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Section 1: 8-K (FORM 8-K)

Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report July 26, 2019

(Date of earliest event reported)

 

 

Riverview Financial Corporation

(Exact name of registrant as specified in its charter)

 

 

 

Pennsylvania    001-38627    38-3917371

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

3901 North Front Street, Harrisburg, PA    17110
(Address of principal executive offices)    (Zip Code)

(717) 957-2196

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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    RIVE    Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2) of this chapter.)

Emerging growth company  ☐

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

 

 

 


CURRENT REPORT ON FORM 8-K

PART I – FINANCIAL INFORMATION

 

Item 1.

Financial Statements.

 

Item 2.02

Results of Operations and Financial Condition.

On July 26, 2019, Riverview Financial Corporation issued a press release reporting its earnings for the three and six months ended June 30, 2019. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Item 9.01

Financial Statements and Exhibits.

 

(a)

Financial Statements of Businesses Acquired.

None.

 

(b)

Pro Forma Financial Information.

None.

 

(c)

Shell Company Transactions.

None.

 

(d)

Exhibits.

 

Exhibit

Number

 

Description

99.1   Press release issued by Riverview Financial Corporation on July 26, 2019 announcing its earnings for the three and six months ended June 30, 2019.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  RIVERVIEW FINANCIAL CORPORATION
 

(Registrant)

Dated: July 30, 2019

 

/s/ Brett D. Fulk

 

Brett D. Fulk

 

President and Chief Executive Officer

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

EX-99.1
NEWS RELEASE    Exhibit 99.1

RIVERVIEW FINANCIAL CORPORATION

REPORTS SECOND QUARTER EARNINGS FOR 2019

HARRISBURG, PA, July 26, 2019 / PRNEWSWIRE / Riverview Financial Corporation (the “Company” or “Riverview”) (NASDAQ: RIVE), today reported unaudited financial results at and for the three months and six ended June 30, 2019. Riverview reported net income of $1.4 million, or $0.16 per basic and diluted weighted average common share, for the second quarter of 2019, compared to net income of $2.8 million, or $0.31 per basic and diluted weighted average common share, for the second quarter of 2018.

For the six months ended June 30, 2019, Riverview reported net income of $747 thousand, or $0.08 per basic and diluted weighted average common share, compared to net income of $5.6 million, or $0.62 per basic and diluted weighted average common share, for the same period last year. The year over year reduction was largely a function of recognizing $1.2 million less of net accretion on acquired assets and assumed liabilities and a $2.2 million nonrecurring executive separation charge in 2019. In addition, the results for the first six months ended June 30, 2019, included $456 thousand of severance expense to employees that either retired or were separated from service due to branch network consolidations. Comparatively, Riverview incurred merger related costs of $461 thousand for the first half of 2018.

In addition to evaluating its results of operations in accordance with accounting principles generally accepted in the United States of America (“GAAP”), Riverview routinely supplements its evaluation with an analysis of certain non-GAAP financial measures, such as tangible book value per share and return on average tangible stockholders’ equity. Riverview believes these non-GAAP financial measures provide information useful to investors in understanding its operating performance and trends. Where non-GAAP disclosures are used in this press release, a reconciliation to the comparable GAAP measures is provided in the accompanying tables. The non-GAAP financial measures Riverview uses may differ from the non-GAAP financial measures other financial institutions use to measure their results of operations.

HIGHLIGHTS

 

   

Book value per share and tangible book value per share increased to $12.62 per share, or 3.9% and $9.58 per share, or 6.6%, respectively, at the end of the second quarter of 2019, compared to the same period last year.

 

   

Tax-equivalent net interest margin was 4.20% in the second quarter of 2019 compared to 3.94% for the same period last year. Tax-equivalent net interest margin, excluding the impact of purchase accounting, improved to 3.76% in the second quarter of 2019 compared to 3.62% for the same period last year.

 

   

Continued strength in asset quality as nonperforming assets as a percentage of loans, net, and other real estate owned was 0.56% at the end of the second quarter of 2019, an improvement from 0.81% at December 31, 2018 and 0.89% at June 30, 2018.

“Riverview Financial Corporation is at an inflection point in its evolution from a $250 million institution covering two counties eight years ago to the $1.1 billion institution we are today, which will be covering fourteen counties in the near future, while adding Trust, Wealth Management, and Treasury Management services along the way. Growth to gain required scale was a priority over the past eight years. While reasonable and profitable growth remains an important component of our strategic plan, we have transitioned rapidly to focus intently on operational efficiencies and the consistent achievement of higher levels of core operating performance. Historically we maintained staffing levels, processes and


operating systems that made the aforementioned growth possible over the past eight years. However, today we find ourselves capable of growing our balance sheet, utilizing more efficient processes, implementation of strategic outsourced financial technology partnerships, utilization of more sophisticated technological resources internally, and a more streamlined employee base”, said Brett D. Fulk, President and Chief Executive Officer.

