Riverview Financial Corporation Reports 2016 Earnings
(firmenpresse) - HARRISBURG, PA -- (Marketwired) -- 01/26/17 -- Riverview Financial Corporation ("Riverview") (OTCQX: RIVE), the financial holding company for Riverview Bank, today reported unaudited financial results at and for the year ended December 31, 2016. Riverview reported net income of $3.1 million or $0.95 per basic and diluted weighted average share for 2016, compared to a net loss of $754 thousand, or ($0.28) per basic and diluted weighted average share, for the comparable period of 2015. The 2015 results included per-tax merger related expenses of approximately $3.3 million from the acquisition of Citizens National Bank of Meyersdale ("Citizens") on December 31, 2015. Core net income for the year ended December 31, was $2.9 million, or $0.90 per share, in 2016 and $1.4 million, or $0.52 per share, in 2015. Core net income, a non-GAAP financial measure reconciled to net income in the tabular material that follows, excludes net gains (losses) on the sale of investment securities and acquisition related expenses, net of tax. Net gains on the sale of investment securities were $484 thousand in 2016. Net losses on the sale of investment securities totaled $17 thousand in 2015.
For the quarter ended December 31, net income was $488 thousand, or $0.15 per share, in 2016 compared to a net loss of $406 thousand, or ($0.15) per share, in 2015. Core net income for the fourth quarter was $488 thousand in 2016 compared to a core net loss of $65 thousand in 2015. The results for the three months ended December 31, 2015, included pretax merger expenses related to the acquisition of Citizens of approximately $530 thousand and net gains on the sale of investment securities of $13 thousand. Core net income per share for the fourth quarter was $0.15 in 2016, compared to a core net loss of ($0.02) in 2015.
"We are pleased to announce that core earnings in 2016 more than doubled those of 2015 adjusted for acquisition costs associated with the completion of the merger of Citizens National Bank of Meyersdale with and into Riverview Bank in the fourth quarter of 2015," stated Kirk D. Fox, Chief Executive Officer. "On January 20, 2017, we successfully completed the closing of a $17 million capital offering. The primary objective of this issuance is to enhance shareholder value through elevating the level of asset generation by taking advantage of organic growth opportunities in new and existing markets. Most recently, we expanded our presence in Berks County through opening a full-service community banking office in Temple, Pennsylvania on January 11, 2017. This new office has a dedicated team of lenders and is expected to have a material impact on elevating loan growth and wealth management opportunities in the near term. We will continue to seek out expansion opportunities by taking advantage of disruptions caused by consolidation in the market," continued Fox. "In addition, we plan to introduce our mobile banking product in the first quarter of 2017, which will significantly improve customer access to their banking relationship with Riverview Bank and is expected to grow our core deposit base," concluded Fox.
For the fourth quarter of 2016, loans, net grew $11.2 million or 11.1% annualized.
Nonperforming assets, excluding accruing restructured loans, decreased to $2.4 million at the end of the fourth quarter of 2016 from $2.6 million at the end of the third quarter 2016 and $4.2 million at December 31, 2015.
Core net income increased $1.5 million or 103.6% comparing the years ended December 31, 2016 and 2015.
Wealth management income increased 51.5% in the fourth quarter of 2016 versus the prior quarter.
Tax-equivalent net interest income for the twelve months ended December 31, increased $3.0 million to $18.6 million in 2016 from $15.6 million in 2015. The increase in tax equivalent net interest income was primarily attributable to additional interest earning assets and interest bearing liabilities acquired as part of the merger as well as a 4 basis point increase in the tax-equivalent net interest margin. The tax-equivalent net interest margin for the year ended December 31, 2016, improved to 3.83% from 3.79% for the year ended December 31, 2015. The tax-equivalent yield on the loan portfolio increased to 4.53% in 2016 compared to 4.49% in 2015. Loans, net averaged $403.0 million in 2016 and $351.6 million in 2015. For the twelve months ended December 31, the tax-equivalent yield on total investments decreased to 3.36% in 2016 from 3.39% in 2015. Average investments totaled $72.3 million in 2016 and $49.9 million in 2015. Average interest-bearing liabilities increased to $414.9 million in 2016 from $349.2 million in 2015. The cost of funds declined to 0.52% in 2016 from 0.55% in 2015. Tax-equivalent net interest income for the three months ended December 31, increased to $4.6 million in 2016 from $4.1 million in 2015. The tax-equivalent net interest margin for the fourth quarter of 2016 was 3.76% compared to 3.88% for the same period last year.
The provision for loan losses totaled $453 thousand for the year ended December 31, 2016, compared to $1.5 million in 2015. The decrease in the provision for loan losses in 2016 was primarily influenced by a lower level of nonperforming assets as a percentage of loans and foreclosed assets compared to the prior year period. A provision of $169 thousand was recognized for the quarter ended December 31, 2016 as compared with $1.0 million for the comparable period last year. The larger provision in the fourth quarter of 2015 was a result of writing down certain loans to two commercial customers.
For the year ended December 31, noninterest income totaled $3.4 million in 2016, an increase of $1.2 million from $2.2 million in 2015. Net gains on sale of investment securities were $484 thousand in 2016 compared to a net loss of $17 thousand in 2015. In addition, increases in service charges, fees and commissions, trust income, wealth management income, mortgage banking activities and life insurance investment income along with a decrease in losses on the sale of other real estate owned also helped to improve noninterest income. For the three months ended December 31, noninterest income totaled $844 thousand in 2016 and $469 thousand in 2015.
