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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 October 22, 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 October 22, 2019, Riverview Financial Corporation issued a press release reporting its earnings for the three and nine months ended September 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 October 22, 2019 announcing its earnings for the three and nine months ended September 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: October 23, 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 THIRD QUARTER EARNINGS FOR 2019

HARRISBURG, PA, October 22, 2019 / PRNEWSWIRE / Riverview Financial Corporation (the “Company” or “Riverview”) (NASDAQ: RIVE), today reported unaudited financial results at and for the three months and nine ended September 30, 2019. Riverview reported net income of $2.3 million, or $0.25 per basic and diluted weighted average common share, for the third quarter of 2019, compared to net income of $2.8 million, or $0.30 per basic and diluted weighted average common share, for the third quarter of 2018. The decrease in the comparable second quarter results was caused primarily by recognizing a higher amount of loan loss provision in 2019.

For the nine months ended September 30, 2019, Riverview reported net income of $3.0 million, or $0.33 per basic and diluted weighted average common share, compared to net income of $8.4 million, or $0.92 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 $1.0 million less of net accretion on acquired assets and assumed liabilities, a $2.2 million nonrecurring executive separation charge and $553 thousand of severance expense to employees that either retired or were separated from service due to branch network consolidations. In addition, the results for the nine months ended September 30, 2019, included $1.6 million of additional loan loss provision compared to the same period in 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

 

   

The operating efficiency ratio improved to 69.11% for the three months ended September 30, 2019 compared to 79.90% for the prior quarter.

 

   

Total noninterest expense decreased $1,053 thousand, or 10.0%, during the quarter compared to the quarter ended June 30, 2019.

 

   

Tax-equivalent interest income increased $523 thousand, or 4.0%, during the quarter compared to the quarter ended June 30, 2019.

 

   

Interest expense declined $76 thousand, or 3.4%, during the quarter compared to the quarter ended June 30, 2019.

 

   

Interest-bearing deposit costs declined in the third quarter of 2019 to 0.99% from 1.02% in the second quarter of 2019.

 

   

Tax-equivalent net interest margin was 4.46% in the third quarter of 2019 compared to 4.15% for the same period last year. Tax-equivalent net interest margin, excluding the impact of purchase accounting, improved to 3.90% in the third quarter of 2019 compared to 3.68% 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 0.66% at the end of the third quarter of 2019, an improvement from 0.81% at December 31, 2018 and 0.91% at September 30, 2018.

 

   

Book value per share and tangible book value per share increased to $12.77 per share, or 3.8% and $9.75 per share, or 6.3%, respectively, at the end of the third quarter of 2019, compared to the same period last year.

 

   

Stockholders’ equity as a percentage of total assets improved to 10.57% at the end of the third quarter of 2019 compared to 9.69% at the same period last year. Tangible stockholders’ equity as a percentage of tangible assets increased to 8.28% at September 30, 2019, from 7.41% at September 30, 2018.

We are pleased to report our third quarter results, particularly as they are beginning to demonstrate the impact of our strategic efficiency initiatives,” said Brett D. Fulk, President and Chief Executive Officer. Fulk continued “I am extremely pleased with the effort put forth by our management team to begin the successful execution of cost savings opportunities identified throughout the first half of 2019, leading directly to a 10% reduction in total non-interest expense this quarter compared to the second quarter of this year. To achieve this level of expense reduction we successfully executed initiatives that reduced Salary and Employee Benefits Expense by 10% and Other Expenses by 15% during the third quarter. Additional expense reduction initiatives will be implemented throughout the remainder of 2019, along with certain fee generation initiatives that are anticipated to have a positive material impact on our core operating results.”

Regarding asset quality, Fulk commented “despite elevated loan loss provisions this quarter and year to date compared to 2018, asset quality remains very strong, as evidenced by our low level of delinquent and non-performing loans. Increased provisioning expense during 2019 is the result of identification of increasing national, regional and local economic risks emerging as the current economic cycle continues to age, coupled with efforts to address legacy loans on a “one off” basis, and should not cause readers of our financial results to draw negative conclusions about systemic loan portfolio credit quality risk within our portfolio”. In closing, Fulk stated with respect to balance sheet growth. “It is imperative we continue to expand our earning asset base responsibly. The lack of organic loan balance growth year to date is being addressed by focusing on methods to generate additional opportunities without increasing our risk profile. Some of these methods include expansion into new growth markets during the third quarter through the opening of two full service offices and one limited purpose office, as well as attracting additional asset generation employees to our organization.”

