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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 (Date of earliest event reported): May 3, 2019

 

 

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, Pennsylvania

  17110
(Address of principal executive offices)   (Zip Code)

(717) 827-4042

(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))

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.  ☐

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 the number of shares outstanding of the registrant’s common stock, as of the latest practicable date: 9,154,982 at April 29, 2019.

 

 

 


CURRENT REPORT ON FORM 8-K

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

 

Item 2.02

Results of Operations and Financial Condition.

On May 3, 2019, Riverview Financial Corporation issued a press release reporting its earnings for the three months ended March 31, 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 May 3, 2019 announcing its earnings for the three months ended March 31, 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: May 3, 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 FIRST QUARTER EARNINGS FOR 2019

HARRISBURG, PA, May 3, 2019 / PRNEWSWIRE / Riverview Financial Corporation (the “Company” or “Riverview”) (NASDAQ: RIVE), today reported unaudited financial results at and for the three months ended March 31, 2019. Riverview reported a net loss of $687 thousand, or $(0.08) per basic and diluted weighted average common share, for the first quarter of 2019, compared to net income of $2.8 million, or $0.31 per basic and diluted weighted average common share, for the first quarter of 2018.

The results for the first three months ended March 31, 2019 included the recognition of a nonrecurring executive separation pre-tax expense totaling $2.2 million, which primarily contributed to the first quarter net loss. The year over year decline was also due to the recognition of lower loan interest income resulting from a decline in loan balances due to anticipated merger related attrition throughout 2018, including payoffs of acquired purchase credit impaired and certain risk related loans and steadfast adherence to both credit quality underwriting standards and pricing discipline.

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 measure 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 $0.47 or 3.94% and $0.58 or 6.63%, respectively, at March 31, 2019, compared to the same period last year.

 

   

Tax-equivalent net interest margin was to 3.86% in the first quarter of 2019 compared to 4.38% for the same period last year. Tax-equivalent net interest margin, excluding the impact of purchase accounting, improved to 3.67% in the first 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 0.68% at the end of the first quarter of 2019, an improvement from 0.81% at December 31, 2018 and 0.90% at March 31, 2018.

 

   

Riverview incurred a pre-tax nonrecurring expense of $2.2 million in the first quarter of 2019 associated with a separation agreement of a contract employee.

“While recording a net operating loss in the first quarter of 2019 is the result of recognizing nonrecurring expenses primarily associated with an executive separation agreement, management’s focus on core results and the need to take advantage of our current scale through improved operating efficiencies is unwavering”, said Brett D. Fulk, President and Chief Executive Officer. “In addition to the anticipated cost savings associated with the separation of service with the aforementioned executive, we have initiated specific strategic measures to enhance noninterest income, improve operating efficiencies and increase interest income. One such initiative was the closure of two offices with successful transition of customers to nearby offices during the first quarter of 2019. 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. Additionally, we continue to analyze and take action with respect to our delivery system by repositioning our branch footprint to markets with greater growth and profitability potential. Lastly, we have identified or developed a number of new products and services that will be introduced throughout 2019, all with demonstrated ability to either enhance revenue or decrease expenses. In closing, management recognizes the need to address efficiencies, maintain expense discipline, while continuing to grow our balance sheet 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 current scale for the purpose of enhancing shareholder value,” concluded Fulk.


INCOME STATEMENT REVIEW

Tax-equivalent net interest income for the three months ended March 31, decreased $1,663 thousand to $9,830 thousand in 2019 from $11,493 thousand in 2018. The decrease in tax-equivalent net interest income was primarily attributable to the decline in loan balances and the realization of lower levels of loan accretion from purchase accounting marks. The tax-equivalent net interest margin for the three months ended March 31, 2019, decreased to 3.86% from 4.38% for the comparable period of 2018. The tax-equivalent yield on earnings assets was 4.73% and the cost of funds was 1.06% in the first quarter of 2019. The tax-equivalent yield on the loan portfolio decreased to 5.02% in 2019 compared to 5.38% in 2018. The tax-equivalent net interest margin excluding the loan accretion would have been 3.67% in the first three months of 2019 compared to 3.62% for the same period last year. Investments yielded 3.10% on a tax-equivalent basis in the first quarter of 2019 compared to 2.74% for the same period last year. For the three months ended March 31, the cost of deposits increased 29 basis points to 1.01% in 2019 from 0.72% in 2018. Loans, net averaged $886.8 million in 2019 and $945.7 million in 2018. Average investments totaled $108.3 million in 2019 and $92.8 million in 2018. Average interest-bearing liabilities decreased to $842.6 million in 2019 from $896.5 million in 2018.