Noninterest expense decreased $688 thousand or 3.9%, to $17.1 million in 2016, from $17.8 million in 2015. The reduction in salaries and employee benefit expense was a result of the recognition of a severance payout for the departure of the former chief executive officer in 2015. The implementation of certain consolidation and efficiency initiatives related to branch closures in 2015 was the primary cause of declines in net occupancy and equipment expenses in 2016. The increase in other expenses comparing 2016 and 2015 was a result of additional advertising and charitable contribution expenditures. For the fourth quarter, noninterest expense amounted to $4.5 million in 2016 and $4.2 million in 2015.
Total assets, loans and deposits totaled $543.0 million, $409.3 million, and $452.6 million, respectively, at December 31, 2016. Loans, net decreased $502 thousand comparing the end of the 2016 to year end 2015. Total investments were $73.1 million at December 31, 2016, a decrease of $2.7 million from year-end 2015. Total deposits increased $4.2 million in 2016. Noninterest-bearing deposits increased $3.8 million, while interest-bearing deposits increased $392 thousand in 2016. For the fourth quarter of 2016, loans net grew $11.2 million or 11.1% annualized as a result of increases in commercial real estate and tax-exempt loans. Investments grew $742 thousand in the fourth quarter of 2016 as purchases of US Treasury securities more than offset changes in the fair market value of investment securities available-for-sale and investment repayments. Total deposits decreased $6.4 million in the quarter ended December 31, 2016, as a decrease in interest-bearing deposits of $9.0 million was partially offset by an increase in noninterest-bearing deposits of $2.6 million.
Stockholders'' equity totaled $41.9 million or $12.95 per share at December 31, 2016, and $42.3 million or $13.20 per share at December 31, 2015. Stockholders'' equity decreased $2.2 million in the fourth quarter of 2016 due primarily to the change in accumulated other comprehensive income from decreases in the value of investment securities available-for-sale as a result of an increase in general market rates. Total tangible stockholders'' equity decreased to $35.1 million or $10.84 per share at December 31, 2016, compared to $37.3 million or $11.54 per share at September 30, 2016, and $36.0 million or $11.24 per share at year-end 2015. Dividends declared for the three and twelve months ended December 31, 2016 amounted to $0.14 per share and $0.55 per share, respectively. The dividend payout ratio was of 57.9% in 2016.
Nonperforming assets were $8.2 million or 2.0% of loans, net and foreclosed assets at December 31, 2016, an improvement from $8.6 million or 2.2% at September 30, 2016, and $10.8 million or 2.6% at December 31, 2015. Adjusting for accruing restructured loans, nonperforming assets were $2.4 million or 0.6% of loans, net and foreclosed assets at December 31, 2016, $2.6 million or 0.6% at September 30, 2016, and $4.2 million or 1.0% at December 31, 2015. The allowance for loan losses equaled $3.7 million or 0.91% of loans, net at December 30, 2016, compared to $3.6 million or 0.91% at September 30, 2016, and $4.4 million or 1.07% of loans, net, at December 31, 2015. Loans charged-off, net of recoveries, for the twelve months ended December 31, 2016, equaled $1.1 million or 0.27% of average loans, compared to $899 thousand or 0.26% of average loans for the twelve months ended December 31, 2015. For the fourth quarter, net loans charged-off totaled $74 thousand or 0.07% of average loans in 2016 and $651 thousand or 0.73% of average loans in 2015.
Riverview Financial Corporation is the parent company of Riverview Bank and its operating divisions Halifax Bank, Marysville Bank, Citizens Neighborhood Bank, and Riverview Financial Wealth Management. An independent community bank, Riverview Bank serves its Central Pennsylvania market area of Berks, Cumberland, Dauphin, Northumberland, Perry, Schuylkill Counties, as well as its Southwestern Pennsylvania market area of Bedford, Cambria, Somerset and Westmoreland Counties through sixteen community banking offices and three limited purpose offices. Each office, interdependent with the community, offers a comprehensive array of financial products and services to individuals, businesses, not-for-profit organizations and government entities. Riverview Financial Wealth Management provides investment advisory services to the general public through offices in Lebanon, Northumberland and Schuylkill Counties. The Company''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 Investor Relations site can be accessed at .
We make statements in this press release, and we may from time to time make other statements regarding our outlook or expectations for future financial or operating results and/or other matters regarding or affecting Riverview Financial Corporation, Riverview Bank, and its subsidiaries (collectively, "Riverview") that may be considered "forward-looking statements" as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," "intend" and "potential." For these statements, Riverview claims the protection of the statutory safe harbors for forward-looking statements.
Riverview cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: prevailing economic and political conditions, particularly in our market area; credit risk associated with our lending activities; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; and other economic, competitive, governmental, regulatory and technological factors affecting Riverview'' operations, pricing, products and services and other factors that may be described in Riverview'' Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission from time to time.
In addition to these risks, acquisitions and business combinations, present risks other than those presented by the nature of the business acquired. Acquisitions and business combinations may be substantially more expensive to complete than originally anticipated, and the anticipated benefits may be significantly harder-or take longer-to achieve than expected. As regulated financial institutions, our pursuit of attractive acquisition and business combination opportunities could be negatively impacted by regulatory delays or other regulatory issues. Regulatory and/or legal issues related to the pre acquisition operations of an acquired or combined business may cause reputational harm to Riverview following the acquisition or combination, and integration of the acquired or combined business with ours may result in additional future costs arising as a result of those issues.
The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, Riverview assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.
In addition to evaluating its results of operations in accordance with accounting principles generally accepted in the United States of America ("GAAP"), Riverview routinely presents and supplements its evaluation with an analysis of certain non-GAAP financial measures, such as tangible stockholders'' equity and core net income ratios. The reported results for the three and twelve months ended December 31, 2016 and 2015, contain items which Riverview considers non-core, namely net gains on sales of investment securities available-for-sale and acquisition related expenses. 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.
(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 of 34%.
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Datum: 26.01.2017 - 08:46 Uhr
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