Allowance for Loan Losses.

In determining the estimated net realizable value of the underlying collateral, the Company primarily uses third-party appraisals which may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available and include consideration of variations in location, size, and income production capacity of the property. Additionally, the appraisals are periodically further adjusted by the Company in consideration of charges that may be incurred in the event of foreclosure and are based on management's historical knowledge, changes in business factors and changes in market conditions.

Impaired loans are reviewed and evaluated quarterly for additional impairment and adjusted accordingly based on the same factors identified above. Because of the high degree of judgment required in estimating the fair value of collateral underlying impaired loans and because of the relationship between fair value and general economic conditions, the Company considers the fair value of impaired loans to be highly sensitive to changes in market conditions.

The following disclosure of the estimated fair value of financial instruments is made in accordance with GAAP. The Company, using available market information and appropriate valuation methodologies, has determined the estimated fair value amounts. However, considerable judgment is necessary to interpret market data in the development of the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in the future. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

The carrying amounts and estimated fair values of financial instruments are as follows at the dates indicated (in thousands):

March 31, 2019	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
Assets:
Cash and cash equivalents	$	22,950	$	22,950	$	-	$	-	$	22,950
Certificates of deposit held for investment		747		-		746		-		746
Loans held for sale		909		-		909		-		909
Investment securities available for sale		178,226		-		178,226		-		178,226
Investment securities held to maturity		35		-		35		-		35
Loans receivable, net		864,659		-		-		862,429		862,429
FHLB stock		3,644		-		3,644		-		3,644

Liabilities:
Certificates of deposit		86,006		-		84,455		-		84,455
FHLB advances		56,586		-		56,586		-		56,586
Junior subordinated debentures		26,575		-		-		15,468		15,468
Capital lease obligation		2,403		-		2,403		-		2,403

March 31, 2018	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value

Assets:
Cash and cash equivalents	$	44,767	$	44,767	$	-	$	-	$	44,767
Certificates of deposit held for investment		5,967		-		5,959		-		5,959
Loans held for sale		210		-		210		-		210
Investment securities available for sale		213,221		-		213,221		-		213,221
Investment securities held to maturity		42		-		43		-		43
Loans receivable, net		800,610		-		-		792,916		792,916
FHLB stock		1,353		-		1,353		-		1,353

Liabilities:
Certificates of deposit		123,144		-		120,940		-		120,940
Junior subordinated debentures		26,484		-		-		15,274		15,274
Capital lease obligation		2,431		-		2,431		-		2,431

Fair value estimates were based on existing financial instruments without attempting to estimate the value of anticipated future business. The fair value was not estimated for assets and liabilities that were not considered financial instruments.

18.	REVENUE FROM CONTRACTS WITH CUSTOMERS

In accordance with ASC 606, revenues are recognized when goods or services are transferred to the customer in exchange for the consideration the Company expects to be entitled to receive. The largest portion of the Company's revenue is from interest income, which is not within the scope of ASC 606. All of the Company's revenue from contracts with customers within the scope of ASC 606 is recognized in non-interest income with the exception of gains on sales of REO, which are included in non-interest expense.

If a contract is determined to be within the scope of ASC 606, the Company recognizes revenue as it satisfies a performance obligation. Payments from customers are generally collected at the time services are rendered, monthly, or quarterly. For contracts with customers within the scope of ASC 606, revenue is either earned at a point in time or revenue is earned over time. Examples of revenue earned at a point in time are automated teller machine ("ATM") transaction fees, wire transfer fees, overdraft fees and interchange fees. Revenue earned at a point in time is primarily based on the number and type of transactions that are generally derived from transactional information accumulated by the Company's systems and is recognized immediately as the transactions occur or upon providing the service to complete the customer's transaction. The Company is generally the principal in these contracts, with the exception of interchange fees, in which case the Company is acting as the agent and records revenue net of expenses paid to the principal. Examples of revenue earned over time, which generally occur on a monthly basis, are deposit account maintenance fees, investment advisory fees, merchant revenue, trust and investment management fees and safe deposit box fees. Revenue is generally derived from transactional information accumulated by the Company's systems or those of third-parties and is recognized as the related transactions occur or services are rendered to the customer.

Disaggregation of Revenue

The following table includes the Company's non-interest income disaggregated by type of service (in thousands):

	Year Ended March 31
	2019		2018		2017

Asset management fees	$	3,791	$	3,448	$	2,988
Debit card and ATM fees		3,104		2,961		2,535
Deposit related fees		1,721		1,628		1,486
Loan related fees		1,258		671		725
BOLI ⁽¹⁾		734		819		760
Net gains on sales of loans held for sale ⁽¹⁾		317		641		656
FHLMC loan servicing fees ⁽¹⁾		141		122		114
Other, net		792		714		750
Total non-interest income	$	11,858	$	11,004	$	10,014

⁽¹⁾Not within the scope of ASC 606

For the years ended March 31, 2019, 2018 and 2017, substantially all of the Company's revenues within the scope of ASC 606 are for performance obligations satisfied at a specified date.

Revenues recognized within the scope of ASC 606

Asset management fees: Asset management fees are variable, since they are based on the underlying portfolio value, which is subject to market conditions and amounts invested by clients through the Trust Company. Asset management fees are recognized over the period that services are provided, and when the portfolio values are known or can be estimated at the end of each quarter.