The provision for loan losses totaled $583 thousand for the quarter ended March 31, 2019, compared to $390 thousand in 2018. Management does not believe this increase to be a reflection of rising systemic risk within the loan portfolio.

For the quarter ended March 31, noninterest income totaled $1,811 thousand in 2019, a decrease of $142 thousand from $1,953 thousand in 2018. The overall reduction was primarily driven by decreases in service charges, fees and commission of $175 thousand, and mortgage banking income of $64 thousand. Service charge income realized a decrease in NSF and overdraft income, while mortgage banking income decreased due to higher mortgage origination rates and normal seasonal stagnation. Positive increases were made in both trust and wealth management as income for the first quarter of 2019 increased by $50 thousand and $93 thousand, respectively, when compared against the first quarter of 2018. Additionally, net losses on the sale of investment securities of $42 thousand were recognized in the first quarter of 2019 in order to dispose of certain investments with low yields and higher risk characteristics.

Noninterest expense increased $2,428 thousand, or 25.5%, to $11,964 thousand for the three months ended March 31, 2019, from $9,536 thousand for the same period last year. The increase was primarily due to $2.2 million in nonrecurring expense from an executive separation agreement. The net cost of operation of other real estate owned was $127 thousand for the first quarter of 2019 versus $(1) thousand in the first quarter of 2018. Other expenses increased $172 thousand, or 6.0% to $3,044 thousand for the first quarter of 2019 from $2,872 thousand for the same period last year. Offsets to the overall increase in noninterest expense were realized through reduced costs in net occupancy and equipment of $33 thousand, and in the amortization expense of intangible assets of $27 thousand when comparing the first quarter of 2019 to the first quarter of 2018.

BALANCE SHEET REVIEW

Total assets, loans, net and deposits totaled $1.1 billion, $878.1 million, and $1.0 billion, respectively, at March 31, 2019. For the three months ended March 31, 2019, total assets increased $1.1 million while loans, net and deposits decreased $15.1 million and $3.6 million, respectively. Business lending, including commercial and commercial real estate loans decreased $11.5 million while retail lending, including residential mortgages and consumer loans decreased $7.3 million during the three months ended March 31, 2019. Offsetting the declines for the same period were increases of $3.7 million in construction lending. Loan originations during the first quarter of 2019 represented a more moderate pace as compared to 2018 as management has continued its emphasize on strong credit quality underwriting standards and pricing discipline. Total investments were $100.7 million at March 31, 2019, compared to $104.7 million at December 31, 2018. Total deposits decreased $3.6 million in 2019 since year-end 2018. Noninterest-bearing deposits increased $2.3 million, while interest-bearing deposits decreased $5.9 million during the first three months of 2019. As a percentage of total deposits, noninterest-bearing deposits amounted to 16.5% at March 31, 2019 and 16.2% at December 31, 2018.


Stockholders’ equity totaled $113.5 million, or $12.40 per share, at March 31, 2019, as compared with $113.9 million, or $12.49 per common share, at December 31, 2018. The decrease in equity in the three months ended March 31, 2019 was a result primarily of a net loss of $687 thousand and dividends declared of $915 thousand, offset partially by a reduction of $841 million in the accumulated other comprehensive loss. A net increase of $341 thousand was realized in common stock and related surplus through the issuance of shares through shareholder and employee issuance and option plans. Tangible stockholders’ equity per common share decreased to $9.33 at March 31, 2019, compared to $9.39 at December 31, 2018.

ASSET QUALITY REVIEW

Nonperforming assets were $6.0 million, or 0.68% of loans, net and foreclosed assets at March 31, 2019 compared to $7.2 million or 0.81% at December 31, 2018. Adjusting for accruing restructured loans, nonperforming assets were $3.2 million, or 0.37% of loans, net and foreclosed assets at March 31, 2019, and $4.3 million, or 0.48%, at December 31, 2018. The allowance for loan losses equaled $6.5 million, or 0.74%, of loans, net at March 31, 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 1.14% as a percentage of loans, net at March 31, 2019. The coverage ratio, allowance for loan losses as a percentage of nonperforming assets, was 108.9% at March 31, 2019 versus 88.1% at December 31, 2018. Excluding accruing restructured loans, the coverage ratio would be 201.1% at March 31, 2019. Loans charged-off, net of recoveries, for the three months ended March 31, 2019, equaled $445 thousand, compared to $181 thousand for the same period last year.

