3^rd ~~and Market Streets, Halifax,~~3901 North Front Street, Harrisburg, PA ~~17032~~17110

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ¨x NO x¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~1,716, 316~~2,709,764 shares of Common Stock, with no par value per share, outstanding as of ~~October 31, 2013.~~May 8, 2015.


		September 30,			December 31,
(In thousands, except share data)		2013			2012			March 31, 2015		December 31, 2014
		(Unaudited)			(Audited)			(Unaudited)		(Audited)
Assets	Assets
Cash and due from banks		$	9,951		$	8,611		$	9,889	$	8,477
Federal funds sold			2,446			1,567
Interest bearing deposits			5,090			5,774			6,314		6,103

Cash and cash equivalents			17,487			15,952			16,203		14,580
Interest bearing time deposits with banks			250			250			992		992
Investment securities available for sale			31,376			45,101			47,378		48,818
Mortgage loans held for sale			—			830			416		216
Loans, net of allowance for loan losses of $3,556 - 2013; $3,736 - 2012			243,374			234,112
Loans, net of allowance for loan losses of $3,735 - 2015; $3,792 - 2014									345,735		338,901
Premises and equipment			6,887			7,162			11,495		11,440
Accrued interest receivable			912			1,014			1,277		1,237
Restricted investments in bank stocks			1,065			1,429			1,462		1,002
Cash value of life insurance			6,870			6,706			8,638		8,587
Foreclosed assets			1,519			1,909			1,121		1,022
Goodwill			2,297			2,297			2,297		2,297
Intangible assets			466			547			1,316		1,381
Other assets			4,189			1,888			5,892		5,673

Total Assets		$	316,692		$	319,197		$	444,222	$	436,146


Liabilities and Shareholders’ Equity	Liabilities and Shareholders’ Equity
Liabilities
Deposits:
Demand, non-interest bearing		$	22,327		$	24,526		$	55,600	$	53,620
Demand, interest bearing			118,293			97,576			130,475		132,860
Savings and money market			57,599			48,342			87,168		83,748
Time			82,402			99,001			99,652		102,034

Total deposits			280,621			269,445			372,895		372,262
Capital lease payable									—		1,655
Short-term borrowings			—			11,000			22,000		12,500
Long-term borrowings			7,000			9,550			7,000		7,000
Accrued interest payable			146			214			154		154
Other liabilities			2,256			2,251			3,870		4,367

Total Liabilities			290,023			292,460			405,919		397,938


Shareholders’ Equity
Common stock, par value $0.50 per share; authorized 5,000,000 shares; issued 2013 and 2012 1,750,003 shares; outstanding 2013 and 2012 1,716,316 shares			875			875
Preferred stock, 2015 and 2014, no par value; authorized 3,000,000 shares									—		—
Common stock, 2015 and 2014, no par value; authorized 5,000,000 shares; issued and outstanding 2015 and 2014 2,708,840 shares									22,077		22,077
Surplus			11,383			11,350			209		201
Retained earnings			15,101			14,217	��		15,796		15,795
Accumulated other comprehensive income (loss)			(353	)		632
Treasury stock, at cost 2013 and 2012 33,687 shares			(337	)		(337	)
Accumulated other comprehensive income									221		135

Total Shareholders’ Equity			26,669			26,737			38,303		38,208

Total Liabilities and Shareholders’ Equity		$	316,692		$	319,197		$	444,222	$	436,146

The accompanying notes are an integral part of these consolidated financial statements.


	Three Months Ended						Nine Months Ended
(In thousands, except share data)	September 30,						September 30,						Three Months Ended March 31,
	2013			2012			2013			2012			2015			2014
Interest and Dividend Income
Loans, including fees	$	3,034		$	2,948		$	8,970		$	8,639		$	3,833		$	3,911
Investment securities - taxable		47			138			133			463			247			289
Investment securities - tax exempt		178			181			534			539			94			186
Interest-bearing deposits		8			4			20			18			9			8
Dividends		3			—			6			2			39			8

Total Interest Income		3,270			3,271			9,663			9,661
Total Interest and Dividend Income														4,222			4,402


Interest Expense
Deposits		494			716			1,659			2,178			439			507
Short-term borrowings		—			7			1			8			15			2
Long-term debt		65			86			225			270			55			67

Total Interest Expense		559			809			1,885			2,456			509			576


Net Interest Income		2,711			2,462			7,778			7,205			3,713			3,826

Provision for Loan Losses		47			425			47			510			—			—


Net Interest Income after Provision for Loan Losses		2,664			2,037			7,731			6,695			3,713			3,826


Noninterest Income
Service charges on deposit accounts		79			78			225			206			98			108
Other service charges and fees		96			91			267			273			137			357
Earnings on cash value of life insurance		52			60			166			186			51			51
Fees and commissions from securities brokerage		136			—			408			—			209			222
Gain on sale of available for sale securities		—			—			119			770
Loss on sale of other real estate owned		(229	)		—			(264	)		(28	)
Gain/(loss) on write-down of other real estate owned		150			—			76			—
Loss on other assets		—			(1	)		—			(8	)
Gain (loss) on sale and valuation of other real estate owned														(26	)		6
Gain on other assets														—			6
Gain on sale of mortgage loans		89			215			475			378			78			75

Total Noninterest Income		373			443			1,472			1,777			547			825


Noninterest Expenses
Salaries and employee benefits		1,293			1,258			3,814			3,568			2,078			1,810
Occupancy expenses		226			229			721			676			436			387
Equipment expenses		132			140			395			382			161			149
Telecommunication and processing charges		183			166			552			489			293			267
Postage and office supplies		67			53			191			178			88			100
FDIC premiums		66			60			172			196			68			90
Bank shares tax expense		73			43			220			185			85			82
Directors’ compensation		67			66			209			198			86			84
Professional services		53			50			152			148			168			66
Amortization of intangible assets														67			74
Other expenses		231			219			733			549			328			225

Total Noninterest Expenses		2,391			2,284			7,159			6,569			3,858			3,334


Income before Income Taxes		646			196			2,044			1,903			402			1,317
Applicable Federal Income Tax Expense (Benefit)		162			(15	)		516			401
Applicable Federal Income Tax Expense														28			307

Net Income	$	484		$	211		$	1,528		$	1,502		$	374		$	1,010


Basic and Diluted Earnings Per Share	$	0.28		$	0.12		$	0.89		$	0.87		$	0.14		$	0.37

Dividends Per Share	$	0.125		$	0.125		$	0.375		$	0.375		$	0.14		$	0.37

The accompanying notes are an integral part of these consolidated financial statements.

Three ~~and Nine~~ Months Ended ~~September 30, 2013~~March 31, 2015 and ~~2012~~2014

~~The accompanying notes are an integral part of these consolidated financial statements.~~


	Three Months Ended March 31,
(In thousands)	2015		2014
	(In thousands)
Net income	$	374	$	1,010
Other comprehensive income, net of tax:
Unrealized gains and losses on securities available for sale:
Net unrealized gains arising during the period, net of tax of $45 and $257		86		498
Reclassification adjustment for gains included in net income		—		—

Net change in unrealized gains		86		498

Total other comprehensive income, net of tax		86		498

Total comprehensive income	$	460	$	1,508

~~Nine~~Three Months Ended ~~September 30, 2013~~March 31, 2015 and ~~2012~~2014

The accompanying notes are an integral part of these consolidated financial statements.


	Nine Months Ended September 30,				Three Months Ended March 31,
(In thousands)					2015			2014
Cash Flows from Operating Activities
Net income					$	374		$	1,010
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation						154			173
Provision for loan losses						—			—
Granting of stock options						8			2
Net amortization of premiums on securities available for sale						108			90
Net (gain) loss from write-down or sale of foreclosed real estate and other assets						26			(12	)
Amortization of intangible assets						67			74
Deferred income taxes						(76	)		(30	)
Proceeds from sale of mortgage loans						3,993			3.553
Net gain on sale of mortgage loans						(78	)		(75	)
Mortgage loans originated for sale						(4,115	)		(3,345	)
Earnings on cash value of life insurance, net						(51	)		(51	)
(Increase) decrease in accrued interest receivable and other assets						(228	)		113
Decrease in accrued interest payable and other liabilities						(499	)		(441	)
	2013		2012

Net Cash Provided by (Used in) Operating Activities						(317	)		1,061


Cash Flows from Investing Activities
Net maturities of interest bearing time deposits						—			1
Securities available for sale:
Proceeds from maturities, calls and principal repayments						1,463			905
Proceeds from the sale of foreclosed real estate						244			22
Net increase in restricted investments in bank stock						(460	)		(319	)
Net increase in loans						(7,203	)		(5,067	)
Purchases of premises and equipment						(209	)		(2,110	)


Net Cash Used in Investing Activities						(6,165	)		(6,568	)


Cash Flows from Financing Activities
Net increase (decrease) in deposits						633			(6,382	)
Increase in short-term borrowings						9,500			9,945
Repayment of long-term debt						—			(3,000	)
Payment of capital lease						(1,655	)		—
Dividends paid						(373	)		(337	)


Net Cash Provided by Financing Activities						8,105			226


Net Increase (Decrease) in Cash and Cash Equivalents						1,623			(5,281	)
Cash and Cash Equivalents - Beginning						14,580			24,062


Cash and Cash Equivalents - Ending					$	16,203		$	18,781
	(In thousands)

Supplemental Disclosures of Cash Flows Information
Interest paid	$	1,884	$	2,497	$	509		$	586

Income taxes paid	$	479	$	387	$	—		$	—


Supplemental Schedule of Noncash Investing and Financing Activities
Other real estate acquired in settlement of loans	$	302	$	1,053	$	369		$	96

The accompanying notes are an integral part of these consolidated financial statements.

On November 1, 2013, Riverview Financial Corporation and Union Bancorp, Inc. (“~~Riverview”~~Union”) consolidated to form a new Pennsylvania corporation under the name of Riverview Financial Corporation (the “Company”). The Company and its wholly-owned bank subsidiary, Riverview Bank ~~(“Bank”~~(the “Bank”), provide loan, deposit and a full range of banking services to individuals, businesses and municipalities through two full service offices in Marysville and Duncannon, Perry County, Pennsylvania, one full service office in Enola, Cumberland County, Pennsylvania, ~~four~~six full service offices in Tower City, Cressona, Pottsville and Orwigsburg, Schuylkill County, Pennsylvania, three full service and one drive-up office in Halifax, Millersburg and Elizabethville, Dauphin County, Pennsylvania and ~~one commercial~~a full service branch office in Wyomissing, Berks County, Pennsylvania. Effective December 27, 2012, ~~the~~Riverview Bank purchased a wealth management ~~business~~company located in Orwigsburg, Schuylkill County, Pennsylvania that provides financial advisory, insurance, trust and investment services relating to non-deposit type investment products. The ~~business, known as Riverview Financial Wealth Management,~~wealth management company is a division of the Bank.

~~The~~ Riverview Bank ~~is a Pennsylvania chartered state bank, which~~ competes with several other financial institutions within its geographic footprint to provide its ~~banking and wealth management~~ services to individuals, businesses, municipalities and other organizations.

The Company and The Citizens National Bank of Meyersdale, PA (“Citizens”) entered into an Agreement and Plan of Merger, dated October 30, 2014 (the “Merger Agreement”), pursuant to which Citizens will merge with and into Riverview Bank, with Riverview Bank surviving (the “Merger”). Citizens shareholders have approved the Merger, as has the Pennsylvania Department of Banking and Securities (“DOB”), subject to receipt of approval from the Company’s federal regulators. The Merger cannot take place until the parties receive the prior approval of the Board of Governors of the Federal Reserve System (the “Federal Reserve”), and the Federal Deposit Insurance Corporation (“FDIC”).

The Bank is a Pennsylvania state-chartered financial institution. The Company and the Bank are subject to regulations of ~~certain~~ state and federal ~~agencies.~~agencies, including the DOB, Federal Reserve and FDIC. These regulatory agencies periodically examine ~~Riverview~~the Company and the Bank for adherence to laws and regulations.

The accounting and reporting policies followed by ~~Riverview~~the Company conform to generally accepted accounting principles and to general practices within the banking industry. The following paragraphs briefly describe the ~~more~~Company’s most significant accounting policies.

The ~~accompanying~~Company’s unaudited consolidated financial statements include the accounts of ~~Riverview~~the Company and its wholly-owned bank subsidiary. and its operating divisions. All significant intercompany accounts and transactions have been eliminated in consolidation. ~~Riverview~~The Company uses the accrual basis of accounting.

The ~~accompanying~~Company’s unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and predominant practices within the banking industry, and are presented in accordance with instructions for Form 10-Q and Rule 10-01 of Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation are of a normal and recurring nature and have been included.

Operating results for the three ~~and nine~~ months ended ~~September 30, 2013,~~March 31, 2015 are not necessarily indicative of the results that may be expected for the year ended December 31, ~~2013~~2015 or any other future period.

The consolidated financial statements presented in this report should be read in conjunction with the audited consolidated financial statements and the accompanying notes for the year ended December 31, ~~2012,~~2014, included in ~~Riverview’s Registration Statement on~~the Company’s Form ~~S-4,~~10-K, filed with the Securities and Exchange Commission on ~~August 9, 2013.~~March 30, 2015.

~~These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and predominant practices within the banking industry.~~ The preparation of these consolidated financial statements requires ~~Riverview~~the Company to make ~~certain~~ estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

~~Riverview~~ The Company evaluates estimates on an ongoing basis. Material estimates that are particularly susceptible to ~~material~~significant change in the near term relate to the determination of the allowance for loan losses, the potential impairment of goodwill, the valuation of deferred tax assets, the determination of other-than-temporary impairment on securities and the valuation of real estate acquired by foreclosure or in satisfaction of loans. The determination of the adequacy of the allowance for loan losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. ~~The current unstable~~In connection with the determination of the estimated losses on loans and foreclosed real estate, management obtains independent appraisals for significant collateral.

While management uses available information to recognize losses on loans, further reductions in the carrying amounts of loans may be necessary based on changes in local economic ~~environment has resulted~~conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the estimated losses on loans. Such agencies may require the Bank to recognize additional losses based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the estimated losses on loans may change materially in ~~a heightened degree~~the near term. However, the amount of ~~uncertainty inherent in these material estimates.~~the change that is reasonably possible cannot be estimated.

The accounting policies of ~~Riverview~~the Company as applied in the interim consolidated financial statements presented, are substantially the same as those followed on an annual basis, as ~~presented~~applied in ~~Riverview’s~~the Company’s annual consolidated audited financial statements included in ~~Riverview’s Registration Statement on~~the Company’s Form ~~S-4.~~10-K. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for Riverview Financial Corporation for the year ended December 31, 2014. The results of interim periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

~~Riverview~~The Company operates in a single business segment consisting of traditional banking activities.

Generally accepted accounting principles establish general standards for accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued. The subsequent events principle sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition in the financial statements, identifies the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and specifies the disclosures that should be made about the events or transactions that occur after the balance sheet date. In preparing these consolidated financial statements, ~~Riverview~~the Company evaluated the events and transactions that occurred ~~after September 30, 2013 through~~from the date ~~these consolidated~~of the financial statements ~~were issued,~~through May 14, 2015, the date this Form 10-Q was filed, and has ~~not~~ identified ~~any~~the following events, that require recognition or disclosure in the consolidated financial ~~statements other than~~statements:

The Company and Citizens National Bank of Meyersdale (“Citizens”) entered into an Agreement and Plan of Merger, dated October 30, 2014 (the “Merger Agreement”), pursuant to which Citizens will merge with ~~Union Bancorp, Inc.~~

~~Effective November 1, 2013, Riverview Financial Corporation completed its consolidation with Union Bancorp, Inc.~~and into ~~a newly formed, Pennsylvania corporation that will operate under the name “Riverview Financial Corporation”. In connection with the consolidation, Union Bank and Trust Company merged with~~ Riverview Bank, with Riverview Bank ~~surviving. The consolidation created a full-service community banking organization serving~~surviving (the “Merger”). In the ~~Perry, Dauphin, Cumberland, Schuylkill, Northumberland and Berks county markets. On a proforma basis as~~Merger, each share of ~~September 30, 2013, the resulting company had $440,000,000~~Citizens common stock that is outstanding, other than treasury stock, will be converted into either (1) $38.46 in ~~assets, $318,000,000 in loans and $394,000,000 in deposits and was be considered well capitalized under capital adequacy guidelines.~~

~~Under the terms~~cash or 2.9586 shares of the ~~consolidation,~~Company’s common stock, at the ~~newly consolidated company acquired all~~election of each Citizens shareholder, subject to proration in order to ensure that no more than 20% of the outstanding Citizens shares are converted into cash consideration. Riverview Bank and Citizens will be combined in a statutory merger under the provisions of ~~Union~~the Pennsylvania Banking Code, and Riverview ~~in a stock for stock transaction in which Union~~Bank will survive as the resulting institution.

Citizens has received the approval of its shareholders ~~received 1.95 shares~~and the DOB has approved the Merger, subject to receipt of approvals from the Company’s federal regulators. The Merger cannot take place until the parties receive the prior approval of the ~~newly consolidated company for each Union share held,~~Federal Reserve and ~~Riverview shareholders received one share of~~ the newly consolidated company for each Riverview share held. As a result of the transaction, Union’s and Riverview’s former shareholders own approximately 36% and 64%, respectively, of the combined company.FDIC.

Basic earnings per share represent income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. For diluted earnings per share, net income is divided by the weighted average number of shares outstanding plus the incremental number of shares ~~added as a result of converting~~that would have been outstanding if dilutive potential common ~~stock equivalents. Riverview’s~~shares had been issued. The Company’s potential common stock equivalents consist of outstanding common stock options, for ~~179,250~~322,200 shares of Riverview common stock as of ~~September 30, 2013~~March 31, 2015 and September 30, 2012. There was intrinsic value associated with all of the stock options outstanding at September 30, 2013 because the exercise prices for the options were lower than the trading price of the stock.

The following table presents the ~~amounts used in computing~~computation of earnings per share for the three months ended March 31, 2015 and 2014.

Comprehensive income is divided into net income and other comprehensive income. The components of the Company’s accumulated other comprehensive income are unrealized gains and (losses) on securities available for sale and unrecognized gains and (losses) associated with the defined benefit postretirement plan. Changes to other comprehensive income are presented net of tax in the Statements of Comprehensive Income. Reclassifications out of accumulated other comprehensive income are recorded in the Consolidated Statements of Income.

The following tables illustrate the disclosure of changes in the balances of each component of accumulated other comprehensive income for the periods presented:

The following tables present the amortized cost and estimated fair values of investment securities at ~~September 30, 2013~~March 31, 2015 and December 31, ~~2012,~~2014, all of which were available-for-sale:


September 30, 2013:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)

State and municipal	$	22,236	$	210	$	716	$	21,730
U.S. Government agencies and sponsored enterprises (GSEs) - residential:
Mortgage-backed securities		9,676		38		68		9,646

	$	31,912	$	248	$	784	$	31,376	March 31, 2015
									Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
									(In thousands)

U.S. Government agency securities									$	775	$	30	$	—	$	805
State and municipal										22,874		558		39		23,393
U.S. Government agencies and sponsored enterprises (GSEs) – residential:
Mortgage-backed securities										19,707		246		—		19,953
Collateralized mortgage obligations (CMOs)										2,208		35		1		2,242
Corporate debt obligations										490		25		—		515
Equity securities, financial services										470		—		—		470

									$	46,524	$	894	$	40	$	47,378


December 31, 2012:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)

U.S Government agencies	$	3,500	$	6	$	—	$	3,506
State and municipal		22,252		665		64		22,853
U.S. Government agencies and sponsored enterprises (GSEs) - residential:
Mortgage-backed securities		12,837		169		—		13,006
Collateralized mortgage obligations (CMOs)		5,555		181		—		5,736

	$	44,144	$	1,021	$	64	$	45,101	December 31, 2014
									Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
									(In thousands)

U.S. Government agency securities									$	798	$	20	$	1	$	817
State and municipal										23,296		474		62		23,708
U.S. Government agencies and sponsored enterprises (GSEs) – residential:
Mortgage-backed securities										20,676		229		3		20,902
Collateralized mortgage obligations (CMOs)										2,364		28		1		2,391
Corporate debt obligations										489		16		—		505
Equity securities, financial services										471		24		—		495

									$	48,094	$	791	$	67	$	48,818

The amortized cost and fair value of debt securities available-for-sale at ~~September 30, 2013,~~March 31, 2015, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to prepay obligations with or without call or prepayment penalties:


	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)				(In thousands)

Due in one year or less	$	—	$	—	$	—	$	—
Due after one year through five years		2,109		2,135		3,310		3,337
Due after five years through ten years		8,281		8,356		9,588		9,793
Due after ten years		11,846		11,239		11,241		11,583

		22,236		21,730		24,139		24,713

Mortgage-backed securities		9,676		9,646		19,707		19,953
CMOs						2,208		2,242
Equity securities						470		470

						22,385		22,665
	$	31,912	$	31,376
					$	46,524	$	47,378

Securities with an amortized cost of ~~$31,910,000~~$44,421,000 and a fair value of ~~$31,375,000~~$45,203,000 were pledged at ~~September 30, 2013~~March 31, 2015 as collateral for public fund deposits and for other purposes as required or permitted by law. ~~This compares to~~In comparison, at December 31, ~~2012, where~~2014, securities with an amortized cost of ~~$30,949,000~~$47,084,000 and a fair value of ~~$31,797,000~~$47,768,000 were pledged for the same purposes.