Debit card and ATM fees: Debit and ATM interchange income represents fees earned when a debit card issued by the Bank is used. The Bank earns interchange fees from debit cardholder transactions through the MasterCard® payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. The performance obligation is satisfied and the fees are earned when the cost of the transaction is charged to the cardholders' debit card. Certain expenses directly associated with the debit cards are recorded on a net basis with the interchange income.

Deposit related fees: Fees are earned on the Bank's deposit accounts for various products offered to or services performed for the Bank's customers. Fees include business account fees, non-sufficient fund fees, stop payment fees, wire services, safe deposit box and others. These fees are recognized on a daily, monthly or quarterly basis, depending on the type of service.

Loan related fees: Non-interest loan fee income is earned on loans that the Bank services, excluding loans serviced for the FHLMC which are not within the scope of ASC 606. Loan related fees include prepayment fees, late charges, brokered loan fees, maintenance fees and others. These fees are recognized on a daily, monthly, quarterly or annual basis, depending on the type of service.

Other: Fees earned on other services, such as merchant services or occasional non-recurring type services, are recognized at the time of the event or the applicable billing cycle.

Contract Balances

As of March 31, 2019, the Company had no significant contract liabilities where the Company had an obligation to transfer goods or services for which the Company had already received consideration. In addition, the Company had no material unsatisfied performance obligations as of this date.

19.	COMMITMENTS AND CONTINGENCIES

Off-balance sheet arrangements – In the normal course of business, the Company is a party to financial instruments with off-balance sheet risk in order to meet the financing needs of its customers. These financial instruments generally include commitments to originate mortgage, commercial and consumer loans. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. The Company's maximum exposure to credit loss in the event of nonperformance by the borrower is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance sheet instruments. Commitments to originate loans are conditional and are honored for up to 45 days subject to the Company's usual terms and conditions. Collateral is not required to support commitments.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third-party. These guarantees are primarily used to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. Collateral held varies and is required in instances where the Company deems it necessary.

Significant off-balance sheet commitments are listed below at the dates indicated (in thousands):

	Contract or Notional Amount
	March 31, 2019		March 31, 2018
Commitments to originate loans:
Adjustable-rate	$	30,579	$	20,065
Fixed-rate		10,158		14,989
Standby letters of credit		2,410		2,432
Undisbursed loan funds and unused lines of credit		139,842		152,982
Total	$	182,989	$	190,468

At March 31, 2019, the Company had firm commitments to sell $1.7 million of residential loans to the FHLMC. Typically, these agreements are short-term fixed-rate commitments and no material gain or loss is likely.

Other Contractual Obligations – In connection with certain asset sales, the Company typically makes representations and warranties about the underlying assets conforming to specified guidelines. If the underlying assets do not conform to the specifications, the Company may have an obligation to repurchase the assets or indemnify the purchaser against loss. At March 31, 2019, loans under warranty totaled $111.4 million, which substantially represents the unpaid principal balance of the Company's loans serviced for the FHLMC. The Company believes that the potential for loss under these arrangements is remote. At March 31, 2019, the Company had an allowance for FHLMC loans of $13,000.

The Bank is a public depository and, accordingly, accepts deposit and other public funds belonging to, or held for the benefit of, Washington and Oregon states, political subdivisions thereof, and municipal corporations. In accordance with applicable state law, in the event of default of a participating bank, all other participating banks in the state collectively assure that no loss of funds are suffered by any public depositor. Generally, in the event of default by a public depository, the assessment attributable to all public depositories is allocated on a pro rata basis in proportion to the maximum liability of each depository as it existed on the date of loss. The Company has not incurred any losses related to public depository funds for the years ended March 31, 2019, 2018 and 2017.

The Bank has entered into employment contracts with certain key employees, which provide for contingent payments subject to future events.

Litigation – The Company is periodically a party to litigation arising in the ordinary course of business. In the opinion of management, these actions will not have a material effect, if any, on the Company's future consolidated financial position, results of operations and cash flows.

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20.	RIVERVIEW BANCORP, INC. (PARENT COMPANY ONLY)

BALANCE SHEETS
AS OF MARCH 31, 2019 AND 2018
(In thousands)	2019		2018
ASSETS
Cash and cash equivalents	$	4,178	$	6,479
Investment in the Bank		155,041		136,497
Other assets		1,445		1,166
TOTAL ASSETS	$	160,664	$	144,142
LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued expenses and other liabilities	$	63	$	80
Dividend payable		904		677
Borrowings		26,575		26,484
Shareholders' equity		133,122		116,901
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	160,664	$	144,142

STATEMENTS OF INCOME
FOR THE YEARS ENDED MARCH 31, 2019, 2018 AND 2017
(In thousands)	2019			2018			2017

INCOME:
Interest on investment securities and other short-term investments	$	35		$	26		$	21
Interest on loan receivable from the Bank		-			6			15
Total income		35			32			36

EXPENSE:
Management service fees paid to the Bank		143			143			143
Other expenses		1,298			1,020			587
Total expense		1,441			1,163			730
LOSS BEFORE INCOME TAXES AND EQUITY
IN UNDISTRIBUTED INCOME OF THE BANK		(1,406	)		(1,131	)		(694	)
BENEFIT FOR INCOME TAXES		(294	)		(513	)		(235	)
LOSS OF PARENT COMPANY		(1,112	)		(618	)		(459	)
EQUITY IN UNDISTRIBUTED INCOME OF THE BANK		18,378			10,860			7,863
NET INCOME	$	17,266		$	10,242		$	7,404

There were no items of other comprehensive income that were solely attributable to the parent company.