Riverview Financial Corporation is the parent company of Riverview Bank and its operating divisions Citizens Neighborhood Bank, CBT Bank, Riverview Wealth Management and CBT Financial and Trust Management. An independent community bank, Riverview Bank serves the Pennsylvania market areas of Berks, Blair, Centre, Clearfield, Dauphin, Huntingdon, Lebanon, Lycoming, Northumberland, Perry, Schuylkill and Somerset Counties through 28 community banking offices and four 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, 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 months ended March 31, 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)

 

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

Key performance data:

          

Per common share data:

          

Net income (loss)

   $ (0.08   $ 0.27     $ 0.30     $ 0.31     $ 0.31  

Core net income (1)

   $ 0.12     $ 0.27     $ 0.31     $ 0.31     $ 0.35  

Cash dividends declared

   $ 0.10     $ 0.10     $ 0.10     $ 0.10     $ 0.00  

Book value

   $ 12.40     $ 12.49     $ 12.30     $ 12.15     $ 11.93  

Tangible book value (1)

   $ 9.33     $ 9.39     $ 9.17     $ 8.99     $ 8.75  

Market value:

          

High

   $ 13.00     $ 14.29     $ 14.40     $ 12.75     $ 13.85  

Low

   $ 10.90     $ 10.11     $ 12.56     $ 11.85     $ 12.31  

Closing

   $ 11.50     $ 10.90     $ 13.60     $ 12.65     $ 12.31  

Market capitalization

   $ 105,278     $ 99,425     $ 123,905     $ 115,052     $ 111,827  

Common shares outstanding

     9,154,599       9,121,555       9,110,676       9,094,986       9,084,277  

Selected ratios:

          

Return on average stockholders’ equity

     (2.46 )%      8.64     9.89     10.17     10.59

Core return on average stockholders’ equity (1)

     3.93     8.78     10.01     10.13     11.88

Return on average tangible stockholders’ equity (1)

     (3.27 )%      11.52     13.29     13.78     14.50

Core return on average tangible stockholders’ equity (1)

     5.23     11.70     13.45     13.73     16.27

Return on average assets

     (0.25 )%      0.86     0.96     0.97     0.98

Core return on average assets (1)

     0.39     0.87     0.97     0.96     1.10

Stockholders’ equity to total assets

     9.97     10.01     9.69     9.59     9.26

Efficiency ratio (2)

     100.74     76.11     69.89     71.46     69.28

Nonperforming assets to loans, net, and foreclosed assets

     0.68     0.81     0.91     0.89     0.90

Net charge-offs to average loans, net

     0.20     0.05     0.07     0.05     0.08

Allowance for loan losses to loans, net

     0.74     0.71     0.71     0.68     0.70

Earning assets yield (FTE) (3)

     4.73     5.13     4.93     4.67     5.05

Cost of funds

     1.06     1.02     0.96     0.89     0.80

Net interest spread (FTE) (3)

     3.67     4.11     3.97     3.78     4.25

Net interest margin (FTE) (3)

     3.86     4.30     4.15     3.94     4.38

 

(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)

 

Three Months Ended    Mar 31
2019
    Mar 31
2018
 

Interest income:

    

Interest and fees on loans:

    

Taxable

   $ 10,688     $ 12,241  

Tax-exempt

     230       234  

Interest and dividends on investment securities:

    

Taxable

     740       523  

Tax-exempt

     69       82  

Dividends

    

Interest on interest-bearing deposits in other banks

     231       79  

Interest on federal funds sold

       10  

Total interest income

     11,958       13,169  

Interest expense:

    

Interest on deposits

     2,073       1,554  

Interest on short-term borrowings

       30  

Interest on long-term debt

     134       176  

Total interest expense

     2,207       1,760  

Net interest income

     9,751       11,409  

Provision for loan losses

     583       390  

Net interest income after provision for loan losses

     9,168       11,019  

Noninterest income:

    

