Riverview Financial Corp (Form: 10-Q, Received: 11/10/2011 06:11:06)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2011

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to .

333-153486-99

Commission File Number

RIVERVIEW FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania		26-3853402
(State or other jurisdiction of		(IRS Employer Identification Number)
incorporation or organization)

3 rd and Market Streets, Halifax, PA 17032

(Address of principal executive offices)

Registrant’s telephone number: 717-896-3433

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 o

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 o

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. (Check one):

Large accelerated filer o		Accelerated filer o

Non-accelerated filer o		Smaller reporting company x

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 1,742,516 shares of Common Stock, par value $0.50 per share, outstanding as of October 31, 2011.

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RIVERVIEW FINANCIAL CORPORATION

INDEX TO FORM 10-Q

		PAGE

PART I.	Financial Information

Item 1.	Financial Statements:

	Consolidated Balance Sheets at September 30, 2011 (unaudited) and December 31, 2010	3

	Consolidated Statements of Income for the Nine Months Ended September 30, 2011 and 2010 (unaudited)	4

	Consolidated Statements of Changes in Shareholders’ Equity for the Nine Months Ended September 30, 2011 and 2010 (unaudited)	5

	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2011 and 2010 (unaudited)	6

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	48

Item 4T.	Controls and Procedures	48

PART II.	Other Information

Item 1.	Legal Proceedings	49

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.	(Removed and Reserved)	49

Item 5.	Other Information	49

Item 6.	Exhibits	50

SIGNATURES		52

Exhibit Index		53

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RIVERVIEW FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)	September 30, 2011			December 31, 2010
	(Unaudited)
Assets
Cash and due from banks	$	4,075		$	5,514
Interest bearing deposits	32,110			24,607
Cash and cash equivalents	36,185			30,121
Interest bearing time deposits with banks	250			350
Investment securities available for sale	44,119			48,696
Mortgage loans held for sale	109			322
Loans, net of allowance for loan losses of $2,983 - 2011; $2,973 - 2010	187,821			175,064
Premises and equipment	7,417			7,607
Accrued interest receivable	964			896
Restricted investments in bank stocks	2,043			2,311
Cash value of life insurance	5,834			5,823
Foreclosed assets	232			230
Goodwill	1,796			1,796
Intangible assets	124			150
Other assets	1,819			1,992
Total Assets	$	288,713		$	275,358

Liabilities and Shareholders’ Equity

Liabilities
Deposits:
Demand, non-interest bearing	$	22,262		$	18,440
Demand, interest bearing	94,778			81,990
Savings and money market	33,041			32,652
Time	97,034			104,190
Total deposits	247,115			237,272
Short-term borrowings	1,286			968
Long-term borrowings	12,179			10,683
Accrued interest payable	217			271
Other liabilities	1,313			1,237
Total Liabilities	262,110			250,431

Shareholders’ Equity
Common stock, par value $0.50 per share; authorized 5,000,000 shares; issued 2011 and 2010 1,750,003 shares; outstanding 2011 1,742,516 shares; 2010 1,745,916 shares	$	875		$	875
Surplus	11,295			11,280
Retained earnings	13,631			12,841
Accumulated other comprehensive loss	885			(29		)
Treasury stock, at cost 2011 7,487 shares; 2010 4,087 shares	(83		)	(40		)
Total Shareholders’ Equity	26,603			24,927
Total Liabilities and Shareholders’ Equity	$	288,713		$	275,358

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

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RIVERVIEW FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except share data)	2011		2010		2011		2010

Interest and Dividend Income
Loans, including fees	$	2,706	$	2,810	$	8,056	$	8,159
Investment securities - taxable	249		288		737		790
Investment securities - tax exempt	153		136		471		424
Interest-bearing deposits	16		6		49		29
Dividends	5		5		17		17

Total Interest Income	3,129		3,245		9,330		9,419

Interest Expense
Deposits	836		957		2,546		2,850
Short-term borrowings	—		2		2		6
Long-term debt	74		69		215		205

Total Interest Expense	910		1,028		2,763		3,061

Net Interest Income	2,219		2,217		6,567		6,358

Provision for Loan Losses	232		582		515		871

Net Interest Income after Provision for Loan Losses	1,987		1,635		6,052		5,487

Noninterest Income
Service charges on deposit accounts	76		83		214		239
Other service charges and fees	90		103		269		340
Earnings on cash value of life insurance	228		62		348		188
Gain on sale of available for sale securities	38		—		274		4
Gain on sale of other real estate owned	—		—		9		—
Gain on sale of mortgage loans	34		156		99		270

Total Noninterest Income	466		404		1,213		1,041

Noninterest Expenses
Salaries and employee benefits	984		819		2,804		2,451
Occupancy expenses	191		165		566		532
Equipment expenses	115		99		320		298
Telecommunication and processing charges	146		119		450		360
Postage and office supplies	48		50		145		146
FDIC premiums	63		90		222		270
Bank shares tax expense	41		62		178		195
Directors’ compensation	64		65		185		192
Professional services	34		35		141		111
Other expenses	190		140		480		379

Total Noninterest Expenses	1,876		1,644		5,491		4,934

Income before Income Taxes	577		395		1,774		1,594

Applicable Federal Income Taxes	74		65		330		324

Net Income	$	503	$	330	$	1,444	$	1,270

Basic Earnings Per Share	$	0.29	$	0.19	$	0.83	$	0.73
Diluted Earnings Per Share	$	0.29	$	0.19	$	0.83	$	0.73

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

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RIVERVIEW FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Nine Months Ended September 30, 2011 and 2010

(Unaudited)

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

Balance — January 1, 2010	$	875	$	11,252	$	12,429		$	161		$	—		$	24,717

Comprehensive income:
Net income	—		—		1,270			—			—			1,270
Other comprehensive income	—		—		—			519			—			519