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RIVERVIEW BANCORP, INC. (PARENT COMPANY ONLY)

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED MARCH 31, 2019, 2018 AND 2017

(In thousands)	2019			2018			2017

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	17,266		$	10,242		$	7,404
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Equity in undistributed income of the Bank		(18,378	)		(10,860	)		(7,863	)
Amortization		91			94			22
Provision for deferred income taxes		10			174			666
Earned ESOP shares		-			148			143
Changes in assets and liabilities:
Other assets		(447	)		1,770			(1,031	)
Accrued expenses and other liabilities		141			(132	)		(19	)
Net cash provided by (used in) operating activities		(1,317	)		1,436			(678	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from assumption of junior subordinated debt (see Note 3)		-			-			3,687
Dividend from the Bank		2,000			1,750			2,500
Net cash provided by investing activities		2,000			1,750			6,187

CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid		(3,163	)		(2,140	)		(1,799	)
Proceeds from exercise of stock options		179			245			11
Net cash used in financing activities		(2,984	)		(1,895	)		(1,788	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(2,301	)		1,291			3,721

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		6,479			5,188			1,467

CASH AND CASH EQUIVALENTS, END OF YEAR	$	4,178		$	6,479		$	5,188

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RIVERVIEW BANCORP, INC.

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED):

(Dollars in thousands, except per share data)	Three Months Ended
	March 31		December 31		September 30		June 30
Fiscal 2019:
Interest and dividend income	$	12,464	$	12,336	$	12,213	$	12,105
Interest expense		930		656		611		618
Net interest income		11,534		11,680		11,602		11,487
Provision for (recapture of) loan losses		-		-		250		(200	)
Non-interest income, net		3,008		2,782		3,016		3,052
Non-interest expense		8,962		8,803		8,915		9,019
Income before income taxes		5,580		5,659		5,453		5,720
Provision for income taxes		1,373		1,271		1,224		1,278

Net income	$	4,207	$	4,388	$	4,229	$	4,442

Basic earnings per common share ⁽¹⁾	$	0.19	$	0.19	$	0.19	$	0.20

Diluted earnings per common share ⁽¹⁾	$	0.19	$	0.19	$	0.19	$	0.20

Fiscal 2018:
Interest and dividend income	$	11,244	$	11,378	$	11,315	$	11,023
Interest expense		587		582		590		590
Net interest income		10,657		10,796		10,725		10,433
Provision for loan losses		-		-		-		-
Non-interest income, net		2,663		2,890		2,713		2,738
Non-interest expense		9,127		8,558		8,759		9,174
Income before income taxes		4,193		5,128		4,679		3,997
Provision for income taxes		1,184		3,608		1,620		1,343

Net income	$	3,009	$	1,520	$	3,059	$	2,654

Basic earnings per common share ⁽¹⁾	$	0.13	$	0.07	$	0.14	$	0.12

Diluted earnings per common share ⁽¹⁾	$	0.13	$	0.07	$	0.14	$	0.12

⁽¹⁾ Quarterly earnings per common share may vary from annual earnings common per share due to rounding.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures: An evaluation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 ("Exchange Act")) was carried out under the supervision and with the participation of the Company's Chief Executive Officer, Chief Financial Officer and several other members of the Company's senior management as of the end of the period covered by this annual report. The Company's Chief Executive Officer and Chief Financial Officer concluded that as of March 31, 2019, the Company's disclosure controls and procedures were effective in ensuring that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) accumulated and communicated to the Company's management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

While the Company believes the present design of its disclosure controls and procedures is effective to achieve its goal, future events affecting its business may cause the Company to modify its disclosure controls and procedures. The Company does not expect that its disclosure controls and procedures and internal control over financial reporting will prevent all errors and fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control procedure are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been

103

detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns in controls or procedures can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any control procedure is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control procedure, misstatements attributable to errors or fraud may occur and not be detected.

(b) Changes in Internal Controls: There was no change in the Company's internal control over financial reporting during the Company's most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

(c) Management's Annual Report on Internal Control Over Financial Reporting: The management of Riverview Bancorp, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. This internal control system has been designed to provide reasonable assurance to the Company's management and board of directors regarding the preparation and fair presentation of the Company's published consolidated financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

The management of Riverview Bancorp, Inc. has assessed the effectiveness of the Company's internal control over financial reporting as of March 31, 2019. To make the assessment, we used the criteria for effective internal control over financial reporting described in Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment, we have concluded that, as of March 31, 2019, the Company's internal control over financial reporting was effective based on those criteria.

The Company's independent registered public accounting firm that audits the Company's consolidated financial statements has audited the Company's internal control over financial reporting as of March 31, 2019. The attestation report, appearing in "Item 8: Financial Statements and Supplementary Data" of this Form 10-K, expresses an unqualified opinion on the effectiveness of the Company's internal control over financial reporting as of March 31, 2019.