Fulk went on to say, “We continued the development and implementation of certain initiatives necessary to improve operating efficiencies, grow interest income and enhance noninterest income in order to establish a consistent core earnings run rate acceptable for an organization of our size and scale during the first half of this year. One such initiative was a retail branch performance and resource allocation analysis, resulting in the closure of two underperforming offices with successful transition of customers to nearby offices during the first quarter of 2019, and the pending closure of two additional branch offices and the sale of a third to a local financial institution in the second half of 2019, pending regulatory approvals. This particular initiative has resulted in a 17% reduction of full service offices when compared to year end 2018 without a material negative impact to Riverview’s deposit, loan, or customer base. Additional efficiency initiatives include, but are certainly not limited to a reduction in the size of our Board of Directors from sixteen (16) to thirteen (13) members following several previously announced departures for various reasons, and a bank-wide reduction in staff effort, which is anticipated to have a materially positive impact to our ongoing core performance despite the resulting one-time severance related expenses taken as a result of these efforts during the second quarter.”

“In concert with divestiture of existing offices, in order to improve operating efficiencies and redefine our market footprint, Riverview continues to seek new opportunities to reposition itself within growth markets. To this end, Riverview is pleased to announce that it has received regulatory approval to open full-service offices in two very attractive markets, Camp Hill, Cumberland County and Allentown, Lehigh County, PA. We believe the opportunity to enter these new growth markets, both contiguous to existing Riverview markets, with offices staffed by experienced bankers that are well known and established in those markets, is an exciting prospect for our franchise. We have had significant success historically with de-novo branch expansion efforts in growth markets by attracting outstanding employees within those markets, and I expect these new offices and markets will continue our trend of past organic expansion success”, continued Fulk. “With respect to interest income, we anticipate loan growth opportunities through the addition of several experienced commercial relationship managers resulting from ongoing market disruption, chiefly among our largest competitors. Lastly, we have identified or developed several new products and services that will be introduced throughout the second half of 2019, each with demonstrated ability to either enhance revenue or decrease expenses.”

“In closing, management recognizes the need to address efficiencies through the identification and elimination of inefficiencies within our existing infrastructure, processes and procedures, to maintain consistent expense discipline, while continuing to grow our balance sheet and revenue in a measured, profitable manner. There is no higher priority in our Company at the present time than positioning Riverview Financial Corporation to capitalize on our increased size and scale for the purpose of enhancing long term shareholder value through demonstration of improving efficiencies and consistent earnings results, while continuing to maintain pricing and underwriting discipline and ongoing focus on asset quality. As we focus on enhancing shareholder value, we will continue to adequately reserve for the risks in our loan portfolio. Given the late state of the economic cycle we currently find ourselves in, we believe the need to maintain strong reserves in our allowance for loan losses is paramount. Therefore, we will not sacrifice our asset quality standards nor our need to adequately allocate reserves to our allowance for loan losses in future periods. The Riverview Financial Corporation Board of Directors and management team are excited about our ability to build upon a solid franchise foundation through execution of our strategic initiatives, many of which are outlined herein”, concluded Fulk.


INCOME STATEMENT REVIEW

Tax-equivalent net interest income for the three and six months ended June 30 were $10.8 million and $20.6 million in 2019 compared to $10.4 million and $21.9 million in 2018. The decrease in tax-equivalent net interest income was attributable to declines in loan balances and reductions in net accretion on purchased assets and assumed liabilities, offset by an improvement in the tax equivalent net interest margin. For the three months ended June 30, the tax-equivalent net interest margin increased to 4.20% in 2019 from 3.94% in 2018. The loan portfolio yield on a tax-equivalent basis improved to 5.41% in the second quarter of 2019 compared to 4.95% for the same period last year. The cost of funds increased 18 basis points comparing the second quarters of 2019 and 2018.

For the six months ended June 30, the tax-equivalent net interest margin was 4.03% in 2019 compared to 4.16% in 2018. The tax-equivalent net interest margin excluding purchase accounting adjustments would have been 3.71% and 3.62% for the six months ended June 30, 2019 and 2018. The tax-equivalent yield on earnings assets was 4.90% and the cost of funds was 1.07% in 2019. The tax-equivalent yield on the loan portfolio increased to 5.22% in 2019 compared to 5.16% in 2018. The tax-equivalent yield on the loan portfolio would have been 4.88% and 4.60% for the first six months of 2019 and 2018, excluding loan accretion of $1.5 million and $2.6 million included in loan interest income related to acquired loans. For the six months ended June 30, investments yielded 3.10% on a tax-equivalent basis in 2019 compared to 2.78% for the same period last year. The cost of deposits increased 25 basis points to 1.01% in 2019 from 0.76% in 2018. The cost of interest bearing liabilities increased to 1.07% in 2019 from 0.84% in 2018. Loans, net averaged $887.4 million in 2019 and $939.6 million in 2018. Average investments totaled $105.2 million in 2019 and $92.3 million in 2018. Average interest-bearing liabilities decreased to $839.2 million in 2019 from $881.7 million in 2018.

For the quarter ended June 30, the provision for loan losses was $618 thousand in 2019 compared to no provision for the same period in 2018. The provision for loan losses totaled $1,201 thousand for the six months ended June 30, 2019, compared to $390 thousand in 2018. The increase in the provision for loan losses in 2019 was influenced by increasing qualitative factors related to economic trends.