Information pertaining to securities with gross unrealized losses at ~~September 30, 2013~~March 31, 2015 and December 31, ~~2012~~2014 aggregated by investment category and length of time that individual securities have been in a continuous loss position are as follows:


	Less Than 12 Months				More Than 12 Months				Total				Less Than 12 Months				More Than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In thousands)												(In thousands)
September 30, 2013:
March 31, 2015:
Available-for-sale:
U.S. Government agency securities													$	25	$	—	$	—	$	—	$	25	$	—
State and municipal	$	8,217	$	656	$	1,251	$	60	$	9,468	$	716		1,230		3		1,253		36		2,483		39
Mortgage-backed securities		4,622		68		—		—		4,622		68
Collateralized mortgage obligations (CMOs)														446		1		—		—		446		1

	$	12,839	$	724	$	1,251	$	60	$	14,090	$	784	$	1,701	$	4	$	1,253	$	36	$	2,954	$	40

December 31, 2012:
Available-for-sale:
State and municipal	$	5,053	$	64	$	—	$	—	$	5,053	$	64

	$	5,053	$	64	$	—	$	—	$	5,053	$	64	Less Than 12 Months				More Than 12 Months				Total
													Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
													(In thousands)
December 31, 2014:
Available-for-sale:
U.S. Government agency securities													$	49	$	1	$	—	$	—	$	49	$	1
State and municipal														2,034		5		3,455		57		5,489		62
Mortgage-backed securities														3,699		3		—		—		3,699		3
Collateralized mortgage obligations (CMOs)														423		1		100		—		523		1

													$	6,205	$	10	$	3,555	$	57	$	9,760	$	67

Management evaluates securities for other-than-temporary impairment, on at least on a quarterly basis. It is management’s intent to hold all investments until maturity unless market, economic, credit quality or specific investment concerns warrant a sale of securities. Consideration is given to (1) the length of time and the extent to which the fair value of ~~securities~~a security has been less than its cost, (2) the credit quality or financial condition and near-term prospects of the issuer, and (3) the intent and ability of the ~~corporation~~Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

At ~~September 30, 2013, twenty-two state and municipal securities and six mortgage-backed~~March 31, 2015, eight securities had unrealized losses as compared with ~~twelve state and municipal~~sixteen securities ~~that had unrealized losses~~ at December 31, ~~2012.~~2014. Management believes ~~that the securities with unrealized losses do not represent impairments that are other-than-temporary. Rather, management believes that~~ the unrealized losses relate to changes in interest rates since the time the individual securities were purchased as opposed to underlying credit issues. As ~~management~~the Company does not intend to sell any of these debt securities, and it is more likely than not that ~~management~~the Company will not be required to sell any of these debt securities before the cost bases are recovered, no declines are deemed to be other-than-temporary.

~~As part of its strategy to manage interest rate risk and prepayment risk inherent within the investment portfolio, the~~The Bank ~~sold five available-for-sale mortgage-backed~~did not sell any securities ~~totaling $5,309,000~~ during ~~the first nine months of 2013. There were no securities sold during the three months ended September 30, 2013 since all of the 2013 securities sales occurred in~~ the first quarter of ~~the year. For the nine months ended September 30, 2013, gross realized gains amounted to $119,000~~2015 and gross realized losses were zero, resulting in a $119,000 net gain on the sale. This compares with sales of available for sale mortgage-backed securities and municipal bonds totaling $19,106,000 for the nine months ended September 30, 2012, resulting in gross realized gains of $770,000, no gross losses, resulting in a net gain of $770,000. There were no securities sold during the three months ended September 30, 2012 since all of the 2012 securities sales occurred in the first quarter of the year.2014.

~~The Bank reinvested the proceeds from the sale of investment securities into funding loan growth.~~

Note 56 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses

The loan portfolio comprises the major component of ~~Riverview’s~~the Company’s earning assets and is the highest yielding asset category. Loans receivable are summarized as follows for the periods presented:


(Dollars in thousands)	September 30, 2013			December 31, 2012			March 31, 2015			December 31, 2014

Commercial, financial, agricultural	$	25,175		$	23,321
Real Estate:
Construction		15,716			19,026
Mortgage		99,763			96,345
Commercial		104,043			97,061		$	40,422		$	37,301
Commercial real estate								203,043			199,782
Commercial land and land development								11,352			11,441
Residential real estate								73,777			73,453
Home equity lines of credit								18,249			18,235
Consumer installment		1,756			1,651			2,627			2,481

Total loans		246,453			237,404			349,470			342,693
Deferred loan fees		477			444
Allowance for loan losses								(3,735	)		(3,792	)

Total loans, net of fees	$	246,930		$	237,848
Allowance for loan losses		(3,556	)		(3,736	)

Total loans, net	$	243,374		$	234,112		$	345,735		$	338,901

The Bank takes a balanced approach to its lending activities by managing risk associated with its loan portfolio. This risk management is achieved by maintaining diversification within the portfolio, consistently applying prudent underwriting standards, ~~ensure~~ensuring that monitoring efforts are ongoing with attention to portfolio dynamics and mix, and following procedures that are consistently applied and updated on an annual basis. The Bank ~~contracts~~utilizes an independent third party each year to conduct a credit review of the loan portfolio to provide an independent assessment of asset quality through an evaluation of the established underwriting criteria used in originating credits. Separately, every loan booked and every loan ~~turndown~~turned down undergoes an audit review for conformity with established policies and compliance with current regulatory lending laws. The Bank has not changed its loan underwriting criteria, and management believes its standards continue to remain conservative. All of the Bank’s loans are to domestic borrowers.

The Bank’s management monitors the loan portfolio on a regular basis with consideration given to detailed analysis of loans by portfolio segment. Portfolio segments represent pools of loans with similar risk characteristics. There are eight portfolio ~~segments~~segments: – commercial loans; non-owner occupied commercial real estate loans; owner occupied commercial real estate loans; one-to-four family investment property loans; commercial land/land development/construction loans; residential real estate loans; home equity lines of credit; and consumer loans. For the purpose of estimating the allowance for loan losses, each of the segments for commercial loans, non-owner occupied commercial real estate loans, owner occupied commercial real estate loans, one-to-four family investment property loans, and commercial land/land development/construction loans are ~~broken into sub-segments~~also evaluated for loan participations bought and loans generated by the branches and commercial offices in Schuylkill and Berks ~~counties,~~Counties, which are ~~new~~newer market areas adjacent to the Bank’s ~~traditional~~original geographic footprint.

~~Note 5 - Loans Receivable, Credit Quality for Loans and~~ In addition, the ~~Allowance for Loan Losses (Continued)~~

~~The loans in these sub-segments have risk characteristics that differ from the general segments and merit~~Company undertakes separate ~~analysis in order to afford additional granularity and accuracy in management’s estimate~~evaluations for the ~~allowance for~~acquired Union Bank loan ~~losses.~~ portfolio.

Internal policy requires that the Chief Credit Officer report to the Board of Directors on a quarterly basis, ~~to discuss~~ the status of the loan portfolio and any related credit quality issues. These reports include, but are not limited, to information on past due and nonaccrual loans, impaired loans, the allowance for loan losses, changes in the allowance for loan losses, credit quality indicators and foreclosed assets.

Loans are considered to be past due when they are not paid in accordance with contractual terms. Past due loans are monitored by portfolio segment and by severity of ~~delinquency -~~delinquency: – 30-59 days past due; 60-89 days past due; and 90 days and greater past due. The accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. A loan may remain on accrual status if it can be documented that it is well secured and in the process of collection. When a loan is placed on nonaccrual status, all unpaid interest credited to income in the current calendar year is reversed and all unpaid interest accrued in prior calendar years is charged against the allowance for loan losses. Interest payments received on nonaccrual loans are either applied against principal or reported as interest income according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

Note 6 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses (continued)

The following table presents an aging of loans receivable by loan portfolio segments as of ~~September 30, 2013~~March 31, 2015 and December 31, ~~2012,~~2014, and includes nonaccrual loans and loans past due 90 days or more and still accruing:


(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due		Current		Total		Recorded Investment Greater Than 90 Days & Accruing		30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due		Current		Total		Recorded Investment Greater Than 90 Days & Accruing

September 30, 2013:
March 31, 2015:
Commercial	$	171	$	46	$	—	$	217	$	25,086	$	25,303	$	—	$	—	$	—	$	365	$	365	$	40,057	$	40,422	$	—
Commercial real estate:
Non-owner occupied		—		—		601		601		69,990		70,591		—		—		2,180		22		2,202		101,605		103,807		—
Owner occupied		418		—		605		1,023		55,295		56,318		—		353		312		49		714		72,234		72,948		—
1-4 family investment		792		142		—		934		27,723		28,657		—		284		—		346		630		25,658		26,288		—
Commercial land and land development		215		—		—		215		10,757		10,972		—		—		—		218		218		11,134		11,352		—
Residential real estate		1,175		—		1,496		2,671		37,529		40,200		175		617		—		593		1,210		72,567		73,777		—
Home equity lines of credit		148		—		408		556		11,959		12,515		—		151		—		60		211		18,038		18,249		—
Consumer		1		1		—		2		2,372		2,374		—		3		—		—		3		2,624		2,627		—

Total	$	2,920	$	189	$	3,110	$	6,219	$	240,711	$	246,930	$	175	$	1,408	$	2,492	$	1,653	$	5,553	$	343,917	$	349,470	$	—


December 31, 2014:
Commercial															$	24	$	41	$	364	$	429	$	36,872	$	37,301	$	—
Commercial real estate:
Non-owner occupied																15		5,426		162		5,603		97,823		103,426		—
Owner occupied																621		—		758		1,379		70,178		71,557		294
1-4 family investment																—		515		446		961		23,838		24,799		132
Commercial land and land development																16		—		215		231		11,210		11,441		—
Residential real estate																739		425		1,805		2,969		70,484		73,453		214
Home equity lines of credit																103		59		436		598		17,637		18,235		—
Consumer																6		5		3		14		2,467		2,481		3

Total															$	1,524	$	6,471	$	4,189	$	12,184	$	330,509	$	342,693	$	643

~~Note 5 - Loans Receivable, Credit Quality for Loans~~Loan balances above include net deferred loan fees of $696,000 and ~~the Allowance for Loan Losses (Continued)~~$716,000 at March 31, 2015 and December 31, 2014, respectively.

Included within the loan portfolio are loans in which the Bank discontinued the accrual of interest due to the deterioration in the financial condition of the borrower. Such loans approximated ~~$3,521,000~~$2,432,000 and $4,245,000 at ~~September 30, 2013.~~March 31, 2015 and December 31, 2014, respectively. If the nonaccrual loans had performed in accordance with their original terms, interest income would have increased by ~~$140,000~~$43,000 for the ~~nine~~three months ended ~~September 30, 2013~~March 31, 2015 and ~~$177,000~~$114,000 for the ~~nine~~three months ended ~~September 30, 2012.~~March 31, 2014.

The following presents loans by loan portfolio segments that were on a nonaccrual status as of ~~September 30, 2013~~March 31, 2015 and December 31, ~~2012:~~2014:


(In thousands)	September 30, 2013		December 31, 2012		March 31, 2015		December 31, 2014
Commercial	$	175	$	190	$	513	$	515
Commercial real estate:
Non-owner occupied		601		1,159		22		162
Owner occupied		869		399		282		701
1-4 family investment		78		389		346		384
Commercial land and land development		—		—		218		215
Residential real estate		1,321		1,173		955		1,735
Home equity lines of credit		477		553		96		533

Total	$	3,521	$	3,863	$	2,432	$	4,245

Note 6 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses (continued)

A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. The Bank further identifies all loans in nonaccrual status and troubled debt restructured loans as impaired loans, except large groups of smaller balance homogeneous loans that are collectively evaluated for impairment. Accordingly, the Bank does not separately identify individual consumer and residential loans for impairment disclosures, unless the loans are the subject of a restructuring agreement. Impairment is measured on a loan by loan basis for commercial and construction loans by either the present value

~~Note 5 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses (Continued)~~

of expected future cash flows discounted at the loan’s effective interest rate, or the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. When the measure of an impaired loan results in a realizable value that is less than the recorded investment in the loan, the difference is recorded as a specific valuation allowance against that loan, and the Bank then makes the appropriate adjustment to the allowance for loan losses.

Note 6 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses (continued)

The following presents impaired loans by loan portfolio segments for ~~September 30, 2013 and December 31, 2012:~~the periods presented:


							Three Months Ended September 30, 2013				Nine Months Ended September 30, 2013				March 31, 2015										March 31, 2014
(In thousands)	Recorded Investment in Impaired Loans		Unpaid Principal Balance of Impaired Loans		Related Allowance		Average Recorded Investment in Impaired Loans		Interest Income Recognized		Average Recorded Investment in Impaired Loans		Interest Income Recognized		Recorded Investment in Impaired Loans		Unpaid Principal Balance of Impaired Loans		Related Allowance		Average Recorded Investment in Impaired Loans		Interest Income Recognized		Average Recorded Investment in Impaired Loans		Interest Income Recognized

Loans with no related allowance recorded:
Commercial	$	712	$	712	$	—	$	718	$	8	$	722	$	24	$	1,181	$	1,181	$	—	$	1,183	$	7	$	1,017	$	8
Commercial real estate:
Non-owner occupied		2,402		2,402		—		2,638		16		2,741		47		2,203		2,203		—		2,203		19		4,564		17
Owner occupied		484		484		—		524		2		690		11		915		915		—		914		15		1,168		12
1-4 family investment		987		987		—		1,001		7		1,002		22		816		816		—		819		5		938		5
Commercial land and land development		—		—		—		—		—		—		—		218		218		—		218		—		215		—
Residential real estate		1,087		1,087		—		1,105		10		1,128		24		2,311		2,311		—		2,343		19		1,802		20
Home equity lines of credit		775		775		—		789		3		791		8		402		402		—		416		—		767		2
Consumer		—		—		—		—		—		—		—		—		—		—		—		—		—		—

															$	8,046	$	8,046	$	—	$	8,096	$	65	$	10,471	$	64


Loans with an allowance recorded:
Commercial		167		167		1		188		—		189		—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate:
Non-owner occupied		114		114		44		168		—		194		—		—		—		—		—		—		—		—
Owner occupied		605		605		188		614		—		617		7		—		—		—		—		—		—		—
1-4 family investment		—		—		—		—		—		—		—		193		193		14		192		—		325		3
Commercial land and land development		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Residential real estate		644		644		209		668		1		668		6		123		123		6		124		1		127		1
Home equity lines of credit		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—		—		—		—		—		—		—		—

															$	316	$	316	$	20	$	316	$	1	$	452	$	4


Total
Commercial		879		879		1		906		8		911		24	$	1,181	$	1,181	$	—	$	1,183	$	7	$	1,017	$	8
Commercial real estate:
Non-owner occupied		2,516		2,516		44		2,806		16		2,935		47		2,203		2,203		—		2,203		19		4,564		17
Owner occupied		1,089		1,089		188		1,138		2		1,307		18		915		915		—		914		15		1,168		12
1-4 family investment		987		987		—		1,001		7		1,002		22		1,009		1,009		14		1,011		5		1,263		8
Commercial land and land development		—		—		—		—		—		—		—		218		218		—		218		—		215		—
Residential real estate		1,731		1,731		209		1,773		11		1,796		30		2,434		2,434		6		2,467		20		1,929		21
Home equity lines of credit		775		775		—		789		3		791		8		402		402		—		416		—		767		2
Consumer		—		—		—		—		—		—		—		—		—		—		—		—		—		—

	$	7,977	$	7,977	$	442	$	8,413	$	47	$	8,742	$	149	$	8,362	$	8,362	$	20	$	8,412	$	66	$	10,923	$	68

Note 56 - Loans Receivable, ~~and~~ Credit Quality for Loans and the Allowance for Loan Losses ~~(Continued)~~(continued)

The recorded investment in impaired loans decreased by ~~$1,001,000~~$46,000 at ~~September 30, 2013~~March 31, 2015 as compared to ~~the year ended~~ December 31, ~~2012.~~2014. This decrease is attributable to the charge-off and transfer of seven loans totaling $525,000 to foreclosed real estate; the full payment of two loans totaling $120,000; the addition of two new impaired loans totaling $669,000; and principalresulted primarily from payments received on impaired loans ~~totaling $1,025,000.~~during the quarter, along with the transfer of two impaired loans to other real estate owned, offset by the addition of three residential loans which became impaired during the first quarter.

Impaired loans also include all loans modified and identified as troubled debt restructurings (“~~TDRs”~~TDR”). A loan is deemed to be a TDR when the Bank agrees to a modification toin the terms of a loan resulting in a concession made by the Bank in an effort to mitigate potential loss arising from a borrower’s financial difficulty. As of ~~September 30, 2013~~March 31, 2015, there were ~~seventeen TDRs~~twenty six restructured loans, totaling ~~$6,551,000 to nine~~$7,125,000, involving nineteen separate and unrelated borrowers who were experiencing financial difficulty. ~~This compares with seventeen TDRs to nine separate customers totaling $6,503,000 as of September 30, 2012.~~ The modifications on these loans included reductions in interest rates, extension of maturity dates, lengthening of amortization schedules and provisions for interest only payments. There are no commitments to extend additional funds to any of these borrowers. At December 31, 2014, there were twenty two restructured loans, totaling $6,596,000, involving fifteen separate and unrelated borrowers.

Note 56 - Loans Receivable, ~~and~~ Credit Quality for Loans and the Allowance for Loan Losses ~~(Continued)~~(continued)

The following ~~table presents~~tables present the number of ~~TDRs~~loans and ~~the~~ recorded investment in ~~TDRs~~loans restructured and identified as troubled debt restructurings for the three ~~and nine~~ months ended ~~September 30, 2013~~March 31, 2015 and ~~2012,~~2014, as well as the number and recorded investment in ~~TDRs~~these loans that subsequently defaulted. Defaulted loans are those which are 30 days or more past due for payment under the modified terms.


	Three Months Ended September 30, 2013						Nine Months Ended September 30, 2013
(In thousands, except contracts data)	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment

March 31, 2015:
Troubled Debt Restructurings:
Commercial		—	$	—	$	—		—	$	—	$	—		—	$	—	$	—
Commercial real estate:
Non-owner occupied		—		—		—		—		—		—		—		—		—
Owner occupied		—		—		—		—		—		—		1		149		149
1-4 family investment		—		—		—		—		—		—		—		—		—
Commercial land and land development		—		—		—		—		—		—		—		—		—
Residential real estate		1		64		64		1		64		64		3		473		473
Home equity lines of credit		—		—		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—		—		—

	Number of Contracts		Recorded Investment				Number of Contracts		Recorded Investment				Number of Contracts		Recorded Investment
Troubled Debt Restructurings That Subsequently Defaulted:
Commercial		—		—				—		—				—	$	—	$	—
Commercial real estate:														—		—		—
Non-owner occupied		—		—				—		—				—		—		—
Owner occupied		—		—				—		—				—		—		—
1-4 family investment		—		—				—		—				—		—		—
Commercial land and land development		—		—				—		—				—		—		—
Residential real estate		—		—				—		—				—		—		—
Home equity lines of credit		—		—				—		—				—		—		—
Consumer		—		—				—		—				—		—		—


	Three Months Ended September 30, 2012						Nine Months Ended September 30, 2012
(In thousands, except contracts data)	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment

March 31, 2014:
Troubled Debt Restructurings:
Commercial		—	$	—	$	—		1	$	183	$	183		—	$	—	$	—
Commercial real estate:
Non-owner occupied		—		—		—		—		—		—		—		—		—
Owner occupied		—		—		—		1		289		289		—		—		—
1-4 family investment		—		—		—		2		785		785		1		85		85
Commercial land and land development		—		—		—		—		—		—		—		—		—
Residential real estate		—		—		—		—		—		—		—		—		—
Home equity lines of credit		1		414		414		1		414		414		—		—		—
Consumer		—		—		—		—		—		—		—		—		—

													Number of Contracts		Recorded Investment
Troubled Debt Restructurings That Subsequently Defaulted:
Commercial														—	$	—	$	—
Commercial real estate:														—		—		—
Non-owner occupied														—		—		—
Owner occupied														—		—		—
1-4 family investment														—		—		—
Commercial land and land development														—		—		—
Residential real estate														—		—		—
Home equity lines of credit														—		—		—
Consumer														—		—		—

Note 56 - Loans Receivable, ~~and~~ Credit Quality for Loans and the Allowance for Loan Losses ~~(Continued)~~(continued)

~~The Bank assesses all loan restructurings in accordance with Accounting Standards Update (ASU) 2011-02,~~~~A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring~~, which provides a creditor with additional guidance in evaluating whether a restructuring of a debt is a troubled debt restructuring. This ASU further clarifies the definition of a troubled debt restructuring and confirms that a creditor should consider all aspects of a restructuring to determine whether it has granted a concession to a borrower, which would result in the classification of the credit as a TDR.

The allowance for loan losses is composed of individual loan valuation allowances deemed necessary to absorb probable and quantifiable losses in the loan portfolio based upon current knowledge of the loan portfolio, and loan pool valuation allowances, allocated and unallocated, deemed necessary to absorb losses which are not specifically identified but are inherent in the loan portfolio. Management evaluates the adequacy of the allowance on a quarterly basis. If the allowance for loan losses is not sufficient to cover actual loan losses, the Bank‘s earnings may be reduced.

Individual valuation allowances are established in connection with specific loan reviews and the asset classification process including the procedures for impairment testing. Such a valuation, which includes a review of loans for which full collectability in accordance with contractual terms is not reasonably assured, considers the estimated fair value of the underlying collateral less the costs to sell, or the present value of expected future cash flows, or the loan’s observable market value. Any shortfall ~~that exists from~~revealed by this analysis results in a specific allowance for the loan. Pursuant to policy, loan losses must be charged off in the period the loans, or portions thereof, are deemed uncollectible. Assumptions and judgments by management in conjunction with outside sources are used to determine whether full collectability of a loan is not reasonably assured. These assumptions and judgments are also used to determine the estimates of the fair value of the underlying collateral or the present value of expected future cash flows or the loan’s observable market value. Individual valuation allowances could differ materially as a result of changes in these assumptions and judgments. Individual loan analyses are performed quarterly on specific loans considered to be impaired. The results of the individual valuation allowances are aggregated and included in the overall allowance for loan losses.