Item 9B. Other Information

There was no information to be disclosed by the Company in a report on Form 8-K during the fourth quarter of fiscal year 2019 that was not so disclosed.

104

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information contained under the section captioned "Proposal I ‑ Election of Directors" contained in the Company's Proxy Statement for the 2019 Annual Meeting of Stockholders, and "Part I - Business -- Executive Officers" of this Form 10-K, is incorporated herein by reference.

Code of Ethics

In December 2003, the Board of Directors adopted the Officer and Director Code of Ethics. The Code of Ethics is applicable to each of the Company's officers, including the principal executive officer and senior financial officers, and requires individuals to maintain the highest standards of professional conduct. A copy of the Code of Ethics is available on the Company's website at www.riverviewbank.com.

Audit Committee Matters and Audit Committee Financial Expert

The Company has a separately-designated standing Audit Committee, composed of Directors Gerald L. Nies, Bess. R. Wills, and Jerry C. Olson. Each member of the Audit Committee is "independent," as defined in the Nasdaq Stock Market Listing Standards. The Company's Board of Directors has designated Mr. Olson, Audit Committee Chairman, as its financial expert, as defined in SEC's Regulation S-K.

Nomination Procedures

There have been no material changes to the procedures by which shareholders may recommend nominees to the Company's Board of Directors.

Item 11. Executive Compensation

The information set forth under the sections captioned "Executive Compensation" and "Directors' Compensation" in the Company's Proxy Statement for the 2019 Annual Meeting of Stockholders (excluding the information contained under the heading "Personnel/Compensation Committee Report,") is incorporated herein by reference.

105

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information set forth under the caption "Security Ownership of Certain Beneficial Owners and Management" in the Company's Proxy Statement for the 2019 Annual Meeting of Stockholders is incorporated herein by reference.

Equity Compensation Plan Information. The following table summarizes share and exercise price information about the Company's equity compensation plan as of March 31, 2019.

Plan category	Number of securities to be issued upon exercise of outstanding options		Weighted- average price of outstanding options	Number of securities remaining available for future issuance under equity compensation plans excluding securities reflected in column (A)

Equity compensation plans approved by security holders:		(A)	(B)		(C)
2017 Equity Incentive Plan		-	-		1,800,000
2003 Stock Option Plan		101,332	3.26		-

Equity compensation plans not approved by security holders:		-	-		-

Total		101,332	3.26		1,800,000

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information set forth under the headings "Related Party Transactions" and "Director Independence" under the heading "Meetings and Committees of the Board of Directors and Corporate Governance Matters – Corporate Governance" in the Company's Proxy Statement for the 2019 Annual Meeting of Stockholders is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services

The information set forth under the section captioned "Independent Registered Public Accounting Firm" in the Company's Proxy Statement for the 2019 Annual Meeting of Stockholders (excluding the information contained under the heading of "Report of the Audit Committee") is incorporated herein by reference.

106

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)

Financial Statements

See "Part II –Item 8. Financial Statements and Supplementary Data."

Financial Statement Schedules

All schedules are omitted because they are not required or applicable, or the required information is shown in the consolidated financial statements or the notes thereto.

		Exhibits
		2.1	Purchase and Assumption Agreement among Riverview Community Bank, a federal savings bank, and Riverview Bancorp, Inc. a Washington corporation, and MBank, an Oregon state-chartered commercial bank, and Merchants Bancorp, an Oregon corporation (1)
		3.1	Articles of Incorporation of the Registrant (2)
		3.2	Bylaws of the Registrant (3)
		4.1	Form of Certificate of Common Stock of the Registrant (2)
		4.2	Description of Riverview Bancorp, Inc. Common Stock *
		10.1	Form of Employment Agreement between the Company and the Bank and each of Kevin J. Lycklama, David Lam, Daniel D. Cox, Kim J. Capeloto and Steven P. Plambeck (4)
		10.2	Form of Change in Control Agreement between the Company and the Bank and each of Kevin J. Lycklama, David Lam, Daniel D. Cox, Kim J. Capeloto and Steven P. Plambeck (4)
		10.3	Form of Employment Agreement between the Company and Chris P. Cline (5)
		10.4	Form of Change in Control Agreement between the Company and Chris P. Cline (5)
		10.5	Employee Severance Compensation Plan (6)
		10.6	Employee Stock Ownership Plan (7)
		10.7	Reserved
		10.8	2003 Stock Option Plan (8)
		10.9	Form of Incentive Stock Option Award Pursuant to 2003 Stock Option Plan (9)
		10.10	Form of Non-qualified Stock Option Award Pursuant to 2003 Stock Option Plan (9)
		10.11	Deferred Compensation Plan (10)
		10.12	2017 Equity Incentive Plan (11)
		10.13	Form of Incentive Stock Option Award Agreement under the Riverview Bancorp, Inc. 2017 Equity Incentive Plan (12)
		10.14	Form of Non-Qualified Stock Option Award Agreement under the Riverview Bancorp, Inc. 2017 Equity Incentive Plan (12)
		10.15	Form of Restricted Stock Award Agreement under the Riverview Bancorp, Inc. 2017 Equity Incentive Plan (12)
		10.16	Form of Restricted Stock Unit Award Agreement under the Riverview Bancorp, Inc. 2017 Equity Incentive Plan (12)
		21	Subsidiaries of Registrant (13)
		23	Consent of Independent Registered Public Accounting Firm *
		31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act *
		31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act *
		32	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act *
		101	The following materials from Riverview Bancorp Inc.'s Annual Report on Form 10-K for the year ended March 31, 2019, formatted on Extensible Business Reporting Language (XBRL) (a) Consolidated Balance Sheets; (b) Consolidated Statements of Income; (c) Consolidated Statements of Comprehensive Income; (d) Consolidated Statements of Shareholders' Equity (e) Consolidated Statements of Cash Flows; and (f) Notes to Consolidated Financial Statements *

(1)	Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on September 29, 2016 and incorporated herein by reference.