Total Comprehensive Income														1,789

Compensation cost of option grants	—		22		—			—			—			22

Cash dividends, $0.375 per share	—		—		(656		)	—			—			(656		)

Repurchase common stock	—		—		—			—			(28		)	(28		)

Balance — September 30, 2010	$	875	$	11,274	$	13,043		$	680		$	(28	)	$	25,844

Balance — January 1, 2011	$	875	$	11,280	$	12,841		$	(29	)	$	(40	)	$	24,927

Comprehensive income:
Net income	—		—		1,444			—			—			1,444
Other comprehensive income	—		—		—			914			—			914

Total Comprehensive Income														2,358

Compensation cost of option grants	—		15		—			—			—			15

Cash dividends, $0.375 per share	—		—		(654		)	—			—			(654		)

Repurchase common stock	—		—		—			—			(43		)	(43		)

Balance —September 30, 2011	$	875	$	11,295	$	13,631		$	885		$	(83	)	$	26,603

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

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RIVERVIEW FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	2011			2010
	(In thousands)
Cash Flows from Operating Activities
Net income	$	1,444		$	1,270
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	415			402
Provision for loan losses	515			871
Granting of stock options	15			22
Net amortization of premiums on securities available for sale	127			179
Net realized gain on sale of foreclosed real estate	(9		)	—
Net realized gain on sale of securities available for sale	(274		)	(4		)
Amortization of intangible assets	26			21
Deferred income taxes	(71		)	(5		)
Proceeds from sale of mortgage loans	5,202			15,581
Net gain on sale of mortgage loans	(99		)	(270		)
Mortgage loans originated for sale	(4,890		)	(15,546		)
Earnings on cash value of life insurance, net	(178		)	(188		)
Increase in accrued interest receivable and other assets	(294		)	(49		)
Increase (decrease) in accrued interest payable and other liabilities	22			(137		)

Net Cash Provided by Operating Activities	1,951			2,147

Cash Flows from Investing Activities
Net maturities of interest bearing time deposits with banks	100			2,350
Securities available for sale:
Purchases	(20,751		)	(28,701		)
Proceeds from maturities, calls and principal repayments	6,870			8,886
Proceeds from sales	19,989			6,174
Net decrease in restricted investments in bank stock	268			—
Proceeds from the sale of other real estate owned	76			239
Net increase in loans	(13,341		)	(6,656		)
Purchases of premises and equipment	(225		)	(744		)
Proceeds from life insurance	167			—

Net Cash Used in Investing Activities	(6,847		)	(18,452		)

Cash Flows from Financing Activities
Net increase in deposits	9,843			18,160
Net increase (decrease) in securities sold under agreements to repurchase	318			(34		)
Proceeds from long-term borrowings	1,500			—
Payments on long-term borrowings	(4		)	(11		)
Purchase of treasury stock	(43		)	(28		)
Dividends paid	(654		)	(656		)

Net Cash Provided by Financing Activities	10,960			17,431

Net Increase in Cash and Cash Equivalents	6,064			1,126

Cash and Cash Equivalents - Beginning	30,121			24,833
Cash and Cash Equivalents - Ending	$	36,185		$	25,959

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CONSOLIDATED STATEMENTS OF CASH FLOWS — CONTINUED

	Nine Months Ended September 30,
	2011		2010
	(In thousands)
Supplemental Disclosures of Cash Flows Information
Interest paid	$	2,817	$	3,174
Income taxes paid	298		177

Supplemental Schedule of Noncash Investing and Financing Activities
Other real estate acquired in settlement of loans	$	69	$	137

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

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RIVERVIEW FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2011

(Unaudited)

Note 1 — Summary of Significant Accounting Policies

Nature of Operations

Riverview Financial Corporation (“Riverview”) and its wholly-owned bank subsidiary, Riverview National Bank (the “Bank”) provide loan, deposit and other commercial banking services through two full service offices in Marysville and Duncannon, Perry County, Pennsylvania, one full service office in Hampden Township, Cumberland County, Pennsylvania, one full service office in Tower City, Schuylkill County, Pennsylvania, and four full service and one drive-up office in Halifax, Millersburg, Elizabethville and Harrisburg, Dauphin County, Pennsylvania. In addition, on August 1, 2011 the Bank opened a loan production office in Cressona, Schuylkill County, Pennsylvania. During the third quarter of 2011, the Bank entered into agreements to lease two separate spaces located in Orwigsburg and Pottsville, both in Schuylkill County, Pennsylvania, for the purpose of opening a branch and a regional office, respectively. The opening of these locations is anticipated for the first quarter of 2012, pending regulatory approval for the branch.

Riverview competes with several other financial institutions to provide its services to individuals, businesses, municipalities and other organizations. Riverview is subject to regulation and supervision by the Federal Reserve Board while the Bank is subject to regulation and supervision by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. On March 14, 2011, the Bank filed an application with the Pennsylvania Department of Banking to convert from a national banking association to a state-chartered bank. The Bank received approval in June 2011 and the conversion is expected to be completed effective November 19, 2011.

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

Principles of Consolidation and Basis of Accounting

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

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and are presented in accordance with instructions for Form 10-Q and Rule 10-01 of the 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 nine-months ended September 30, 2011, are not necessarily indicative of the results that may be expected for the year ended December 31, 2011 or any other future period. The consolidated financial statements presented in this report should be read in conjunction with the audited financial statements and the accompanying notes for the year ended December 31, 2010, included in Riverview’s Form 10-K filed with the Securities and Exchange Commission on March 29, 2011.

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Note 1 — Summary of Significant Accounting Policies (Continued)

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ significantly from those estimates.

Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the potential impairment of goodwill and restricted stock, 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. 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 and foreclosed real estate, further reductions in the carrying amounts of loans and foreclosed real estate may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the estimated losses on loans and foreclosed real estate. Such agencies may require the Bank to recognize additional losses based on their judgment 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 and foreclosed real estate may change materially in the near term. However, the amount of the change that is reasonably possible cannot be estimated.

