{"id":424233,"date":"2021-01-28T16:42:07","date_gmt":"2021-01-28T21:42:07","guid":{"rendered":"http:\/\/www.marketnewsdesk.com\/?p=424233"},"modified":"2021-01-28T16:42:07","modified_gmt":"2021-01-28T21:42:07","slug":"riverview-financial-corporation-reports-fourth-quarter-and-annual-financial-results-for-2020","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/riverview-financial-corporation-reports-fourth-quarter-and-annual-financial-results-for-2020\/","title":{"rendered":"Riverview Financial Corporation Reports Fourth Quarter And Annual Financial Results For 2020"},"content":{"rendered":"
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PR Newswire<\/p>\n<\/p><\/div>\n

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\n HARRISBURG, Pa.<\/span>, Jan. 28, 2021<\/span> \/PRNewswire\/ — Riverview Financial Corporation\u00a0(the “Company” or “Riverview<\/span>“)\u00a0(NASDAQ: RIVE), the holding company for Riverview Bank (the “Bank”), today reported net income of $1.6 million<\/span> or $0<\/span>.17\u00a0per basic and diluted weighted average common share,\u00a0for the fourth quarter of 2020, compared to net income of $1.3 million<\/span>,\u00a0or $0.14<\/span> per basic and diluted weighted average common share, for the fourth quarter of 2019.\u00a0For the year ended December 31, 2020<\/span>, Riverview<\/span> reported a net loss of $21.2 million<\/span>, or $(2.29)<\/span> per basic and diluted weighted average common share, compared to net income of $4.3 million<\/span>, or $0.47<\/span> per basic and diluted weighted average common share, for the same period last year. <\/p>\n

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The increase in the Company’s earnings for the three months ended December 31, 2020<\/span> as compared to the same period in 2019 was the result of an increase in loan income from the recognition of interest and fees earned on Paycheck Protection Program (“PPP”) Loans, lower deposit costs, and the impact of ongoing efficiency initiatives, including branch office consolidations. The Company implemented cost reduction strategies beginning in 2019, and those efforts continued at the end of the third quarter of 2020 by implementing additional efficiency initiatives aimed at substantially lowering operating costs. Partially offsetting these favorable influences was an increase in the loan loss provision along with the recognition of charges related to lease payments and the write off of certain property and equipment on closed offices. \u00a0<\/p>\n

The COVID-19 pandemic continues to place additional pressure on bank earnings, causing increased emphasis on the need to improve operational efficiency as a means to mitigate margin compression and noninterest income reductions. As a result, during the fourth quarter of 2020, Riverview<\/span> continued to evaluate its branch network by utilizing its retail branch performance and resource allocation analytics. After evaluating the results, the Company determined to divest four additional offices by closing two and selling two branch offices. With respect to the sale, on January 15, 2021<\/span>, the Company announced the execution of a definitive agreement whereby AmeriServ Financial, Inc. will acquire Citizens Neighborhood Bank’s (“CNB”), an operating division of Riverview Bank, branch and deposit customers in Meyersdale<\/span>, as well as the deposit customers of CNB’s leased branch in the Borough of Somerset.\u00a0 The transaction is expected to close in the second quarter of 2021, subject to regulatory approval and other customary closing conditions.\u00a0As of the agreement date, the related deposits total approximately $48 million<\/span> and will be acquired for a 3.71% deposit premium.\u00a0<\/p>\n

The decrease in the Company’s earnings for the year ended December 31, 2020<\/span> as compared to the same period in 2019 was primarily the result of a non-cash charge related to the recognition of goodwill impairment and an increase in the provision for loan losses, both stemming from the COVID-19 pandemic. The goodwill impairment of $24.8 million<\/span> had no impact on tangible book value, regulatory capital ratios, liquidity or the Company’s cash balances. For the year ended December 31, 2020<\/span>, the provision for loan losses totaled $6.3 million<\/span> compared to $2.4 million<\/span> for the comparable period in 2019. The increase in the year over year provision for loan losses is the combined result of year to date 2020 organic loan growth, excluding 100% SBA guaranteed PPP Loans, and changes in qualitative factors used in our ALLL model, accounting for increased economic risks and the direct impact on our customers resulting from the COVID-19 pandemic as of December 31<\/span>, 2020.\u00a0As the Company continues to evaluate the impact of the COVID-19 pandemic on our overall financial performance and operations, including its effects on our loan portfolio, our provision for loan losses may increase in future periods, which could adversely affect our results of operations.\u00a0 In addition, the Company recognized $572 thousand<\/span> in costs associated with severance and furlough expenses related to the implementation of the cost reduction strategy aimed at substantially lowering ongoing operating costs. Also impacting fourth quarter 2020 results was the recognition of write downs of fair values on certain held for sale properties along with lease payments and write offs of certain property and equipment on closed offices totaling $1.5 million<\/span>. The Company’s earnings were further impacted by a $2.4 million<\/span> reduction of net accretion on acquired assets and assumed liabilities during the year ended December 31<\/span>, 2020,\u00a0as compared to the same period last year. <\/p>\n

The impact of these reductions was offset by the recognition of interest and fees on the origination of loans pursuant to the PPP of $4.4 million<\/span> during the twelve months ended December 31, 2020<\/span>. In addition, the Company recognized $815 thousand<\/span> net gain on the sale of investment securities to provide liquidity to fund loan demand and limit exposure to falling rates through the disposition of adjustable rate securities in the first quarter of 2020.\u00a0<\/p>\n

In concert with our third quarter 2020 announcement of the suspension of dividend payments until further notice, we took additional action to further strengthen the safety and soundness of the Bank’s capital position, \u00a0support future growth, and potentially take advantage of\u00a0 future strategic opportunities focused upon enhancing shareholder value, by successfully completing a private placement of $25 million<\/span> of 5.75% Fixed to Floating Rate Subordinated Notes, due 2030 to certain qualified institutional buyers and accredited investors on October 6, 2020<\/span>.<\/p>\n

In addition to evaluating its results of operations in accordance with accounting principles generally accepted in the United States of America<\/span> (“GAAP”), Riverview<\/span> 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<\/span> 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<\/span> uses may differ from the non-GAAP financial measures other financial institutions use to measure their results of operations.<\/p>\n

\n HIGHLIGHTS<\/b>\n <\/p>\n