For the quarter ended June 30, noninterest income totaled $2,126 thousand in 2019, a decrease of $407 thousand from $2,533 thousand in 2018. The decrease in noninterest income for the quarter was due primarily to decreases in services charges, fees and commissions of $336 thousand, and mortgage banking income of $89 thousand. For the six months ended June 30, noninterest income decreased to $3,937 thousand in 2019 compared to $4,486 thousand in 2018. Service charges, fees and commissions declined $511 thousand due to reduced fees on loan swap arrangements, while mortgage banking income declined $153 thousand due to lower volumes of originations in saleable loans.

Noninterest expense increased $1,076 thousand to $10,484 thousand for the three months ended June 30, 2019, from $9,408 thousand for the same period last year. The increase in noninterest expense for the quarter was due primarily to increases in salaries and employee benefits expense of $609 thousand and other expenses of $555 thousand. The increase in salary and benefits expense was primarily due to accruals of $456 thousand in contractual payments due to retirement and severances associated with staff elimination and the planned branch closures. For the six months ended June 30, noninterest expense increased to $22,448 thousand in 2019 compared to $18,944 thousand in 2018. The increase was primarily due to $2.2 million in nonrecurring expenses from the execution of an executive separation agreement and $456 thousand of retirement and severance accruals.

BALANCE SHEET REVIEW

Total assets, loans, net, and deposits totaled $1.1 billion, $889.3 million, and $979.7 million, respectively, at June 30, 2019. For the three months ended June 30, 2019, total assets and deposits decreased $18.5 million and $21.3 million, respectively, while loans, net increased $11.2 million. Year to


date, loans, net, decreased $3.9 million comparing the end of the second quarter of 2019 to year end 2018. Business lending, including commercial and commercial real estate loans, decreased $2.1 million while retail lending, including residential mortgages and consumer loans, decreased $11.2 million during the six months ended June 30, 2019. For this same period construction lending increased $9.4 million. Loan originations during the first six months of 2019 represented a more moderate pace as compared to the same period of 2018. The reduction in loan growth was a result of management’s decision to focus on improving margins on loan originations and maintaining strong underwriting standards. Total investments were $100.3 million at June 30, 2019, compared to $104.7 million at December 31, 2018. Total deposits decreased $24.9 million in the six months of 2019 as management sought to maintain margins and was able to reduce reliance on higher cost deposits. Noninterest-bearing deposits decreased $2.2 million, while interest-bearing deposits decreased $22.7 million. As a percentage of total deposits, noninterest-bearing deposits amounted to 16.4% at June 30, 2019 and 16.2% at December 31, 2018.

Stockholders’ equity totaled $115.7 million, or $12.62 per share, at June 30, 2019, $113.5 million, or $12.40 per share, at March 30, 2019, and $113.9 million, or $12.49 per common share, at December 31, 2018. The increase in equity in the six months ended June 30, 2019 was due primarily to an increase of $2.4 million in accumulated other comprehensive income and net income of $747 thousand offset partially by dividends declared of $1.8 million. Tangible stockholders’ equity per common share increased to $9.58 at June 30, 2019, compared to $9.33 at March 30, 2019 and $9.39 at December 31, 2018. Dividends declared for the second quarter of 2019 amounted to $0.10 per share representing a dividend payout ratio of 64.0%.

ASSET QUALITY REVIEW

Nonperforming assets were $5.0 million, or 0.56% of loans, net, and foreclosed assets at June 30, 2019 compared to $7.2 million or 0.81% at December 31, 2018. Adjusting for accruing restructured loans, nonperforming assets were $2.3 million, or 0.26% of loans, net and foreclosed assets at June 30, 2019, and $4.3 million, or 0.48%, at December 31, 2018. The allowance for loan losses equaled $7.0 million, or 0.79%, of loans, net, at June 30, 2019, compared to $6.3 million, or 0.71%, at December 31, 2018. Adding accounting marks for purchased credit impaired loans to the allowance for loan losses would result in a ratio of 1.06% as a percentage of loans, net at June 30, 2019. The coverage ratio, allowance for loan losses as a percentage of nonperforming assets, was 139.5% at June 30, 2019 versus 88.1% at December 31, 2018. Excluding accruing restructured loans, the coverage ratio would be 304.0% at June 30, 2019. Loans charged-off, net of recoveries, for the six months ended June 30, 2019, equaled $547 thousand, compared to $295 thousand for the same period last year.

Riverview Financial Corporation is the parent company of Riverview Bank. An independent community bank, Riverview Bank serves the Pennsylvania market areas of Berks, Blair, Centre, Clearfield, Cumberland, Dauphin, Huntingdon, Lebanon, Lehigh, Lycoming, Northumberland, Perry, Schuylkill and Somerset Counties through 30 community banking offices and three limited purpose offices. Each office, interdependent with the community, offers a comprehensive array of financial products and services to individuals, businesses, not-for-profit organizations and government entities. The Wealth Management and Trust divisions of Riverview Bank, with assets under management exceeding $350 million, provide trust and investment advisory services to the general public, businesses and not-for-profit organizations. Riverview’s business philosophy includes offering direct access to senior management and other officers and providing friendly, informed and courteous service, local and timely decision making, flexible and reasonable operating procedures and consistently applied credit policies. The Company’s common stock trades on the Nasdaq Global Market under the symbol “RIVE”. The Investor Relations site can be accessed at https://www.riverviewbankpa.com/.


