Riverview Financial Corporation Reports First Quarter 2017 Financial Results
(firmenpresse) - HARRISBURG, PA -- (Marketwired) -- 04/28/17 -- Riverview Financial Corporation ("Riverview") (OTCQX: RIVE), the financial holding company for Riverview Bank, today reported unaudited financial results at and for the quarter ended March 31, 2017. Riverview reported a net loss of $567 thousand or $(0.12) per basic and diluted weighted average common share for the first quarter of 2017, compared to net income of $753 thousand or $0.23 per basic and diluted weighted average common share, for the comparable period of 2016. The net loss recognized in the first quarter of 2017 was a direct result of incurring certain costs involved in implementing strategic initiatives to enhance shareholder value through asset growth provided by organic and inorganic opportunities. On January 20, 2017, Riverview announced the successful completion of a $17.0 million private placement of common and preferred securities. The additional capital afforded Riverview the ability to significantly grow its loan portfolio through hiring multiple teams of experienced and established lenders to serve new and existing markets. More notably the capital raise allowed Riverview to announce on April 20, 2017, the execution of a definitive business combination agreement to form a strategic partnership with CBT Financial Corp. This action will form a combined community banking franchise with approximately $1.2 billion of assets and will provide enhanced products and services through 33 banking locations covering 12 Pennsylvania counties.
"We are pleased with the success from the addition of our new lending teams growing loans by more than $55 million in the first quarter of 2017 and are extremely excited for shareholders, customers and communities with the announcement of the merger of CBT Financial Corp. with and into Riverview," stated Kirk D. Fox, Chief Executive Officer. "We are confident that the shareholders of both entities will recognize the exceptional value created through the combination of two community banks having long established histories of providing excellent service and extensive community support to Central and Southwestern Pennsylvania. This move is a logical step in our announced strategy to expand throughout Central Pennsylvania and into markets with attractive demographics and long-term growth potential. In addition, CBT Financial Corp. has an established track record of profitability, rooted in very strong local relationships and excellent customer service," concluded Fox.
For the first quarter of 2017, loans, net grew $55.1 million or 54.6% annualized.
Deposits increased $43.9 million or 39.3% annualized to $496.5 million at the end of the first quarter of 2017 from $452.6 million at year-end 2016.
Stockholders'' equity increased $15.2 million to $57.1 million or 9.5% of total assets at March 31, 2017 as a result of the capital offering.
Asset quality improved as nonperforming assets as a percentage of loans, net and other real estate owned declined to 1.74% at March 31, 2017 compared to 1.99% at December 31, 2016 and 2.44% at March 31, 2016.
Tax-equivalent net interest income for the three months ended March 31, decreased $131 thousand to $4,487 thousand in 2017 from $4,618 thousand in 2016. The decrease in tax equivalent net interest income was primarily attributable to an unfavorable rate variance caused by a 22 basis point decline in the tax-equivalent net interest margin offset partially by a favorable volume variance from an increase in average interest earning assets and a decrease in average interest bearing liabilities. The tax-equivalent net interest margin for the three months ended March 31, 2017, declined to 3.57% from 3.79% for the comparable period of 2016. The tax-equivalent yield on the loan portfolio decreased to 4.30% in 2017 compared to 4.50% in 2016. Loans, net averaged $420.1 million in 2017 and $407.3 million in 2016. The majority of loan originations accounting for the net loan growth of $55.1 million in the first quarter of 2017 were closed at the end of the quarter. For the three months ended March 31, the tax-equivalent yield on total investments increased to 3.45% in 2017 from 3.36% in 2016. Average investments totaled $75.0 million in 2017 and $73.0 million in 2016. The cost of funds increased to 0.60% in 2017 from 0.53% in 2016. Average interest-bearing liabilities decreased to $423.8 million in 2017 from $427.4 million in 2016.
The provision for loan losses totaled $605 thousand for the quarter ended March 31, 2017, compared to $99 thousand in 2016. The increase in the provision for loan losses in 2017 was primarily influenced by significant loan growth originated through the successful hiring of teams of lenders.