Accounting Policies

The accounting policies of Riverview as applied in the interim financial statements presented, are substantially the same as those followed on an annual basis as presented in Riverview’s Form 10-K.

Reclassifications

Certain amounts in the 2010 consolidated financial statements have been reclassified to conform to the 2011 presentation. Such reclassification had no effect on net income.

Subsequent Events

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. In preparing these consolidated financial statements, Riverview evaluated the events and transactions that occurred from the date of the financial statements through the date these consolidated financial statements were issued, and has not identified any events that require recognition or disclosure in the consolidated financial statements.

Note 2 — Comprehensive Income

Accounting principles generally accepted in the United States of America require that recognized revenue, expenses, gains, and losses be included in net income. Changes in certain assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. Accumulated other comprehensive income (loss), which represents a component

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Note 2 — Comprehensive Income (Continued)

of shareholders’ equity, represents the net unrealized gains (losses) on securities available for sale, net of taxes.

The only comprehensive income item that Riverview presently has is unrealized gains on securities available for sale. The components of the change in unrealized gains are as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands)	2011			2010			2011			2010
Unrealized holding gains arising during the period	$	619		$	134		$	1,659		$	789
Reclassification of gains realized in net income	38			—			274			(4		)
	581			134			1,385			785
Deferred income tax effect	(198		)	(45		)	(471		)	(266		)
Change in accumulated other comprehensive income	$	383		$	89		$	914		$	519

Note 3 - Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands, except share data)	2011		2010		2011		2010
Net income applicable to common stock	$	503	$	330	$	1,444	$	1,270

Weighted-average common shares outstanding	1,742,795		1,748,859		1,743,939		1,749,617
Effect of dilutive securities, stock options	4,433		—		2,955		—
Weighted-average common shares outstanding used to calculate diluted earnings per share	1,747,228		1,748,859		1,746,894		1,749,617

Basic earnings per share	$	0.29	$	0.19	$	0.83	$	0.73
Diluted earnings per share	$	0.29	$	0.19	$	0.83	$	0.73

Note 4 — Investment Securities Available for Sale

In April 2009, a new accounting standard was released relating to the Recognition and Presentation of Other-Than-Temporary Impairments . This standard clarified the interaction of the factors that should be considered when determining whether a debt security is other-than-temporarily impaired. For debt securities, management must assess whether (a) it has the intent to sell the security and (b) it is more likely than not that it will be required to sell the security prior to its anticipated recovery. These steps are done before assessing whether the entity will recover the cost basis of the investment. Previously, this assessment required management to assert it had both the intent and the ability to hold a security for a period of time sufficient to allow for an anticipated recovery in fair value to avoid recognizing an other-than-temporary impairment. This change does not affect the need to forecast recovery of the value of the security through either cash flows or market price.

In instances when a determination is made that an other-than-temporary impairment exists but the investor does not intend to sell the debt security and it is not more likely than not that it will be required to sell the debt security prior to its anticipated recovery, the accounting standard dictates the presentation and the amount of the other-than-temporary impairment that should be recognized in the income

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Note 4 — Investment Securities Available for Sale (Continued)

statement. The other-than-temporary impairment is separated into (a) the amount of the total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and (b) the amount of the total other-than-temporary impairment related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to all other factors is recognized in other comprehensive income.

This accounting standard was effective for Riverview for reporting periods June 30, 2009 and after. The adoption of this standard did not have a material impact on Riverview’s consolidated financial statements.

The amortized cost and estimated fair values of investment securities available for sale are reflected in the following schedules at September 30, 2011 and December 31, 2010:

	September 30, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
State and municipal	$	16,424	$	551	$	(7	)	$	16,968
Mortgage-backed securities	26,354		835		(38		)	27,151
	$	42,778	$	1,386	$	(45	)	$	44,119

	December 31, 2010
U.S. Government agencies	$	1,316	$	10	$	—		$	1,326
State and municipal	17,350		50		(568		)	16,832
Mortgage-backed securities	30,074		487		(23		)	30,538
	$	48,740	$	547	$	(591	)	$	48,696

Securities with an amortized cost of $27,661,000 and a fair value of $28,440,000 on September 30, 2011 were pledged as collateral for public deposits and for other purposes as required or permitted by law.

Information pertaining to securities with gross unrealized losses at September 30, 2011 in comparison with December 31, 2010 is 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
(In thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2011:
Available for Sale:
State and municipal	$	494	$	(7	)	$	—	$	—	$	494	$	(7	)
Mortgage-backed securities	3,272		(38		)	—		—		3,272		(38		)
	$	3,766	$	(45	)	$	—	$	—	$	3,766	$	(45	)

December 31, 2010:
Available for Sale:
State and municipal	$	9,640	$	(568	)	$	—	$	—	$	9,640	$	(568	)
Mortgage-backed securities	2,582		(23		)	—		—		2,582		(23		)
	$	12,222	$	(591	)	$	—	$	—	$	12,222	$	(591	)

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Note 4 — Investment Securities Available for Sale (Continued)

At September 30, 2011, three securities had unrealized losses. Management believes that the securities with unrealized losses do not represent impairments that are other-than-temporary. Rather it is believed that the unrealized losses relate more to changes in interest rates since the individual securities were purchased as opposed to underlying credit issues. As management does not intend to sell any debt securities, and it is more likely than not that management will not be required to sell any debt securities before the cost bases are recovered, no declines are deemed to be other-than-temporary.

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis. In evaluating whether an investment security is other-than-temporarily impaired, consideration is given to the length of time and the extent to which the fair value of a security has been less than cost, and the financial condition and near-term prospects of the issuer. Management’s intent is to hold all investments until maturity unless market, economic or specific investment concerns warrant a sale of the securities. None of the securities in the portfolio were considered to be other than temporarily impaired at September 30, 2011.