Service charges, fees and commissions

     1,053       1,228  

Commissions and fees on fiduciary activities

     260       210  

Wealth management income

     247       154  

Mortgage banking income

     106       170  

Life insurance investment income

     187       191  

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

     (42  

Total noninterest income

     1,811       1,953  

Noninterest expense:

    

Salaries and employee benefits expense

     7,510       5,322  

Net occupancy and equipment expense

     1,089       1,122  

Amortization of intangible assets

     194       221  

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

     127       (1

Other expenses

     3,044       2,872  

Total noninterest expense

     11,964       9,536  

Income (loss) before income taxes

     (985     3,436  

Income tax expense (benefit)

     (298     625  

Net income (loss)

   $ (687   $ 2,811  

Other comprehensive income (loss):

    

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

   $ 1,023     $ (1,075

Reclassification adjustment for (gain) loss included in net income

     42    

Change in pension liability

    

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

     224       (225

Other comprehensive income (loss), net of income taxes

     841       (850

Comprehensive income (loss)

   $ 154     $ 1,961  

Per common share data:

    

Net income (loss):

    

Basic

   $ (0.08   $ 0.31  

Diluted

   $ (0.08   $ 0.31  

Average common shares outstanding:

    

Basic

     9,143,316       9,079,043  

Diluted

     9,143,316       9,137,706  

Cash dividends declared

   $ 0.10     $ 0.00  


Riverview Financial Corporation

Consolidated Statements of Income (Loss)

(In thousands, except per share data)

 

Three months ended    Mar 31
2019
    Dec 31
2018
    Sept 30
2018
    Jun 30
2018
    Mar 31
2018
 

Interest income:

          

Interest and fees on loans:

          

Taxable

   $ 10,688     $ 12,309     $ 11,957     $ 11,226     $ 12,241  

Tax-exempt

     230       231       230       235       234  

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

          

Taxable

     740       660       551       542       523  

Tax-exempt

     69       77       80       81       82  

Dividends

          

Interest on interest-bearing deposits in other banks

     231       214       181       101       79  

Interest on federal funds sold

           10       10  

Total interest income

     11,958       13,491       12,999       12,195       13,169  

Interest expense:

          

Interest on deposits

     2,073       2,027       1,885       1,723       1,554  

Interest on short-term borrowings

             30  

Interest on long-term debt

     134       184       194       192       176  

Total interest expense

     2,207       2,211       2,079       1,915       1,760  

Net interest income

     9,751       11,280       10,920       10,280       11,409  

Provision for loan losses

     583         225         390  

Net interest income after provision for loan losses

     9,168       11,280       10,695       10,280       11,019  

Noninterest income:

          

Service charges, fees and commissions

     1,053       1,551       1,267       1,651       1,228  

Commissions and fees on fiduciary activities

     260       244       226       235       210  

Wealth management income

     247       239       199       219       154  

Mortgage banking income

     106       114       168       189       170  

Life insurance investment income

     187       192       194       199       191  

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

     (42         40    

Total noninterest income

     1,811       2,340       2,054       2,533       1,953  

Noninterest expense:

          

Salaries and employee benefits expense

     7,510       6,489       5,032       5,221       5,322  

Net occupancy and equipment expense

     1,089       1,011       1,008       1,012       1,122  

Amortization of intangible assets

     194       212       215       220       221  

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

     127       18       29       2       (1

Other expenses

     3,044       2,910       3,057       2,953       2,872  

Total noninterest expense

     11,964       10,640       9,341       9,408       9,536  

Income (loss) before income taxes

     (985     2,980       3,408       3,405       3,436  

Income tax expense (benefit)

     (298     508       620       618       625  

Net income (loss)

   $ (687)     $ 2,472     $ 2,788     $ 2,787     $ 2,811  

Other comprehensive income (loss):

          

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

   $ 1,023     $ 527     $ (576)     $ 112     $ (1,075

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)

     224       54       (121     15       (225

Other comprehensive income (loss), net of income taxes

     841       208       (455     57       (850

Comprehensive income (loss)

   $ 154     $ 2,680     $ 2,333     $ 2,844     $ 1,961  

Per common share data:

          

Net income (loss):

          

Basic

   $ (0.08)     $ 0.27     $ 0.30     $ 0.31     $ 0.31  

Diluted

   $ (0.08)     $ 0.27     $ 0.30     $ 0.31     $ 0.31  

Average common shares outstanding:

          

Basic

     9,143,316       9,115,450       9,100,616       9,089,011       9,079,043  

Diluted

     9,143,316       9,163,855       9,156,931       9,134,248       9,137,706  

Cash dividends declared

   $ 0.10     $ 0.10     $ 0.10     $ 0.10     $ 0.00  


Riverview Financial Corporation

Details of Net Interest and Net Interest Margin

(In thousands, fully taxable equivalent basis)

 

Three months ended    Mar 31
2019
    Dec 31
2018
    Sept 30
2018
    Jun 30
2018
    Mar 31
2018
 

Net interest income:

          

Interest income

          

Loans, net:

          

Taxable

   $ 10,688     $ 12,309     $ 11,957     $ 11,226     $ 12,241  

Tax-exempt

     291       292       291       298       296  

Total loans, net

     10,979       12,601       12,248       11,524       12,537  

Investments:

          

Taxable

     740       660       551       542       523  

Tax-exempt

     87       97       102       102       104  

Total investments

     827       757       653       644       627  

Interest on interest-bearing balances in other banks

     231       214       181       101       79  

Federal funds sold

           10       10  

Total interest income

     12,037       13,572       13,082       12,279       13,253  

Interest expense:

          

Deposits

     2,073       2,027       1,885       1,723       1,554  

Short-term borrowings

             30  

Long-term debt

     134       184       194       192       176  

Total interest expense

     2,207       2,211       2,079       1,915       1,760  

Net interest income

   $ 9,830     $ 11,361     $ 11,003     $ 10,364     $ 11,493  

Yields on earning assets:

          

Loans, net:

          

Taxable

     5.09     5.60     5.32     5.02     5.46

Tax-exempt

     3.34     3.26     3.25     3.29     3.23

Total loans, net

     5.02     5.51     5.24     4.95     5.38

Investments:

          

Taxable

     3.09     3.00     2.82     2.82     2.76

Tax-exempt

     3.15     2.92     2.83     2.77     2.66

Total investments

     3.10     2.99     2.82     2.81     2.74

Interest-bearing balances with banks

     2.54     2.08     2.14     1.50     1.36

Federal funds sold

           1.56     1.55

Total earning assets

     4.73     5.13     4.93     4.67     5.05

Costs of interest-bearing liabilities:

          

Deposits

     1.01     0.95     0.88     0.81     0.72

Short-term borrowings

             1.67

Long-term debt

     7.87     5.95     5.89     5.87     5.41

Total interest-bearing liabilities

     1.06     1.02     0.96     0.89     0.80

Net interest spread

     3.67     4.11     3.97     3.78     4.25

Net interest margin

     3.86     4.30     4.15     3.94     4.38


Riverview Financial Corporation

Consolidated Balance Sheets

(In thousands, except per share data)

 

At period end    Mar 31
2019
    Dec 31
2018
    Sept 30
2018
    Jun 30
2018
    Mar 31
2018
 

Assets:

          

Cash and due from banks

   $ 12,278     $ 16,708     $ 13,310     $ 13,139     $ 14,396  

Interest-bearing balances in other banks

     55,823       37,108       43,505       23,481       40,724  

Federal funds sold

             4,729  

Investment securities available-for-sale

     100,684       104,677       97,102       87,908       88,773  

Loans held for sale

     695       637       598       873       610  

Loans, net

     878,070       893,184       915,529       939,887       934,190  

Less: allowance for loan losses

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

Net loans

     871,584       886,836       909,057       933,486       927,675  

Premises and equipment, net

     18,355       18,208       18,427       18,542       18,714  

Accrued interest receivable

     3,018       3,010       3,066       2,786       2,865  

Goodwill

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

Other intangible assets, net

     3,315       3,509       3,721       3,935       4,155  

Other assets

     48,206       42,156       43,193       42,900       43,771  

Total assets

   $ 1,138,712     $ 1,137,603     $ 1,156,733     $ 1,151,804     $ 1,171,166  

Liabilities:

          

Deposits:

          

Noninterest-bearing

   $ 164,880     $ 162,574     $ 162,385     $ 170,232     $ 157,011  

Interest-bearing

     836,149       842,019       858,379       847,490       881,594  

Total deposits

     1,001,029       1,004,593       1,020,764       1,017,722       1,038,605  

Short-term borrowings

          