Loan pool valuation allowances represent loss allowances that have been established to recognize the inherent risks associated with the Bank’s lending activity, but which, unlike individual allowances, have been allocated to unimpaired loans within the following eight portfolio segments: commercial loans; non-owner occupied commercial real estate loans; owner occupied commercial real estate loans; one-to-four family investment property loans; commercial land/land development/construction loans; residential real estate loans; home equity lines of credit; and consumer loans. ~~The~~Each of the segments for commercial loans, non-owner occupied commercial real estate loans, owner occupied commercial real estate loans, one-to-four family investment property loans, and commercial land/land development/ construction loans are ~~broken into sub-segments~~also separately evaluated for loan participations bought, and for loans generated by the branches and commercial offices in Schuylkill and Berks counties, which are ~~new~~newer market areas adjacent to the Bank’s ~~traditional~~original geographic footprint. ~~The loans in these sub-segments~~

~~Note 5 - Loans Receivable and Credit Quality for Loans and the Allowance for Loan Losses (Continued)~~

~~have risk characteristics that differ from the general segments and merit~~In addition, there are separate ~~analysis in order to afford additional granularity and accuracy in management’s estimate~~evaluations made for the ~~allowance for~~acquired Union Bank loan ~~losses.~~ portfolio.

The Bank measures estimated credit losses on each of these groups of loans based on the historical loss rate of each group. The historical loss rate is calculated based on the average annualized net charge-offs over the most recent eight calendar quarters. ~~Unimpaired criticized and classified loans~~In the case of the acquired Union Bank loan portfolio, the historical loss rate is calculated based on the average annualized net charge-offs over the five calendar quarters since acquisition.

Loss factors are ~~further segregated as “sub- pools” within each of these eight segments.~~

~~A separate, higher loss factor is~~ ascribed to ~~each of these “sub-pools”~~loan segments based on the relative risk in each segment, as indicated by historical loss ratios, the level of criticized/classified assets, and the nature of each segment in terms of collateral and inherent risk of the loan type. Management believes that historical losses or even recent trends in losses do not ~~by themselves,~~ form a sufficient basis to determine the appropriate level for the allowance. Management therefore also considers the following qualitative factors that are likely to cause estimated credit losses associated with each of the portfolio segments to differ from historical loss experience:

Each portfolio segment is examined quarterly with regard to the impact of each of these factors on the quality and risk profile of the pool, and adjustments ranging from zero to fifty basis points per factor are calculated. The sum of these qualitative

Note 6 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses (continued)

factor adjustments are added to the historical loss ratio for each segment, and the resulting percentage is applied to the loan balance of the segment to arrive at the required loan pool valuation allowance. An unallocated valuation allowance estimate is also made generally in order to give effect to significant loan growth in 2013 resulting from the entry into new markets in Schuylkill county in mid-2011 and Berks county in mid-2012. These portfolios are unseasoned and have not yet developed any loss history. Growth is expected to continue in these portfolios, with focus being given to business, construction, and commercial real estate loans. These loans are normally larger and more complex, and their collection rates are harder to predict.made. Management determines the unallocated portion, which represents the difference between the reported allowance for loan losses and the calculated allowance for loan losses, based generally on the following criteria:

The loan pool valuation allowance for each segment along with the unallocated valuation allowance is totaled and added to the individual valuation allowance for impaired loans to arrive at the total allowance for loan losses.

These evaluations are inherently subjective because even though they are based on objective data, it is management’s interpretation of the data that determines the amount of the appropriate allowance. If the evaluations prove to be incorrect, the allowance for loan losses may not be sufficient to cover losses inherent in the loan portfolio, resulting in additions to the allowance for loan losses and a reduction in ~~the~~ Bank earnings.

~~Note 5 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses (Continued)~~

Charge offs of commercial and industrial loans and commercial real estate and construction loans are recorded promptly upon determination that all or a portion of any loan balance is uncollectible. A loan is considered uncollectible when the borrower is 90 days or more delinquent in principal or interest repayment and the following conditions exist:

All unsecured consumer loans are charged-off when they become 120 days delinquent or when it is determined that the debt is uncollectible. Overdrafts are charged off when it is determined recovery is not likely or the overdraft becomes 45 days old, whichever comes first.

All secured consumer loans, except those secured by a primary or secondary ~~residence,~~residences, are charged off when they become 120 days delinquent, or when it is determined that the debt is uncollectible.

Uncollateralized portions of ~~first mortgage~~ residential real estate loans and consumer loans secured by real estate are charged off ~~upon completion of a sheriff’s sale, but prior to the transfer of the fair value carrying balance to other real estate owned.~~no later than when they are180 days past due. Current appraisals are obtained to determine the appropriate carrying balance with any exposed portion of the loan principal balance being charged off.

Note 6 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses (continued)

The allowance for loan losses is presented by loan portfolio segments with the outstanding balances of loans for the ~~three and nine months ended September 30, 2013 and 2012 as follows:~~periods presented:


				Commercial Real Estate																							Commercial Real Estate
(In thousands)	Commercial			Non-Owner Occupied		Owner Occupied		1-4 Family Investment		Commercial - Land and Land Development			Residential Real Estate		Home Equity Lines of Credit		Consumer		Unallocated			Total		Commercial			Non-Owner Occupied			Owner Occupied			1-4 Family Investment			Commercial – Land and Land Development			Residential Real Estate			Home Equity Lines of Credit			Consumer			Unallocated			Total

Allowance for Loan Losses for the Three Months Ended September 30, 2013:
Allowance for Loan Losses as of March 31, 2015:
Beginning balance	$	581		$	829	$	759	$	532	$	154		$	585	$	117	$	30	$	186		$	3,773	$	330		$	1,380		$	713		$	369		$	115		$	701		$	104		$	15		$	65		$	3,792
Charge-offs		—			—		—		167		—			35		65		—		—			267		—			—			39			—			—			15			—			6			—			60
Recoveries		2			—		—		—		—			—		—		1		—			3		—			—			—			—			—			0			—			3			—			3
Provision		(195	)		85		187		44		(23	)		80		55		—		(186	)		47		33			(83	)		57			26			(2	)		(14	)		3			7			(27	)		—

Ending balance	$	388		$	914	$	946	$	409	$	131		$	630	$	107	$	31	$	—		$	3,556	$	363		$	1,297		$	731		$	395		$	113		$	672		$	107		$	19		$	38		$	3,735


Ending balance: individually evaluated for impairment	$	1		$	44	$	188	$	—	$	—		$	209	$	—	$	—	$	—		$	442	$	—		$	—		$	—		$	14		$	—		$	6		$	—		$	—		$	—		$	20


Ending balance: collectively evaluated for impairment	$	387		$	870	$	758	$	409	$	131		$	421	$	107	$	31	$	—		$	3,114	$	363		$	1,297		$	731		$	381		$	113		$	666		$	107		$	19		$	38		$	3,715


Loans as of March 31, 2015:
Ending balance																								$	40,422		$	103,807		$	72,948		$	26,288		$	11,352		$	73,777		$	18,249		$	2,627					$	349,470


Ending balance: individually evaluated for impairment																								$	1,181		$	2,203		$	915		$	1,009		$	218		$	2,434		$	402		$	—					$	8,362


Ending balance: collectively evaluated for impairment																								$	39,241		$	101,604		$	72,033		$	25,279		$	11,134		$	71,343		$	17,847			2,627					$	341,108


Allowance for Loan Losses as of December 31, 2014:
Beginning balance																								$	424			875			831			373			144			567			103			30			316			3,663
Charge-offs																									36			244			—			93			—			140			—			11						524
Recoveries																									119			—			—			—			—			3			—			5						127
Provision																									(177	)		749			(118	)		89			(29	)		271			1			(9	)		(251	)		526

Ending balance																								$	330		$	1,380		$	713		$	369		$	115		$	701		$	104		$	15		$	65		$	3,792


Ending balance: individually evaluated for impairment																								$	—		$	50		$	22		$	5		$	—		$	5		$	—		$	—		$	—		$	82


Ending balance: collectively evaluated for impairment																								$	330		$	1,330		$	691		$	364		$	115		$	696		$	104		$	15		$	65		$	3,710


Loans as of December 31, 2014:
Ending balance																								$	37,301		$	103,426		$	71,557		$	24,799		$	11,441		$	73,453		$	18,235		$	2,481					$	342,693


Ending balance: individually evaluated for impairment																								$	1,193		$	2,034		$	1,186		$	1,048		$	215		$	1,958		$	774		$	—					$	8,408


Ending balance: collectively evaluated for impairment																								$	36,108		$	101,392		$	70,371		$	23,751		$	11,226		$	71,495		$	17,461		$	2,481					$	334,285


Allowance for Loan Losses as of March 31, 2014:
Beginning balance																								$	424		$	875		$	831		$	373		$	144		$	567		$	103		$	30		$	316		$	3,663
Charge-offs																									54			—			—			—			—			22			—			3			—			79
Recoveries																									24			—			—			—			—			—			—			2			—			26
Provision																									(38	)		100			(31	)		(16	)		(18	)		24			(4	)		(2	)		(15	)		—

Ending balance																								$	356		$	975		$	800		$	357		$	126		$	569		$	99		$	27		$	301		$	3,610

Note 56 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses ~~(Continued)~~(continued)

~~Note 5 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses (Continued)~~

The Bank has established a credit risk rating system to quantify the risk in the Bank’s loan portfolio. This system is a critical tool for managing the Bank’s lending activities and for evaluating appropriate loan loss reserves. This rating system is dynamic with risk ratings subject to change at any time when circumstances warrant. The system rates the strength of the borrower and is designed to be a tool for management to manage the Bank’s credit risk and provide an early warning system for negative migration of credits. The system also provides for recognition of improvement in credits. Risk ratings move dynamically, both negatively and positively.

Each new, renewed or modified credit facility is given a risk rating that takes into consideration factors that affect credit quality. The primary determinants of the risk rating assigned are based upon the reliability of the primary source of repayment and the past, present, and projected financial condition of the borrower. The rating also reflects current economic and industry conditions. Major factors used in determining the rating include the following variables:

~~Note 5 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses (Continued)~~

In addition, the following factors ~~may affect~~are used to enhance the risk rating derived from the above factors:

Collateral: The rating may be affected by the type and quality of collateral, the level of coverage, the economic life of the collateral, liquidation value, and the Bank’s ability to dispose of the collateral.

Guarantors: ~~The support provided by guarantors varies on a case-by-case basis and, thus the impact of the guarantor on~~Guarantees can differ substantially in enhancing the risk rating assigned to a loan or lending ~~commitment also varies.~~commitment. In order to provide enough support to impact the assigned rating by one or more levels, the guarantee must be unconditional and be from an individual or entity with substantial financial strength and a vested interest in the success of the borrower.

The Bank assigns risk ratings based on a scale from 1 to 8 with 1 being the highest quality rating and 8 being the lowest quality ~~grade.~~rating.

This category is reserved for loans that contain ~~a virtual absence of any~~virtually no credit risk. The loan is secured by properly margined cash collateral (in accordance with loan policy). Loans that are unquestionably guaranteed by the U.S. government, or any agency thereof, would also fit this category.

Note 6 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses (continued)

Loans in this category would be characterized by nominal risk and strong repayment certainty. This category would include loans to companies or individuals that are paying as agreed and that are either unsecured or secured where reliance is placed on non-liquid or less than good quality liquid collateral.

Loans in this category are considered to exhibit an average level of credit risk. However, these loans have certain risk characteristics, whether due to management, industry, economic or financial concerns. Credits with satisfactory liquidity and leverage, with losses considered to be of a temporary nature for which there is only minor concern, would be so rated. Loans for start-up businesses or loans to firms exhibiting high leverage could receive this rating. Loans in this category would also include borrowers whose underlying financial strength may be relatively ~~weak. However,~~weak where, however, risk of loss is considered minimal due to adequate, well-margined and controlled collateral.

Loans in this category would typically be experiencing some negative trends due to financial, operational, economic, or regulatory reasons. A deteriorating collateral position or guarantor, in isolation, could also justify this rating. Such loans must have elevated monitoring as a result of negative trends which, if not addressed, could result in an unacceptable increase in credit risk.

A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in a deterioration of the repayment prospects for the loan or in the Bank’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Bank to sufficient risk to warrant an adverse classification. Loans for which economic or market conditions are beginning to adversely affect the borrower may be so rated. An adverse trend in the borrower’s operations or an imbalanced position in the balance sheet which has not reached a point where ~~the~~ liquidation is jeopardized may be best handled by this rating. Loans in which actual weaknesses are evident and significant ~~are~~should be considered for more serious criticism. In cases where the credit is weak but trends are improving, and/or collateral support is within normal advance margins, consideration isshould be given for the next higher rating.

~~Note 5 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses (Continued)~~

A substandard loan is inadequately protected by the current sound worth and paying capacity of the borrower or by the collateral pledged, if any. Loans so classified ~~must~~ have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. These loans, even if apparently protected by collateral value, have well-defined weaknesses related to adverse financial, managerial, economic, market, or political conditions which have clearly jeopardized repayment of principal and interest as originally intended. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. All loans in nonaccrual status may be rated no higher than substandard.

A doubtful loan has all of the weaknesses inherent in a loan classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of current facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending events that may work to strengthen the asset, its classification as a loss is deferred until its ~~most exact~~ status ~~may~~can be ~~determined.~~better determined in light of pending events. Generally, pending events should be resolved within a relatively short period and the rating ~~will be~~ adjusted based on the new information. Because of high probability of loss, loans rated doubtful must be in non-accrual status.

Loans classified loss are considered uncollectible and of such little value that their continuance as a bankable asset is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this ~~basically worthless~~ asset even though a partial recovery may be effected in the future. When access to collateral, rather than the value of the collateral, is a problem, a less severe classification may be appropriate. However, the Bank will not maintain an asset on the balance sheet if realizing its value would require long-term litigation or other lengthy recovery efforts. Losses are recorded in the period the asset becomes uncollectible.

Note 6 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses (continued)

The following table presents the credit quality indicators and total credit exposure for each segment in the loan portfolio by internally assigned grades as of ~~September 30, 2013~~March 31, 2015 and December 31, ~~2012:~~2014:

~~Note 5 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses (Continued)~~

The adequacy of the allowance is analyzed quarterly, ~~with any adjustment~~and adjusted to the level deemed appropriate by credit administration management, based upon its risk assessment of the entire portfolio. Based upon credit administration’s review of the classified loans and the overall allowance levels as they relate to the entire loan portfolio at ~~September 30, 2013,~~March 31, 2015, management believes the allowance for loan losses has been established at ~~a level~~levels sufficient to cover the probable incurred losses in the loan portfolio.

Purchased loans are initially recorded at their acquisition date fair values. The carryover of the allowance for loan losses is prohibited as any credit losses in the loans are included in the determination of the fair value of the loans at the acquisition date. Fair values for purchased loans are based on a cash flow methodology that involves assumptions and judgments as to credit risk, default rates, loss severity, collateral values, discount rates, payment speeds, and prepayment risk.

As part of its acquisition due diligence process, the Bank reviewed the acquired institution’s loan grading system and the associated risk rating for loans. In performing this review, the Bank considered cash flows, debt service coverage, delinquency status, accrual status, and collateral for the loan. This process allowed Riverview to clearly identify the population of acquired loans that had evidence of deterioration in credit quality since origination and for which it was probable, at acquisition, that the Bank would be unable to collect all contractually required payments. All such loans identified by the Bank were considered to be within the scope of ASC 310-30, Loan and Debt Securities Acquired with Deteriorated Credit Quality and are identified as “Purchased Credit Impaired Loans”.

As part of the consolidation with Union, effective November 1, 2013, the Bank identified fourteen purchased credit impaired (“PCI”) loans. For all PCI loans, the excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable discount and is recognized as interest income over the remaining life of the loan. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the non-accretable discount. The non-accretable discount represents estimated future credit losses expected to be incurred over the life of the loan. Subsequent decreases to the expected cash flows require the Bank to evaluate the need for an allowance for loan losses on these loans. Subsequent improvements in expected cash flows result in the reversal of a corresponding amount of the non-accretable discount which the Bank then reclassifies as an accretable discount that is recognized as interest income over the remaining life of the loan. The Bank’s evaluation of the amount of future cash flows that it expects to collect is based on a cash flow methodology that involves assumptions and judgments as to credit risk, collateral values, discount rates, payment speeds, and prepayment risk. Charge-offs of the principal amount on purchased impaired loans are first applied to the non-accretable discount.

Note 6 - Loans Receivable, Credit Quality for Loans and the Allowance for Loan Losses (continued)

As a result of this accounting methodology, certain credit-related ratios of the Bank, including, for example, the growth rate in non-performing assets, may not necessarily be directly comparable with periods prior to the acquisition of the PCI loans.

For purchased loans that are not deemed impaired at acquisition, credit discounts representing principal losses expected over the life of the loans are a component of the initial fair value, and the discount is accreted to interest income over the life of the asset. Subsequent to the purchase date, the method used to evaluate the sufficiency of the credit discount is similar to originated loans, and if necessary, additional reserves are recognized in the allowance for loan losses.

The following is a summary of the loans purchased in the Union transaction as November 1, 2013, the date of consolidation:

The unpaid principal balances and the related carrying amounts of acquired loans as of March 31, 2015 and December 31, 2014 were as follows:

As of the indicated dates, the changes in the accretable discount related to the purchased credit impaired loans were as follows:

In January 2009, ~~Riverview~~the Company implemented a nonqualified stock option plan. The purpose of the 2009 Stock Option Plan was to advance the development, growth and financial condition of ~~Riverview~~the Company by providing incentives through participation in the appreciation of the common stock of ~~Riverview~~the Company to secure, retain and motivate its directors, officers and key employees and to align ~~such person’s~~those persons’ interests with those of ~~Riverview’s~~the Company’s shareholders. Originally, 170,000 shares of ~~Riverview’s~~the Company’s common stock ~~that may~~were authorized to be issued ~~or transferred~~ under ~~this plan could not exceed, in~~ the ~~aggregate, 170,000 shares.~~2009 Stock Option Plan. On January 4, 2012, the 2009 Stock Option Plan was

amended and restated to increase the total number of shares of common stock that may be issued under the Plan ~~through grants~~to a total of ~~nonqualified stock options. The amendment increased~~220,000 shares. On April 16, 2014 the 2009 Stock Option Plan was again amended and restated to increase the total number of shares of common stock by 130,000 shares thus increasing the total number of available shares under the Plan ~~in the aggregate,~~ to ~~220,000 shares from 170,000 shares that were originally documented in the Plan.~~ 350,000 shares.

The vesting schedule for all options is a seven year cliff, which means that the options are 100% vested in the seventh year following the grant date and the expiration date is ten years following the grant date. The Plan states that upon the date of death of a participant, all awards granted pursuant to the agreement for that participant shall become fully vested and remain exercisable for the option grant’s remaining term. As of ~~September 30, 2013,~~March 31, 2015, there were ~~11,500~~174,250 option grants fully vested ~~or exercisable as a result of the deaths of two directors of Riverview.~~ and exercisable.

Information pertaining to options outstanding at ~~September 30, 2013~~March 31, 2015 is as follows:


	Options Outstanding					Options Exercisable					Options Outstanding						Options Exercisable
Range of exercise price	Number Outstanding		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Number Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life

$10.35 - $10.60		179,250	7 years	$	10.58		11,500	$	10.60	7 years
$9.75 - $10.60												322,200		7.5 years	$	10.29		174,250	$	10.58		2.7 years

~~Riverview~~There was intrinsic value associated with all of the stock options outstanding at March 31, 2015 because the exercise prices for the options were lower than the trading price of the stock.

The Company accounts for these options in accordance with generally accepted accounting principles related toShare Based Payments, which requires that the fair value of the equity awards be recognized as compensation expense over the period during which the employee is required to provide service in exchange for such an award. ~~Riverview is amortizing~~The Company amortizes compensation expense over the vesting period, or seven years. Total compensation

expense relating to the options that has been recognized ~~is $144,000, out~~since inception of the Plan through March 31, 2015 was $304,000, of which ~~$11,000~~$8,000 was recorded for the three months ended ~~September 30, 2013 and $33,000 was recorded for the nine months ended September 30, 2013.~~March 31, 2015. The remaining unrecognized compensation expense as of ~~September 30, 2013~~March 31, 2015 was ~~$127,000.~~$186,000. In comparison with ~~2012, $15,000~~2014, $2,000 in option compensation expense was recorded for the three months ended ~~September 30, 2012 for a total of $42,000 for~~March 31, 2014.

~~During~~March 31, 2015, no options were either granted or exercised, as compared with the three ~~and nine~~ months ended ~~September 30, 2013, no~~March 31, 2014, during which 40,750 options were granted, and no options were exercised.

In the ordinary course of business, the Bank is party to financial instruments with off balance sheet risk to meet the financing needs of its customers. These financial instruments consist primarily of commitments to extend credit, typically residential mortgage loans and commercial loans and, to a lesser extent, letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized on the balance sheet.

The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making such commitments and conditional obligations as it does for on balance sheet instruments. The Bank does not anticipate any material losses from those commitments.

The Bank’s exposure to credit loss for loan commitments (unfunded loans and unused lines of credit, including home equity lines of credit) and standby and performance letters of credit was as follows for the periods indicated:


	Contract or Notional Amount				Contract or Notional Amount
	September 30, 2013		December 31, 2012		March 31, 2015		December 31, 2014
	(In thousands)				(In thousands)

Commitments to grant loans	$	16,583	$	13,262		19,619	$	17,046
Unfunded commitments of existing loans		20,965		21,396		28,540		33,603
Standby and performance letters of credit		1,818		1,749		3,141		2,667

					$	51,300	$	53,316
	$	39,366	$	36,407

Because these instruments have fixed maturity dates, and because many of them will expire without being drawn upon, they do not generally present any significant liquidity risk.

The ability of the Bank to transfer funds to the Company in the form of cash dividends, loans or advances is restricted by applicable regulations. Regulatory approval is required if the total of all dividends declared by a state-chartered bank in any calendar year exceeds net profits (as defined) for that year combined with the retained net profits for the two preceding years. At March 31, 2015, $1,815,000 of undistributed earnings of the Bank, included in consolidated shareholders’ equity, was available for distribution to the Company as dividends without prior regulatory approval.