INCOME STATEMENT REVIEW

Tax-equivalent net interest income for the three months ended September 30 was $11.4 million in 2019 compared to $11.0 million in 2018. The improvement in the tax-equivalent net interest income was attributable to recognizing a greater amount of net accretion on purchased assets and assumed liabilities along with an increase in the tax equivalent net interest margin, offset by a reduction in average loan volumes. Net accretion totaled $1.4 million in the third quarter of 2019 compared to $1.1 million for the same period last year. For the three months ended September 30, the tax-equivalent net interest margin increased to 4.46% in 2019 from 4.15% in 2018. Excluding purchase accounting adjustments, the tax-equivalent net interest margins were 3.90% and 3.68% for the third quarters of 2019 and 2018. The loan portfolio yield on a tax-equivalent basis improved to 5.67% in the third quarter of 2019 compared to 5.24% for the same period last year. The cost of funds increased nine basis points comparing the third quarters of 2019 and 2018. Average loan volume declined $44.3 million to $882.6 million from $926.9 million comparing the three months ended September 30, 2019 and 2018.


For the nine months ended September 30, tax-equivalent net interest income declined $1.0 million to $31.9 million in 2019 from $32.9 million in 2018. The decrease in tax-equivalent net interest income was attributable to declines in average loan balances and reductions in net accretion on purchased assets and assumed liabilities, offset by an improvement in the tax equivalent net interest margin. Loans averaged $885.8 million for the nine months ended September 30, 2019 compared to $935.3 million for the same period last year. For the nine months ended September 30, tax-equivalent net interest margin was 4.18% in 2019 compared to 4.16% in 2018. Adjusting for the recognition of purchase accounting adjustments of $3.0 million and $4.1 million, the tax-equivalent net interest margin would have been 3.78% and 3.64% for the nine months ended September 30, 2019 and 2018. The tax-equivalent yield on earnings assets was 5.04% and the cost of funds was 1.06% in 2019. The tax-equivalent yield on the loan portfolio increased to 5.37% in 2019 compared to 5.19% in 2018. Excluding loan accretion of $2.9 million and $3.8 million included in loan interest income related to acquired loans, the tax-equivalent yield on the loan portfolio would have been 4.94% and 4.65% for the nine months ended September 30, 2019 and 2018. For the nine months ended September 30, investments yielded 3.06% on a tax-equivalent basis in 2019 compared to 2.79% for the same period last year. The cost of deposits increased 20 basis points to 1.00% in 2019 from 0.80% in 2018. The cost of interest-bearing liabilities increased to 1.06% in 2019 from 0.88% in 2018.

For the quarter ended September 30, the provision for loan losses was $1,049 thousand in 2019 compared to $225 thousand for the same period in 2018. The provision for loan losses totaled $2,250 thousand for the nine months ended September 30, 2019, compared to $615 thousand in 2018. The increase in the provision for loan losses in 2019 was influenced by increasing qualitative factors related to weakening economic trends and higher historical loss factors due to an increase in net charge-offs primarily associated with legacy purchased loans.

For the quarter ended September 30, noninterest income totaled $1,960 thousand in 2019, a decrease of $94 thousand from $2,054 thousand in 2018. The decrease in noninterest income for the quarter was due primarily to decreases in services charges, fees and commissions of $138 thousand, and recognizing a net loss on the sale of investment securities of $53 thousand offset partially by an increase of $88 thousand in trust commissions and fees. For the nine months ended September 30, noninterest income decreased to $5,897 thousand in 2019 compared to $6,540 thousand in 2018. The decrease was primarily a result of lower service charges, fees and commissions of $649 thousand and mortgage banking income of $170 thousand offset partially by increases in trust commissions and fees of $184 thousand and wealth management income of $137 thousand.

Noninterest expense increased $90 thousand to $9,431 thousand for the three months ended September 30, 2019, from $9,341 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 $200 thousand. The increase in salary and benefits expense was primarily due to accruals of severances associated with staff elimination and the planned branch closures. For the nine months ended September 30, noninterest expense increased to $31,879 thousand in 2019 compared to $28,285 thousand in 2018. The increase was primarily due to $2.2 million in nonrecurring expenses from the execution of an executive separation agreement and $553 thousand of retirement and severance accruals.