As part of the Bank’s strategy to reduce some of the prepayment risk inherent within the investment portfolio, Riverview sold ten available for sale securities during the first nine months of 2011 and received proceeds of $19,989,000. On a year to date basis, gross realized gains amounted to $274,000 and gross realized losses were zero, resulting in a $274,000 net gain on the sale. In turn, the Bank reinvested the proceeds of the sale by purchasing fixed rate mortgage backed securities which not only provide interest income but also provide a more stable cash flow during future periods.

Note 5 — Credit Quality for Loans and the Allowance for Loan Losses

The Bank monitors its 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 — 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 have sub-segments for loan participations bought, and loans generated by Riverview’s newly opened loan production office in Cressona, Schuylkill County, Pennsylvania. The loans in these sub-segments have risk characteristics that differ from the general segments and merit separate analysis in order to afford additional granularity and accuracy in management’s estimate for the allowance for loan losses. Internal policy requires that the Chief Credit Officer report to the Board of Directors on a quarterly basis as to the status of the loan portfolio and any related credit quality issues. These reports include information on past due and nonaccrual loans, impaired loans, the allowance for loan losses and changes in the allowance for loan losses, credit quality indicators and foreclosed assets.

Past Due Loans and Nonaccrual Loans

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 — 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

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Note 5 — Credit Quality for Loans and the Allowance for Loan Losses (Continued)

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.

The following table presents an aging of loans receivable by loan portfolio segments as of September 30, 2011 and December 31, 2010, 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

September 30, 2011:
Commercial	$	179	$	400	$	164	$	743	$	14,180	$	14,923	$	—
Commercial real estate:
Non-owner occupied	—		704		1,568		2,272		38,486		40,718		—
Owner occupied	99		819		607		1,525		31,711		33,236		—
1-4 family investment	—		109		—		109		28,544		28,653		—
Commercial land and land development	—		222		1,010		1,232		11,549		12,781		—
Residential real estate	690		690		539		1,919		44,629		46,548		539
Home equity lines of credit	—		424		—		424		10,736		11,160		—
Consumer	—		24		—		24		2,761		2,785		—
Total	$	968	$	3,392	$	3,888	$	8,249	$	182,556	$	190,804	$	539

December 31, 2010:
Commercial	$	—	$	81	$	269	$	350	$	12,214	$	12,564	$	—
Commercial real estate:
Non-owner occupied	—		—		—		—		32,898		32,898		—
Owner occupied	348		—		384		732		31,208		31,940		—
1-4 family investment	112		95		67		274		28,937		29,211		—
Commercial land and land development	229		—		1,010		1,239		10,508		11,747		—
Residential real estate	250		98		1,230		1,578		44,904		46,482		1,111
Home equity lines of credit	—		—		527		527		9,738		10,265		424
Consumer	62		—		—		62		2,868		2,930		—
Total	$	1,001	$	274	$	3,487	$	4,762	$	173,275	$	178,037	$	1,535

The recorded investment in loans greater than 90 days and still accruing was $539,000 at September 30, 2011 as compared with $1,535,000 at December 31, 2010.

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 $3,534,000 and $2,779,000 at September 30, 2011 and December 31, 2010, respectively. If the nonaccrual loans had performed in accordance with their original terms, interest income would have increased by $168,000 for the nine months ended September 30, 2011 and $138,000 for the twelve months ended December 31, 2010, respectively.

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Note 5 — Credit Quality for Loans and the Allowance for Loan Losses (Continued)

The following presents loans by loan portfolio segments that were on a nonaccrual status as of September 30, 2011 and December 31, 2010:

(In thousands)	September 30, 2011		December 31, 2010
Commercial	$	164	$	1,010
Commercial real estate:
Non-owner occupied	1,568		—
Owner occupied	607		384
1-4 family investment	—		144
Commercial land and land development	1,010		1,010
Residential real estate	102		128
Home equity lines of credit	83		103
Consumer	—		—
Total	$	3,534	$	2,779

Impaired Loans

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 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 will make the appropriate adjustment to the allowance for loan losses.

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Note 5 — Credit Quality for Loans and the Allowance for Loan Losses (Continued)

The following presents impaired loans by loan portfolio segments as of September 30, 2011 and December 31, 2010:

(In thousands)	Recorded Investment in Impaired Loans		Unpaid Principal Balance of Impaired Loans		Related Allowance		Average Recorded Investment in Impaired Loans		Interest Income Recognized
September 30, 2011:
Loans with no related allowance recorded:
Commercial	$	175	$	175	$	—	$	511	$	—
Commercial real estate:
Non-owner occupied	2,960		2,960		—		2,863		53
Owner occupied	368		368		—		367		—
1-4 family investment	543		543		—		544		23
Commercial land and land development	1,010		1,010		—		1,010		—
Residential real estate	1,496		1,496		—		1,498		64
Home equity lines of credit	806		806		—		813		21
Consumer	11		11		—		13		1

Loans with an allowance recorded:
Commercial	754		754		36		753		52
Commercial real estate:
Non-owner occupied	—		—		—		—		—
Owner occupied	239		239		46		239		—
1-4 family investment	—		—		—		—		—
Commercial land and land development	—		—		—		—		—
Residential real estate	545		545		279		548		24
Home equity lines of credit	—		—		—		—		—
Consumer	—		—		—		—		—

Total
Commercial	929		929		36		1,264		52
Commercial real estate:
Non-owner occupied	2,960		2,960		—		2,863		53
Owner occupied	607		607		46		606		—
1-4 family investment	543		543		—		544		23
Commercial land and land development	1,010		1,010		—		1,010		—
Residential real estate	2,041		2,041		279		2,046		88
Home equity lines of credit	806		806		—		813		21
Consumer	11		11		—		13		1
	$	8,907	$	8,907	$	361	$	9,159	$	238