(2)	Filed as an exhibit to the Registrant's Registration Statement on Form S-1 (Registration No. 333-30203), and incorporated herein by reference.

(3)	Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on May 3, 2019 and incorporated herein by reference.

(4)	Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended March 31, 2019, and incorporated herein by reference.

(5)	Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the year ended March 31, 2017 and incorporated herein by reference.

(6)	Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997, and incorporated herein by reference.

(7)	Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the year ended March 31, 1998, and incorporated herein by reference.

(8)	Filed as an exhibit to the Registrant’s Definitive Annual Meeting Proxy Statement (000-22957), filed with the Commission on June 5, 2003, and incorporated herein by reference.

(9)	Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2005, and incorporated herein by reference.

(10)	Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended March 31, 2009 and incorporated herein by reference.

(11)	Filed as Appendix A to the Registrant’s Definitive Annual Meeting Proxy Statement (000-22957), filed with the Commission on June 16, 2017, and incorporated herein by reference.

(12)	Filed as an exhibit to the Registrant’s Registration Statement on Form S-8 (Registration No. 333-228099), and incorporated herein by reference.

(13)	Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended March 31, 2017, and incorporated herein by reference.

*	Filed herewith

107

Item 16. Form 10-K Summary

None.

108

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		RIVERVIEW BANCORP, INC.

Date:	June 14, 2019	By:	/s/ Kevin J. Lycklama
			Kevin J. Lycklama
			President and Chief Executive Officer Director (Duly Authorized Representative)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ Patrick Sheaffer	By:	/s/ Kevin J. Lycklama
	Patrick Sheaffer		Kevin J. Lycklama
	Chairman of the Board		President and Chief Executive Officer Director (Principal Executive Officer)

Date:	June 14, 2019	Date:	June 14, 2019


By:	/s/ David Lam	By:	/s/ Bess R. Wills
	David Lam		Bess R. Wills
	Executive Vice President and		Director
	Chief Financial Officer (Principal Financial and Accounting Officer)

Date:	June 14, 2019	Date:	June 14, 2019


By:	/s/ David Nierenberg	By:	/s/ Bradley J. Carlson
	David Nierenberg		Bradley J. Carlson
	Director		Director

Date:	June 14, 2019	Date:	June 14, 2019


By:	/s/ John A. Karas	By:	/s/ Jerry C. Olson
	John A. Karas		Jerry C. Olson
	Director		Director

Date:	June 14, 2019	Date:	June 14, 2019


By:	/s/ Gerald L. Nies	By:	/s/ Patricia W. Eby
	Gerald L. Nies		Patricia W. Eby
	Director		Director

Date:	June 14, 2019	Date:	June 14, 2019

109

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Common Stock, Par Value $0.01 per share	RVSB	The NASDAQ Stock Market LLC

	At March 31,
	2019					2018					2017					2016					2015
	Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent

Commercial and construction:
Commercial business	$	162,796		18.58	%	$	137,672		16.97	%	$	107,371		13.78	%	$	69,397		11.11	%	$	77,186		13.31	%
Other real estate mortgage ⁽¹⁾		530,029		60.50			529,014		65.20			506,661		65.00			399,527		63.94			345,506		59.60
Real estate construction		90,882		10.37			39,584		4.88			46,157		5.92			26,731		4.28			30,498		5.26
Total commercial and construction		783,707		89.45			706,270		87.05			660,189		84.70			495,655		79.33			453,190		78.17
Consumer:
Real estate one-to-four family		84,053		9.60			90,109		11.10			92,865		11.91			88,780		14.21			89,801		15.49
Other installment		8,356		0.95			14,997		1.85			26,378		3.39			40,384		6.46			36,781		6.34
Total consumer		92,409		10.55			105,106		12.95			119,243		15.30			129,164		20.67			126,582		21.83
Total loans		876,116		100.00	%		811,376		100.00	%		779,432		100.00	%		624,819		100.00	%		579,772		100.00	%
Less:
Allowance for loan losses		11,457					10,766					10,528					9,885					10,762
Total loans receivable, net	$	864,659				$	800,610				$	768,904				$	614,934				$	569,010

⁽¹⁾ Other real estate mortgage consists of commercial real estate, land and multi-family loans.