BALANCE SHEET REVIEW

Total assets, loans, net, and deposits totaled $1.1 billion, $883.5 million, and $969.6 million at September 30, 2019. For the three months ended September 30, 2019, total assets, loans and deposits decreased $10.4 million, $5.8 million and $10.1 million, respectively. For the nine months ended September 30, 2019, total assets decreased $27.8 million or 2.4%. Year to date, loans, net, decreased $9.7 million comparing the end of the third quarter of 2019 to year-end 2018. Business lending, including commercial and commercial real estate loans, decreased $12.0 million while retail lending, including


residential mortgages and consumer loans, decreased $16.7 million during the nine months ended September 30, 2019. For this same period construction lending increased $19.0 million. Loan originations during the first nine 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 margin discipline on loan originations and an unwavering commitment to maintaining strong credit underwriting standards. Total investments were $106.6 million at September 30, 2019, compared to $104.7 million at December 31, 2018. Total deposits decreased $35.0 million in the nine months ended September 30, 2019, as the softness in loan demand reduced the need to aggressively price deposits along with management’s desire to maintain margins through reducing reliance on interest-bearing deposits. Noninterest-bearing deposits decreased $1.4 million, while interest-bearing deposits decreased $33.6 million. As a percentage of total deposits, noninterest-bearing deposits amounted to 16.6% at September 30, 2019 and 16.2% at December 31, 2018.

Stockholders’ equity totaled $117.3 million, or $12.77 per share, at September 30, 2019, $115.7 million, or $12.62 per share, at June 30, 2019, and $113.9 million, or $12.49 per common share, at December 31, 2018. The increase in equity in the nine months ended September 30, 2019 was due primarily to an change of $2.2 million in accumulated other comprehensive income and net income of $3.0 million offset partially by dividends declared of $2.5 million. Tangible stockholders’ equity per common share increased to $9.75 at September 30, 2019, compared to $9.58 at June 30, 2019 and $9.39 at December 31, 2018. Dividends declared for the third quarter of 2019 amounted to $0.075 per share representing a dividend payout ratio of 2.6% based on the Company’s closing market price on September 30, 2019.

ASSET QUALITY REVIEW

Nonperforming assets were $5.8 million, or 0.66% of loans, net, and foreclosed assets at September 30, 2019 compared to $7.2 million or 0.81% at December 31, 2018. Adjusting for accruing restructured loans, nonperforming assets were $3.1 million, or 0.35% of loans, net and foreclosed assets at September 30, 2019, and $4.3 million, or 0.48%, at December 31, 2018. The allowance for loan losses equaled $7.1 million, or 0.80%, of loans, net, at September 30, 2019, compared to $6.4 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 0.94% as a percentage of loans, net at September 30, 2019. The coverage ratio, allowance for loan losses as a percentage of nonperforming assets, was 122.2% at September 30, 2019 versus 88.1% at December 31, 2018. Excluding accruing restructured loans, the coverage ratio would be 227.9% at September 30, 2019. Loans charged-off, net of recoveries, for the nine months ended September 30, 2019, equaled $1,501 thousand, compared to $154 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, Bucks, Centre, Clearfield, Cumberland, Dauphin, Huntingdon, Lebanon, Lehigh, 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 and Trust Management divisions of Riverview Bank, with assets under management exceeding $350 million, provide trust and investment advisory services to the general public. 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’s operations, pricing, products and services and other factors that may be described in Riverview’s 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 a regulated financial institution, 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 nine months ended September 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)

 

     Sep 30     Jun 30     Mar 31     Dec 31     Sep 30  
     2019     2019     2019     2018     2018  

Key performance data:

          

Per common share data:

          

Net income (loss)

   $ 0.25     $ 0.16     $ (0.08   $ 0.27     $ 0.30  

Core net income (1)

   $ 0.25     $ 0.16     $ 0.12     $ 0.27     $ 0.30  

Cash dividends declared

   $ 0.08     $ 0.10     $ 0.10     $ 0.10     $ 0.10  

Book value

   $ 12.77     $ 12.62     $ 12.40     $ 12.49     $ 12.30  

Tangible book value (1)