SOURCE: Riverview Financial Corporation

Contact: Scott A. Seasock, CFO at 717.827.4039 or [email protected]

Safe Harbor Forward-Looking Statements:

We make statements in this press release, and we may from time to time make other statements regarding our outlook or expectations for future financial or operating results and/or other matters regarding or affecting Riverview Financial Corporation, Riverview Bank, and its subsidiaries (collectively, “Riverview”) that may be considered “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “intend” and “potential.” For these statements, Riverview claims the protection of the statutory safe harbors for forward-looking statements.

Riverview cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: prevailing economic and political conditions, particularly in our market area; credit risk associated with our lending activities; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; and other economic, competitive, governmental, regulatory and technological factors affecting Riverview’ operations, pricing, products and services and other factors that may be described in Riverview’ Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission from time to time.

In addition to these risks, acquisitions and business combinations present risks other than those presented by the nature of the business acquired. Acquisitions and business combinations may be substantially more expensive to complete than originally anticipated, and the anticipated benefits may be significantly harder-or take longer-to achieve than expected. As regulated financial institutions, our pursuit of attractive acquisition and business combination opportunities could be negatively impacted by regulatory delays or other regulatory issues. Regulatory and/or legal issues related to the pre-acquisition operations of an acquired or combined business may cause reputational harm to Riverview following the acquisition or combination, and integration of the acquired or combined business with ours may result in additional future costs arising as a result of those issues.

The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, Riverview assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

In addition to evaluating its results of operations in accordance with accounting principles generally accepted in the United States of America (“GAAP”), Riverview routinely presents and supplements its evaluation with an analysis of certain non-GAAP financial measures, such as tangible stockholders’ equity and Core net income ratios. The reported results for the three and six months ended June 30, 2019 and 2018, contain items which Riverview considers non-Core, namely net gains on sales of investment securities available-for-sale, acquisition related expenses and the adjustment to tax expense due to the enactment of the Tax Act. Riverview presents the non-GAAP financial measures because it believes that these measures provide useful and comparative information to assess trends in Riverview’s results of operation. Presentation of these non-GAAP financial measures is consistent with how Riverview evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in evaluation of companies in Riverview’s industry. Where non-GAAP measures are used in this press release, reconciliations to the comparable GAAP measures are provided in the accompanying tables. The non-GAAP financial measures Riverview uses may differ from similarly titled non-GAAP financial measures of other financial institutions. These non-GAAP financial measures would not be considered a substitute for GAAP basis measures, and Riverview strongly encourages a review of its condensed consolidated financial statements in their entirety. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are presented in the tabular material that follows.

[TABULAR MATERIAL FOLLOWS]


Summary Data

Riverview Financial Corporation

Five Quarter Trend

(In thousands, except per share data)

 

     Jun 30     Mar 31     Dec 31     Sept 30     Jun 30  
     2019     2019     2018     2018     2018  

Key performance data:

          

Per common share data:

          

Net income (loss)

   $ 0.16     $ (0.08   $ 0.27     $ 0.30     $ 0.31  

Core net income (1)

   $ 0.16     $ 0.12     $ 0.27     $ 0.31     $ 0.31  

Cash dividends declared

   $ 0.10     $ 0.10     $ 0.10     $ 0.10     $ 0.10  

Book value

   $ 12.62     $ 12.40     $ 12.49     $ 12.30     $ 12.15  

Tangible book value (1)

   $ 9.58     $ 9.33     $ 9.39     $ 9.17     $ 8.99  

Market value:

          

High

   $ 11.44     $ 13.00     $ 14.29     $ 14.40     $ 12.75  

Low

   $ 10.50     $ 10.90     $ 10.11     $ 12.56     $ 11.85  

Closing

   $ 10.50     $ 11.50     $ 10.90     $ 13.60     $ 12.65  

Market capitalization

   $ 96,261     $ 105,278     $ 99,425     $ 123,905     $ 115,052  

Common shares outstanding

     9,167,670       9,154,599       9,121,555       9,110,676       9,094,986  

Selected ratios:

          

Return on average stockholders’ equity

     5.00     (2.46 )%      8.64     9.89     10.17

Core return on average stockholders’ equity (1)

     5.00     3.93     8.78     10.01     10.13

Return on average tangible stockholders’ equity (1)

     6.61     (3.27 )%      11.52     13.29     13.78

Core return on average tangible stockholders’ equity (1)

     6.61     5.23     11.70     13.45     13.73

Tangible stockholders’ equity to tangible assets (1)

     8.04     7.69     7.72     7.41     7.28

Return on average assets

     0.51     (0.25 )%      0.86     0.96     0.97

Core return on average assets (1)

     0.51     0.39     0.87     0.97     0.96

Stockholders’ equity to total assets

     10.33     9.97     10.01     9.69     9.59

Efficiency ratio (2)

     79.90     100.74     76.11     69.89     71.46

Nonperforming assets to loans, net, and foreclosed assets

     0.56     0.68     0.81     0.91     0.89

Net charge-offs to average loans, net

     0.05     0.20     0.05     0.07     0.05

Allowance for loan losses to loans, net

     0.79     0.74     0.71     0.71     0.68

Earning assets yield (FTE) (3)

     5.07     4.73     5.13     4.93     4.67

Cost of funds

     1.07     1.06     1.02     0.96     0.89

Net interest spread (FTE) (3)

     4.00     3.67     4.11     3.97     3.78

Net interest margin (FTE) (3)

     4.20     3.86     4.30     4.15     3.94

 

(1)

See Reconciliation of Non-GAAP financial measures.