Long-term debt

     6,912       6,892       13,019       13,091       13,160  

Accrued interest payable

     475       484       503       449       466  

Other liabilities

     16,806       11,724       10,416       10,075       10,535  

Total liabilities

     1,025,222       1,023,693       1,044,702       1,041,337       1,062,766  

Stockholders’ equity:

          

Common stock

     101,500       101,134       100,999       100,790       100,660  

Capital surplus

     307       332       356       424       422  

Retained earnings

     13,461       15,063       13,503       11,625       9,747  

Accumulated other comprehensive income (loss)

     (1,778     (2,619     (2,827     (2,372     (2,429

Total stockholders’ equity

     113,490       113,910       112,031       110,467       108,400  

Total liabilities and stockholders’ equity

   $ 1,138,712     $ 1,137,603     $ 1,156,733     $ 1,151,804     $ 1,171,166  


Riverview Financial Corporation

Consolidated Balance Sheets

(In thousands except per share data)

 

Average quarterly balances    Mar 31
2019
     Dec 31
2018
     Sept 30
2018
     Jun 30
2018
     Mar 31
2018
 

Assets:

              

Loans, net:

              

Taxable

   $ 851,515      $ 872,615      $ 891,455      $ 897,085      $ 908,574  

Tax-exempt

     35,298        35,501        35,478        36,374        37,153  

Total loans, net

     886,813        908,116        926,933        933,459        945,727  

Investments:

              

Taxable

     97,041        87,249        77,573        77,061        76,952  

Tax-exempt

     11,215        13,198        14,288        14,784        15,836  

Total investments

     108,256        100,447        91,861        91,845        92,788  

Interest-bearing balances with banks

     36,953        40,787        33,553        27,067        23,607  

Federal funds sold

              2,568        2,617  

Total earning assets

     1,032,022        1,049,350        1,052,347        1,054,939        1,064,739  

Other assets

     97,628        95,000        97,377        99,492        98,503  

Total assets

   $ 1,129,650      $ 1,144,350      $ 1,149,724      $ 1,154,431      $ 1,163,242  

Liabilities and stockholders’ equity:

              

Deposits:

              

Interest-bearing

   $ 835,687      $ 847,867      $ 850,492      $ 853,986      $ 875,985  

Noninterest-bearing

     156,735        159,758        163,142        166,828        149,123  

Total deposits

     992,422        1,007,625        1,013,634        1,020,814        1,025,108  

Short-term borrowings

                 7,297  

Long-term debt

     6,902        12,268        13,060        13,124        13,205  

Other liabilities

     17,006        10,973        11,208        10,573        9,996  

Total liabilities

     1,016,330        1,030,866        1,037,902        1,044,511        1,055,606  

Stockholders’ equity

     113,320        113,484        111,822        109,920        107,636  

Total liabilities and stockholders’ equity

   $ 1,129,650      $ 1,144,350      $ 1,149,724      $ 1,154,431      $ 1,163,242  


Riverview Financial Corporation

Asset Quality Data

(In thousands)

 

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

At quarter end:

              

Nonperforming assets:

              

Nonaccrual loans

   $ 2,643      $ 2,729      $ 2,780      $ 2,070      $ 2,629  

Accruing restructured loans

     2,731        2,913        4,663        4,693        5,310  

Accruing loans past due 90 days or more

     122        839        225        1,536        393  

Foreclosed assets

     461        721        668        90        92  

Total nonperforming assets

   $ 5,957      $ 7,202      $ 8,336      $ 8,389      $ 8,424  

Three months ended:

              

Allowance for loan losses:

              

Beginning balance

   $ 6,348      $ 6,472      $ 6,401      $ 6,515      $ 6,306  

Charge-offs

     520        166        189        166        226  

Recoveries

     75        42        35        52        45  

Provision for loan losses

     583           225           390  

Ending balance

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


Riverview Financial Corporation

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)

 

Three months ended:   

Mar 31

2019

   

Dec 31

2018

   

Sept 30

2018

   

Jun 30

2018

   

Mar 31

2018

 

Core net income (loss) per common share:

          

Net income (loss)

   $ (687   $ 2,472     $ 2,788     $ 2,787     $ 2,811  

Adjustments:

          