   $ 9.75     $ 9.58     $ 9.33     $ 9.39     $ 9.17  

Market value:

          

High

   $ 11.68     $ 11.44     $ 13.00     $ 14.29     $ 14.40  

Low

   $ 9.90     $ 10.50     $ 10.90     $ 10.11     $ 12.56  

Closing

   $ 11.68     $ 10.50     $ 11.50     $ 10.90     $ 13.60  

Market capitalization

   $ 107,252     $ 96,261     $ 105,278     $ 99,425     $ 123,905  

Common shares outstanding

     9,182,565       9,167,670       9,154,599       9,121,555       9,110,676  

Selected ratios:

          

Return on average stockholders’ equity

     7.62     5.00     (2.46 )%      8.64     9.89

Core return on average stockholders’ equity (1)

     7.76     5.00     3.93     8.78     10.01

Return on average tangible stockholders’ equity (1)

     9.97     6.61     (3.27 )%      11.52     13.29

Core return on average tangible stockholders’ equity (1)

     10.16     6.61     5.23     11.70     13.44

Tangible stockholders’ equity to tangible assets (1)

     8.28     8.04     7.69     7.72     7.41

Return on average assets

     0.81     0.51     (0.25 )%      0.86     0.96

Core return on average assets (1)

     0.82     0.51     0.39     0.87     0.97

Stockholders’ equity to total assets

     10.57     10.33     9.97     10.01     9.69

Efficiency ratio (2)

     69.11     79.90     100.74     76.11     69.89

Nonperforming assets to loans, net, and foreclosed assets

     0.66     0.56     0.68     0.81     0.91

Net charge-offs to average loans, net

     0.43     0.05     0.20     0.05     0.07

Allowance for loan losses to loans, net

     0.80     0.79     0.74     0.71     0.71

Earning assets yield (FTE) (3)

     5.31     5.07     4.73     5.13     4.93

Cost of funds

     1.05     1.07     1.06     1.02     0.96

Net interest spread (FTE) (3)

     4.26     4.00     3.67     4.11     3.97

Net interest margin (FTE) (3)

     4.46     4.20     3.86     4.30     4.15

 

(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)

 

Nine Months Ended   

Sep 30

2019

   

Sep 30

2018

 

Interest income:

    

Interest and fees on loans:

    

Taxable

   $ 34,651     $ 35,424  

Tax-exempt

     722       699  

Interest and dividends on investment securities:

    

Taxable

     2,113       1,616  

Tax-exempt

     159       243  

Dividends

    

Interest on interest-bearing deposits in other banks

     647       361  

Interest on federal funds sold

       20  

Total interest income

     38,292       38,363  

Interest expense:

    

Interest on deposits

     6,199       5,162  

Interest on short-term borrowings

       30  

Interest on long-term debt

     392       562  

Total interest expense

     6,591       5,754  

Net interest income

     31,701       32,609  

Provision for loan losses

     2,250       615  

Net interest income after provision for loan losses

     29,451       31,994  

Noninterest income:

    

Service charges, fees and commissions

     3,497       4,146  

Commissions and fees on fiduciary activities

     855       671  

Wealth management income

     709       572  

Mortgage banking income

     357       527  

Life insurance investment income

     574       584  

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

     (95     40  

Total noninterest income

     5,897       6,540  

Noninterest expense:

    

Salaries and employee benefits expense

     18,572       15,575  

Net occupancy and equipment expense

     3,174       3,142  

Amortization of intangible assets

     582       656  

Net cost of operation of other real estate owned

     20       30  

Other expenses

     9,531       8,882  

Total noninterest expense

     31,879       28,285  

Income before income taxes

     3,469       10,249  

Income tax expense (benefit)

     456       1,863  

Net income

   $ 3,013     $ 8,386  

Other comprehensive income:

    

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

   $ 2,703     $ (1,539

Reclassification adjustment for (gain) loss included in net income

     95       (40

Change in pension liability

    

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

     588       (331

Other comprehensive income (loss), net of income taxes

     2,210       (1,248

Comprehensive income

   $ 5,223     $ 7,138  

Per common share data:

    

Net income:

    

Basic

   $ 0.33     $ 0.92  

Diluted

   $ 0.33     $ 0.92  

Average common shares outstanding:

    

Basic

     9,159,281       9,089,636  

Diluted

     9,172,015       9,143,041  

Cash dividends declared

   $ 0.28     $ 0.20  


Riverview Financial Corporation

Consolidated Statements of Income (Loss)

(In thousands, except per share data)

 

Three months ended   

Sep 30

2019

   

Jun 30

2019

   

Mar 31

2019

   

Dec 31

2018

   

Sep 30

2018

 

Interest income:

          

Interest and fees on loans:

          

Taxable

   $ 12,283     $ 11,680     $ 10,688     $ 12,309     $ 11,957  

Tax-exempt

     259       233       230       231       230  

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

          

Taxable

     641       732       740       660       551  

Tax-exempt

     43       47       69       77       80  

Dividends

          

Interest on interest-bearing deposits in other banks

     200       216       231       214       181  

Interest on federal funds sold

          

Total interest income

     13,426       12,908       11,958       13,491       12,999  

Interest expense:

          

Interest on deposits

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

Interest on short-term borrowings

          

Interest on long-term debt

     127       131       134       184       194  

Total interest expense

     2,154       2,230       2,207       2,211       2,079  

Net interest income

     11,272       10,678       9,751       11,280       10,920  

Provision for loan losses

     1,049       618       583         225  

Net interest income after provision for loan losses

     10,223       10,060       9,168       11,280       10,695  

Noninterest income:

          

Service charges, fees and commissions

     1,129       1,315       1,053       1,551       1,267  

Commissions and fees on fiduciary activities

     314       281       260       244       226  

Wealth management income

     226       236       247       239       199  

Mortgage banking income

     151       100       106       114       168  

Life insurance investment income

     193       194       187       192       194  

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

     (53       (42    

Total noninterest income

     1,960       2,126       1,811       2,340       2,054  

Noninterest expense:

          

Salaries and employee benefits expense

     5,232       5,830       7,510       6,489       5,032  

Net occupancy and equipment expense

     1,041       1,044       1,089       1,011       1,008  

Amortization of intangible assets

     194       194       194       212       215  

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

     (15     (92     127       18       29  

Other expenses

     2,979       3,508       3,044       2,910       3,057  

Total noninterest expense

     9,431       10,484       11,964       10,640       9,341  

Income (loss) before income taxes

     2,752       1,702       (985     2,980       3,408  

Income tax expense (benefit)

     486       268       (298     508       620  

Net income (loss)

   $ 2,266     $ 1,434     $ (687   $ 2,472     $ 2,788  

Other comprehensive income (loss):

          

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

   $ (256   $ 1,936     $ 1,023     $ 527     $ (576

Reclassification adjustment for (gain) loss included in net income

     53         42      

Change in pension liability

           (265  

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

     (42     406       224       54       (121

Other comprehensive income (loss), net of income taxes

     (161     1,530       841       208       (455

Comprehensive income (loss)

   $ 2,105     $ 2,964     $ 154     $ 2,680     $ 2,333  

Per common share data:

          

Net income (loss):

          

Basic

   $ 0.25     $ 0.16     $ (0.08   $ 0.27     $ 0.30  

Diluted

   $ 0.25     $ 0.16     $ (0.08   $ 0.27     $ 0.30  

Average common shares outstanding:

          

Basic

     9,173,901       9,160,290       9,143,316       9,115,450       9,100,616  

Diluted

     9,181,076       9,172,992       9,143,316       9,163,855       9,156,931  

Cash dividends declared

   $ 0.08     $ 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   

Sep 30

2019

   

June 30

2019

   

Mar 31

2019

   

Dec 31

2018

   

Sep 30

2018

 

Net interest income:

          

Interest income

          

Loans, net:

          

Taxable

   $ 12,283     $ 11,680     $ 10,688     $ 12,309     $ 11,957  

Tax-exempt

     328       295       291       292       291  

Total loans, net

     12,611       11,975       10,979       12,601       12,248  

Investments:

          

Taxable

     641       732       740       660       551  

Tax-exempt

     54       60       87       97       102  

Total investments

     695       792       827       757       653  

Interest on interest-bearing balances in other banks

     200       216       231       214       181  

Federal funds sold

          

Total interest income

     13,506       12,983       12,037       13,572       13,082  

Interest expense:

          

Deposits

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

Short-term borrowings

          

Long-term debt

     127       131       134       184       194  

Total interest expense

     2,154       2,230       2,207       2,211       2,079  

Net interest income

   $ 11,352     $ 10,753     $ 9,830     $ 11,361     $ 11,003  

Yields on earning assets:

          

Loans, net:

          

Taxable

     5.77     5.49     5.09     5.60     5.32

Tax-exempt

     3.47     3.41     3.34     3.26     3.25

Total loans, net

     5.67     5.41     5.02     5.51     5.24

Investments:

          

Taxable

     2.90     3.07     3.09     3.00     2.82

Tax-exempt

     4.08     3.67     3.15     2.92     2.83

Total investments

     2.96     3.11     3.10     2.99     2.82

Interest-bearing balances with banks

     2.31     2.36     2.54     2.08     2.14

Federal funds sold

          

Total earning assets

     5.31     5.07     4.73     5.13     4.93

Costs of interest-bearing liabilities:

          

Deposits

     0.99     1.02     1.01     0.95     0.88

Short-term borrowings

          

Long-term debt

     7.26     7.59     7.87     5.95     5.89

Total interest-bearing liabilities

     1.05     1.07     1.06     1.02     0.96

Net interest spread

     4.26     4.00     3.67     4.11     3.97

Net interest margin

     4.46     4.20     3.86     4.30     4.15


Riverview Financial Corporation

Consolidated Balance Sheets

(In thousands, except per share data)

 

At period end   

Sep 30

2019

   

Jun 30

2019

   

Mar 31

2019

   

Dec 31

2018

   

Sep 30

2018

 

Assets:

          

Cash and due from banks

   $ 13,108     $ 11,354     $ 12,278     $ 16,708     $ 13,310  

Interest-bearing balances in other banks

     16,733       29,621       55,823       37,108       43,505  

Federal funds sold

          

Investment securities available-for-sale

     106,637       100,254       100,684       104,677       97,102  

Loans held for sale

     336       170       695       637       598  

Loans, net

     883,506       889,305       878,070       893,184       915,529  

Less: allowance for loan losses

     7,097       7,002       6,486       6,348       6,472  

Net loans

     876,409       882,303       871,584       886,836       909,057  

Premises and equipment, net

     18,115       18,144       18,355       18,208       18,427  

Accrued interest receivable

     2,751       2,870       3,018       3,010       3,066  

Goodwill

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

Other intangible assets, net

     2,927       3,121       3,315       3,509       3,721  

Other assets

     47,989       47,607       48,206       42,156       43,193  

Total assets

   $ 1,109,759     $ 1,120,198     $ 1,138,712     $ 1,137,603     $ 1,156,733  

Liabilities:

          

Deposits:

          

Noninterest-bearing

   $ 161,211     $ 160,407     $ 164,880     $ 162,574     $ 162,385  

Interest-bearing

     808,372       819,293       836,149       842,019       858,379  

Total deposits

     969,583       979,700       1,001,029       1,004,593       1,020,764  

Short-term borrowings

          

Long-term debt

     6,951       6,932       6,912       6,892       13,019  

Accrued interest payable

     432       445       475       484       503  

Other liabilities

     15,538       17,443       16,806       11,724       10,416  

Total liabilities

     992,504       1,004,520       1,025,222       1,023,693       1,044,702  

Stockholders’ equity:

          

Common stock

     101,807       101,644       101,500       101,134       100,999  

Capital surplus

     300       304       307       332       356  

Retained earnings

     15,557       13,978       13,461       15,063       13,503  

Accumulated other comprehensive income (loss)

     (409     (248     (1,778     (2,619     (2,827

Total stockholders’ equity

     117,255       115,678       113,490       113,910       112,031  

Total liabilities and stockholders’ equity

   $ 1,109,759     $ 1,120,198     $ 1,138,712     $ 1,137,603     $ 1,156,733  


Riverview Financial Corporation

Consolidated Balance Sheets

(In thousands except per share data)

 

Average quarterly balances   

Sep 30

2019

    

Jun 30

2019

    

Mar 31

2019

    

Dec 31

2018

    

Sep 30

2018

 

Assets:

              

Loans, net:

              