	Commercial Business		Other Real Estate Mortgage		Real Estate Construction		Commercial & Construction Total
March 31, 2019

Commercial business	$	162,796	$	-	$	-	$	162,796
Commercial construction		-		-		70,533		70,533
Office buildings		-		118,722		-		118,722
Warehouse/industrial		-		91,787		-		91,787
Retail/shopping centers/strip malls		-		64,934		-		64,934
Assisted living facilities		-		2,740		-		2,740
Single purpose facilities		-		183,249		-		183,249
Land acquisition and development		-		17,027		-		17,027
Multi-family		-		51,570		-		51,570
One-to-four family construction		-		-		20,349		20,349
Total	$	162,796	$	530,029	$	90,882	$	783,707

March 31, 2018

Commercial business	$	137,672	$	-	$	-	$	137,672
Commercial construction		-		-		23,158		23,158
Office buildings		-		124,000		-		124,000
Warehouse/industrial		-		89,442		-		89,442
Retail/shopping centers/strip malls		-		68,932		-		68,932
Assisted living facilities		-		2,934		-		2,934
Single purpose facilities		-		165,289		-		165,289
Land acquisition and development		-		15,337		-		15,337
Multi-family		-		63,080		-		63,080
One-to-four family construction		-		-		16,426		16,426
Total	$	137,672	$	529,014	$	39,584	$	706,270

Table of Contents
PART I		PAGE
Item 1.	Business	4
Item 1A.	Risk Factors	31
Item 1B.	Unresolved Staff Comments	43
Item 2.	Properties	43
Item 3.	Legal Proceedings	43
Item 4.	Mine Safety Disclosures	43
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	44
Item 6.	Selected Financial Data	46
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	48
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	59
Item 8.	Financial Statements and Supplementary Data	61
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	103
Item 9A.	Controls and Procedures	103
Item 9B.	Other Information	104
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	105
Item 11.	Executive Compensation	105
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	106
Item 13.	Certain Relationships and Related Transactions, and Director Independence	106
Item 14.	Principal Accounting Fees and Services	106
PART IV
Item 15.	Exhibits and Financial Statement Schedules	107
Item 16.	Form 10-K Summary	108

Signatures		109

	Northwest Oregon		Other Oregon		Southwest Washington		Total
March 31, 2019

Land acquisition and development	$	2,184	$	1,908	$	12,935	$	17,027
Speculative and custom/presold construction		1,680		104		15,284		17,068
Total	$	3,864	$	2,012	$	28,219	$	34,095

March 31, 2018

Land acquisition and development	$	482	$	881	$	13,974	$	15,337
Speculative and custom/presold construction		400		421		12,596		13,417
Total	$	882	$	1,302	$	26,570	$	28,754

	Within 1 Year		1 – 3 Years		After 3 – 5 Years		After 5 – 10 Years		Beyond 10 Years		Total
Commercial and construction:
Commercial business	$	17,501	$	19,920	$	15,369	$	50,117	$	59,889	$	162,796
Other real estate mortgage		14,680		20,939		68,037		336,189		90,184		530,029
Real estate construction		15,085		1,555		-		62,567		11,675		90,882
Total commercial and construction		47,266		42,414		83,406		448,873		161,748		783,707
Consumer:
Real estate one-to-four family		326		501		931		4,363		77,932		84,053
Other installment		1,047		5,536		1,184		263		326		8,356
Total consumer		1,373		6,037		2,115		4,626		78,258		92,409
Total loans	$	48,639	$	48,451	$	85,521	$	453,499	$	240,006	$	876,116

	Fixed Rate		Adjustable Rate		Total

Commercial and construction:
Commercial business	$	89,199	$	56,096	$	145,295
Other real estate mortgage		180,845		334,504		515,349
Real estate construction		27,701		48,096		75,797
Total commercial and construction		297,745		438,696		736,441
Consumer:
Real estate one-to-four family		63,082		20,645		83,727
Other installment		6,769		540		7,309
Total consumer		69,851		21,185		91,036
Total loans	$	367,596	$	459,881	$	827,477

	March 31, 2019				March 31, 2018
	Number of Loans		Balance		Number of Loans		Balance

Commercial business		2	$	225		1	$	178
Commercial real estate		2		1,081		2		1,200
Land		-		-		1		763
Consumer		16		213		12		277
Total		20	$	1,519		16	$	2,418

	At or For the Year
	Ended March 31,
	2019			2018

Classified loans	$	6,306		$	7,423

General loss allowances		11,435			10,697
Specific loss allowances		22			69
Net recoveries		(641	)		(238	)

	Less Than One Year					One to Five Years					More Than Five to Ten Years					More Than Ten Years
	Amount		Weighted Average Yield ⁽¹⁾			Amount		Weighted Average Yield ⁽¹⁾			Amount		Weighted Average Yield ⁽¹⁾			Amount		Weighted Average Yield ⁽¹⁾

Municipal securities	$	-		-	%	$	-		-	%	$	3,339		2.40	%	$	5,542		2.46	%
Agency securities		2,994		1.30			3,018		2.76			6,329		2.22			-		-
REMICS		1,955		2.14			36		4.36			11,657		2.42			26,514		2.28
Residential MBS		-		-			1,083		1.86			17,896		2.05			56,877		2.39
Other MBS		-		-			4,400		2.11			8,152		2.24			28,469		2.27
Total	$	4,949		1.63	%	$	8,537		2.32	%	$	47,373		2.22	%	$	117,402		2.34	%