The Bank is subject to various regulatory capital requirements administered by the Federal Deposit Insurance Corporation (FDIC). Failure to meet the minimum regulatory capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company and the consolidated financial statements. Under the Basel III regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines involving quantitative measures of its assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification under the prompt corrective action guidelines are also subject to qualitative judgments by the regulators about components, risk-weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of: total risk-based capital and Tier 1 capital to risk-weighted assets (as defined in the regulations), and Tier 1 capital to average total assets (as defined). Management believes that, as of March 31, 2015, the Bank meets all the capital adequacy requirements to which it is subject and meets the criteria to be well capitalized. To remain categorized as well capitalized the Bank will have to maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as disclosed in the table below. There are no conditions or events since year end that management believes have changed the Bank’s category.

The Federal Reserve Board approved a final rule in 2006 that expands the definition of a small bank holding company (“BHC”) under the Board’s Small Bank Holding Company Policy Statement and the Board’s risk-based and leverage capital guidelines for bank holding companies. Based on the ruling, the Company meets the eligibility criteria of a small BHC and is exempt from certain regulatory requirements administered by the federal banking agencies.

The Bank’s actual capital ratios, at March 31, 2015 and December 31, 2014, and the minimum ratios required for capital adequacy purposes and to be well capitalized, are summarized as follow:

The Basel III capital rules became effective for the Bank on January 1, 2015. A new capital ratio - Common equity tier 1 risk-based capital – was introduced under the Basel III capital rules. The presentation does not take into account the 2.5% capital conservation buffer phase-in because it does not begin until 2016, with full phase-in to be effective by 2019.

Management uses its best judgment in estimating the fair value of ~~Riverview’s~~the Company’s financial instruments. However, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates set forth herein are not necessarily indicative of the amounts ~~Riverview~~the Company could have realized in sales ~~transaction~~transactions on the dates indicated. The estimated fair value amounts have been measured as of their respective year-ends and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each year-end.

TheFair Value Measurements standard ~~under generally accepted accounting principles defines~~establishes a fair value ~~describes a framework for measuring fair value and requires disclosures about fair value measurements by establishing a three-level~~ hierarchy that prioritizes the inputs to valuation ~~techniques~~methods used to measure fair value. The ~~fair value~~ hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1)1 measurements) and the lowest priority to unobservable inputs (Level 3)3 measurements). ~~If the inputs used to measure the assets or liabilities fall within different levels of the hierarchy, the classification is based on the lowest level input~~

~~Note 8 - Fair Value Measurements and Fair Values of Financial Instruments (Continued)~~

that is significant to the fair value measurement of the asset or liability. Classification of assets and liabilities within the hierarchy considers the markets in which the assets and liabilities are traded and the reliability and transparency of the assumptions used to determine fair value.

The three levels of the fair value hierarchy under this standard are ~~defined~~ as follows:

Note 10 - Fair Value Measurements and Fair Values of Financial Instruments (continued)

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. At March 31, 2015 and December 31, 2014, the Company had no liabilities subject to fair value reporting measurement requirements.

The fair value of securities available for sale are determined by matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for specific securities, but rather by relying on the securities’ relationship to other benchmark quoted prices. For these securities, the Company obtains fair value measurements from an independent pricing service. For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at ~~September 30, 2013~~March 31, 2015 and December 31, ~~2012 are~~2014 were as follows:

Certain financial assets are measured at fair value on a nonrecurring basis in accordance with accounting principles generally accepted in the United States of America. Adjustments to the fair value of these assets usually results from the application of lower-of-cost-or-market accounting or write-downs of individual assets. The following discussion describes the valuation techniques used by the Company to measure certain financial assets recorded at fair value on a nonrecurring basis in the financial statements.

Loans held for sale are carried at the lower of cost or fair value. These loans typically consist of one-to-four family residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2). As such, the Company records any fair value adjustments on a nonrecurring basis.

Certain assets such as other real estate owned (OREO) are measured at fair value of real estate acquired through foreclosure at an estimated fair value less cost to sell. At or near the time of foreclosure, real estate appraisals are obtained on the

Note 810 - Fair Value Measurements and Fair Values of Financial Instruments ~~(Continued)~~(continued)

~~For~~properties acquired through foreclosure. The real estate is then valued at the lesser of the appraised value or the loan balance, including interest receivable, at the time of foreclosure less an estimate of costs to sell the property. Appraised values are typically determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of the Company using observable market data (Level 2). However, if the acquired property is a house or building in the process of construction or if an appraisal of the real estate property is over two years old, then the fair value is considered a Level 3. The estimate of costs to sell the property is based on historical transactions of similar holdings.

ASC 820 applies to loans measured for impairment using the practical expedients permitted by generally accepted accounting principles (GAAP), including impaired loans measured at an observable market price (if available), or at the fair value of the loan’s collateral (if the loan is collateral dependent). Fair value of the loan’s collateral, when the loan is dependent on collateral, is determined by appraisals or independent valuation which is then adjusted for the cost related to liquidation of collateral. The value of the collateral is typically determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of the Company using observable market data (Level 2). However, if the collateral is a house or building in the process of construction or if an appraisal of the real estate property is over two years old, then the fair value is considered Level 3. The value of business equipment is based upon an outside appraisal if deemed significant, or the net book value of the applicable business’ financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivable collateral are based on financial statement balances or aging reports (Level 3). Impaired loans are measured at the lower of cost or fair value of the underlying collateral less estimated costs to sell on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as a provision for loan losses on the Consolidated Statements of Income. The Company had impaired loans of $8,362,000 at March 31, 2015, out of which $316,000 required a valuation allowance of $20,000. This compares with impaired loans of $8,408,000 at December 31, 2014, out of which $738,000 required a valuation allowance of $82,000.

The fair value of goodwill is determined in the same manner as goodwill recognized in a business combination and uses standard valuation methodologies. Fair value may be determined using market prices, comparison to similar assets, market multiples, discounted cash flow analysis and other factors. Estimated cash flows may extend far into the future and by their nature are difficult to determine over an extended time frame. Factors that may significantly affect the estimates include specific industry or market sector conditions, changes in revenue growth trends, customer behavior, competitive forces, cost structures and changes in discount rates. The Company did not incur goodwill impairment during the three months ended March 31, 2015 and 2014.

A summary of assets at March 31, 2015 and December 31, 2014, measured at estimated fair value on a nonrecurring basis ~~the fair value measurements by level within the fair value hierarchy used at September 30, 2013 and December 31, 2012 are as~~ follows:

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Level 3 inputs have been used to determine fair value (in thousands):

The following information should not be interpreted as an estimate of the fair value of ~~Riverview~~the Company since a fair value calculation is only provided for a limited portion of ~~Riverview’s~~the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between ~~Riverview’s~~the Company’s disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the fair values of ~~Riverview’s~~the Company’s financial instruments at ~~September 30, 2013~~March 31, 2015 and December 31, ~~2012:~~2014.

Note 10 - Fair Value Measurements and Fair Values of Financial Instruments (continued)

The carrying ~~amounts~~amount reported in the balance sheet for cash, due from banks, federal funds sold and ~~short-term instruments~~interest-bearing deposits approximate those assets’ fair values.

Fair values for fixed-rate time certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits. Riverviewapproximate cost. The Company generally purchases amounts below the insured limit, thus limiting the amount of credit risk on these time deposits.

~~Note 8 - Fair Value Measurements and Fair Values of Financial Instruments (Continued)~~

The fair value of securities available-for-sale (carried at fair value) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. For certain securities which are not traded in active markets or are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments are generally based on available market evidence (Level 3). In the absence of such evidence, management’s best estimate is used. Management’s best estimate consists of both internal and external support on certain Level 3 investments. Internal cash flow models using a present value formula that include assumptions market participants would use along with indicative exit pricing obtained from broker/dealers (where available) are used to support fair values of certain Level 3 investments, if applicable.

The fair value of mortgages held for sale is determined, when possible, using quoted secondary market prices. If no such quoted prices exist, the fair value of the loan is determined using quoted market prices for a similar loan or loans, adjusted for the specific attributes of that loan.

The fair values of loans are estimated using discounted cash flow ~~analyses,~~analysis, using market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the loans. Projected future cash flows are calculated based upon contractual maturities or call dates, projected repayments and prepayments of principal. Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values.

Impaired loans are those that are accounted for under the standard regardingAccounting by Creditors for Impairment of a Loan, in which ~~Riverview~~the Company has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 2 fair values, based upon the lowest level of input that is significant to the fair value measurements. At September 30, 2013, Riverview had impaired loans of $7,977,000, out of which $1,530,000 required a valuation allowance of $442,000. This compares with impaired loans of $8,978,000 at December 31, 2012, out of which $1,038,000 required a valuation allowance of $366,000.measurement.

The carrying amount of restricted investment in Bank stock approximates fair value, and considers the limited marketability of such securities.

The carrying amount of accrued interest receivable and accrued interest payable approximates its fair value.

Note 10 - Fair Value Measurements and Fair Values of Financial Instruments (continued)

The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits.

~~Note 8 - Fair Value Measurements and Fair Values of Financial Instruments (Continued)~~

Fair values of FHLB advances are estimated using discounted cash flow analysis, based on quoted prices for new FHLB advances with similar credit risk characteristics, terms and remaining maturity. The prices were obtained from an active market and represent a fair value that is deemed to represent the transfer price if the liability were assumed by a third party.

Fair values for ~~Riverview’s~~the Company’s off-balance sheet financial instruments (lending commitments and letters of credit) are based on fees currently charged in the market to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing.

The estimated fair values of ~~Riverview’s~~the Company’s financial instruments at ~~September 30, 2013~~March 31, 2015 and December 31, ~~2012~~2014 are presented ~~in the following table:~~as follows:


											Fair Value Measurements at March 31, 2015 Using:
(In thousands)	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2013
Financial assets:
Financial assets:
Cash and cash equivalents	$	17,487	$	17,487	$	—	$	—	$	16,203	$	16,203	$	16,203	$	—	$	—
Interest-bearing time deposits		250		250		—		—		992		992		992		—		—
Investment securities		31,376		—		31,376		—		47,378		47,378		—		47,378		—
Mortgage loans held for sale		—		—		—		—		416		416		—		416		—
Loans, net		243,374		—		—		246,277		345,735		348,647		—		348,647		—
Accrued interest receivable		912		—		912		—		1,277		1,277		—		1,277		—
Restricted investments in bank stocks		1,065		—		1,065		—		1,462		1,462		—		—		1,462
Financial liabilities:

Financial liabilities:
Deposits		280,621		—		274,424		—		372,895		370,160		—		370,160		—
Short-term borrowings										22,000		22,001		—		22,001		—
Long-term borrowings		7,000		—		7,375		—		7,000		7,296		—		7,296		—
Accrued interest payable		146		—		146		—		154		154		—		154		—

Off balance sheet financial instruments		—		—		—		—		—		—		—		—		—

Note 810 - Fair Value Measurements and Fair Values of Financial Instruments ~~(Continued)~~(continued)


											Fair Value Measurements at December 31, 2014 Using:
(In thousands)	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2012
Financial assets:
Financial assets:
Cash and cash equivalents	$	15,952	$	15,952	$	—	$	—	$	14,580	$	14,580	$	14,580	$	—	$	—
Interest-bearing time deposits		250		250		—		—		992		992		992		—		—
Investment securities		45,101		—		45,101		—		48,818		48,818		—		48,818		—
Mortgage loans held for sale		830		—		830		—		216		216		—		216		—
Loans, net		234,112		—		—		237,376		338,901		341,121		—		341,121		—
Accrued interest receivable		1,014		—		1,014		—		1,237		1,237		—		1,237		—
Restricted investments in bank stocks		1,429		—		1,429		—		1,002		1,002		—		—		1,002
Financial liabilities:

Financial liabilities:
Deposits		269,445		—		272,079		—		372,262		366,510		—		366,510		—
Capital lease payable										1,655		1,655		—		1,655		—
Short-term borrowings		11,000		—		10,998		—		12,500		12,499		—		12,499		—
Long-term borrowings		9,550		—		10,138		—		7,000		7,283		—		7,283		—
Accrued interest payable		214		—		214		—		154		154		—		154		—

Off balance sheet financial instruments		—		—		—		—		—		—		—		—		—

~~The Financial~~In January 2014, FASB issued ASU 2014-01, “Investments – Equity Method and Joint Ventures (Topic 323): Accounting ~~Standards Board (“FASB”)~~for Investments in ~~January 2013 issued Accounting Standards Update (“ASU”) No. 2013-01, “Disclosures About Offsetting Assets and Liabilities”, which clarifies~~Qualified Affordable Housing Projects”.ASU 2014-01 permits reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the ~~scope~~proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the ~~new offsetting disclosures requires under ASU No. 2013-01. It is limited~~investment in proportion to ~~(1) derivatives, (2) repurchase~~the tax credits and ~~reverse repurchase agreements,~~other tax benefits received and ~~(3) securities borrowing and lending transactions, that are either: offset~~recognizes the net investment performance in the income statement as a component of ~~financial position~~income tax expense (benefit). The amendments in ~~accordance with ASC 10, “Balance Sheet Presentment”, or ASC 815, “Derivatives and Hedging”, or subject~~ASU 2014-01 should be applied retrospectively to ~~an enforceable master netting arrangement or similar agreement regardless~~all periods presented. A reporting entity that uses the effective yield method to account for its investments in qualified affordable housing projects before the date of ~~whether they are presented net in~~adoption may continue to apply the ~~financial statements. This~~effective yield method for those pre-existing investments. ASU 2014-01 is effective for public business entities for annual periods and interim reporting periods within those annual periods, beginning ~~on or~~ after ~~January 1, 2013.~~December 15, 2014. Early adoption is permitted. This ~~guidance~~ASU was not adopted and did not have a significant impact on ~~Riverview’s~~the Company’s financial statements.

Issued in January 2014, ASU 2014-04, “Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force)” clarifies when an “in substance repossession or foreclosure” occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, such that all or a portion of the loan should be derecognized and the real estate property recognized. ASU 2014-04 states that a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure, or the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The amendments of ASU 2014-04 also require interim and annual disclosure of both the amount of foreclosed residential real estate property held by the creditor and the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure. The amendments of ASU 2014-04 are effective for interim and annual periods beginning after December 15, 2014, and may be applied using either a modified retrospective transition method or a prospective transition method as described in ASU 2014-04. The adoption of ASU 2014-04 will be a change in presentation only for the newly required disclosures and is not expected to have a significant impact to the Company’s consolidated financial statements.

In May 2014, the FASB issued ASC Update 2014-09, “Revenue from Contracts with Customers.” This standards update provides a framework that replaces most existing revenue recognition guidance. The core principle prescribed by this standards update is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC Update 2014-09 is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. The Company is evaluating the impact of the adoption of ASC Update 2014-09 on its consolidated financial statements. In April 2015, FASB proposed delaying the implementation of ASC Update 2014-09 until December 15, 2017, but entities would be allowed to adopt at the original effective date. This ASU Update still awaits final approval.

In June 2014, the FASB issued ASC Update 2014-11, “Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures.” In addition to new disclosure requirements, ASC Update 2014-11 requires that all repurchase-to-maturity transactions be accounted for as secured borrowings rather than as sales of financial assets. Also, all transfers of financial assets executed contemporaneously with a repurchase agreement with the same counterparty must be accounted for separately, the result of which would be the treatment of such transactions as secured borrowings. ASC Update 2014-11 is effective for public business entities’ interim and annual reporting periods beginning after December 15, 2014. The adoption of ASC Update 2014-11 is not expected to have a material impact on the Company’s consolidated financial statements.

In June 2014, the FASB issued ASC Update 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” ASC Update 2014-12 clarifies guidance related to accounting for share-based payment awards with terms that allow an employee to vest in the award regardless of whether the employee is rendering service on the date a performance target is achieved. ASC Update 2014-12 requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. ASC Update 2014-12 is effective for public business entities’ interim and annual reporting periods beginning after December 15, 2014, with earlier adoption permitted. The adoption of ASC Update 2014-12 is not expected to have a material impact on the Company’s consolidated financial statements.

In August 2014, the FASB issued ASC Update 2014-14, “Receivables - Troubled Debt Restructuring by Creditors.” ASC Update 2014-14 clarifies troubled debt restructuring guidance related to the classification and measurement of certain government-sponsored loan guarantee programs upon foreclosure. ASC Update 2014-14 is effective for public business entities’ interim and annual reporting periods beginning after December 15, 2014, with earlier adoption permitted. The adoption of ASC Update 2014-14 is not expected to have a material impact on the Company’s consolidated financial statements.

In August 2014, the FASB issued ASC Update 2014-15, “Presentation of Financial Statements - Going Concern.” ASC Update 2014-15 provides guidance regarding management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related disclosures. The standards update describes how an entity’s management should assess whether there are conditions and events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. ASC Update 2014-15 is effective for public business entities’ annual reporting periods ending after December 15, 2016, with earlier adoption permitted. The adoption of ASC Update 2014-15 is not expected to have a material impact on the Company’s consolidated financial statements.

In November 2014, the FASB issued ASU No. 2014-16, “Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity.” The amendments in ASU do not change the current criteria in GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required. The amendments clarify how current GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract. Furthermore, the amendments clarify that no single term or feature would necessarily determine the economic characteristics and risks of the host contract. Rather, the nature of the host contract depends upon the economic characteristics and risks of the entire hybrid financial instrument. The amendments in this ASU also clarify that, in evaluating the nature of a host contract, an entity should assess the substance of the relevant terms and features (i.e., the relative strength of the debt-like or equity-like terms and features given the facts and circumstances) when considering how to weight those terms and features. The amendments in this ASU are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption, including adoption in an interim period, is permitted. The Company does not expect the adoption of ASU 2014-16 to have a material impact on its consolidated financial statements.

In January 2015, the FASB issued ASU No. 2015-01, “Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” The amendments in this ASU eliminate from GAAP the concept of extraordinary items. Subtopic 225-20, Income Statement - Extraordinary and Unusual Items, required that an entity separately classify, present, and disclose extraordinary events and transactions. Presently, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item. If an event or transaction meets the criteria for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. The entity also is required to

disclose applicable income taxes and either present or disclose earnings-per-share data applicable to the extraordinary item. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company does not expect the adoption of ASU 2015-01 to have a material impact on its consolidated financial statements.

In February ~~2013,~~2015, the FASB issued ASU No. ~~2013-02, “Reporting~~2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis.” The amendments in this ASU are intended to improve targeted areas of ~~Amounts Reclassified Out~~consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). In addition to reducing the number of ~~Accumulated Other Comprehensive Income”, which requires disclosure~~consolidation models from four to two, the new standard simplifies the FASB Accounting Standards Codification and improves current GAAP by placing more emphasis on risk of loss when determining a controlling financial interest, reducing the frequency of the ~~effects~~application of ~~reclassifications out~~related-party guidance when determining a controlling financial interest in a variable interest entity (“VIE”) and changing consolidation conclusions for public and private companies in several industries that typically make use of ~~accumulated other comprehensive income (“AOCI”)~~limited partnerships or ~~net income line items only~~VIEs. The amendments in this ASU are effective for public business entities for fiscal years, and interim periods within those ~~items that are reported~~fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in ~~their entirety~~an interim period. ASU 2015-02 may be applied retrospectively in net income in the period of reclassification. For AOCI reclassification items that are not reclassified in their entirety into net income, entities would then cross reference to the related note to thepreviously issued financial statements for ~~additional information. Riverview adopted~~one or more years with a cumulative-effect adjustment to retained earnings as of the ~~provisions~~beginning of ~~ASU No. 2013-2 effective January 1, 2013. Since Riverview’s only AOCI item consists of unrealized gains or losses on securities available for sale,~~the first year restated. The Company does not expect the adoption of ~~this standard had no~~ASU 2015-02 to have a material impact on ~~Riverview’s~~its consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The amendments in this ASU are intended to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The amendments in this ASU are effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The Company does not expect the adoption of ASU 2015-03 to have a material impact on its consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” The amendments in this ASU provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendments do not change the accounting for a customer’s accounting for service contracts. As a result of the amendments, all software licenses within the scope of Subtopic 350-40 will be accounted for consistent with other licenses of intangible assets. The amendments in this ASU are effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. An entity can elect to adopt the amendments either: (1) prospectively to all arrangements entered into or materially modified after the effective date; or (2) retrospectively. The Company is currently assessing the impact that ASU 2015-05 will have on its consolidated financial statements.

ITEM 2.

MANAGEMENT’S DISCUSSIONAND ANALYSISOF FINANCIAL CONDITIONAND RESULTSOF OPERATIONSOF RIVERVIEW FINANCIAL CORPORATION

The following discussion and analysis summarizes ~~Riverview’s~~the Company’s results of operations and highlights material changes for the three ~~and nine~~ months ended ~~September 30, 2013~~March 31, 2015 and ~~September 30, 2012~~March 31, 2014 and its financial condition as of ~~September 30, 2013.~~March 31, 2015. This discussion is intended to provide additional information which may not be readily apparent from the consolidated selected financial data included in this report.

This discussion and analysis should be read in conjunction with the audited consolidated financial statements and related footnotes presented in ~~Riverview’s~~the Company’s December 31, ~~2012~~2014 Annual Report contained in the ~~Registration Statement on~~ Form ~~S-4.~~10-K. Current performance does not guarantee and may not be indicative of similar performance in the future. Other than described herein, management does not believe there are any trends, events or uncertainties that are reasonably expected to have a material impact on future results of operations, liquidity or capital resources.