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(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, 2010:
Loans with no related allowance recorded:
Commercial	$	741	$	741	$	—	$	759	$	—
Commercial real estate:
Non-owner occupied	—		—		—		—		—
Owner occupied	—		—		—		—		—
1-4 family investment	—		—		—		—		—
Commercial land and land development	1,010		1,010		—		1,255		—
Residential real estate	1,090		1,090		—		1,095		64
Home equity lines of credit	424		424		—		424		14
Consumer	—		—		—		—		—

Loans with an allowance recorded:
Commercial	245		245		97		274		—
Commercial real estate:
Non-owner occupied	—		—		—		—		—
Owner occupied	499		499		170		501		7
1-4 family investment	77		77		9		79		—
Commercial land and land development	—		—		—		—		—
Residential real estate	551		551		215		552		28
Home equity lines of credit	—		—		—		—		—
Consumer	—		—		—		—		—

Total
Commercial	986		986		97		1,033		—
Commercial real estate:
Non-owner occupied	—		—		—		—		—
Owner occupied	499		499		170		501		7
1-4 family investment	77		77		9		79		—
Commercial land and land development	1,010		1,010		—		1,255		—
Residential real estate	1,641		1,641		215		1,647		92
Home equity lines of credit	424		424		—		424		14
Consumer	—		—		—		—		—
	$	4,637	$	4,637	$	491	$	4,939	$	113

The recorded investment in impaired loans increased by $4,270,000 at September 30, 2011 since December 31, 2010. This increase is attributable primarily to two unrelated commercial loan relationships that were identified as impaired in the latter part of the first quarter of 2011, one unrelated commercial loan relationship and two related residential real estate loans that were identified as impaired in the second quarter of 2011, and one unrelated commercial loan relationship that was identified as impaired in the third quarter of 2011. Each of these loans was measured for impairment and additions were made to the allowance for loan losses as deemed appropriate by management.

Impaired loans also include all loans modified and identified as troubled debt restructurings (“TDR”). A loan is deemed to be a TDR when the Bank agrees to a modification in 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, 2011 there were eighteen restructured loans totaling $5,000,000 to seven separate and unrelated borrowers who were experiencing financial difficulty. The modifications on these loans include reductions in interest rates, extension of maturity dates and

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Note 5 — Credit Quality for Loans and the Allowance for Loan Losses (Continued)

provisions for interest only payments. There is a commitment to extend additional funds in the amount of $445,000 to one of these borrowers for the completion of construction on an income generating property. Extension of these additional funds is necessary and prudent to ensure the continued economic viability of the project, which is the repayment source for the loan.

The following table presents the number of loans and recorded investment in loans restructured and identified as troubled debt restructurings for the nine months ended September 30, 2011, as well as the number and recorded investment in these loans that subsequently defaulted. Defaulted loans are those which are 30 days or more past due for payment under the modified terms.

(In thousands, except contracts data)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment

September 30, 2011:
Troubled Debt Restructurings:
Commercial	1	$	5	$	5
Commercial real estate:
Non-owner occupied	2	1,359		1,391
Owner occupied	—	—		—
1-4 family investment	2	241		241
Commercial land and land development	—	—		—
Residential real estate	1	142		142
Home equity lines of credit	2	385		383
Consumer	1	14		11

	Number of Contracts	Recorded Investment
Troubled Debt Restructurings That Subsequently Defaulted:
Commercial	1	$	5
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	—	—

As a result of adopting the amendments in Accounting Standards Update No. 2011-2, Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring , Riverview reassessed all restructurings that occurred on or after the beginning of the current fiscal year, effective January 1, 2011, for identification as a troubled debt restructurings. There were no restructurings that occurred on or after the beginning of the current fiscal year for which the allowance for loan losses had previously been measured under a general allowance for loan losses methodology.

Allowance for Loan Losses

The allowance for loan losses is composed of individual valuation allowances to absorb probable and quantifiable losses based upon current knowledge of the loan portfolio, and loan pool valuation

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allowances, allocated and unallocated, to absorb losses which are not specifically identified but are inherent in the 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, if any, or the present value of expected future cash flows, or the loan’s observable market value. Any shortfall that exists from 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. 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 have sub-segments for loan participations bought, and for loans generated by Riverview’s new loan production office in Cressona, Schuylkill County, Pennsylvania. The loans in these sub-segments have risk characteristics that differ from the general segments and merit separate analysis in order to afford additional granularity and accuracy in management’s estimate for the Allowance for Loan Losses. 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 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” 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 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:

· Changes in lending policies and procedures, including changes in underwriting standards;

· Changes in national, regional and local economic and business conditions and developments that affect the collectability of the portfolio;

· Changes in the nature and volume of the portfolio and in the terms of loans;

· Changes in the experience, ability and depth of lending management and other relevant staff;

· Changes in the volume and severity of past due loans, the volume of non-accrual loans, and the volume and severity of adversely classified loans;

· Changes in the quality of the Bank’s loan review system;

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· The existence and effect of any concentrations of credit, and the changes in the level of such concentrations; and

· The effect of other external factors such as competition and legal and regulatory requirements in the level of estimated credit losses in the existing portfolio.

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 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. Currently, an unallocated valuation allowance estimate is also made in order to give effect to significant loan growth in the third quarter of 2011 resulting from the opening of a loan production office in Cressona, Schuylkill County Pennsylvania. This is a new market for the Bank and the portfolio has not yet developed any loss history. Growth is expected to continue in this portfolio, to be centered in business, construction, and commercial real estate loans. These loans are normally larger and more complex, and their collection rates are harder to predict. The unallocated valuation allowance is management’s best estimate of a reasonable additional allowance for loan losses providing for the risks inherent in this new, unseasoned portfolio that cannot currently be measured using the same methods as with the Bank’s more seasoned portfolios. The loan pool valuation allowance for each segment along with the unallocated valuation allowance is summed 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 Bank earnings.