For the quarter ended March 31, noninterest income totaled $779 thousand in 2017, an increase of $142 thousand from $637 thousand in 2016. Wealth management income grew $100 thousand or 63.3% due to revenues from businesses acquired in 2016. In addition, service charges, fees and commissions and trust income improved $39 thousand and $11 thousand, respectively, comparing the first quarters of 2017 and 2016. The recognition of a sign on bonus from a credit card vendor was primarily responsible for the increase in service charges, fees and commissions. Mortgage banking income in 2017 remained at the amount recognized during the first quarter of last year despite recent increases in interest rates. Income of bank owned life insurance declined to $73 thousand in the first quarter of 2017 compared to $82 thousand for the comparable quarter of 2016.
Noninterest expense increased $1,048 thousand or 25.5%, to $5,163 thousand for the three months ended March 31, 2017, from $4,115 thousand for the same period last year. The majority of the increase in salaries and employee benefit expense was a result of implementing the lending team lift out initiative and related costs, as well as the opening of a new, full service office in Temple, Berks County, Pennsylvania in the first quarter of 2017. Additions to leased facilities for this newly opened community banking office along with offices to support the lending teams were primarily responsible for the $93 thousand or 16.8% increase in occupancy and equipment costs. The majority of the $188 thousand increase in other expenses comparing the first quarters of 2017 and 2016 was a result of incurring professional fees related to the announced business combination with CBT Financial Corp.
Total assets, loans and deposits totaled $600.4 million, $464.5 million, and $496.5 million, respectively, at March 31, 2017. Loans, net increased $55.1 million or 13.5% comparing the end of the first quarter of 2017 to year end 2016 with commercial real estate loans being responsible for the majority of the improvement. Total investments were $72.7 million at March 31, 2017, compared to $73.1 million at December 31, 2016. Total deposits increased $43.9 million or 9.7% in first three months of 2017. Noninterest-bearing deposits increased $5.2 million, while interest-bearing deposits increased $38.7 million. An improvement in the volume of money market accounts was primarily responsible for the increase in interest-bearing deposits.
Stockholders'' equity totaled $57.1 million or $12.45 per common share at March 31, 2017, and $41.9 million or $12.95 per common share at December 31, 2016. The increase in equity in the first quarter of 2017 was a result of the completion of the sale of approximately $17.0 million in common and preferred equity, before expenses, to accredited investors and qualified institutional buyers through the private placement of 269,885 shares of common stock and 1,348,809 shares of a newly created series of convertible, perpetual preferred stock. Tangible stockholders'' equity per common share decreased to $10.65 per share at March 31, 2017, compared to $10.84 per share at year-end 2016. Dividends declared for the three months ended March 31, 2017 amounted to $0.14 per share. The annualized dividend yield based on the closing price on March 31, 2017 of $11.95 per share was 4.6%.
Nonperforming assets were $8.1 million or 1.7% of loans, net and foreclosed assets at March 31, 2017, an improvement from $8.2 million or 2.0% at December 31, 2016, and $9.8 million or 2.4% at March 31, 2016. Adjusting for accruing restructured loans, nonperforming assets were $2.5 million or 0.5% of loans, net and foreclosed assets at March 31, 2017, $2.4 million or 0.6% at December 31, 2016, and $3.2 million or 0.8% at March 31, 2016. The allowance for loan losses equaled $4.3 million or 0.93% of loans, net at March 31, 2017, compared to $3.7 million or 0.91% of loans, net at December 31, 2016, and $3.7 million or 0.93% of loans, net, at March 31, 2016. Loans charged-off, net of recoveries, for the three months ended March 31, 2017, equaled $8 thousand or 0.01% of average loans, compared to $747 thousand or 0.74% of average loans for the same period last year.
Riverview Financial Corporation is the parent company of Riverview Bank and its operating divisions Halifax Bank, Marysville Bank, Citizens Neighborhood Bank, and Riverview 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 seventeen 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 Wealth Management provides trust and investment advisory services to the general public through offices in Lebanon 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 months ended March 31, 2017 and 2016, 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.
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Datum: 28.04.2017 - 15:00 Uhr
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