~~Except for historical information,~~Certain of the matters discussed in this ~~report~~document and in documents incorporated by reference herein, including matters discussed below, may ~~be deemed to contain “forward-looking” statements regarding Riverview. Examples of~~constitute forward-looking statements include, but are not limited to, (a) projections or statements regarding future earnings, expenses, net interest income, other income, earnings or loss per share, asset mix and quality, growth prospects, capital structure and other financial terms, (b) statements of plans and objectives of management or the board of directors, and (c) statements of assumptions, such as economic conditions in Riverview’s market areas. Such forward-looking statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “intends,” “will,” “should,” “anticipates,” or the negative of anyfor purposes of the ~~foregoing or other variations thereon or comparable terminology, or by discussion~~Securities Act of ~~strategy.~~

~~No assurance can be given that~~1933, as amended, and the ~~future results covered by forward-looking statements will be achieved. Such statements are subject to~~Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties and other factors ~~that could~~which may cause the actual results, performance or achievements of the Company to ~~differ~~be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. ~~Important~~The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” and similar expressions are intended to identify such forward-looking statements.

The Company’s actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, ~~that could impact Riverview’s operating results include, but are~~including, without limitation:

All written or oral forward-looking statements attributable to the ~~effect of such condition on loan customers’ ability~~Company are expressly qualified in their entirety by these cautionary statements. The Company does not undertake any obligation to ~~repay loans, (ix) inability to achieve consolidated related cost savings, and (x) other external developments which could materially affect Riverview’s business and operations.~~update forward looking statements.

The consolidated financial statements include Riverview Financial Corporation and its wholly-owned subsidiary, Riverview Bank. All significant intercompany accounts and transactions have been eliminated.

The accounting and reporting policies followed by the Company conform, in all material respects, to accounting principles generally accepted in the United States of America. In preparing the consolidated financial statements, management has made estimates, judgments and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheets and results of operations for the periods indicated. Actual results could differ significantly from those estimates.

The Company has adopted various accounting policies that govern the application of accounting principles generally accepted in the United States of America and that are consistent with general practices within the banking industry in the preparation of its consolidated financial statements. The Company’s significant accounting policies are described in Note 1 of the Notes to unaudited consolidated financial statements for the period ended March 31, 2015 herein contained in Part I, Item 1, Financial Statements.

Certain accounting policies involve significant judgments and assumptions by the Company that have a material impact on the carrying value of certain assets and liabilities. The Company considers ~~certain~~these accounting policies to be critically important to the fair presentation of its financial condition and results of operations. These policies require management to make complex judgments on matters which by their nature have elements of uncertainty. The sensitivity of Riverview’s consolidated financial statements to these critical accounting ~~policies,~~policies. The judgment and ~~the~~ assumptions and estimates applied, could have a significant impact on its financial condition and results of operations. These assumptions, estimates and judgments made by management can be influenced by a number of factors, including the general economic environment. Riverview has identified the following as critical accounting policies:

The allowance for loan losses is a valuation account that reflects management’s evaluation of probable losses in the loan portfolio. Riverview’s evaluation of the adequacy of the allowance for loan losses includes a review of all loans on which the collectability of principal may not be reasonably assured. Riverview performs periodic and systematic detailed reviews of its loan portfolio to assess overall collectability. The level of the allowance for loan losses reflects an estimate of the losses inherent in the loan portfolio at any point in time. While these estimates are based on substantiated methods for determining allowance requirements, actual outcomes may differ significantly from estimated results, especially when determining allowances for business, construction, and commercial real estate loans. These loans are normally larger and more complex, and their collection rates are harder to predict. Personal loans, including personal mortgage and other consumer loans, are individually smaller and perform in a more homogenous manner, making loss estimates more predictable.

Riverview’s available for sale securities portfolio is carried at estimated fair value, with any unrealized gains or losses, net of taxes, reported as accumulated other comprehensive income or loss in shareholders’ equity. Estimated fair value of these securities is determined based on methodologies in accordance with generally accepted accounting principles. Fair values are volatile and may be influenced by a number of factors, including market conditions, discount rates, credit ratings and yield curves. Fair values for investment securities are based on market quotations or matrix pricing, where available. If quoted market prices are not available, fair values used are based on historical experience and other factors, which the ~~quoted prices of similar instruments or an estimate of fair value by using a range of fair value estimates in~~Company believes to be reasonable under the ~~marketplace as a result~~circumstances. Because of the ~~illiquid market specific to the type of security.~~

When the fair value of a security is below its amortized cost, and depending on the length of time the condition exists and the extent the fair value is below amortized cost, additional analysis is performed to determine whether an other than temporary impairment condition exists. Available for sale securities are analyzed quarterly for possible other than temporary impairment. The analysis considers (i) whether the bank has the intent to sell the securities prior to recovery and/or maturity and (ii) whether it is more likely than not that the bank will have to sell the securities prior to recovery and/or maturity. Often, the information available to conduct these assessments is limited and rapidly changing, making estimates of fair value subject to judgment. If actual information or conditions are different than estimated, the extentnature of the ~~impairment of the security may be different than previously estimated,~~judgments and assumptions made, actual results could differ from these estimates, which could have a material ~~effect~~impact on ~~Riverview’s results of operations and financial condition.~~

Goodwill and other intangible assets are reviewed for potential impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment in accordance with generally accepted accounting principles relating to~~Goodwill and Other Intangible Assets, and~~~~Accounting for Impairment or Disposal of Long-Lived Assets~~~~. Goodwill is tested for impairment and an impairment loss is recorded to the extent that~~ the carrying ~~amount~~values of ~~goodwill exceeds~~ its implied fair value. Riverview employs general industry practices in evaluating the fair value of its goodwill and other intangible assets. No assurance can be given that future impairment tests will not result in a charge to earnings.

~~Deferred income tax~~ assets and liabilities ~~are determined using~~and its results of operations.

Effective November 1, 2013 (the “effective date”), and pursuant to the ~~liability method.~~Amended and Restated Agreement and Plan of Consolidation (the “Agreement”), dated, April 24, 2013, by and between Riverview and Union, Riverview and Union consolidated to form a new Pennsylvania corporation under the name of Riverview Financial Corporation (the “consolidation”).

The Company’s financial results reflect the consolidation. The combined financial information reflects the impact of the consolidation of Riverview’s and Union’s combined financial condition under the purchase method of accounting with the Company treated as the acquirer from an accounting standpoint. Under this method, the ~~net deferred tax asset or liability is recognized for the future tax consequences attributable to differences between the financial statement carrying amounts~~Company was formed and treated as a recapitalization of ~~existing~~Riverview, with Riverview’s assets and liabilities recorded at their historical values, and ~~their respective tax bases. Deferred tax~~Union’s assets and liabilities ~~are measured using enacted tax rates applied~~recorded at their fair values as of the date the consolidation was completed. The transaction was effective on November 1, 2013.

As a community-focused financial institution, the Company, through its wholly-owned banking subsidiary, generates the majority of its revenues from net interest income derived from its core banking activities. Consolidated total assets were $444,222,000 at March 31, 2015, an increase of $8,076,000, or 1.9%, from $436,164,000 at December 31, 2014. The Company’s loans increased $6,834,000, or 2.0%, to ~~taxable income in the years in which those temporary differences are expected~~$345,735,000 at March 31, 2015, while deposits increased $633,000, or 0.2%, to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date. To the extent that current available evidence about the future raises doubt about the likelihood of a deferred tax asset being realized, a valuation allowance is established. The judgment about the level of future taxable income, including that which is considered capital, is inherently subjective and is reviewed on a continual basis as regulatory and business factors change. Riverview has deemed that its deferred tax assets will more likely than not be realized, and accordingly, has not established a valuation allowance on them.

Riverview is a Pennsylvania corporation headquartered in Halifax, Pennsylvania and is the holding company for Riverview Bank, which is a Pennsylvania chartered full-service community bank headquartered in Marysville, Pennsylvania. Riverview Bank and its operating divisions, Marysville Bank, Halifax Bank and Riverview Financial Wealth Management, provide a full range of commercial and consumer banking and wealth management services to individuals, businesses and municipalities in Perry, Dauphin, Cumberland, Schuylkill and Berks counties.

~~Riverview had total consolidated assets of $316,692,000, loans of $243,374,000, deposits of $280,621,000, and shareholders’ equity of $26,669,000 at September 30, 2013.~~$372,895,000. Net income of ~~$484,000~~$374,000 for the three months ended ~~September 30, 2013~~March 31, 2015 was ~~$273,000 higher~~$636,000 lower than net income of ~~$211,000~~$1,010,000 for the three months ended ~~September 30, 2012.~~March 31, 2014. The ~~increase~~decrease quarter over quarter was primarily attributable to ~~higher~~recording one-time extraordinary expenses during the first quarter of 2014, some of which were related to the consolidation with Union. In addition, the Company incurred additional expenses during the 2015 period relating to the merger with Citizens, which further contributed to the decreased earnings for 2015.

The Company’s results of operations are primarily derived from income generated on the spread between the interest received on its interest-earning assets and the interest paid on its interest-bearing liabilities. Changes in net interest income are not only affected by changes in interest rates, but are also impacted by changes in the make-up and volume of the balance sheet as well as the level of yield generated from interest-earning assets versus the costs associated with interest-bearing liabilities. The Company also generates non-interest income from fees associated with various products and services offered to customers, mortgage banking activities, bank owned life insurance (“BOLI”), wealth management and trust operations, and from the sale of assets, such as loans or investments. Offsetting these revenues are provisions for potential losses on loans, administrative expenses and income taxes.

As of the 2015 first quarter-end, the Company recorded net income of $374,000, a decrease of $636,000, or 63.0%, from net income of $1,010,000 for the first quarter of 2014. Basic and diluted earnings per share of $0.14 per share as of the first quarter in 2015 decreased 62.7% from basic and diluted earnings per share of $0.37 per share as of the first quarter in 2014. The decrease in the earnings per share was attributable to ~~lower cost of funds and a lower provision to~~ the ~~allowance for loan losses. For the nine months ended September 30, 2013,~~decrease in net income ~~was $1,528,000 (or $ $0.89 per share) as compared to $1,502,000 (or $0.87 per share) for the nine months ended September 30, 2012.~~year over year. The ~~annualized~~ return on average assets ~~which~~ was ~~0.65% for~~0.34% as of the ~~nine months ended September 30, 2013~~2015 quarter-end as compared with ~~0.69% for~~0.94 % as of the ~~comparable period in 2012 and the annualized~~2014 quarter-end. The return on average equity ~~which~~ was ~~7.62% for the first nine months of 2013~~3.97% at March 31, 2015 as compared ~~with 7.51% for the same period~~to 10.77% as of March 31, 2014. The decrease in ~~2012.~~these ratios was principally due to decreased earnings year over year.

The following table ~~presents Riverview’s~~present the Company’s average balances, interest rates, interest income and expense, interest rate spread and net interest margin, adjusted to a fully-tax equivalent basis (a non-GAAP financial measurement), for the three months ended ~~September 30, 2013~~March 31, 2015 and ~~2012.~~2014.


Average Balances and Average Interest Rates (Dollars in thousands)
	For the Three Months Ended														For the Three Months Ended
	September 30,														March 31,
	2013							2012							2015								2014
	Average Balance		Interest		Average Rate			Average Balance		Interest		Average Rate			Average Balance		Interest			Average Rate			Average Balance		Interest			Average Rate
Assets
Interest earning assets:
Securities:
Taxable	$	10,055	$	47		1.85	%	$	24,864	$	138		2.20	%	$	34,008	$	247			2.95	%		34,452		289			3.40	%
Tax-exempt		22,239		270		4.82	%		22,544		275		4.84	%		13,419		142			4.29	%		23,148		282			4.94	%

Total securities		32,294		317		3.89	%		47,408		413		3.46	%		47,427		389			3.33	%		57,600		571			4.02	%

Other interest earning assets		14,463		11		0.30	%		6,638		4		0.24	%		10,268		48			1.90	%		11,178		16			0.58	%
Loans:
Consumer		1,708		26		6.04	%		1,653		29		6.96	%		2,068		31			6.08	%		1,903		30			6.39	%
Commercial		25,734		256		3.95	%		21,470		223		4.12	%		38,888		403			4.20	%		39,178		551			5.70	%
Real estate		214,743		2,743		5.07	%		201,150		2,685		5.30	%		305,708		3,431			4.55	%		285,028		3,349			4.77	%

Total loans		242,185		3,025		4.96	%		224,273		2,937		5.20	%		346,664		3,865			4.52	%		326,109		3,930			4.89	%

Total earning assets		288,942		3,353		4.60	%		278,319		3,354		4.78	%		404,359		4,302			4.32	%		394,887		4,517			4.64	%

Non-interest earning assets		27,401							24,377							36,632								36,126


Total assets	$	316,343						$	302,696						$	440,991							$	431,013


Liabilities and shareholders’ equity
Interest-bearing liabilities:
Deposit accounts:
Interest-bearing demand	$	115,575	$	126		0.43	%	$	95,053	$	239		1.00	%		132,815		116			0.35	%		126,791		137			0.44	%
Savings		58,057		71		0.49	%		36,681		28		0.30	%		84,291		48			0.23	%		91,913		82			0.36	%
Time deposits		83,468		297		4.41	%		99,441		451		1.80	%		100,818		275			1.11	%		109,815		288			1.06	%


Total deposits		257,100		494		0.76	%		231,175		718		1.23	%		317,924		439			0.56	%		328,519		507			0.63	%

Borrowings:
Short-term borrowings		—		—		—			8,853		5		0.22	%		19,524		15			0.31	%		4,840		2			0.17	%
Long-term borrowings		7,000		65		3.68	%		10,767		86		3.17	%		7,000		55			3.19	%		7,300		67			3.72	%


Total borrowings		7,000		65		3.68	%		19,620		91		1.84	%		26,524		70			1.07	%		12,140		69			2.31	%


Total interest bearing liabilities		264,100		559		0.84	%		250,795		809		1.28	%		344,448		509			0.60	%		340,659		576			0.69	%


Demand deposits		23,104							23,420							53,782								49,921
Other liabilities		2,538							1,515							4,522								3,681
Shareholders’ equity		26,601							26,966							38,239								36,752


Total liabilities and shareholders’ equity	$	316,343						$	302,696						$	440,991							$	431,013


Net interest income			$	2,794						$	2,545						$	3,793							$	3,941
Tax-equivalent adjustment																		(80	)							(115	)

																	$	3,713							$	3,826

Net interest spread						3.76	%						3.50	%							3.72	%							3.95	%

Net interest margin						3.84	%						3.63	%							3.80	%							4.05	%

Tax-exempt income is presented on a fully tax-equivalent basis assuming a tax rate of 34%.

For yield computation purposes, non-accruing loans are included in average loan balances and any income recognized on these loans is included in interest income.

Securities held as available-for-sale are carried at amortized cost for purposes of calculating average yield.

For the three months ended ~~September 30, 2013,~~March 31, 2015, total interest income decreased on a fully tax equivalent basis (as adjusted for the tax benefit derived from tax-exempt assets) by ~~$1,000~~$215,000 to ~~$3,353,000~~$4,302,000 from ~~$3,354,000~~$4,517,000 for the three months

ended ~~September 30, 2012. Although the yield on total~~March 31, 2014. While average interest earning assets ~~decreased~~increased $9,472,000, to ~~4.60% for the third quarter of 2013 from 4.78% for the third quarter of 2012, the fact that average interest earning~~

~~assets increased $10,623,000, to $288,942,000~~$404,359,000 as of the end of the ~~third~~first quarter ~~2013~~of 2015 as compared ~~with the $278,319,000~~to $394,887,000 for the ~~2012 third~~first quarter ~~end~~of 2014, the decline in the yield to 4.32% for the first quarter of 2015 from 4.64% for the first quarter of 2014, contributed to ~~there being very little change~~the decline in ~~the~~ total ~~amount of~~ interest income ~~generated for the third~~ quarter ~~of 2013 as compared with the third quarter of 2012.~~over quarter.

Total interest expense decreased ~~$250,000,~~$67,000, or ~~30.9%~~11.6%, to ~~$559,000~~$509,000 for the three months ended ~~September 30, 2013~~March 31, 2015 from ~~$809,000~~$576,000 for the three months ended ~~September 30, 2012.~~March 31, 2014. This decrease was attributable to a 44nine basis point decline in total cost of funds, which decreased to ~~0.84%~~0.60% for the ~~third~~first quarter of ~~2013~~2015 from ~~1.28%~~0.69% for the same period in ~~2012.~~2014. The decline in the cost of funds offset the ~~$13,305,000,~~$3,789,000, or ~~5.3%~~1.0%, increase in the volume of average interest bearing liabilities.

Net interest income calculated on a fully tax equivalent basis ~~increased $249,000,~~decreased $148,000, to ~~$2,794,000~~$3,793,000 for the three months ended ~~September 30, 2013~~March 31, 2015 from ~~$2,545,000~~$3,941,000 for the three months ended ~~September 30, 2012. Riverview’s~~March 31, 2014. The Company’s net interest spread ~~increased~~decreased to ~~3.76%~~3.72% for the three months ended ~~September 30, 2013~~March 31, 2015 from ~~3.50%~~3.95% for the three months ended ~~September 30, 2012,~~March 31, 2014, while its net interest margin ~~increased~~decreased to ~~3.84%~~3.80% for the three months ended ~~September 30, 2013~~March 31, 2015 from ~~3.63%~~4.05% for the three months ended ~~September 30, 2012.~~March 31, 2014. The decrease in cost of funds was not enough to offset the decline in the yield on interest earning assets, which ~~positively~~in turn, negatively impacted the net interest spread and margin.

The following table presents Riverview’s average balances, interest rates, interest income and expense, interest rate spread and net interest margin, adjusted to a fully-tax equivalent basis, for the nine months ended September 30, 2013 and 2012.

~~Tax-exempt income is presented on a fully tax-equivalent basis assuming a tax rate of 34%.~~

~~For yield computation purposes, non-accruing loans are included in average loan balances and any income recognized on these loans is included in interest income.~~

~~Securities held as available-for-sale are carried at amortized cost for purposes of calculating average yield.~~

For the nine months ended September 30, 2013, total interest income increased on a fully tax equivalent basis (as adjusted for the tax benefit derived from tax-exempt assets) by $3,000 to $9,910,000 from $9,907,000 for the nine months ended September 30, 2012. The increase in total interest income was due to the $16,847,000 increase in total interest earning assets, which grew to $286,515,000 at September 30, 2013 as compared with $269,668,000 at September 30, 2012. The increase in the volume of total interest earning assets, which was mostly attributable to loan growth, offset the decline in the yield of total earning assets to 4.62% for the nine months ended September 30, 2013 from 4.91% for the nine months ended September 30, 2012. In particular, the decline in the loan yield to 4.98% at September 30, 2013 from 5.42% at September 30, 2012 had the greatest impact in reducing the overall yield generated from total interest earning assets.

Total interest expense decreased $571,000 to $1,885,000 for the nine months ended September 30, 2013 from $2,456,000 for the nine months ended September 30, 2012. This decrease was attributable to a 40 basis point decline in total cost of funds, which decreased to 0.96% at September 30, 2013 from 1.36% at September 30, 2012. The decline in the cost of funds offset the 8.4% increase in the volume of total average interest bearing liabilities, all of which was attributable to deposit growth.

Net interest income calculated on a fully tax equivalent basis increased $574,000, to $8,025,000, for the nine months ended September 30, 2013 from $7,451,000 for the nine months ended September 30, 2012. Riverview’s net interest spread increased to 3.66% for the nine months ended September 30, 2013 from 3.55% for the nine months ended September 30, 2012, while its net interest margin also increased to 3.74% for the nine months ended September 30, 2013 from 3.69% for the nine months ended September 30, 2012. The decrease in cost of funds helped to offset interest rate compression on the asset side of the balance sheet, which was somewhat mitigated by the increased volume of total earning assets.

The provision for loan losses represents management’s determination of the amount necessary to be charged to operations in order to maintain the allowance for loan losses at a level that represents management’s best estimate of the known and inherent losses in the existing loan portfolio. Credit exposures deemed uncollectible are charged against the allowance for loan losses. Recoveries of previously charged-off loans are credited to the allowance for loan losses. Management performs periodic evaluations of the allowance for loan losses with consideration given to historical, internal and external factors. In evaluating the adequacy of the allowance for loan losses, management considers historical loss experience, delinquency trends and charge-off activity, status of past due and non-performing loans, growth within the portfolio, the amount and types of loans comprising the loan portfolio, adverse situations that may affect a borrower’s ability to pay, the estimated value of underlying collateral, peer group information and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are caused to undergo interpretation and possible revision as events occur or as more information becomes available. Loans are also reviewed for impairment based on discounted cash flows using the loans’ initial effective interest rates or the fair value of the collateral for certain collateral dependent loans as provided under the accounting standard relating toAccounting by Creditors for Impairment of a Loan. After an evaluation of these factors, ~~Riverview~~the Company recorded ano provision ~~of $47,000~~ for the three months ended ~~September 30, 2013 for~~March 31, 2015 and March 31, 2014. The decision not to record a ~~total~~ provision ~~of $47,000~~ for the ~~nine months ended September 30, 2013. This compares with a provision~~first quarter of $425,000 recorded for the three months ended September 30, 2012 for a total provision of $510,000 recorded for the nine months ended September 30, 2012. The lower provision in the first nine month of 2013 as compared to the first nine months of 20122015 was driven by general improvement in credit quality indicators over the prior ~~year, nominal loan growth since the 2012 year end,~~quarter, and the level of unallocated provision. The allowance for loan losses was ~~$3,556,000,~~$3,735,000, or ~~1.44%~~1.07% of total loans outstanding, at ~~September 30, 2013,~~March 31, 2015, as compared to ~~$3,736,000,~~$3,792,000, or ~~1.57%~~1.11% of total loans at December 31, ~~2012, and $3,319,000, or 1.42% of total loans at September 30, 2012.~~2014.

Management assesses the allowance for loan losses on a quarterly basis and makes provisions for loan losses, if necessary, in order to maintain the adequacy of the allowance. Management believes the allowance for loan losses at ~~September 30, 2013~~March 31, 2015 is maintained at a level that is adequate to absorb probable and potential losses inherent in the loan portfolio. At the same time, management continues to allocate dedicated resources to continue to manage at-risk credits.

The following table sets forth changes in non-interest income for the three months ended ~~September 30, 2013~~March 31, 2015 and ~~2012.~~2014.