Loan Charge Offs

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:

· It is unlikely that the borrower will have the ability to pay the debt in a timely manner.

· Collateral value is insufficient to cover the outstanding indebtedness.

· Guarantors do not provide adequate support.

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, 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. Current appraisals are obtained to determine the appropriate carrying balance with any exposed portion of the loan principal balance being charged off.

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Note 5 — 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 nine months ended September 30, 2011 and the year ended December 31, 2010 as follows:

			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

Allowance for Loan Losses as of September 30, 2011:
Beginning balance	$	585	$	397	$	567	$	361	$	327		$	648	$	63	$	25	$	—	$	2,973
Charge-offs	398		—		108		5		—			1		—		2		—		514
Recoveries	9		—		—		—		—			—		—		—		—		9
Provision	366		82		14		12		(178		)	66		—		3		150		515
Ending balance	$	562	$	479	$	473	$	368	$	149		$	713	$	63	$	26	$	150	$	2,983

Ending balance:
individually evaluated for impairment	$	36	$	—	$	469	$	—	$	—		$	279	$	—	$	—	$	—	$	361

Ending balance:
collectively evaluated for impairment	$	526	$	479	$	427	$	368	$	149		$	434	$	63	$	26	$	150	$	2,622

Loans as of September 30, 2011:
Ending balance	$	14,923	$	40,718	$	33,236	$	28,653	$	12,781		$	46,548	$	11,160	$	2,785	$	—	$	190,804

Ending balance:
individually evaluated for impairment	$	929	$	2,960	$	607	$	543	$	1,010		$	2,041	$	806	$	11	$	—	$	8,907

Ending balance:
collectively evaluated for impairment	$	13,994	$	37,758	$	32,629	$	28,110	$	11,771		$	44,507	$	10,354	$	2,774	$	—	$	181,897

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			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

Allowance for Loan Losses as of December 31, 2010:
Ending balance	$	585	$	397	$	567	$	361	$	327	$	648	$	63	$	25	$	—	$	2,973

Ending balance:
individually evaluated for impairment	$	97	$	—	$	170	$	9	$	—	$	215	$	—	$	—	$	—	$	491

Ending balance:
collectively evaluated for impairment	$	488	$	397	$	397	$	352	$	327	$	433	$	63	$	25	$	—	$	2,482

Loans as of December 31, 2010:
Ending balance	$	12,564	$	32,898	$	31,940	$	29,211	$	11,747	$	46,482	$	10,265	$	2,930	$	—	$	178,037

Ending balance:
individually evaluated for impairment	$	986	$	—	$	499	$	77	$	1,010	$	1,641	$	424	$	—	$	—	$	4,637

Ending balance:
collectively evaluated for impairment	$	11,578	$	32,898	$	31,441	$	29,134	$	10,737	$	44,841	$	9,841	$	2,930	$	—	$	173,400

The following summarizes the changes in the allowance for loan losses for the nine months ended September 30, 2011 and the year ended December 31, 2010:

	September 30, 2011			December 31, 2010
	(In thousands)
Beginning balance — January 1	$	2,973		$	2,560
Provision charged to operations	515			1,506
Recoveries on charged off loans	9			14
Loans charged off	(514		)	(1,107		)

Ending balance	$	2,983		$	2,973

Credit Quality Indicators

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 senior 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.

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Note 5 — Credit Quality for Loans and the Allowance for Loan Losses (Continued)

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:

· Capitalization

· Liquidity

· Cash flow

· Revenue and earnings trends

· Management strength or weakness

· Quality of financial information

· Reputation and credit history

· Industry, including economic climate

In addition, the following factors may contribute 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: Guarantees can differ substantially in enhancing the risk rating assigned to a loan or lending 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.

· Levels 1-4 are “Pass” grades

· Level 5 is “Special Mention” (criticized loan)

· Level 6 is “Substandard” (classified loan)

· Level 7 is “Doubtful” (classified loan)

· Level 8 is “Loss” (classified loan)

Risk Rating Definitions

1 - Excellent

This category is reserved for loans that contain a virtual absence of any 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.

2 —Good

Loans in this category would be characterized by nominal risk and strong repayment certainty. This 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.

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Note 5 — Credit Quality for Loans and the Allowance for Loan Losses (Continued)

3 -Satisfactory

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, risk of loss is considered minimal due to adequate, well-margined and controlled collateral.

4 -Watch

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.

5 - Special Mention

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 which 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 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 should be given for the next higher rating.

6 — Substandard

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.

7 - Doubtful

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 be determined. 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.

8 - Loss

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

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Note 5 — Credit Quality for Loans and the Allowance for Loan Losses (Continued)

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.

The following presents the credit quality indicators and total credit exposure for each segment in the loan portfolio by internally assigned grades as of September 30, 2011 and December 31, 2010:

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

September 30, 2011:
1 – Excellent	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2 – Good	1,511		336		2,843		77		1,651		—		—		—		6,418
3 – Satisfactory	9,642		31,889		21,544		22,822		8,666		43,853		9,452		2,774		150,642
4 – Watch	575		2,309		5,417		3,140		668		52		839		—		13,000
5 – Special Mention	1,731		4,836		2,255		1,265		536		32		363		—		11,018
6 – Substandard	1,464		1,348		1,177		1,349		1,260		2,611		506		11		9,726
7 – Doubtful	—		—		—		—		—		—		—		—		—
8 – Loss	—		—		—		—		—		—		—		—		—
Total	$	14,923	$	40,718	$	33,236	$	28,653	$	12,781	$	46,548	$	11,160	$	2,785	$	190,804

December 31, 2010:
1 – Excellent	$	22	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	22
2 – Good	1,394		597		2,990		—		295		—		—		—		5,276
3 – Satisfactory	7,130		23,748		19,654		23,428		8,047		44,001		8,818		2,930		137,756
4 – Watch	1,677		4,099		6,361		3,134		1,703		300		852		—		18,126
5 – Special Mention	987		3,856		1,501		1,450		442		60		40		—		8,336
6 – Substandard	1,194		598		1,434		1,199		1,260		2,121		555		—		8,361
7 – Doubtful	160		—		—		—		—		—		—		—		160
8 – Loss	—		—		—		—		—		—		—		—		—
Total	$	12,564	$	32,898	$	31,940	$	29,211	$	11,747	$	46,482	$	10,265	$	2,930	$	178,037

The adequacy of the allowance is analyzed quarterly, with any adjustment 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, 2011, management believes the allowance for loan losses has been established at levels sufficient to cover the probable incurred losses in the loan portfolio.