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

     (33         32    

Add: Acquisition related expenses, net of tax

       39       34       22       342  

Add: Executive severance payout

     1,752          

Net income (loss) Core

   $ 1,098     $ 2,511     $ 2,822     $ 2,777     $ 3,153  

Average common shares outstanding

     9,143,316       9,115,450       9,100,616       9,089,011       9,079,043  

Core net income (loss) per common share

   $ 0.12     $ 0.27     $ 0.31     $ 0.31     $ 0.35  

Tangible book value:

          

Total stockholders’ equity

   $ 113,490     $ 113,910     $ 112,031     $ 110,467     $ 108,400  

Less: Goodwill

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

Less: Other intangible assets, net

     3,315       3,509       3,721       3,935       4,155  

Total tangible stockholders’ equity

   $ 85,421     $ 85,647     $ 83,556     $ 81,778     $ 79,491  

Common shares outstanding

     9,154,599       9,112,555       9,110,676       9,094,986       9,084,277  

Tangible book value per share

   $ 9.33     $ 9.39     $ 9.17     $ 8.99     $ 8.75  

Core return on average stockholders’ equity:

          

Net income (loss) GAAP

   $ (687   $ 2,472     $ 2,788     $ 2,787     $ 2,811  

Adjustments:

          

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

     (33         32    

Add: Acquisition related expenses, net of tax

       39       34       22       342  

Add: Executive separation expense, net of tax

     1,752          

Net income (loss) Core

   $ 1,098     $ 2,511     $ 2,822     $ 2,777     $ 3,153  

Average stockholders’ equity

   $ 113,320     $ 113,484     $ 111,822     $ 109,920     $ 107,636  

Core return on average stockholders’ equity

     3.93     8.78     10.01     10.13     11.88

Return on average tangible equity:

          

Net income (loss) GAAP

   $ (687   $ 2,472     $ 2,788     $ 2,787     $ 2,811  

Average stockholders’ equity

   $ 113,320     $ 113,484     $ 111,822     $ 109,920     $ 107,636  

Less: average intangibles

     28,164       28,365       28,578       28,800       29,021  

Average tangible stockholders’ equity

   $ 85,156     $ 85,119     $ 83,244     $ 81,120     $ 78,615  

Return on average tangible stockholders’ equity

     (3.27 )%      11.52     13.29     13.78     14.50

Core return on average tangible stockholders’ equity:

          

Net income (loss) GAAP

   $ (687   $ 2,472     $ 2,788     $ 2,787     $ 2,811  

Adjustments:

          

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

     (33         32    

Add: Acquisition related expenses, net of tax

       39       34       22       342  

Add: Executive separation expense, net of tax

     1,752          

Net income (loss) Core

   $ 1,098     $ 2,511     $ 2,822     $ 2,777     $ 3,153  

Average stockholders’ equity

   $ 113,320     $ 113,484     $ 111,822     $ 109,920     $ 107,636  

Less: average intangibles

     28,164       28,365       28,578       28,800       29,021  

Average tangible stockholders’ equity

   $ 85,156     $ 85,119     $ 83,244     $ 81,120     $ 78,615  

Core return on average tangible stockholders’ equity

     5.23     11.70     13.45     13.73     16.27

Core return on average assets:

          

Net income (loss) GAAP

   $ (687   $ 2,472     $ 2,788     $ 2,787     $ 2,811  

Adjustments:

          

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

     (33         32    

Add: Acquisition related expenses, net of tax

       39       34       22       342  

Add: Executive separation expense, net of tax

     1,752          

Net income (loss) Core

   $ 1,098     $ 2,511     $ 2,822     $ 2,777     $ 3,153  

Average assets

   $ 1,129,650     $ 1,144,350     $ 1,149,724     $ 1,154,431     $ 1,163,242  

Core return on average assets

     0.39     0.87     0.97     0.96     1.10


Riverview Financial Corporation

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)

 

    

Mar 31

2019

   

Mar 31

2018

 

Three months ended:

    

Core net income per common share:

    

Net income (loss)

   $ (687   $ 2,811  

Adjustments:

    

Less: Gains on sale of investment securities, net of tax

     (33  

Add: Acquisition related expenses, net of tax

       342  

Add: Executive severance payout

     1,752    

Net income (loss) Core

   $ 1,098     $ 3,153  

Average common shares outstanding

     9,143,316       9,079,043  

Core net income (loss) per common share

   $ 0.12     $ 0.35  
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