Non-Interest Income (Dollars in thousands)
Non-Interest Income
(Dollars in thousands)
	Three Months Ended September 30,												Three Months Ended March 31,
	Increase/(Decrease)												Increase/(Decrease)
	2013			Amount			%			2012			2015			Amount			%			2014
Service charges on deposit accounts	$	79		$	1			1.3	%	$	78		$	98		($	10	)		(9.3	%)	$	108
Other service charges and fees		96			5			5.5	%		91			137			(220	)		(61.6	%)		357
Earnings on cash value of life insurance		52			(8	)		(13.3	%)		60			51			—			—			51
Fees and commissions from securities brokerage		136			136			100.0	%		—			209			(13	)		(5.9	%)		222
Loss on sale of other real estate owned		(229	)		(229	)		(100.0	%)		—
Gain from write-down of other real estate owned		150			150			100.0	%		—
Gain (loss) on sale and valuation of other real estate owned														(26	)		(32	)		(533.3	%)		6
Loss on other assets		0			1			100.0	%		(1	)		—			(6	)		(100.0	%)		6
Gain from sale of mortgage loans		89			(126	)		(58.6	%)		215
Gain on sale of mortgage loans														78			3			4.0	%		75

	$	373		($	70	)		(15.8	%)	$	443		$	547		($	278	)		(33.7	%)	$	825

Non-interest income continues to be an important source of income for ~~Riverview,~~the Company, representing 12.1% of total revenues (comprised of net interest income and non-interest income) for the third quarter of 2013 as compared with 15.2% for the third quarter of 2012. Non-interest income decreased 15.8% in comparing the financial results for the third quarter of 2013 with the results for the same period in 2012. The decrease was attributable to generating less gains within the third quarter of 2013 as compared with 2012 from the sale of mortgage loans, serviced released, sold in the secondary market. In addition, there was a net loss of $79,000 recorded during the third quarter of 2013 relating to the write-down and/ or sale of other real owned, whereas there was no such loss recorded during the third quarter of 2012.

~~The following table sets forth changes in non-interest income for the nine months ended September 30, 2013 and 2012.~~

~~Non-interest income represented 15.9%~~12.8% of total revenues (comprised of net interest income and non-interest income) for the first ~~nine months~~quarter of ~~2013~~2015 as compared with ~~19.8%~~17.8% for

the first quarter of 2014. Non-interest income decreased 33.7% in comparing the financial results for the first ~~nine months~~quarter of ~~2012. Total non-interest income~~2015 with the results for the same period in 2014. The decrease was ~~17.2% lower at September 30, 2013 as compared with September 30, 2012 due~~primarily attributable to a ~~$770,000~~decline in other service charges and fees, which included a one-time extraordinary gain of $229,000 in the first quarter of 2014 relating to the restoration of a purchased loan that was previously charged off. In addition, there was a net ~~gain from the sale~~loss of ~~investment securities~~$26,000 recorded during the first quarter of ~~2012 as compared with~~2015 relating to the write-down and/or sale of other real owned, whereas there was a ~~net~~ gain of ~~$119,000 from~~$6,000 on the sale and/or valuation of ~~investment securities recorded~~other real owned during the first quarter of 2013. Further contributing to the decrease in 2013 non-interest income was the recording of a $264,000 loss from the sale of other real estate owned offset by a $76,000 gain on the write-up of other real estate owned. Offsetting this decrease was an increase in gains from the sale of mortgage loans, which amounted to $475,000 at September 30, 2013 as compared with $378,000 at September 30, 2012. This increase was due to an increase in the volume of loans available for sale that were sold to Freddie Mac on a servicing released basis during 2013 as compared with 2012. In addition, the wealth management company acquired at the 2012 year end generated $408,000 in fee and commission income during the first nine months of 2013.2014.

The following table presents the components of non-interest expense for the ~~third~~first quarters of ~~2013~~2015 and ~~2012.~~2014.


Non-Interest Expense (Dollars in thousands)
Non-Interest Expense
(Dollars in thousands)
	Three Months Ended September 30,										Three Months Ended March 31,
	Increase/(Decrease)										Increase/(Decrease)
	2013		Amount			%			2012		2015		Amount			%			2014
Salaries and employee benefits	$	1,293	$	35			2.8	%	$	1,258	$	2,078	$	268			14.8	%	$	1,810
Occupancy expense		226		(3	)		(1.3	%)		229		436		49			12.7	%		387
Equipment expense		132		(8	)		(5.7	%)		140		161		12			8.1	%		149
Telecommunications and processing charges		183		(18	)		(9.0	%)		201		293		26			9.7	%		267
Postage and office supplies		67		14			26.4	%		53		88		(12	)		(12.0	%)		100
FDIC premium		66		6			10.0	%		60		68		(22	)		(24.4	%)		90
Bank shares tax expense		73		30			69.8	%		43		85		3			3.7	%		82
Directors’ compensation		67		1			1.5	%		66		86		2			2.4	%		84
Professional services		53		3			6.0	%		50		168		102			154.5	%		66
Amortization of intangibles												67		(7	)		(9.5	%)		74
Other expenses		231		47			25.5	%		184		328		103			45.8	%		225

	$	2,391	$	107			4.7	%	$	2,284	$	3,858	$	524			15.7	%	$	3,334

Non-interest expenses increased ~~4.7%~~15.7% in comparing the ~~third~~first quarter of ~~2013~~2015 with the ~~third~~first quarter of ~~2012.~~2014. In particular, the increases in the expenses quarter over quarter ~~relating~~related to salary and employee benefits, occupancy and ~~other expenses were~~equipment associated with the Bank’s expansion through the opening of a new ~~branches and~~branch in Wyomissing, Berks County, Pennsylvania. In addition, the opening of a ~~wealth management company in Schuylkill county and a commercial~~new corporate office in ~~Berks county. The increase in the bank shares tax expense for 2013 is due~~Harrisburg, Pennsylvania also added to the timing in which contributions were made under the Pennsylvania Educational Improvement Tax Credit program (“EITC”), which allows 90% of the total amount of contributions made to state-approved educational programs to be used as a tax credit offsetting bank shares tax expense. In 2013, these contributions were made in October as compared with 2012 when they were made in September.

~~The following table presents the components of non-interest expense for the first nine months of 2013 and 2012.~~

~~Non-interest expenses increased 9.0% year over year. In particular, the increases in the expenses relating to salary and employee benefits,~~ occupancy, equipment, telecommunications and processing ~~charges and~~expenses. The increase in professional services was the result of expenses incurred relating to the merger with Citizens. The increase in other expenses ~~were associated with the Bank’s expansion into the Schuylkill and Berks county market areas and the acquisition of a wealth management company in December 2012. There~~ was ~~a reduction in the FDIC premium expense which was~~partly attributable to the FDIC’s revision of its calculation of the base assessment rate of the premium using average assets as opposed to domestic deposits. The increase in the bank shares tax expense in 2013 is attributable the fact that the year to date expense for 2013 does not reflect a tax credit associated with contributions made under Pennsylvania EITC program, which is reflected as a reduction in the 2012 year to date bank shares taxBank’s growth but also includes merger related expense.

The income tax expense was ~~$162,000~~$28,000 for the ~~third~~first quarter of ~~2013, an increase~~2015, a decrease of ~~$177,000~~$279,000 compared to ~~($15,000)~~$307,000 for the ~~third~~first quarter of ~~2012.~~2014. The ~~increase~~decrease in the ~~third~~first quarter tax provision was attributable to ~~the increase~~a decline in pre-tax net income ~~before tax~~ quarter over quarter. For the nine months ended September 30, 2013, the tax provision was $516,000 compared to $401,000 for the nine months ended September 30, 2012. The increase in the tax accrual for 2013 was attributable to a higher amount of net income before taxes recorded for the first nine months of 2013 as compared with 2012.

Financial Condition as of ~~September 30, 2013~~March 31, 2015 and December 31, ~~2012~~2014

The following table sets forth the composition of the investment securities portfolio as of ~~September 30, 2013~~March 31, 2015 and December 31, ~~2012:~~2014:


Investment Securities (In thousands)
	September 30,		December 31,
	2013		2012		Fair Values as of
Available for Sale Securities (at fair value):
U.S. Government agencies	$	—	$	3,506
					March 31, 2015		December 31, 2014
Available-for-sale securities:
U.S. Government agencies securities					$	805	$	817

State and municipal		21,730		22,853		23,393		23,708

U.S. Government agencies and sponsored enterprises (GSEs) - residential:

Mortgage-backed securities		9,646		13,006		19,953		20,902

Collateralized mortgage obligations (CMOs)		—		5,736		2,242		2,391

Total	$	31,376	$	45,101
Corporate debt obligations						515		505

Equity securities, financial services						470		495


					$	47,378	$	48,818

Since the year end, total investment securities have decreased as a result of security calls, ~~sales,~~ maturities, and normal repayments and accelerated prepayments, especially from mortgage-backed securities. None of the mortgage-backed securities in the portfolio are private label but are comprised of residential mortgage pass-through securities either guaranteed or issued by the Federal National Mortgage Association (“FNMA”) or the Federal Home Loan Mortgage Corporation (“FHLMC”). Securities issued by these agencies contain additional guarantees that make them among the most creditworthy investments available.

No securities are considered other-than-temporarily impaired based on management’s evaluation of the individual securities, including the extent and length of any unrealized losses, and ~~Riverview’s~~the Company’s ability to hold the securities until maturity or until the fair values recover, and management’s opinion that it will not have to sell the securities prior to recovery of value. ~~Riverview~~The Company invests in securities for the cash flow and yields they produce and not to profit from trading. ~~Riverview~~The Company holds no trading securities in its portfolio, and the portfolio did not contain high risk securities or derivatives as of ~~September 30, 2013.~~March 31, 2015 or December 31, 2014.

~~Riverview~~The Bank’s investment in restricted ~~stock is~~stocks reflects a required investment in the common stock of correspondent banks consisting of Atlantic Central Bankers Bank and the Federal Home Loan Bank of Pittsburgh (“FHLB”). These stocks have no readily available market values and are carried at cost since they are not actively traded.

In December 2008, the FHLB notified member banks that it was suspending the repurchase of capital stock and dividend payments to preserve capital. Beginning in the fourth quarter of 2010 the FHLB announced its decision to repurchase excess capital stock and has continued to do so on a quarterly basis. Riverview Bank has since received $1,139,000 representing the repurchase of 11,390 shares from the FHLB, of which $524,000 was received during the first nine months of 2013. In early 2012, the FHLB resumed the payment of a dividend to its member banks. Riverview Bank received a dividend of $2,000 for the three months ended September 30, 2013, for a total of $4,000 for the nine months ended September 30, 2013. During the third quarter of 2013, the FHLB

announced the payment of a dividend to its member banks at an annualized rate of 1.50%, calculated on the stockholder’s average capital stock held for the three months ended September 30, 2013, payable October 30, 2013.

Management evaluates restricted stock for impairment based upon its assessment of the ultimate recoverability of the cost rather than by recognizing temporary declines in value. Management believes no impairment charge is necessary with regard to such restricted stock investments.

The loan portfolio comprises the major component of ~~Riverview’s~~the Company’s earning assets and is the highest yielding asset category. ~~Total loans, net~~The following table presents the composition of ~~unearned income~~the total loan portfolio at March 31, 2015 and ~~the allowance for loan losses increased $9,262,000, or 4%, to $243,374,000 at September 30, 2013 from $234,112,000 at~~ December 31, ~~2012.~~ 2014:

Since the ~~2012~~2014 year end, there has been modest growth in the loan portfolio. At March 31, 2015, total loans receivable (net of the allowance for loan losses, unearned fees and origination costs) amounted to $345,735,000, an increase of $6,834,000, or 2.0%, as compared with $338,901,000 as of December 31, 2014. The increase in the loan portfolio was attributable to continuing growth in the commercial and commercial real estate portfolios, particularly in the Berks/Schuylkill market.

As new loans were recorded during the first ~~nine~~three months of ~~2013,~~2015, scheduled loan payments and increased prepayments and payoffs impacted loan growth. In addition, ~~Riverview~~the Bank originated mortgage loans which it continued to sell to Freddie Mac on a service released basis. The decision to sell mortgage loans was generally based upon the Bank’s relationship with the customer, with further consideration given to the interest rate environment, interest rate risk and overall economic conditions.

Loans receivable, net of the allowance for loan losses, represented 77.8% of total assets and 92.7% of total deposits as of March 31, 2015, as compared to 77.7% and 91.0%, respectively, at December 31, 2014. All of ~~Riverview’s~~the Bank’s loans are to domestic borrowers.

The Bank focuses its lending activities on making loans to small and medium sized businesses, entrepreneurs, professionals and consumers in our primary market area. Our lending activities consist of Commercial Loans, Commercial Real Estate Loans, Commercial Land and Land Development Loans, Residential Real Estate Loans, Home Equity Lines of Credit, and Consumer Installment Loans. Riverview also makes residential real estate loans which are sold to Freddie Mac with servicing rights released.

The Bank has established a comprehensive lending policy, which includes rigorous underwriting standards for all types of loans. Our lending staff follows pricing guidelines established periodically by our management team. In an effort to manage risk, individual lending officer lending authorities are low. All credit requests in excess of an individual lending officer’s authority up to $750,000 are approved by dual signature of two of the following officers: Chief Executive Officer, President, Chief Operating Officer, or Chief Credit Officer. Credit requests in excess of $750,000 are approved by the majority vote of a Loan Committee consisting of the foregoing four officers and five members of the Bank’s Board of Directors. Credit requests in excess of $2,000,000 are approved by a majority vote of the entire Board of Directors. Management believes that we employ experienced lending officers, require appropriate collateral, carefully assess the repayment ability of all borrowers, and adequately monitor both the financial condition of our borrowers and the concentration of loans in the portfolio.

As of March 31, 2015, the Bank’s legal lending limit for loans to one borrower was $5,685,000. As part of our risk management strategy, we may attempt to participate a portion of larger loans to other financial institutions. This strategy allows the Bank to maintain customer relationships while reducing credit exposure. However, this strategy may not always be available.

In addition to the normal repayment risks, all loans in the portfolio are subject to the state of the economy and the related effects on the borrower and/or real estate market. Longer term loans have periodic interest rate adjustments and/or call provisions. Senior management monitors the loan portfolio closely to ensure that past due loans are minimized and potential problem loans are dealt with swiftly.

The Bank also retains an outside, independent firm to review the loan portfolio. This firm performs a detailed annual review. We use the results of the firm’s report to validate our internal loan risk ratings and we review their commentary on specific loans and on our loan administration activities in order to improve our operations.

The Bank’s commercial loans consist of revolving and non-revolving lines of credit, term loans, equipment loans, standby letters of credit and unsecured loans. We originate commercial loans to established businesses for any legitimate business purpose including the financing of machinery, equipment, leasehold improvements, inventory, carrying accounts receivable, general working capital and acquisition activities. We have a diverse customer base, and we have no concentration in these types of loans in any specific industry segment. We generally secure commercial business loans with accounts receivable, equipment, real estate and other collateral such as marketable securities, cash value of life insurance, and time deposits at the Bank.

Commercial business loans generally have a higher degree of risk. These loans typically involve higher average balances, increased difficulty in monitoring and a higher risk of default since repayment primarily depends on the successful operation of the borrower’s business. To help manage this risk, we typically limit these loans to proven businesses, and we obtain appropriate collateral and personal guarantees from the principal owners of the business. We monitor the financial condition of the business by requiring submission of periodic financial statements and annual tax returns.

The Bank finances both owner occupied and non-owner occupied commercial real estate for its customers. Our underwriting policies and process focuses on the customer’s ability to repay the loan as well as an assessment of the underlying real estate collateral. We originate commercial real estate loans on a fixed rate or floating rate basis. Fixed rates typically are committed for a three to five year time period, after which the rate will become floating unless an additional fixed rate period is negotiated. Repayment terms include amortization schedules from three years to a maximum of 25 years, with the majority of loans amortized over 15 to 20 years. Principal and interest payments are due monthly, with all remaining unpaid principal and interest due at maturity.

Risks inherent in managing a commercial real estate portfolio relate to sudden or gradual declines in property values as well as changes in the economic climate that may detrimentally impact the borrower’s ability to repay. We attempt to mitigate risk by carefully underwriting these loans. Our underwriting includes a cash flow analysis which is conducted by thoroughly examining leases and building operating expenses. A minimum Debt Coverage Ratio of 1.2:1.0 is generally required. The character of the borrower and current and prospective conditions in the market are considered. We generally limit loans in this category to a maximum loan to value ratio of 80%, and require personal guarantees of the principal owners and/or corporate guarantees. We monitor the financial condition and operating performance of these borrowers by a thorough review of annual tax returns, property operating data, and periodic financial statements.

The Bank’s commercial land and land development loan portfolio consists of funds advanced for construction of multifamily housing, commercial buildings, single family homes, and site acquisition and development. This segment is relatively small compared to most other portfolios of the Bank. All of these loans are concentrated in our primary market area, and the Bank is highly selective in making loans in this segment.

Construction and site acquisition and development lending entails significant risks. These loans generally involve large loan balances concentrated with single borrowers with funds advanced upon the security of the land or the project under construction. The value of the project is estimated prior to completion of construction, thus it is more difficult to accurately evaluate the total funds required to complete a project and related loan to value ratios. To mitigate risk, we generally limit construction loans to the lesser of 80% of cost or appraised value. Loan to value ratios for site acquisition and development loans is limited to 75%. A first lien position on the property is required. These loans are offered only to experienced builders and commercial entities or individuals who have demonstrated the ability to successfully and profitably complete these types of projects. Loans for multifamily and commercial buildings are typically made with the intent that upon completion of construction, the loan will convert to a permanent loan with the Bank. Loans for site acquisition and development are structured so that all funds advanced for the project are repaid upon the sale of not more than 75% of the total available lots in the development. A complete analysis of borrower and the project is performed, including a review of costs to construct, cash flow available to support the required interest payments during construction, the feasibility of the project based on market conditions, the borrower’s liquidity and ability to absorb any cost overruns, and, in the case of multifamily and commercial buildings, an assessment of the borrower’s ability to repay the loan on an amortizing basis upon completion of construction. Advances for construction are made based on work completed in accordance with budget and subject to inspection by the Bank.

The Bank offers a fixed and adjustable rate residential real estate secured loans to homeowners in our primary market area. These loans are made for the purchase or refinance of a borrower’s primary or secondary residence. These loans also include home equity installment loans granted for a variety of purposes. Our customer base is geographically diverse, reducing our potential risk. The loans are secured with a security interest in the borrower’s primary or secondary residence with a loan to value ratio of no more than 80%. Our underwriting includes an analysis of the borrower’s Debt to Income ratio which generally may not exceed 40%, collateral value, length and stability of employment and prior credit history. We do not originate nor do we have any subprime residential real estate loans.

The Bank offers variable rate residential real estate secured revolving lines of credit to homeowners. These home equity lines of credit are made to individuals in our primary market area. Our customer base is geographically diverse, reducing our potential risk. The loans are secured with a security interest in the borrower’s primary or secondary residence with a required loan to value limited of no more than 80%. Our underwriting includes an analysis of the borrower’s Debt to Income ratio which generally may not exceed 40%, collateral value, length and stability of employment and prior credit history.

The Bank offers various types of secured and unsecured consumer purpose installment loans. Consumer purpose non-real estate secured lines of credit also fall into this category. Our underwriting includes an analysis of the borrower’s Debt to Income ratio which generally may not exceed 40% (35% for unsecured loans), collateral value if any, length and stability of employment and prior credit history. These consumer loans may present greater credit risk than residential real estate loans because some are unsecured or secured by rapidly depreciating assets. Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance because of the greater likelihood of damage, loss or depreciation. Consumer loan collections depend on the borrower’s continuing financial stability. If a borrower suffers personal financial difficulty, the loan may not be repaid. Also various federal and state laws, including bankruptcy laws, may limit the amount that can be recovered on such loans.

In summary, the Bank takes a balanced approach to its lending activities and manages risk associated with its loan portfolio by maintaining diversification within the portfolio, consistently applying prudent underwriting standards, ongoing monitoring efforts with attention to portfolio dynamics and mix, and procedures that are consistently applied and updated on an annual basis. The Bank contracts with an independent third party each year to conduct a credit review of the loan portfolio to provide an independent assessment of asset quality through an evaluation of the established underwriting criteria used in originating credits. Separately, every loan booked and every loan turndown undergoes a review for conformity with established policies and compliance with current regulatory lending laws. The Bank has not lessened its loan underwriting criteria during this time, and management believes its underwriting standards continue to remain conservative.

The following table presents non-performing loans and assets as of ~~September 30, 2013~~March 31, 2015 and December 31, ~~2012:~~2014:


Non-Performing Assets (Dollars in thousands)
Non-Performing Assets
(Dollars in thousands)
	September 30,			December 31,			March 31,			December 31,
	2013			2012			2015			2014
Accruing loans past due 90 days	$	175		$	231		$	—		$	643
Non-accrual loans		3,521			3,863			2,432			4,245

Total non-performing loans		3,696			4,094			2,432			4,888

Foreclosed real estate		1,519			1,909			1,121			1,022

Total non-performing assets	$	5,215		$	6,003		$	3,553		$	5,910


Non-performing loans to total loans		1.50	%		1.72	%		0.70	%		1.43	%
Non-performing assets to total assets		1.65	%		1.88	%		0.80	%		1.36	%
Allowance to non-performing loans		96.21	%		91.26	%		153.58	%		77.58	%

The non-performing asset ratios presented in the table above reflect improvement in the credit quality of the loan portfolio since the ~~2012 year end.~~2014 year-end. During the first ~~nine~~three months of ~~2013,~~2015, the Bank experienced a decrease of ~~$398,000~~$2,456,000 in total non-performing loans attributable to a decrease in accruing ~~loan~~loans past due 90 days of ~~$56,000~~$643,000 and a decrease of ~~$342,000~~$1,813,000 in non-accrual loans. The ~~$788,000~~$1,813,000 decrease in non-accrual loans is primarily the result of the return to accrual status for four loans. Each of these loans had been performing and paying as agreed for a period in excess of the time limits established by Bank policy for return to accrual status. The $2,357,000 decrease in total non-performing assets as of ~~September 30, 2013~~March 31, 2015 as compared with the ~~2012 year end~~2014 year-end was attributable to the ~~$398,000~~$2,456,000 decrease in non-performing loans and a ~~$390,000 decrease~~$99,000 increase in foreclosed real estate. Management continues to be vigilant in its efforts to identify, evaluate and minimize credit risk and potential losses. Management is proactive in addressing and managing risk appropriate to the level of loan volume and delinquencies in the loan portfolio through its implementation of an enhanced credit administration process - including a structured loan collection process and close monitoring of compliance with underwriting and loan to value guidelines.