Note 6 — Stock Option Plan

In January 2009, Riverview implemented a non-qualified stock option plan. The purpose of the 2009 Stock Option Plan was to advance the development, growth and financial condition of Riverview by providing incentives through participation in the appreciation of Riverview’s common stock to secure, retain and motivate Riverview’s directors, officers and key employees and to align such persons’ interests with those of the shareholders. Shares of Riverview’s common stock that may be issued or transferred under this plan cannot exceed 170,000 shares at an exercise price of $13.00 per share. The vesting schedule is a seven year cliff, which means that the options are 100% vested in the seventh year following

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Note 6 — Stock Option Plan (Continued)

the grant date and the expiration date is ten years following the grant date. This vesting schedule can be accelerated due to certain triggering events. As of September 30, 2011, 5,750 option grants were vested and exercisable.

During 2009, Riverview granted 155,000 options on January 21, 2009, of which 7,000 options were forfeited in April 2009, and an additional 22,000 options were granted on September 16, 2009 for a total of 170,000 options. Each award had a fair value of $0.72, based on the following: fair value of stock on the date of grant — $13.00; exercise price — $13.00; life — 7 years; volatility — 12.22%; dividend yield — 5.00%; discount rate — 3.10%.

Riverview accounts for these awards in accordance with generally accepted accounting principles related to Share 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 compensation expense over the vesting period, or 7 years. Total compensation expense relating to the options that has been recognized is $56,000, out of which $15,000 was recorded during the first nine months of 2011. The remaining unrecognized compensation expense as of September 30, 2011 is $66,000.

Note 7 — Guarantees

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 include commitments to extend credit and letters of credit. Such financial instruments are recorded in the financial statements when they become payable. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

The Bank does not issue any guarantees that would require liability recognition or disclosure, other than its letters of credit. Letters of credit that are written are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Generally, all letters of credit, when issued, have expiration dates within one year. The credit risk involved in issuing letters of credit is essentially the same as those that are involved in extending loan facilities to customers. The Bank generally holds collateral and/or personal guarantees supporting these commitments. The Bank had $2,143,000 in financial and performance letters of credit as of September 30, 2011. Management believes that the proceeds obtained through liquidation of collateral and the enforcement of guarantees would be sufficient to cover the potential amount of future payments required under the corresponding guarantees. The current amount of the liability as of September 30, 2011 for guarantees under letters of credit is not material.

N ote 8 — Fair Value Measurements and Fair Values of Financial Instruments

Management uses its best judgment in estimating the fair value of Riverview’s financial instruments. However, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts Riverview could have realized in a sales transaction 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.

In September 2006, a new accounting standard was released relating to Fair Value Measurements . This standard defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements. The standard establishes a fair value

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N ote 8 — Fair Value Measurements and Fair Values of Financial Instruments (Continued)

hierarchy regarding the assumptions used to measure fair value and clarifies assumptions about risk and the effect of a restriction on the sale or use of an asset. The standard was effective for Riverview as of January 1, 2008. However, in February 2008 the effective date of this standard for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value on a recurring basis (at least annually) was extended to the fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. The impact of this standard did not have a material effect on Riverview’s consolidated financial statements upon adoption on January 1, 2009.

In October 2008, a new accounting standard was issued related to Determining the Fair Value of a Financial Asset When the Market for that Asset is Not Active to clarify the application of the provisions of Fair Value Measurements in an active market and how an entity would determine fair value in an inactive market. This standard was effective immediately and applied to Riverview’s December 31, 2008 and later consolidated financial statements.

In April 2009, a new accounting standard with regard to Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly was issued. The standard for Fair Value Measurements defines fair value as the price that would be received to sell the asset or transfer the liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. The new standard provides additional guidance for determining when the volume and level of activity for the asset or liability has significantly decreased. The standard also includes guidance on identifying circumstances when a transaction may not be considered orderly. This standard also provides a list of factors that a reporting entity should evaluate to determine whether there has been a significant decrease in the volume and level of activity for the asset or liability in relation to normal market activity for the asset or liability. When the reporting entity concludes there has been a significant decrease in the volume and level of activity for the asset or liability, further analysis of the information from that market is needed and significant adjustments to the related prices may be necessary to estimate fair value in accordance with the Fair Value Measurements standard. This standard clarifies that when there has been a significant decrease in the volume and level of activity for the asset or liability, some transactions may not be orderly. In those situations, the entity must evaluate the weight of the evidence to determine whether the transaction is orderly. The standard provides a list of circumstances that may indicate that a transaction is not orderly. A transaction price that is not associated with an orderly transaction is given little, if any, weight when estimating fair value. This standard is effective for Riverview for interim and annual reporting periods ending June 30, 2009 and after. Adoption of this pronouncement did not have a material impact on Riverview’s financial statements.

The Fair Value Measurements standard establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under this standard are as follows:

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).

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N ote 8 — 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 September 30, 2011, Riverview had no liabilities subject to fair value reporting requirements.