(2)

Total noninterest expense less amortization of intangible assets divided by tax-equivalent net interest income and noninterest income less net gain (loss) on sale of investment securities available-for-sale.

(3)

Tax-equivalent adjustments were calculated using the prevailing federal statutory tax rate.


Riverview Financial Corporation

Consolidated Statements of Income (Loss)

(In thousands, except per share data)

 

Six Months Ended   

Jun 30

2019

   

Jun 30

2018

 

Interest income:

    

Interest and fees on loans:

    

Taxable

   $ 22,368     $ 23,467  

Tax-exempt

     463       469  

Interest and dividends on investment securities:

    

Taxable

     1,472       1,065  

Tax-exempt

     116       163  

Dividends

    

Interest on interest-bearing deposits in other banks

     447       180  

Interest on federal funds sold

       20  

Total interest income

     24,866       25,364  

Interest expense:

    

Interest on deposits

     4,172       3,277  

Interest on short-term borrowings

       30  

Interest on long-term debt

     265       368  

Total interest expense

     4,437       3,675  

Net interest income

     20,429       21,689  

Provision for loan losses

     1,201       390  

Net interest income after provision for loan losses

     19,228       21,299  

Noninterest income:

    

Service charges, fees and commissions

     2,368       2,879  

Commissions and fees on fiduciary activities

     541       445  

Wealth management income

     483       373  

Mortgage banking income

     206       359  

Life insurance investment income

     381       390  

Net gain (loss) on sale of investment securities available-for-sale

     (42     40  

Total noninterest income

     3,937       4,486  

Noninterest expense:

    

Salaries and employee benefits expense

     13,340       10,543  

Net occupancy and equipment expense

     2,133       2,134  

Amortization of intangible assets

     388       441  

Net cost of operation of other real estate owned

     35       1  

Other expenses

     6,552       5,825  

Total noninterest expense

     22,448       18,944  

Income before income taxes

     717       6,841  

Income tax expense (benefit)

     (30     1,243  

Net income

   $ 747     $ 5,598  

Other comprehensive income:

    

Unrealized gain (loss) on investment securities available-for-sale

   $ 2,959     $ (963

Reclassification adjustment for (gain) loss included in net income

     42       (40

Change in pension liability

    

Income tax expense (benefit) related to other comprehensive income (loss)

     630       (210

Other comprehensive income (loss), net of income taxes

     2,371       (793

Comprehensive income

   $ 3,118     $ 4,805  

Per common share data:

    

Net income:

    

Basic

   $ 0.08     $ 0.62  

Diluted

   $ 0.08     $ 0.62  

Average common shares outstanding:

    

Basic

     9,151,850       9,084,054  

Diluted

     9,167,409       9,136,004  

Cash dividends declared

   $ 0.20     $ 0.10  


Riverview Financial Corporation

Consolidated Statements of Income (Loss)

(In thousands, except per share data)

 

Three months ended   

Jun 30

2019

   

Mar 31

2019

   

Dec 31

2018

   

Sept 30

2018

   

Jun 30

2018

 

Interest income:

          

Interest and fees on loans:

          

Taxable

   $ 11,680     $ 10,688     $ 12,309     $ 11,957     $ 11,226  

Tax-exempt

     233       230       231       230       235  

Interest and dividends on investment securities available-for-sale:

          

Taxable

     732       740       660       551       542  

Tax-exempt

     47       69       77       80       81  

Dividends

          

Interest on interest-bearing deposits in other banks

     216       231       214       181       101  

Interest on federal funds sold

             10  

Total interest income

     12,908       11,958       13,491       12,999       12,195  

Interest expense:

          

Interest on deposits

     2,099       2,073       2,027       1,885       1,723  

Interest on short-term borrowings

          

Interest on long-term debt

     131       134       184       194       192  

Total interest expense

     2,230       2,207       2,211       2,079       1,915  

Net interest income

     10,678       9,751       11,280       10,920       10,280  

Provision for loan losses

     618       583         225    

Net interest income after provision for loan losses

     10,060       9,168       11,280       10,695       10,280  

Noninterest income:

          

Service charges, fees and commissions

     1,315       1,053       1,551       1,267       1,651  

Commissions and fees on fiduciary activities

     281       260       244       226       235  

Wealth management income

     236       247       239       199       219  

Mortgage banking income

     100       106       114       168       189  

Life insurance investment income

     194       187       192       194       199  

Net gain (loss) on sale of investment securities available-for-sale

       (42         40  

Total noninterest income

     2,126       1,811       2,340       2,054       2,533  

Noninterest expense:

          

Salaries and employee benefits expense

     5,830       7,510       6,489       5,032       5,221  

Net occupancy and equipment expense

     1,044       1,089       1,011       1,008       1,012  

Amortization of intangible assets

     194       194       212       215       220  

Net cost (benefit) of operation of other real estate owned

     (92     127       18       29       2  

Other expenses

     3,508       3,044       2,910       3,057       2,953  

Total noninterest expense

     10,484       11,964       10,640       9,341       9,408  

Income (loss) before income taxes

     1,702       (985     2,980       3,408       3,405  

Income tax expense (benefit)