~~Riverview~~The Bank had ~~$1,519,000~~$1,121,000 in real estate acquired through foreclosure as of ~~September 30, 2013~~March 31, 2015 as compared with ~~$1,909,000~~$1,022,000 as of December 31, ~~2012.~~2014. The foreclosed real estate as of ~~September 30, 2013~~March 31, 2015 consisted of one residential development loan totaling ~~$1,113,000,~~$707,000, representing ~~Riverview’s~~the Bank’s purchased participation in a loan made by another financial institution to a now defunct developer, two mixed-use properties totaling $105,000; one commercial property ~~approved for development~~ totaling ~~$126,000~~$256,000 and ~~seven one-to-four~~one single family residential ~~investment properties~~

property totaling ~~$280,000.~~$53,000. The ~~decrease~~increase at ~~September 30, 2013~~March 31, 2015 from December 31, ~~2012~~2014 was due to the ~~sale~~addition of ~~two~~one mixed-use property, one commercial property and one single family ~~homes, sale of a one-to-four family~~ residential ~~investment~~ property, ~~and~~mostly offset by the sale of ~~a commercial warehouse, along with an additional write down in the carrying value of three one-to four~~five single family residential ~~investment properties reflecting the market conditions in the community where these properties are located.~~properties. Each of the foreclosed loans has been marked to the appropriate realizable value, and, at this time, no material loss is anticipated upon the ultimate sale of these assets.

A loan concentration is considered to exist when the total amount of loans to any one or multiple number of borrowers engaged in similar activities or have similar economic characteristics, exceed 10% of loans outstanding.

The following table presents loan concentrations as of ~~September 30, 2013~~March 31, 2015 and December 31, ~~2012.~~2014.


(Dollars in thousands)	September 30, 2013		December 31, 2012		March 31, 2015		December 31, 2014
Loans to Lessors of:
Residential buildings and dwellings	$	45,436	$	44,954	$	53,421	$	51,248
Nonresidential buildings	$	37,189		37,572		55,456		56,626

Although the loans listed above were not made to any one particular borrower or industry, the quality of these loans could be affected by the region’s economy and overall real estate market. The performance of these portfolios continues to be acceptable, with no losses for the ~~year.~~quarter.

Demand for office space and residential apartment space was solid in ~~2012~~2014 in the Bank’s market area. This demand has continued through the first ~~nine months~~quarter of ~~2013.~~2015. The marketplace shows continuing signs of improvement as occupancy and rental rates have become increasingly more stable. As such, management does not believe that this concentration is an adverse ~~trend~~condition to the Bank at this time.

The Bank’s lending policy is executed through the assignment of tiered loan limit authorities to individual officers of the Bank and the Board of Directors. Although the Bank maintains sound credit policies, certain loans may deteriorate for a variety of reasons. The Bank’s policy is to place all loans in a non-accrual status upon becoming 90 days delinquent in ~~their~~ payments, unless the loan is well secured and there is documented, reasonable expectation of the collection of the delinquent amount. Loans are reviewed daily as to their status. Management is not aware of any potential loan problems that have not been disclosed in this report.

As a result of management’s ongoing assessment as to the adequacy of the allowance for loan losses in consideration of the risks and trends associated with the loan portfolio, ~~Riverview recorded~~the Bank did not record a provision of ~~$47,000~~to the allowance for loan losses during the three months ended September 30, 2013 for a total provision of $47,000 for the nine months ended September 30, 2013. This compares with a provision of $425,000 recorded for the three months ended September 30, 2012 for a total provision of $510,000 recorded for the nine months ended September 30, 2012.March 31, 2015 and March 31, 2014. Management determined that the total of the allocated and unallocated allowance for loan losses was adequate to absorb any losses inherent in the portfolio. Although management believes that it uses the best information available to make such determinations, future adjustments to the allowance for loan losses may be necessary, and the results of operations could be significantly and adversely affected if circumstances differ substantially from the assumptions used in making ~~the~~these determinations. Because future events affecting borrowers and collateral cannot be predicted with certainty, there can be no assurance that the existing allowance for loan losses is adequate or that material increases will not be necessary should the quality of the loans deteriorate as a result of factors previously discussed.

The ~~increase~~decrease in the allowance for loan losses as a percentage of total loans as of ~~September 30, 2013~~March 31, 2015 as compared with ~~September 30, 2012~~March 31, 2014 primarily ~~reflects~~reflected growth in the ~~additional provisions that were made during~~portfolio along with improvement in credit quality of the ~~latter part~~loan portfolio which resulted in reduction to the qualitative factors applied to each pool of ~~2012 as a result of loan growth and charge offs.~~loans. Although management is proactive in identifying and dealing with credit issues that it can control, it anticipates that, going forward, additional provisions to its allowance for loan losses may be warranted as a result of economic factors the Bank cannot control.

Other assets, comprised of miscellaneous accounts receivable and prepaid expenses, were $4,189,000 at September 30, 3013, an increase of $2,301,000 as compared with $1,888,000 at December 31, 2012. The increase was attributable to an entry passed at the end of September to record the payoff of a loan participation in the amount of $1,889,000. The entry cleared October 1, 2013.

Deposits are the major source of the Bank’s funds for lending and investing purposes. Total deposits at ~~September 30, 2013~~March 31, 2015 were ~~$280,621,000,~~$372,895,000, an increase of ~~$11,176,000,~~$633,000, or ~~4.1%~~0.2%, from total deposits of ~~$269,445,000~~$372,262,000 at December 31, ~~2012. Most of~~2014. There was a shift in the deposit ~~growth was attributable to~~mix since the 2014 year-end, as time deposits decreased $2,382,000 and interest bearing deposits ~~which increased $13,375,000, or 5.5%, to $258,294,000 at September 30, 2013 from $244,919,000 at December 31, 2012, while~~decreased $2,385,000. In turn, noninterest bearing ~~deposit decreased $2,199,000, or 9%, at September 30, 2013 since the 2012 year end.~~deposits increased $1,980,000 and savings deposits increased $3,420,000. As a result of the low interest rate environment, the Bank’s cost of funds associated with interest bearing deposits declined to ~~0.88%~~0.60% at ~~September 30, 2013~~March 31, 2015 from ~~1.23%~~0.62% at December 31, ~~2012~~2014 and ~~1.29%~~0.69% at ~~September 30, 2012.~~March 31, 2014.

~~The~~Short-term borrowings are generally used to meet temporary funding needs and consist of federal funds purchased, securities sold under agreements to repurchase, and overnight and short-term borrowings from the Federal Home Loan Bank ~~paid off~~of Pittsburgh (“FHLB”). As of March 31, 2015, short-term borrowings totaled $22,000,000, all of ~~its~~which were borrowed under the Bank’s Open Repo Plus line with the FHLB. This level of short-term borrowings ~~all within the first quarter of 2013 so that there were no outstanding balances at September 30, 2013 as~~ compared with ~~$11,000,000~~$12,500,000 in outstanding short-term borrowings at December 31, ~~2012,~~2014, all of which were ~~comprised of borrowings~~borrowed under the Bank’s FHLB Open Repo Plus line.

Long-term borrowings totaled $7,000,000 at ~~September 30, 2013 as compared to $9,550,000 at~~March 31, 2015 and December 31, ~~2012~~2014, respectively, and are summarized as follows:

At ~~September 30, 2013,~~March 31, 2015, shareholders’ equity for ~~Riverview~~the Company totaled ~~$26,669,000, a decrease~~$38,303,000, an increase of ~~$68,000~~$95,000 as compared with shareholder equity of ~~$26,737,000~~$38,208,000 at December 31, ~~2012.~~2014. The ~~decrease~~increase was due to net income of ~~$1,528,000,~~$374,000, less the payment of dividends of ~~$644,000,~~$373,000, an increase of ~~$33,000~~$8,000 to surplus to reflect the compensation cost associated with option grants, and ~~a decrease~~an increase in the net unrealized gains on securities available for sale, which net of tax, ~~reduced~~increased equity by ~~$985,000.~~$86,000.

~~Riverview~~The Company meets the eligibility criteria of a small bank holding company in accordance with the Federal Reserve Board’s Small Bank Holding Company Policy Statement. Accordingly, ~~Riverview~~the Company is exempt from certain regulatory requirements administered by the federal banking agencies. However, the Bank is subject to various regulatory capital adequacy requirements administered by the Federal Reserve Board. On January 1, 2015, the Basel III capital rules became effective for the Bank. The table that follows presents the Bank’s capital ratios as determined and reported to its regulator. ~~Tier 1~~The Bank’s capital ~~includes common stock, surplus, and retained earnings less disallowed goodwill and other intangible assets. Total capital consists of tier 1 capital and the allowance for loan losses. The Bank exceeds~~ratios exceed both the regulatory minimums and the requirements necessary for designation as a “well-capitalized” ~~institution.~~


Capital Ratios (of Bank)
	September 30, 2013			December 31, 2012			Regulatory Minimum			“Well Capitalized” Requirement			March 31, 2015			December 31, 2014			Regulatory Minimum			“Well Capitalized” Requirement
Tier 1 capital (to average assets)		8.3	%		8.1	%		4.0	%		5.0	%		8.2	%		8.0	%		4.0	%		5.0	%
Tier 1 capital (to risk-weighted assets)		10.8	%		10.9	%		4.0	%		6.0	%		10.3	%		10.3	%		6.0	%		8.0	%
Total risk-based capital (to risk-weighted assets)		12.0	%		12.1	%		8.0	%		10.0	%		11.4	%		11.5	%		8.0	%		10.0	%
Common equity tier 1 risk based capital (to risk-weighted assets)														10.3	%		n/a			4.5	%		6.5	%

The ratios presented do not reflect additional future Basel III requirements taking into account the 2.5% capital conservation buffer that will be phased in on the minimum regulatory capital ratios beginning in 2016 through 2019.

Banking laws and regulations limit the ability of the Bank to transfer cash to ~~Riverview~~the Company in the form of ~~cash~~ dividends, loans or advances. Regulatory approval is required if the total of all dividends declared by a state bank in any calendar year exceeds net profits (as defined) for that year combined with the retained net profits for the two preceding years. At ~~September 30, 2013, $1,946,000~~March 31, 2015, $1,815,000 of undistributed earnings of the Bank, included in consolidated shareholders’ equity, was available for distribution to ~~Riverview~~the Company as dividends without prior regulatory approval.

The following presents the details of ~~the regular and special~~ quarterly cash dividends paid to ~~Riverview’s~~the Company’s shareholders during the ~~nine~~three months ended ~~September 30, 2013, which reduced retained earnings by $644,000:~~March 31, 2015 as compared with March 31, 2014:

During March 2011, ~~Riverview~~the Company approved and implemented a Dividend Reinvestment and Stock Purchase Plan (the ~~“Plan”~~“DRP Plan”). The Plan enables registered stockholders to automatically reinvest all or a portion of their cash dividends into the purchase of additional common shares of ~~Riverview.~~the Company. Stockholders enrolled in the Plan also have the option to make voluntary cash contributions to the Plan on a quarterly basis in order to purchase additional shares of common stock. A 5% discount is applied to the purchase price of all shares purchased by the

Plan. Shares purchased by the DRP Plan are ~~only~~ made in open market or privately negotiated transactions (or a combination of both), and are administered by ~~Riverview’s~~the Company’s transfer agent. ~~Riverview will~~The Company does not offer or sell any of its ~~treasury shares or~~ authorized but unissued shares to the ~~Plan,~~DRP, and therefore ~~will~~does not receive any proceeds from the purchase of common stock by this Plan.

In June 2014, the Board of Directors and shareholders of the Company approved an Employee Stock Purchase Plan (“ESPP”), giving eligible employees the opportunity to purchase common stock at a 15% discount from the market price. On April 21, 2015, the Company filed a Form S-8 with the Securities and Exchange Commission to register a total of 150,000 common shares, of which 75,000 shares are reserved and could be used for the purchase of common shares by the ESPP and 75,000 shares are reserved and could be used for the purchase of common shares by Riverview Financial Corporation 401(k) Retirement Plan. Shares purchased by the ESPP, which is administered by the Company’s transfer agent, either may be purchased in the open market or privately negotiated transactions, or may be issued from the reserve of 75,000 registered shares. In the event shares are issued from the reserve, the Company would receive the proceeds from the purchase of common stock by the ESPP.

~~Riverview~~The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, and to a lesser extent, letters of credit. At ~~September 30, 2013, Riverview~~March 31, 2015, the Company had unfunded outstanding commitments to extend credit of ~~$37,548,000~~$48,159,000 and outstanding letters of credit of ~~$1,818,000.~~$3,141,000. Because these commitments generally have fixed expiration dates and many will expire without being drawn upon, the total commitment level does not necessarily represent future cash requirements. Refer to Note 1112 of the ~~2012~~2014 Consolidated Financial Statements for a discussion of the nature, business purpose and importance of ~~Riverview’s~~the Company’s off-balance sheet arrangements.

Interest rate risk is the exposure of a bank’s current and future earnings and capital arising from adverse movements in interest rates. Interest rate risk can create exposure for the Bank in two primary areas. Changes in rates may have an impact on the Bank’s liquidity position and movements in interest rates can create fluctuations in net interest income and changes in the economic value of equity.

The Bank employs various management techniques and analytical tools to monitor and minimize its exposure to interest rate risk. The guidelines used by the Bank are to limit exposure to changes in interest rates that affect the underlying economic value of assets and liabilities, earnings and capital. The Asset/Liability Committee (“ALCO Committee”),

consisting of key financial and senior management personnel and directors, meets on a quarterly basis. The ALCO Committee is responsible for reviewing the interest rate sensitivity position of the Bank, approving asset and liability management policies and overseeing the formulation and implementation of strategies regarding balance sheet positions, liquidity and earnings.

The ALCO Committee examines the extent to which the Bank’s assets and liabilities are interest rate sensitive and reviews a variety of strategies that project changes in asset or liability mix and the impact of those changes on projected net interest income. The Committee also reviews the interest rate sensitivity gap, which is the difference between interest earning assets and interest bearing liabilities scheduled to mature or re-price within specific time periods using flat rates as a base and rising and declining rates. A positive gap occurs when the amount of interest sensitive assets exceed the amount of interest sensitive liabilities, while a negative gap occurs when the amount of interest sensitive liabilities exceed the amount of interest sensitive assets. During a period of declining interest rates, a negative gap position tends to result in an increase in net interest income, while a positive gap in that particular rate environment tends to adversely affect net interest income. If re-pricing of assets and liabilities were equally flexible and moved concurrently, the impact of any increase or decrease in interest rates on net interest income would be minimal.

The Bank’s balance sheet at ~~September 30, 2013~~March 31, 2015 was positively gapped, which suggests that the net yield on interest earning assets may increase during periods of rising rates. However, a simple interest rate gap analysis alone may not be an accurate indicator of how changes in interest rates will affect net interest income. Changes in interest rates may not uniformly affect income associated with interest earning assets and costs associated with interest bearing liabilities. In addition, the magnitude and duration of changes in interest rates may have a significant impact on net interest income. Although certain assets and liabilities may have similar maturities or periods of re-pricing, they may react differently to changes in market interest rates. Interest rates on certain types of assets and liabilities fluctuate in advance of changes in general market interest rates, while interest rates on other types may lag behind changes in general market rates. In the event of a change in interest rates, prepayments and early withdrawal levels could also deviate from those assumed in evaluating the interest rate gap.

Liquidity refers to ~~Riverview’s~~the Company’s ability to generate adequate amounts of cash to meet financial obligations to its customers in order to fund loans, to respond to deposit outflows and to cover operating expenses. Maintaining a level of liquid funds through asset/liability management seeks to ensure that these needs are met at a reasonable cost. Liquidity is essential to compensate for fluctuations in the balance sheet and provide funds for growth and normal operating expenditures. Sources of liquidity are provided on a continuous basis through scheduled and unscheduled principal reductions and interest payments on outstanding loans and investment securities. Liquidity needs may also be met by converting assets into cash or obtaining sources of additional funding, whether through deposit growth, securities sold under agreements to repurchase or borrowings under lines of credit with correspondent banks.

Liquidity from the asset category is provided through cash, amounts due from banks, interest-bearing deposits with banks and federal funds sold, which totaled ~~$17,737,000~~$17,195,000 at ~~September 30, 2013,~~March 31, 2015, and was ~~$1,500,000~~$1,623,000 higher than the ~~$16,202,000~~$15,572,000 that was outstanding at December 31, ~~2012.~~2014. While liquidity sources generated from assets include scheduled and prepayments of principal and interest from securities and loans in ~~Riverview’s~~the Company’s portfolios, longer-term liquidity needs may be met by selling securities available-for-sale, selling loans or raising additional capital. At ~~September 30, 2013,~~March 31, 2015, there were no$2,708,000 of unpledged available-for-sale securities readily available for sale for liquidity purposes as compared with ~~$13,304,000 that was available~~$555,000 at December 31, ~~2012.~~2014. The ~~decrease~~increase in the volume of unpledged securities was attributable to the ~~increase~~decrease in the amount of investment securities that were needed to be pledged as a result of ~~an increase~~a decrease in public fund deposits since the ~~2012 year end.~~2014 year-end.

On the liability side, the primary source of funds available to meet liquidity needs is to attract deposits at competitive rates. ~~Riverview~~The Bank’s core deposits, which exclude certificates of deposit over $250,000, were ~~$269,361,000~~$365,723,000 at ~~September 30, 2013~~March 31, 2015 as compared to ~~$255,427,000~~$365,137,000 at December 31, ~~2012.~~2014. Core deposits have historically provided a source of relatively stable and low cost liquidity. Short-term and long-term borrowings utilizing the federal funds line and credit facilities established with a correspondent financial institution and the FHLB are also considered to be reliable sources for funding. As of ~~September 30, 2013, Riverview~~March 31, 2015, the Bank had access to two formal borrowing lines with its correspondent banks totaling ~~$103,574,000,~~$165,744,000, net of the aggregate ~~amount~~amounts outstanding on these lines totaling ~~$17,000,000,~~$27,000,000, comprised of $5,000,000 in term loans and ~~$12,000,000~~$22,000,000 in short-term ~~letters of credit. This is in~~borrowings. In addition to the ~~$3,000,000~~Bank’s borrowing capacity, Riverview has a $5,000,000 secured guidance line of credit available from ACNB Bank, with ~~ACNB Bank.~~no outstanding draws as of March 31, 2015 and December 31, 2014.

There are a number of factors that may impact ~~Riverview’s~~the Company’s liquidity position. Changes in interest rates, local economic conditions and the competitive marketplace can influence prepayments on investment securities, loan fundings and

payments, and deposit flows. Management is of the opinion that its liquidity position at ~~September 30, 2013~~March 31, 2015 was adequate to respond to fluctuations “on” and “off” the balance sheet since it manages liquidity on a daily basis and expects to have sufficient funds to meet all of its funding requirements.

Except as discussed above, there are no known demands, trends, commitments, events or uncertainties that may result in, or that are reasonably likely to result in ~~Riverview’s~~the Company’s inability to meet anticipated or unexpected needs.

The impact of inflation upon financial institutions can affect assets and liabilities through the movement of interest rates. The exact impact of inflation on ~~Riverview~~the Company is difficult to measure. Inflation may cause operating expenses to change at a rate not matched by the change in earnings. Inflation may affect the borrowing needs of consumer and commercial customers, in turn affecting the growth of ~~Riverview’s~~the Company’s assets. Inflation may also affect the level of interest rates in the general market, which in turn can affect ~~Riverview’s~~the Company’s profitability and the market value of assets held. ~~Riverview~~The Company actively manages its interest rate sensitive assets and liabilities countering the effects of inflation.

~~Riverview’s~~As of March 31,2015, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer (Principal Accounting Officer) ~~carried out an evaluation~~, of the effectiveness of the design and the operation of ~~Riverview’s~~the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~September 30, 2013,~~March 31, 2015, pursuant to Exchange Act Rule 15d-15. Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. These controls and procedures include, without limitations, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding disclosure. Based upon ~~that~~the evaluation, the Chief Executive Officer along with the Chief Financial Officer (Principal Accounting Officer) concluded that ~~Riverview’s~~the Company’s disclosure controls and procedures were effective as of ~~September 30, 2013,~~the end of the period covered by this quarterly report.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system are ~~effective~~met. In addition, the design of any control system is based in ~~timely alerting them to material information relating to Riverview~~part upon certain assumptions about the likelihood if future events. Because of these and other inherent limitations of control systems, there can be no assurance that ~~is required to be~~any design will succeed in ~~Riverview’s periodic filings~~achieving its stated goals under ~~the Exchange Act.~~all potential conditions, regardless of how remote.

There have been no changes in ~~Riverview’s~~the Company’s internal controls over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect ~~Riverview’s~~the Company’s internal control over financial reporting.

In the opinion of ~~Riverview,~~the Company, after review with legal counsel, there are no proceedings pending to which ~~Riverview~~the Company is a party or to which its property is subject, which, if determined adversely to ~~Riverview,~~the Company, would be material in relation to ~~Riverview’s~~the Company’s consolidated financial condition. There are no proceedings pending other than ordinary, routine litigation incident to the business of ~~Riverview.~~the Company. In addition, no material proceedings are pending or are known to be threatened or contemplated against ~~Riverview~~the Company by governmental authorities.