Taxable

   $ 845,103      $ 853,329      $ 851,515      $ 872,615      $ 891,455  

Tax-exempt

     37,523        34,714        35,298        35,501        35,478  

Total loans, net

     882,626        888,043        886,813        908,116        926,933  

Investments:

              

Taxable

     87,753        95,577        97,041        87,249        77,573  

Tax-exempt

     5,257        6,558        11,215        13,198        14,288  

Total investments

     93,010        102,135        108,256        100,447        91,861  

Interest-bearing balances with banks

     34,323        36,780        36,953        40,787        33,553  

Federal funds sold

              

Total earning assets

     1,009,959        1,026,958        1,032,022        1,049,350        1,052,347  

Other assets

     101,242        99,923        97,628        95,000        97,377  

Total assets

   $ 1,111,201      $ 1,126,881      $ 1,129,650      $ 1,144,350      $ 1,149,724  

Liabilities and stockholders’ equity:

              

Deposits:

              

Interest-bearing

   $ 810,430      $ 829,003      $ 835,687      $ 847,867      $ 850,492  

Noninterest-bearing

     159,320        159,069        156,735        159,758        163,142  

Total deposits

     969,750        988,072        992,422        1,007,625        1,013,634  

Short-term borrowings

              

Long-term debt

     6,942        6,922        6,902        12,268        13,060  

Other liabilities

     16,581        16,944        17,006        10,973        11,208  

Total liabilities

     993,273        1,011,938        1,016,330        1,030,866        1,037,902  

Stockholders’ equity

     117,928        114,943        113,320        113,484        111,822  

Total liabilities and stockholders’ equity

   $ 1,111,201      $ 1,126,881      $ 1,129,650      $ 1,144,350      $ 1,149,724  


Riverview Financial Corporation

Asset Quality Data

(In thousands)

 

    

Sep 30

2019

    

Jun 30

2019

    

Mar 31

2019

    

Dec 31

2018

    

Sep 30

2018

 

At quarter end:

              

Nonperforming assets:

              

Nonaccrual loans

   $ 2,927      $ 2,165      $ 2,643      $ 2,729      $ 2,780  

Accruing restructured loans

     2,692        2,715        2,731        2,913        4,663  

Accruing loans past due 90 days or more

     100        52        122        839        225  

Foreclosed assets

     87        86        461        721        668  

Total nonperforming assets

   $ 5,806      $ 5,018      $ 5,957      $ 7,202      $ 8,336  

Three months ended:

              

Allowance for loan losses:

              

Beginning balance

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

Charge-offs

     985        142        520        166        189  

Recoveries

     31        40        75        42        35  

Provision for loan losses

     1,049        618        583           225  

Ending balance

   $ 7,097      $ 7,002      $ 6,486      $ 6,348      $ 6,472  


Riverview Financial Corporation

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)

 

Three months ended:   

Sep 30

2019

   

Jun 30

2019

   

Mar 31

2019

   

Dec 31

2018

   

Sep 30

2018

 

Core net income (loss) per common share:

          

Net income (loss)

   $ 2,266     $ 1,434     $ (687   $ 2,472     $ 2,788  

Adjustments:

          

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

     (42       (33    

Add: Acquisition related expenses, net of tax

           39       33  

Add: Executive separation expense, net of tax

         1,752      

Net income (loss) Core

   $ 2,308     $ 1,434     $ 1,098     $ 2,511     $ 2,821  

Average common shares outstanding

     9,173,901       9,160,290       9,143,316       9,115,450       9,100,616  

Core net income (loss) per common share

   $ 0.25     $ 0.16     $ 0.12     $ 0.27     $ 0.30  

Tangible book value:

          

Total stockholders’ equity

   $ 117,255     $ 115,678     $ 113,490     $ 113,910     $ 112,031  

Less: Goodwill

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

Less: Other intangible assets, net

     2,927       3,121       3,315       3,509       3,721  

Total tangible stockholders’ equity

   $ 89,574     $ 87,803     $ 85,421     $ 85,647     $ 83,556  

Common shares outstanding

     9,182,565       9,167,670       9,154,599       9,121,555       9,110,676  

Tangible book value per share

   $ 9.75     $ 9.58     $ 9.33     $ 9.39     $ 9.17  

Tangible stockholders’ equity to tangible assets:

          