     268       (298     508       620       618  

Net income (loss)

   $ 1,434     $ (687   $ 2,472     $ 2,788     $ 2,787  

Other comprehensive income (loss):

          

Unrealized gain (loss) on investment securities available-for-sale

   $ 1,936     $ 1,023     $ 527     $ (576   $ 112  

Reclassification adjustment for (gain) loss included in net income

       42           (40

Change in pension liability

         (265    

Income tax expense (benefit) related to other comprehensive income (loss)

     406       224       54       (121     15  

Other comprehensive income (loss), net of income taxes

     1,530       841       208       (455     57  

Comprehensive income (loss)

   $ 2,964     $ 154     $ 2,680     $ 2,333     $ 2,844  

Per common share data:

          

Net income (loss):

          

Basic

   $ 0.16     $ (0.08   $ 0.27     $ 0.30     $ 0.31  

Diluted

   $ 0.16     $ (0.08   $ 0.27     $ 0.30     $ 0.31  

Average common shares outstanding:

          

Basic

     9,160,290       9,143,316       9,115,450       9,100,616       9,089,011  

Diluted

     9,172,992       9,143,316       9,163,855       9,156,931       9,134,248  

Cash dividends declared

   $ 0.10     $ 0.10     $ 0.10     $ 0.10     $ 0.10  


Riverview Financial Corporation

Details of Net Interest and Net Interest Margin

(In thousands, fully taxable equivalent basis)

 

Three months ended   

Jun 30

2019

   

Mar 31

2019

   

Dec 31

2018

   

Sept 30

2018

   

Jun 30

2018

 

Net interest income:

          

Interest income

          

Loans, net:

          

Taxable

   $ 11,680     $ 10,688     $ 12,309     $ 11,957     $ 11,226  

Tax-exempt

     295       291       292       291       298  

Total loans, net

     11,975       10,979       12,601       12,248       11,524  

Investments:

          

Taxable

     732       740       660       551       542  

Tax-exempt

     60       87       97       102       102  

Total investments

     792       827       757       653       644  

Interest on interest-bearing balances in other banks

     216       231       214       181       101  

Federal funds sold

             10  

Total interest income

     12,983       12,037       13,572       13,082       12,279  

Interest expense:

          

Deposits

     2,099       2,073       2,027       1,885       1,723  

Short-term borrowings

          

Long-term debt

     131       134       184       194       192  

Total interest expense

     2,230       2,207       2,211       2,079       1,915  

Net interest income

   $ 10,753     $ 9,830     $ 11,361     $ 11,003     $ 10,364  

Yields on earning assets:

          

Loans, net:

          

Taxable

     5.49     5.09     5.60     5.32     5.02

Tax-exempt

     3.41     3.34     3.26     3.25     3.29

Total loans, net

     5.41     5.02     5.51     5.24     4.95

Investments:

          

Taxable

     3.07     3.09     3.00     2.82     2.82

Tax-exempt

     3.67     3.15     2.92     2.83     2.77

Total investments

     3.11     3.10     2.99     2.82     2.81

Interest-bearing balances with banks

     2.36     2.54     2.08     2.14     1.50

Federal funds sold

             1.56

Total earning assets

     5.07     4.73     5.13     4.93     4.67

Costs of interest-bearing liabilities:

          

Deposits

     1.02     1.01     0.95     0.88     0.81

Short-term borrowings

          

Long-term debt

     7.59     7.87     5.95     5.89     5.87

Total interest-bearing liabilities

     1.07     1.06     1.02     0.96     0.89

Net interest spread

     4.00     3.67     4.11     3.97     3.78

Net interest margin

     4.20     3.86     4.30     4.15     3.94


Riverview Financial Corporation

Consolidated Balance Sheets

(In thousands, except per share data)

 

At period end   

Jun 30

2019

   

Mar 31

2019

   

Dec 31

2018

   

Sept 30

2018

   

Jun 30

2018

 

Assets:

          

Cash and due from banks

   $ 11,354     $ 12,278     $ 16,708     $ 13,310     $ 13,139  

Interest-bearing balances in other banks

     29,621       55,823       37,108       43,505       23,481  

Federal funds sold

          

Investment securities available-for-sale

     100,254       100,684       104,677       97,102       87,908  

Loans held for sale

     170       695       637       598       873  

Loans, net

     889,305       878,070       893,184       915,529       939,887  

Less: allowance for loan losses

     7,002       6,486       6,348       6,472       6,401  

Net loans

     882,303       871,584       886,836       909,057       933,486  

Premises and equipment, net

     18,144       18,355       18,208       18,427       18,542  

Accrued interest receivable

     2,870       3,018       3,010       3,066       2,786  

Goodwill

     24,754       24,754       24,754       24,754       24,754  

Other intangible assets, net

     3,121       3,315       3,509       3,721       3,935  

Other assets

     47,607       48,206       42,156       43,193       42,900  

Total assets

   $ 1,120,198     $ 1,138,712     $ 1,137,603     $ 1,156,733     $ 1,151,804  

Liabilities:

          

Deposits:

          