~~Riverview~~The Company did not repurchase any of its common stock during the first ~~nine~~three months of ~~2013.~~2015.

The following Exhibits are filed as part of this filing on Form 10-Q, or incorporated by reference hereto:

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		PAGE

PART I.	Financial Information

Item 1.	Financial Statements:

	Consolidated Balance Sheets at ~~September 30, 2013~~March 31, 2015 (unaudited) and December 31, ~~2012~~2014		3

	Consolidated Statements of Income for the Three ~~and Nine~~ Months Ended ~~September 30, 2013~~March 31, 2015 and ~~2012~~2014 (unaudited)		4

	Consolidated Statements of Comprehensive Income for the Three ~~and Nine~~ Months Ended ~~September 30, 2013~~March 31, 2015 and ~~2012~~2014 (unaudited)		5

	Consolidated Statements of Changes in Shareholders’ Equity for the ~~Nine~~Three Months Ended ~~September 30, 2013~~March 31, 2015 and ~~2012~~2014 (unaudited)		65

	Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2013~~March 31, 2015 and ~~2012~~2014 (unaudited)		76

	Notes to Consolidated Financial Statements		97

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		3335

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		48

Item 4.	Controls and Procedures		4948

PART II.	Other Information

Item 1.	Legal Proceedings		4948

Item 1A.	Risk Factors		49

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		49

Item 3.	Defaults Upon Senior Securities		49

Item 4.	Mine Safety Disclosures		49

Item 5.	Other Information		49

Item 6.	Exhibits		5049

SIGNATURES			5150

Exhibit Index			5251


	Nine Months Ended September 30,
(In thousands)	2013			2012

Cash Flows from Operating Activities
Net income	$	1,528		$	1,502
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		444			452
Provision for loan losses		47			510
Granting of stock options		33			42
Net amortization (accretion) of premiums on securities available for sale		(210	)		279
Net realized loss from write-down or sale of foreclosed real estate and other assets		188			28
Net realized gain on sale of securities available for sale		(119	)		(770	)
Acquisition of mortgage servicing rights		—			(6	)
Amortization of intangible assets		81			26
Deferred income taxes		(48	)		278
Proceeds from sale of mortgage loans		31,410			27,054
Net gain on sale of mortgage loans		(475	)		(378	)
Mortgage loans originated for sale		(30,105	)		(26,837	)
Earnings on cash value of life insurance, net		(166	)		(186	)
Increase in accrued interest receivable and other assets		(1,643	)		(503	)
Decrease in accrued interest payable and other liabilities		(63	)		(183	)


Net Cash Provided by Operating Activities		902			1,308


Cash Flows from Investing Activities
Securities available for sale:
Purchases		—			(29,214	)
Proceeds from maturities, calls and principal repayments		7,134			5,448
Proceeds from sales		5,427			19,106
Proceeds from the sale of foreclosed real estate		504			84
Net decrease in restricted investments in bank stock		364			163
Net increase in loans		(9,611	)		(35,876	)
Purchases of premises and equipment		(169	)		(385	)
Purchase of life insurance		—			(775	)
Proceeds from life insurance		2			—


Net Cash Provided by (Used in) Investing Activities		3,651			(41,449	)


Cash Flows from Financing Activities
Net increase in deposits		11,176			13,312
Net increase in securities sold under agreements to repurchase		—			(893	)
Increase (decrease) on short-term borrowings		(11,000	)		11,821
Repayment of long-term debt		(2,550	)		(3,128	)
Purchase of treasury stock		—			(64	)
Dividends paid		(644	)		(645	)


Net Cash Provided by (Used in) Financing Activities		(3,018	)		20,403


Net Increase (Decrease) in Cash and Cash Equivalents		1,535			(19,738	)
Cash and Cash Equivalents - Beginning		15,952			27,905


Cash and Cash Equivalents - Ending	$	17,487		$	8,167


	Income Numerator		Common Shares Denominator		EPS
	(In thousands, except share data)
2015:
Basic EPS	$	374		2,708,840	$	0.14
Dilutive effect of potential common stock options				12,658

Diluted EPS	$	374		2,721,498	$	0.14


2014:
Basic EPS	$	1,010		2,703,840	$	0.37
Dilutive effect of potential common stock options				1,187

Diluted EPS	$	1,010		2,705,027	$	0.37


	Purchased Credit Impaired Loans			Purchased Non- Impaired Loans			Total Purchased Loans
Union	(In thousands)
Contractually required principal and interest at acquisition	$	10,290		$	92,704		$	102,994
Contractual cash flows not expected to be collected		(5,487	)		(9,492	)		(14,979	)

Expected cash flows at acquisition		4,803			83,212			88,015
Interest component of expected cash flows		(386	)		(12,278	)		(12,664	)

Basis in acquired loans at acquisition – estimated fair value	$	4,417		$	70,934		$	75,351


	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(In thousands)

Net income	$	484		$	211		$	1,528		$	1,502
Other comprehensive income (loss), net of tax:
Unrealized gains and losses on securities available for sale:
Net unrealized gains (losses) arising during the period, net of tax	($	347	)	($	218	)	($	1,064	)	($	820	)
Reclassification adjustment for income included in net income, net of tax		—			—			79			510

Total other comprehensive income (loss), net of tax	($	347	)	($	218	)	($	985	)	($	310	)


Total comprehensive income (loss)	$	137		($	7	)	$	543		$	1,192


(In thousands, except share data)	Common Stock		Surplus		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total Shareholders’ Equity

Balance - January 1, 2012	$	875	$	11,307	$	13,490		$	1,006		($	272	)	$	26,406

Net income		—		—		1,502			—			—			1,502

Other comprehensive income (loss)		—		—		—			(310	)		—			(310	)

Compensation cost of option grants		—		42		—			—			—			42

Cash dividends, $0.375 per share		—		—		(645	)		—			—			(645	)

Repurchase common stock		—		—		—			—			(64	)		(64	)


Balance - September 30, 2012	$	875	$	11,349	$	14,347		$	696		($	336	)	$	26,931


Balance - January 1, 2013	$	875	$	11,350	$	14,217		$	632		($	337	)	$	26,737

Net income		—		—		1,528			—			—			1,528

Other comprehensive income (loss)		—		—		—			(985	)		—			(985	)

Compensation cost of option grants		—		33		—			—			—			33

Cash dividends, $0.375 per share		—		—		(644	)		—			—			(644	)


Balance - September 30, 2013	$	875	$	11,383	$	15,101		($	353	)	($	337	)	$	26,669


	March 31, 2015
(In thousands)	Unrealized Gains and Losses on Available-for- Sale			Defined Benefit Pension Items			Total
Beginning balance	$	477		($	342	)	$	135

Other comprehensive income (loss) before reclassifications		131			—			131
Amounts reclassified from accumulated other comprehensive income⁽¹⁾		—			—			—

Tax effect of current period changes⁽²⁾		(45	)		—			(45	)

Net current-period other comprehensive income (loss)		86			—			86

Ending balance	$	563		($	342	)	$	221


(In thousands)	Recorded Investment in Impaired Loans		Unpaid Principal Balance of Impaired Loans		Related Allowance		Average Recorded Investment in Impaired Loans		Interest Income Recognized
December 31, 2012:
Loans with no related allowance recorded:
Commercial	$	731	$	731		—	$	747	$	34
Commercial real estate:
Non-owner occupied		3,082		3,082		—		3,441		61
Owner occupied		991		991		—		1,059		36
1-4 family investment		1,073		1,073		—		1,084		35
Commercial land and land development		—		—		—		—		—
Residential real estate		1,207		1,207		—		1,244		19
Home equity lines of credit		853		853		—		865		12
Consumer		3		3		—		6		—

Loans with an allowance recorded:
Commercial		177		177		2		191		—
Commercial real estate:
Non-owner occupied		—		—		—		—		—
Owner occupied		—		—		—		—		—
1-4 family investment		343		343		148		350		9
Commercial land and land development		—		—		—		—		—
Residential real estate		518		518		216		541		11
Home equity lines of credit		—		—		—		—		—
Consumer		—		—		—		—		—

Total
Commercial		908		908		2		938		34
Commercial real estate:
Non-owner occupied		3,082		3,082		—		3,441		61
Owner occupied		991		991		—		1,059		36
1-4 family investment		1,416		1,416		148		1,434		44
Commercial land and land development		—		—		—		—		—
Residential real estate		1,725		1,725		216		1,785		30
Home equity lines of credit		853		853		—		865		12
Consumer		3		3		—		6		—

	$	8,978	$	8,978	$	366	$	9,528	$	217


	March 31, 2015			March 31, 2014
	(In thousands)

Balance – beginning of period	$	310		$	378
Union acquisition		—			—
Accretion recognized during the period		(26	)		(28	)
Net reclassification from non-accretable to accretable		16			(7	)

Balance – end of period	$	300		$	343


	Actual					Minimum Regulatory Capital Ratios under Basel III (without 2.5% capital conservation buffer phase-in)					Well Capitalized under Basel III
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
As of March 31, 2015:
Total risk-based capital (to risk-weighted assets)	$	39,365		11.4	%	$	27,577	³	8.0	%	$	34,471	³	10.0	%
Tier 1 capital (to risk-weighted assets)		35,630		10.3			20,683	³	6.0			27,577	³	8.0
Tier 1 capital (to average total assets)		35,630		8.2			17,440	³	4.0			21,800	³	5.0
Common equity tier 1 risk-based capital (to risk-weighted assets)		35,630		10.3			15,512	³	4.5			22,406	³	6.5


	Actual					Minimum Regulatory Capital Ratios					Well Capitalized under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2014:
Total risk-based capital (to risk-weighted assets)	$	37,899		11.5	%	$	26,385	³	8.0	%	$	32,982	³	10.0	%
Tier 1 capital (to risk-weighted assets)		34,096		10.3			13,193	³	4.0			19,789	³	6.0
Tier 1 capital (to average total assets)		34,096		8.0			17,103	³	4.0			21,378	³	5.0


Level 1:		Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2:		Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.

Level 3:		Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).


Description	Balance		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
	(In thousands)
September 30, 2013:
State and municipal	$	21,730	$	—	$	21,730	$	—
U.S. Government agencies and sponsored enterprises (GSEs) - residential:
Mortgage-backed securities		9,646		—		9,646		—

Securities available-for-sale	$	31,376	$	—	$	31,376	$	—

December 31, 2012:
U.S. Government agencies	$	3,506	$	—	$	3,506	$	—
State and municipal		22,853		—		22,853		—
U.S. Government agencies and sponsored enterprises (GSEs) - residential:
Mortgage-backed securities		13,006		—		13,006		—
CMOs		5,736		—		5,736		—

Securities available-for-sale	$	45,101	$	—	$	45,101	$	—


	Level 1		Level 2		Level 3		Total		Total Gains/Losses
	(In thousands)
September 30, 2013:
Loans held for sale	$	—	$	—	$	—	$	—	$	—
Other real estate owned		—		1,519		—		1,519		(188	)
Impaired loans, net of related allowance		—		358		731		1,089		—

Total	$	—	$	1,877	$	731	$	2,608	($	188	)


December 31, 2012:
Loans held for sale	$	—	$	830	$	—	$	830	$	—
Other real estate owned		—		1,909		—		1,909		(122	)
Impaired loans, net of related allowance		—		501		171		672		—

Total	$	—	$	3,240	$	171	$	3,411	($	122	)


September 30, 2013	Fair Value Estimate		Valuation Technique	Unobservable Input	Range
Impaired loans	$	731	Appraisal of collateral⁽¹⁾	Appraisal and liquidation adjustments⁽²⁾	0-(20)%


Average Balances and Average Interest Rates (Dollars in thousands)
	For the Nine Months Ended
	September 30,
	2013							2012
	Average Balance		Interest		Average Rate			Average Balance		Interest		Average Rate
Assets
Interest earning assets:
Securities:
Taxable	$	11,860	$	133		1.50	%	$	25,842	$	463		2.40	%
Tax-exempt		22,245		809		4.86	%		21,914		817		4.98	%

Total securities		34,105		942		3.69	%		47,756		1,280		3.58	%

Other interest earning assets		12,258		26		0.28	%		9,417		20		0.28	%
Loans:
Consumer		1,674		76		6.07	%		1,694		87		6.87	%
Commercial		25,613		771		4.02	%		19,896		633		4.25	%
Real estate		212,865		8,095		5.08	%		190,905		7,887		5.52	%

Total loans		240,152		8,942		4.98	%		212,495		8,607		5.42	%

Total earning assets		286,515		9,910		4.62	%		269,668		9,907		4.91	%
Non-interest earning assets		27,992							23,363


Total assets	$	314,507						$	293,031


Liabilities and shareholders’ equity
Interest-bearing liabilities:
Deposit accounts:
Interest-bearing demand	$	107,082	$	430		0.54	%	$	93,547	$	725		1.04	%
Savings		55,890		204		0.49	%		35,303		82		0.31	%
Time deposits		90,046		1,025		1.52	%		96,791		1,371		1.89	%

Total deposits		253,018		1,659		0.88	%		225,641		2,178		1.29	%

Borrowings:
Short-term borrowings		352		1		0.38	%		4,450		8		0.24	%
Long-term borrowings		8,569		225		3.51	%		11,651		270		3.10	%

Total borrowings		8,921		226		3.39	%		16,101		278		2.31	%

Total interest bearing liabilities		261,939		1,885		0.96	%		241,742		2,456		1.36	%


Demand deposits		23,326							23,072
Other liabilities		2,421							1,461
Shareholders’ equity		26,821							26,756


Total liabilities and shareholders’ equity	$	314,507						$	293,031


Net interest income			$	8,025						$	7,451

Net interest spread						3.66	%						3.55	%

Net interest margin						3.74	%						3.69	%


Non-Interest Income (Dollars in thousands)
	Nine Months Ended September 30,
	Increase/(Decrease)
	2013			Amount			%			2012
Service charges on deposit accounts	$	225		$	19			9.2	%	$	206
Other service charges and fees		267			(6	)		(2.2	%)		273
Earnings on cash value of life insurance		166			(20	)		(10.8	%)		186
Fees and commissions from securities brokerage		408			408			100.0	%		—
Gains from sale of available for sale securities		119			(651	)		(84.5	%)		770
Loss on the sale of other real estate owned		(264	)		(236	)		(842.9	%)		(28	)
Gain on write-up of other real estate owned		76			76			100.0	%		—
Loss on other assets		—			8			100.0	%		(8	)
Gain from the sale of mortgage loans		475			97			25.7	%		378

	$	1,472		($	305	)		(17.2	%)	$	1,777


Analysis of the Allowance for Loan Losses
(Dollars in thousands)
	March 31, 2015			March 31, 2014
Beginning balance	$	3,792		$	3,663
Provision for loan losses		—			—

Charge-offs:
Commercial, financial, agricultural		—			54
Real estate commercial		39			—
Real estate mortgage		15			22
Installments		6			3

Total charge-offs		60			79

Recoveries:
Commercial, financial, agricultural		—			24
Real estate commercial		—			—
Real estate mortgage		—			—
Installments		3			2

Total recoveries		3			26


Net (charge-offs)/recoveries		(57	)		(53	)


Ending balance	$	3,735		$	3,610


Net (charge-offs)/recoveries to average loans (annualized)		(0.07	%)		(0.07	%)
Allowance for loan losses to total loans		1.07	%		1.10	%


	September 30, 2013			September 30, 2012
Beginning balance
Provision for loan losses	$	3,736		$	3,423
		47			510
Charge-offs:
Commercial, financial, agricultural		—			268
Real estate commercial		167			353
Real estate mortgage		107			31
Installments		3			9

Total charge-offs		277			661


Recoveries:
Commercial, financial, agricultural		21			47
Real estate commercial		26			—
Real estate mortgage		—			—
Installments		3			—

Total recoveries		50			47


Net (charge-offs)/recoveries		(227	)		(614	)


Ending balance	$	3,556		$	3,319


Net (charge-offs)/recoveries to average loans (annualized)		(0.13	%)		(0.39	%)
Allowance for loan losses to total loans		1.44	%		1.42	%



2.1		Amended and Restated Agreement and Plan of Consolidation, dated April 24, 2013, between Riverview Financial Corporation and Union Bancorp, Inc. ~~(incorporated~~(Incorporated by reference to Annex A included in Riverview’s Amendment No. 2 to ~~Riverview Financial Corporation’s~~ Registration Statement ~~No. 333-188193~~ on Form S-4 (Registration No. 333-188193 filed ~~with the Securities and Exchange Commission on~~ August 5, ~~2013).~~2013.)

~~3(i)~~3.1		~~The Registrant’s~~ Articles of ~~Incorporation.~~Incorporation of Riverview Financial Corporation. (Incorporated by reference to Exhibit ~~3.1~~D of Annex A included in Riverview’s ~~Post Effective~~ Amendment No. 12 to ~~S-4~~ Registration Statement on Form S-4 (Registration No. ~~333-188193)~~333-188193 filed ~~November 4, 2013).~~August 5, 2013.)

~~3(ii)~~3.2		~~The Registrant’s By-laws.~~Amended and Restated Bylaws of Riverview Financial Corporation. (Incorporated by reference to Exhibit ~~3.2 of~~3(ii) to Riverview’s ~~Post Effective Amendment No. 1 to S-4 Registration Statement~~Current Report on Form 8-K (Registration No. ~~333-188193)~~333-188193 filed ~~November~~March 4, ~~2013).~~2015.)

~~11.1~~ 3.3		~~Statements re computation~~Registration statement on Form S-8 to register 150,000 shares of ~~per share earnings (see Note 3 to~~Riverview common stock for Riverview Financial ~~Corporation’s unaudited consolidated financial statements~~Corporation 401k Retirement Plans and Riverview Financial Corporation Employee Stock Purchase Plan (Registration No. 333-203544 filed ~~herein).~~April 21, 2015.)

21 21.1		Subsidiaries of ~~the~~ Registrant.

31.1		Section 302 Certification of the Chief Executive Officer (Pursuant to Rule 13a-14(a)/15d-14(a)).

31.2		Section 302 Certification of the Chief Financial Officer (Pursuant to Rule 13a-14(a)/15d-14(a)).

32.1		Chief Executive Officer’s §1350 Certification (Pursuant to Rule 13a-14(b)/15d-14(b)).

32.2		Chief Financial Officer’s §1350 Certification (Pursuant to Rule 13a-14(b)/15d-14(b)).

~~101.INS~~101		~~XBRL Instance Document.~~

~~101.SCH~~		~~XBRL Taxonomy Extension Schema Document.~~

~~101.PRE~~		~~XBRL Taxonomy Presentation Linkbase Document.~~

~~101.CAL~~		~~XBRL Taxonomy Calculation Linkbase Document.~~

~~101.LAB~~		~~XBRL Taxonomy Label Linkbase Document.~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase Document.~~Interactive Data File (XBRL).


By:		/s/ Robert M. Garst
		Robert M. Garst
		Chief Executive Officer
		(Principal Executive Officer)

Date:		~~November~~May 14, ~~2013~~2015

By:		/s/ Theresa M. Wasko
		Theresa M. Wasko
		Chief Financial Officer
		(Principal Financial Officer)

Date:		~~November~~May 14, ~~2013~~2015


Exhibit No.		Description

2.1		Amended and Restated Agreement and Plan of Consolidation, dated April 24, 2013, between Riverview Financial Corporation and Union Bancorp, Inc. ~~(incorporated~~(Incorporated by reference to Annex A included in Riverview’s Amendment No. 2 to ~~Riverview Financial Corporation’s~~ Registration Statement ~~No. 333-188193~~ on Form S-4 (Registration No. 333-188193 filed ~~with the Securities and Exchange Commission on~~ August 5, ~~2013).~~2013.)

~~3(i)~~3.1		~~The Registrant’s~~ Articles of ~~Incorporation.~~Incorporation of Riverview Financial Corporation. (Incorporated by reference to Exhibit ~~3.1~~D of Annex A included in Riverview’s ~~Post-Effective~~ Amendment No. 12 to ~~S-4~~ Registration Statement on Form S-4 (Registration No. ~~333-188193)~~333-188193 filed ~~November 4, 2013).~~August 5, 2013.)

~~3(ii)~~3.2		~~The Registrant’s By-laws.~~Amended and Restated Bylaws of Riverview Financial Corporation. (Incorporated by reference to Exhibit ~~3.2 of~~3(ii) to Riverview’s ~~Post-Effective Amendment No. 1 to S-4 Registration Statement~~Current Report on Form 8-K (Registration No. ~~333-188193)~~333-188193 filed ~~November~~March 4, ~~2013).~~2015.)

~~11.1~~ 3.3		~~Statements re computation~~Registration statement on Form S-8 to register 150,000 shares of ~~per share earnings (see Note 3 to~~Riverview common stock for Riverview Financial ~~Corporation’s unaudited consolidated financial statements~~Corporation 401k Retirement Plans and Riverview Financial Corporation Employee Stock Purchase Plan (Registration No. 333-203544 filed ~~herein).~~April 21, 2015.)

21 21.1		Subsidiaries of ~~the~~ Registrant.

31.1		Section 302 Certification of the Chief Executive Officer (Pursuant to Rule 13a-14(a)/15d-14(a)).

31.2		Section 302 Certification of the Chief Financial Officer (Pursuant to Rule 13a-14(a)/15d-14(a)).

32.1		Chief Executive Officer’s §1350 Certification (Pursuant to Rule 13a-14(b)/15d-14(b)).

32.2		Chief Financial Officer’s §1350 Certification (Pursuant to Rule 13a-14(b)/15d-14(b)).

~~101.INS~~101		~~XBRL Instance Document.~~

~~101.SCH~~		~~XBRL Taxonomy Extension Schema Document.~~

~~101.PRE~~		~~XBRL Taxonomy Presentation Linkbase Document.~~

~~101.CAL~~		~~XBRL Taxonomy Calculation Linkbase Document.~~

~~101.LAB~~		~~XBRL Taxonomy Label Linkbase Document.~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase Document.~~Interactive Data File (XBRL).

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company