Total stockholders’ equity

   $ 117,255     $ 115,678     $ 113,490     $ 113,910     $ 112,031  

Less: Goodwill

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

Less: Other intangible assets, net

     2,927       3,121       3,315       3,509       3,721  

Total tangible stockholders’ equity

   $ 89,574     $ 87,803     $ 85,421     $ 85,647     $ 83,556  

Total assets

   $ 1,109,759     $ 1,120,198     $ 1,138,712     $ 1,137,603     $ 1,156,733  

Less: Goodwill

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

Less: Other intangible assets, net

     2,927       3,121       3,315       3,509       3,721  

Total tangible assets

   $ 1,082,078     $ 1,092,323     $ 1,110,643     $ 1,109,340     $ 1,128,258  

Tangible stockholders’ equity to tangible assets

     8.28     8.04     7.69     7.72     7.41

Core return on average stockholders’ equity:

          

Net income (loss) GAAP

   $ 2,266     $ 1,434     $ (687   $ 2,472     $ 2,788  

Adjustments:

          

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

     (42       (33    

Add: Acquisition related expenses, net of tax

           39       33  

Add: Executive separation expense, net of tax

         1,752      

Net income (loss) Core

   $ 2,308     $ 1,434     $ 1,098     $ 2,511     $ 2,821  

Average stockholders’ equity

   $ 117,928     $ 114,943     $ 113,320     $ 113,484     $ 111,822  

Core return on average stockholders’ equity

     7.76     5.00     3.93     8.78     10.01

Return on average tangible equity:

          

Net income (loss) GAAP

   $ 2,266     $ 1,434     $ (687   $ 2,472     $ 2,788  

Average stockholders’ equity

   $ 117,928     $ 114,943     $ 113,320     $ 113,484     $ 111,822  

Less: average intangibles

     27,775       27,968       28,164       28,365       28,578  

Average tangible stockholders’ equity

   $ 90,153     $ 86,975     $ 85,156     $ 85,119     $ 83,244  

Return on average tangible stockholders’ equity

     9.97     6.61     (3.27 )%      11.52     13.29


Riverview Financial Corporation

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)

 

Three months ended:   

Sep 30

2019

   

Jun 30

2019

   

Mar 31

2019

   

Dec 31

2018

   

Sep 30

2018

 

Core return on average tangible stockholders’ equity:

          

Net income (loss) GAAP

   $ 2,266     $ 1,434     $ (687   $ 2,472     $ 2,788  

Adjustments:

          

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

     (42       (33    

Add: Acquisition related expenses, net of tax

           39       33  

Add: Executive separation expense, net of tax

         1,752      

Net income (loss) Core

   $ 2,308     $ 1,434     $ 1,098     $ 2,511     $ 2,821  

Average stockholders’ equity

   $ 117,928     $ 114,943     $ 113,320     $ 113,484     $ 111,822  

Less: average intangibles

     27,775       27,968       28,164       28,365       28,578  

Average tangible stockholders’ equity

   $ 90,153     $ 86,975     $ 85,156     $ 85,119     $ 83,244  

Core return on average tangible stockholders’ equity

     10.16     6.61     5.23     11.70     13.44

Core return on average assets:

          

Net income (loss) GAAP

   $ 2,266     $ 1,434     $ (687   $ 2,472     $ 2,788  

Adjustments:

          

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

     (42       (33    

Add: Acquisition related expenses, net of tax

           39       33  

Add: Executive separation expense, net of tax

         1,752      

Net income (loss) Core

   $ 2,308     $ 1,434     $ 1,098     $ 2,511     $ 2,821  

Average assets

   $ 1,111,201     $ 1,126,881     $ 1,129,650     $ 1,144,350     $ 1,149,724  

Core return on average assets

     0.82     0.51     0.39     0.87     0.97


Riverview Financial Corporation

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)

 

Nine months ended:   

Sep 30

2019

   

Sep 30

2018

 

Core net income per common share:

    

Net income

   $ 3,013     $ 8,386  

Adjustments:

    

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

     (75     31  

Add: Acquisition related expenses, net of tax

       398  

Add: Executive separation expense, net of tax

     1,752    

Net income - core

   $ 4,840     $ 8,753  

Average common shares outstanding

     9,159,281       9,089,636  

Core net income (loss) per common share

   $ 0.53     $ 0.96  
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