Noninterest-bearing

   $ 160,407     $ 164,880     $ 162,574     $ 162,385     $ 170,232  

Interest-bearing

     819,293       836,149       842,019       858,379       847,490  

Total deposits

     979,700       1,001,029       1,004,593       1,020,764       1,017,722  

Short-term borrowings

          

Long-term debt

     6,932       6,912       6,892       13,019       13,091  

Accrued interest payable

     445       475       484       503       449  

Other liabilities

     17,443       16,806       11,724       10,416       10,075  

Total liabilities

     1,004,520       1,025,222       1,023,693       1,044,702       1,041,337  

Stockholders’ equity:

          

Common stock

     101,644       101,500       101,134       100,999       100,790  

Capital surplus

     304       307       332       356       424  

Retained earnings

     13,978       13,461       15,063       13,503       11,625  

Accumulated other comprehensive income (loss)

     (248     (1,778     (2,619     (2,827     (2,372

Total stockholders’ equity

     115,678       113,490       113,910       112,031       110,467  

Total liabilities and stockholders’ equity

   $ 1,120,198     $ 1,138,712     $ 1,137,603     $ 1,156,733     $ 1,151,804  


Riverview Financial Corporation

Consolidated Balance Sheets

(In thousands except per share data)

 

Average quarterly balances   

Jun 30

2019

    

Mar 31

2019

    

Dec 31

2018

    

Sept 30

2018

    

Jun 30

2018

 

Assets:

              

Loans, net:

              

Taxable

   $ 853,329      $ 851,515      $ 872,615      $ 891,455      $ 897,085  

Tax-exempt

     34,714        35,298        35,501        35,478        36,374  

Total loans, net

     888,043        886,813        908,116        926,933        933,459  

Investments:

              

Taxable

     95,577        97,041        87,249        77,573        77,061  

Tax-exempt

     6,558        11,215        13,198        14,288        14,784  

Total investments

     102,135        108,256        100,447        91,861        91,845  

Interest-bearing balances with banks

     36,780        36,953        40,787        33,553        27,067  

Federal funds sold

                 2,568  

Total earning assets

     1,026,958        1,032,022        1,049,350        1,052,347        1,054,939  

Other assets

     99,923        97,628        95,000        97,377        99,492  

Total assets

   $ 1,126,881      $ 1,129,650      $ 1,144,350      $ 1,149,724      $ 1,154,431  

Liabilities and stockholders’ equity:

              

Deposits:

              

Interest-bearing

   $ 829,003      $ 835,687      $ 847,867      $ 850,492      $ 853,986  

Noninterest-bearing

     159,069        156,735        159,758        163,142        166,828  

Total deposits

     988,072        992,422        1,007,625        1,013,634        1,020,814  

Short-term borrowings

              

Long-term debt

     6,922        6,902        12,268        13,060        13,124  

Other liabilities

     16,944        17,006        10,973        11,208        10,573  

Total liabilities

     1,011,938        1,016,330        1,030,866        1,037,902        1,044,511  

Stockholders’ equity

     114,943        113,320        113,484        111,822        109,920  

Total liabilities and stockholders’ equity

   $ 1,126,881      $ 1,129,650      $ 1,144,350      $ 1,149,724      $ 1,154,431  


Riverview Financial Corporation

Asset Quality Data

(In thousands)

 

    

Jun 30

2019

    

Mar 31

2019

    

Dec 31

2018

    

Sept 30

2018

    

Jun 30

2018

 

At quarter end:

              

Nonperforming assets:

              

Nonaccrual loans

   $ 2,165      $ 2,643      $ 2,729      $ 2,780      $ 2,070  

Accruing restructured loans

     2,715        2,731        2,913        4,663        4,693  

Accruing loans past due 90 days or more

     52        122        839        225        1,536  

Foreclosed assets

     86        461        721        668        90  

Total nonperforming assets

   $ 5,018      $ 5,957      $ 7,202      $ 8,336      $ 8,389  

Three months ended:

              

Allowance for loan losses:

              

Beginning balance

   $ 6,486      $ 6,348      $ 6,472      $ 6,401      $ 6,515  

Charge-offs

     142        520        166        189        166  

Recoveries

     40        75        42        35        52  

Provision for loan losses

     618        583           225     

Ending balance

   $ 7,002      $ 6,486      $ 6,348      $ 6,472      $ 6,401  


Riverview Financial Corporation

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)

 

Three months ended:   

Jun 30

2019

   

Mar 31

2019

   

Dec 31

2018

   

Sept 30

2018

   

Jun 30

2018

 

Core net income (loss) per common share:

          

Net income (loss)

   $ 1,434     $ (687   $ 2,472     $ 2,788     $ 2,787  

Adjustments:

          

Less: Gain (loss) on sale of investment securities, net of tax

       (33         32  

Add: Acquisition related expenses, net of tax

         39       34       22  

Add: Executive separation expense, net of tax

       1,752        

Net income (loss) Core

   $ 1,434     $ 1,098     $ 2,511     $ 2,822     $ 2,777  

Average common shares outstanding

     9,160,290       9,143,316       9,115,450       9,100,616       9,089,011  

Core net income (loss) per common share

   $ 0.16     $ 0.12     $ 0.27     $ 0.31     $ 0.31  

Tangible book value:

          

