Mid Penn to acquire Riverview Financial
The $124million deal will create the sixth-largest Pennsylvania-based bank under $10 billion.
MILLERSBURG >> Mid Penn Bancorp Inc. has announced plans to acquire Riverview Financial Corp., in an all-stock transaction valued at $124.7 million.
The two companies jointly announced the definitive merger agreement Wednesday. The merger has been unanimously approved by both boards of directors and is expected to close in the fourth quarter of 2021, pending receipt of regulatory and shareholder approvals.
Under the terms of the merger agreement, shareholders of Riverview common stock will receive 0.4833 shares of Mid Penn common stock for each share of Riverview common stock they own.
“These two great community bank organizations have been familiar with each other for years as competitors but now get to provide world class customer service to our markets throughout Pennsylvania together,” Rory G. Ritrievi, Mid Penn president and CEO, said in a statement. “This combination provides strong economic value to both shareholder groups and creates a financial institution with plenty of muscle at a time when it is most important. That muscle should allow us to continue to provide best in class return to both groups of shareholders.”
In a conference call Thursday morning with investors, Ritrievi outlined the strategic and financial benefits of the merger including: increased scale, lending limits and competitive capabilities throughout Pennsylvania markets; entrance into the Lehigh Valley and State College markets, and the addition of high quality core deposits in western Pennsylvania; and the creation of greater positive operating leverage, increased profitability, and stock liquidity.
The combination of the two companies will create a Pennsylvania community bank with approximately $4.8 billion in assets, $3.7 billion in deposits and $3.7 billion in loans. Following the transaction, Mid Penn will be the sixth largest Pennsylvania headquartered bank under $10 billion and will retain its standing as the top-ranked community bank by deposit market share in the Harrisburg MSA, according to information provided by Mid Penn.
Ritrievi said on that call that since the company’s last acquisition — of First Priority in 2018 — Mid Penn Bank has been focused on successfully integrating that acquisition and growing the companies’ combined markets.
“Our success most recently has been evidenced by the PPP loans Mid Penn Bank was able to produce with over $1B in originations with a large portion coming from the southeastern Pennsylvania market acquired as part of the First Priority transaction,” Ritrievi said.
He added that the company has stated that its focus “was on realizing the significant opportunity in front of us, and that we would only consider a bank M&A opportunity that was both strategic and financially compelling. Riverview is that opportunity for us.”
In a statement, Riverview’s President and CEO Brett D. Fulk said the merger presents an opportunity to join a “like-minded, high-performing community bank” with considerable franchise value and growth potential.
“Mid Penn has a high degree of familiarity with our operating markets and business lines. They share our relationship-centric culture, and together we will provide our clients with growth opportunities via higher lending limits and the ability to further invest in technology and digital initiatives,” he said.
Riverview Financial Corp. is headquartered in Harrisburg, has 220 employees and operates 27 branches, including two in Berks County.
Because 50% of Riverview’s offices are within 5 miles of Mid Penn Bank locations, Ritrievi said there will be some branch closings — including both Mid Penn and Riverview branches.
“This is a combined franchise that needs some consolidation,” he said.
The number of branches that will close has not yet been determined. It’s expected that the information will be made public within three months of the transaction’s close.
This acquisition will be the fourth for Mid Penn since 2015, when it completed its acquisition of Schuylkill County-based Miners Bank. In early 2018, Scottdale Bank & Trust was acquired, expanding Mid Penn’s footprint into western Pennsylvania. The acquisition of the Chester County-based First Priority Bank was completed in July 2018 — an all-stock transaction valued at approximately $82 million — expanding Mid Penn’s footprint into southeastern Pennsylvania.
Mid Penn Bank currently across 12 counties in Pennsylvania — including one location in Chester, one location in Montgomery, four locations in Berks and one location in Bucks counties.
Following completion of the merger, Riverview Bank will be merged with and into Mid Penn Bank. Additionally, two Riverview directors will join the board of directors of Mid Penn Bancorp, Inc.
The transaction is intended to qualify as a reorganization for federal income tax purposes and, as a result, the receipt of Mid Penn common stock by shareholders of Riverview is expected to be tax-free, according to a press release announcing the agreement.