Maturity Period	Amount		Weighted Average Rate

Three months or less	$	9,906		0.46	%
Over three through six months		7,299		0.41
Over six through 12 months		12,386		0.43
Over 12 months		13,466		0.95
Total	$	43,057		0.60	%

Name	Age ⁽¹⁾	Position
Kevin J. Lycklama	41	President and Chief Executive Officer
David Lam	42	Executive Vice President and Chief Financial Officer
Daniel D. Cox	41	Executive Vice President and Chief Credit Officer
Kim J. Capeloto	57	Executive Vice President and Chief Banking Officer
Steven P. Plambeck	59	Executive Vice President and Chief Lending Officer
Christopher P. Cline	58	President and Chief Executive Officer of Riverview Trust Company

	At March 31,
	2019					2018
	Amount ⁽¹⁾		Percent			Amount ⁽¹⁾		Percent

Speculative construction	$	12,315		8.01	%	$	7,589		6.80	%
Commercial/multi-family construction		116,815		76.01			80,357		72.04
Custom/presold construction		19,643		12.78			18,029		16.16
Construction/permanent		4,923		3.20			5,573		5.00
Total	$	153,696		100.00	%	$	111,548		100.00	%

	3/31/14*	3/31/15	3/31/16	3/31/17	3/31/18	3/31/19

Riverview Bancorp, Inc.	100.00	131.37	124.10	214.46	283.47	225.62
S & P 500	100.00	112.73	114.74	134.45	153.26	167.81
NASDAQ Bank	100.00	101.72	102.05	145.83	161.33	142.38


	At or For the Years Ended March 31,
		2019		2018		2017		2016		2015

KEY FINANCIAL RATIOS:
Performance Ratios:
Return on average assets		1.51	%	0.90	%	0.76	%	0.72	%	0.54	%
Return on average equity		13.86		8.78		6.66		5.93		4.42
Dividend payout ratio ⁽¹⁾		19.74		23.33		24.24		23.21		5.63
Interest rate spread		4.25		3.99		3.72		3.60		3.52
Net interest margin		4.38		4.08		3.79		3.67		3.59
Non-interest expense to average assets		3.13		3.15		3.38		3.39		3.70
Efficiency ratio ⁽²⁾		61.38		66.43		75.35		77.62		86.40
Average equity to average assets		10.92		10.30		11.39		12.14		12.23
Asset Quality Ratios:
Allowance for loan losses to total loans at end of period		1.31		1.33		1.35		1.58		1.86
Allowance for loan losses to nonperforming loans		754.25		445.24		382.98		364.22		202.37
Net (recoveries) charge-offs to average outstanding loans during the period		(0.08	)	(0.03	)	(0.10	)	(0.05	)	-

Ratio of nonperforming assets to total assets		0.13		0.24		0.27		0.36		0.81
Ratio of nonperforming loans to total loans		0.17		0.30		0.35		0.43		0.92
Capital Ratios:
Total capital to risk-weighted assets		16.88		15.41		14.06		16.07		15.89
Tier 1 capital to risk-weighted assets		15.63		14.16		12.81		14.81		14.63
Common equity tier 1 capital to risk-weighted assets		15.63		14.16		12.81		14.81		14.63
Leverage ratio		11.56		10.26		10.21		11.18		10.89

	Years Ended March 31,
	2019							2018							2017
	Average Balance		Interest and Dividends		Yield/ Cost			Average Balance		Interest and Dividends		Yield/ Cost			Average Balance		Interest and Dividends		Yield/ Cost
	(Dollars in thousands)
Interest-earning assets:
Mortgage loans	$	663,225	$	35,725		5.39	%	$	629,153	$	31,914		5.07	%	$	547,609	$	26,609		4.86	%
Non-mortgage loans		180,917		8,462		4.68			160,051		7,745		4.84			115,460		5,000		4.33
Total net loans ⁽¹⁾		844,142		44,187		5.23			789,204		39,659		5.03			663,069		31,609		4.77

Investment securities ⁽²⁾		199,463		4,647		2.33			214,723		4,786		2.23			175,862		3,589		2.04
Daily interest-earning assets		64		1		1.56			104		-		-			238		-		-
Other earning assets		15,394		328		2.13			40,876		558		1.37			51,547		443		0.86
Total interest-earning assets		1,059,063		49,163		4.64			1,044,907		45,003		4.31			890,716		35,641		4.00

Non-interest-earning assets:
Office properties and equipment, net		15,485							15,888							14,435
Other non-interest-earning assets		66,142							71,648							70,906
Total assets	$	1,140,690						$	1,132,443						$	976,057

Interest-bearing liabilities:
Savings accounts	$	136,720	$	145		0.11	%	$	132,376	$	133		0.10	%	$	106,324	$	110		0.10	%
Interest checking accounts		180,256		101		0.06			170,124		100		0.06			151,801		98		0.06
Money market accounts		252,202		302		0.12			275,092		335		0.12			252,040		309		0.12
Certificates of deposit		105,049		448		0.43			136,370		640		0.47			118,769		634		0.53
Total interest-bearing deposits		674,227		996		0.15			713,962		1,208		0.17			628,934		1,151		0.18

Other interest-bearing liabilities		44,368		1,819		4.10			29,668		1,141		3.85			25,977		718		2.76
Total interest-bearing liabilities		718,595		2,815		0.39			743,630		2,349		0.32			654,911		1,869		0.28