Total stockholders’ equity

   $ 115,678     $ 113,490     $ 113,910     $ 112,031     $ 110,467  

Less: Goodwill

     24,754       24,754       24,754       24,754       24,754  

Less: Other intangible assets, net

     3,121       3,315       3,509       3,721       3,935  

Total tangible stockholders’ equity

   $ 87,803     $ 85,421     $ 85,647     $ 83,556     $ 81,778  

Common shares outstanding

     9,167,670       9,154,599       9,121,555       9,110,676       9,094,986  

Tangible book value per share

   $ 9.58     $ 9.33     $ 9.39     $ 9.17     $ 8.99  

Tangible stockholders’ equity to tangible assets:

          

Total stock holders’ equity

   $ 115,678     $ 113,490     $ 113,910     $ 112,031     $ 110,467  

Less: Goodwill

     24,754       24,754       24,754       24,754       24,754  

Less: Other intangible assets, net

     3,121       3,315       3,509       3,721       3,935  

Total tangible stockholders’ equity

   $ 87,803     $ 85,421     $ 85,647     $ 83,556     $ 81,778  

Total assets

   $ 1,120,198     $ 1,138,712     $ 1,137,603     $ 1,156,733     $ 1,151,804  

Less: Goodwill

     24,754       24,754       24,754       24,754       24,754  

Less: Other intangible assets, net

     3,121       3,315       3,509       3,721       3,935  

Total tangible assets

   $ 1,092,323     $ 1,110,643     $ 1,109,340     $ 1,128,258     $ 1,123,115  

Tangible stockholders’ equity to tangible assets

     8.04     7.69     7.72     7.41     7.28

Core return on average stockholders’ equity:

          

Net income (loss) GAAP

   $ 1,434     $ (687   $ 2,472     $ 2,788     $ 2,787  

Adjustments:

          

Less: Gain (loss) on sale of investment securities, net of tax

       (33         32  

Add: Acquisition related expenses, net of tax

         39       34       22  

Add: Executive separation expense, net of tax

       1,752        

Net income (loss) Core

   $ 1,434     $ 1,098     $ 2,511     $ 2,822     $ 2,777  

Average stockholders’ equity

   $ 114,943     $ 113,320     $ 113,484     $ 111,822     $ 109,920  

Core return on average stockholders’ equity

     5.00     3.93     8.78     10.01     10.13

Return on average tangible equity:

          

Net income (loss) GAAP

   $ 1,434     $ (687   $ 2,472     $ 2,788     $ 2,787  

Average stockholders’ equity

   $ 114,943     $ 113,320     $ 113,484     $ 111,822     $ 109,920  

Less: average intangibles

     27,968       28,164       28,365       28,578       28,800  

Average tangible stockholders’ equity

   $ 86,975     $ 85,156     $ 85,119     $ 83,244     $ 81,120  

Return on average tangible stockholders’ equity

     6.61     (3.27 )%      11.52     13.29     13.78


Riverview Financial Corporation

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)

 

    

Jun 30

2019

   

Mar 31

2019

   

Dec 31

2018

   

Sept 30

2018

   

Jun 30

2018

 

Core return on average tangible stockholders’ equity:

          

Net income (loss) GAAP

   $ 1,434     $ (687   $ 2,472     $ 2,788     $ 2,787  

Adjustments:

          

Less: Gain (loss) on sale of investment securities, net of tax

       (33         32  

Add: Acquisition related expenses, net of tax

         39       34       22  

Add: Executive separation expense, net of tax

       1,752        

Net income (loss) Core

   $ 1,434     $ 1,098     $ 2,511     $ 2,822     $ 2,777  

Average stockholders’ equity

   $ 114,943     $ 113,320     $ 113,484     $ 111,822     $ 109,920  

Less: average intangibles

     27,968       28,164       28,365       28,578       28,800  

Average tangible stockholders’ equity

   $ 86,975     $ 85,156     $ 85,119     $ 83,244     $ 81,120  

Core return on average tangible stockholders’ equity

     6.61     5.23     11.70     13.45     13.73

Core return on average assets:

          

Net income (loss) GAAP

   $ 1,434     $ (687   $ 2,472     $ 2,788     $ 2,787  

Adjustments:

          

Less: Gain (loss) on sale of investment securities, net of tax

       (33         32  

Add: Acquisition related expenses, net of tax

         39       34       22  

Add: Executive separation expense, net of tax

       1,752        

Net income (loss) Core

   $ 1,434     $ 1,098     $ 2,511     $ 2,822     $ 2,777  

Average assets

   $ 1,126,881     $ 1,129,650     $ 1,144,350     $ 1,149,724     $ 1,154,431  

Core return on average assets

     0.51     0.39     0.87     0.97     0.96


Riverview Financial Corporation

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)

 

Six months ended:   

June 30

2019

   

June 30

2018

 

Core net income per common share:

    

Net income

   $ 747     $ 5,598  

Adjustments:

    

Less: Gains (loss) on sale of investment securities, net of tax

     (33     31  

Add: Acquisition related expenses, net of tax

       364  

Add: Executive separation expense, net of tax

     1,752    

Net income – core

   $ 2,532     $ 5,931  

Average common shares outstanding

     9,151,850       9,084,054  

Core net income (loss) per common shares

   $ 0.28     $ 0.66  
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