Non-interest-bearing liabilities:
Non-interest-bearing deposits		289,707							264,128							202,376
Other liabilities		7,846							8,016							7,560
Total liabilities		1,016,148							1,015,774							864,847
Shareholders' equity		124,542							116,669							111,210
Total liabilities and shareholders' equity	$	1,140,690						$	1,132,443						$	976,057
Net interest income			$	46,348						$	42,654						$	33,772
Interest rate spread						4.25	%						3.99	%						3.72	%
Net interest margin						4.38	%						4.08	%						3.79	%
Ratio of average interest-earning assets to average interest-bearing liabilities						147.38	%						140.51	%						136.01	%
Tax-Equivalent Adjustment ⁽³⁾			$	45						$	43						$	14

⁽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 and preferred equity securities dividend income.

	Year Ended March 31,
	2019 vs. 2018									2018 vs. 2017

	Increase (Decrease) Due to									Increase (Decrease) Due to

							Total
(Dollars in thousands)	Volume			Rate			Increase (Decrease)			Volume			Rate			Total Increase

Interest Income:
Mortgage loans	$	1,760		$	2,051		$	3,811		$	4,112		$	1,193		$	5,305
Non-mortgage loans		980			(263	)		717			2,103			642			2,745
Investment securities ⁽¹⁾		(349	)		210			(139	)		842			355			1,197
Daily interest-earning		-			1			1			-			-			-
Other earning assets		(451	)		221			(230	)		(107	)		222			115
Total interest income		1,940			2,220			4,160			6,950			2,412			9,362

Interest Expense:
Savings accounts		3			9			12			23			-			23
Interest checking accounts		1			-			1			2			-			2
Money market accounts		(33	)		-			(33	)		26			-			26
Certificates of deposit		(140	)		(52	)		(192	)		84			(78	)		6
Other interest-bearing liabilities		600			78			678			112			311			423
Total interest expense		431			35			466			247			233			480
Net interest income	$	1,509		$	2,185		$	3,694		$	6,703		$	2,179		$	8,882

	Within 1 Year		Over 1 - 3 Years		Over 3 - 5 Years		After 5 Years		Total Balance
Certificates of deposit	$	59,487	$	19,273	$	4,709	$	2,537	$	86,006
Operating leases		1,492		1,582		1,062		1,453		5,589
Capital lease		34		86		115		2,168		2,403
Junior subordinates debentures		-		-		-		27,836		27,836
Total other contractual obligations	$	61,013	$	20,941	$	5,886	$	33,994	$	121,834

Change in interest rates ⁽¹⁾	Percent change in net interest income (12 months)	Percent change in net interest income (24 months)

Up 300 basis points	(5.5)%	3.3%
Up 200 basis points	(3.6)%	2.5%
Up 100 basis points	(1.5)%	1.9%
Base case	-	0.3%
Down 100 basis points	(0.7)%	(4.6)%
Down 200 basis points	(1.8)%	(8.8)%

⁽¹⁾ The target federal funds rate as of March 31, 2019 was 2.5%. No rates in this model are allowed to go below zero and therefore a down 300 basis point scenario would not be plausible.

	Average Rate			Within 1 Year			After 1 - 3 Years			After 3 - 5 Years			After 5 - 10 Years		Beyond 10 Years		Total

Interest-Sensitive Assets:

Loans receivable		4.94	%	$	48,639		$	48,451		$	85,521		$	453,499	$	240,006	$	876,116
Investment securities and other
interest-earning assets		2.31			27,536			21,919			58,946			76,450		-		184,851
FHLB stock		2.46			1,458			1,093			1,093			-		-		3,644
Total assets				$	77,633		$	71,463		$	145,560		$	529,949	$	240,006	$	1,064,611

Interest-Sensitive Liabilities:

Interest checking		0.06		$	73,356		$	55,016		$	55,016		$	-	$	-	$	183,388
Savings accounts		0.10			55,001			41,251			41,251			-		-		137,503
Money market accounts		0.12			93,327			69,995			69,995			-		-		233,317
Certificate accounts		0.53			59,487			19,273			4,709			2,521		16		86,006
FHLB advances		2.62			56,586			-			-			-		-		56,586
Subordinated debentures		4.22			-			-			-			-		27,836		27,836
Obligations under capital lease		7.16			34			86			115			438		1,730		2,403
Total liabilities					337,791			185,621			171,086			2,959		29,582		727,039
Interest sensitivity gap					(260,158	)		(114,158	)		(25,526	)		526,990		210,424	$	337,572
Cumulative interest sensitivity gap				$	(260,158	)	$	(374,316	)	$	(399,842	)	$	127,148	$	337,572
Off-Balance Sheet Items:

Commitments to extend credit				$	40,737		$	-		$	-		$	-	$	-	$	40,737
Unused lines of credit				$	139,842		$	-		$	-		$	-	$	-	$	139,842

Valuation technique

Significant unobservable inputs

Impaired loans

Appraised value

Discounted cash flows

Adjustment for market conditions

Discount rate

N/A⁽¹⁾

5.25% 8.00%

⁽¹⁾ There were no adjustments to appraised values of impaired loans as of March 31, 2019 and 2018.