For investment securities measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at September 30, 2011 and December 31, 2010 are as follows:

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, 2011:
State and municipal	$	16,968	$	—	$	16,968	$	—
Mortgage-backed securities	27,151		—		27,151		—
Securities available for sale	$	44,119	$	—	$	44,119	$	—

December 31, 2010:
U.S. Government agencies	$	1,326	$	—	$	1,326	$	—
State and municipal	16,832		—		16,832		—
Mortgage-backed securities	30,538		—		30,538		—
Securities available for sale	$	48,696	$	—	$	48,696	$	—

For financial assets measured at estimated fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at September 30, 2011 and December 31, 2010 are as follows:

	Level 1		Level 2		Level 3		Total		Total Gains/ Losses
			(In thousands)
September 30, 2011:
Loans held for sale	$	—	$	109	$	—	$	109	$	—
Other real estate owned	—		232		—		232		—
Impaired loans, net of related allowance	—		855		323		1,178		—
Total	$	—	$	1,196	$	323	$	1,519	$	—

December 31, 2010:
Loans held for sale	$	—	$	322	$	—	$	322	$	—
Other real estate owned	—		230		—		230		—
Impaired loans, net of related allowance	—		—		881		881		—
Total	$	—	$	552	$	881	$	1,433	$	—

In April 2009, the FASB issued a new standard related to Interim Disclosures about Fair Value of Financial Instruments . This standard amends the Disclosures about Fair Value of Financial Instruments standard, to require disclosure about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This standard also amends the Interim Financial Reporting standards, to require those disclosures in summarized financial information at interim reporting periods.

This standard is effective for Riverview for reporting periods June 30, 2009 and after. The adoption of this standard did not have a material impact on Riverview’s consolidated financial statements.

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N ote 8 — Fair Value Measurements and Fair Values of Financial Instruments (Continued)

The following information should not be interpreted as an estimate of the fair value of Riverview since a fair value calculation is only provided for a limited portion of Riverview’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 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 financial instruments at September 30, 2011:

Cash and cash equivalents (carried at cost):

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

Interest bearing time deposit (carried at cost):

Fair values for fixed-rate time certificates of deposit placed with other banks 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. Riverview generally purchases amounts below the insured limit, limiting the amount of credit risk on these time deposits.

Securities:

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 includes 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.

Mortgage loans held for sale (carried at lower of cost or fair value):

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.

Loans (carried at cost):

The fair values of loans are estimated using a combination of techniques including the use of discounted cash flow analyses, and quoted market prices 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 maturity 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 (generally carried at fair value):

Impaired loans are those that are accounted for under generally accepted accounting principles relating to Accounting by Creditors for Impairment of a Loan in which Riverview 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 for the collateral securing such loans, adjusted for the timing of anticipated cash flows. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.

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N ote 8 — Fair Value Measurements and Fair Values of Financial Instruments (Continued)

Restricted investment in bank stocks (carried at cost):

The carrying amount of restricted investment in bank stock is based on redemption at par value, and considers the limited marketability of such securities.

Accrued interest receivable and payable (carried at cost):

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

Deposit liabilities (carried at cost):

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.

Short-term borrowings (carried at cost):

The carrying amounts of short-term borrowings approximate their fair values.

Long-term borrowings (carried at cost):

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.

Off-balance sheet financial instruments (disclosed at cost):

Fair values for Riverview’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.

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N ote 8 — Fair Value Measurements and Fair Values of Financial Instruments (Continued)

The estimated fair values of Riverview’s financial instruments as of September 30, 2011 and December 31, 2010 are presented as follows:

	September 30, 2011				December 31, 2010
(In thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	36,185	$	36,185	$	30,121	$	30,121
Interest bearing time deposits	250		250		350		350
Investment securities	44,119		44,119		48,696		48,696
Mortgage loans held for sale	109		109		322		322
Loans, net	187,821		189,601		175,064		175,055
Accrued interest receivable	964		964		896		896
Restricted investments in bank stocks	2,043		2,043		2,311		2,311

Financial liabilities:
Deposits	247,115		255,812		237,272		235,883
Short-term borrowings	1,286		1,286		968		968
Long-term borrowings	12,179		12,784		10,683		10,963
Accrued interest payable	217		217		271		271

Off balance sheet financial instruments	—		—		—		—

Note 9 — New Accounting Pronouncements

In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements . ASU 2010-06 amends Subtopic 820-10 to clarify existing disclosures, require new disclosures, and includes conforming amendments to guidance on employers’ disclosures about postretirement benefit plan assets. ASU 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The adoption of the new guidance did not have a material impact on Riverview’s consolidated financial statements.

In July 2010, the FASB issued ASU 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses . The new disclosure guidance will significantly expand the existing requirements and will lead to greater transparency into a company’s exposure to credit losses from lending arrangements. The extensive new disclosures of information as of the end of a reporting period will become effective for both interim and annual reporting periods ending on or after December 15, 2010. Specific disclosures regarding activity that occurred before the issuance of the ASU, such as the allowance roll forward and modification disclosures will be required for periods beginning or after December 15, 2010. Riverview has included the required disclosures in its consolidated financial statements.

In December 2010, the FASB issued ASU 2010-28, Intangible — Goodwill and Other (Topic 350) - When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts . The amendments in this ASU modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. Early adoption is not permitted. The adoption of the new guidance did not have a material impact on Riverview’s consolidated financial statements.

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Note 9 — New Accounting Pronouncements (Continued)

In December 2010, the FASB issued ASU 2010-29, Business Combination (Topic 805) - Disclosure of Supplementary Pro Forma Information for Business Combinations . The guidance requires pro forma disclosure for business combinations that occurred in the current reporting period as though the acquisition date for all business combinations that occurred during the year had been as of the beginning of the annual reporting period. If comparative financial statements are presented, the pro forma information should be reported as though the acquisition date for all business combinations that occurred during the current year had been as of the beginning of the comparable prior annual reporting period. ASU 2010-29 is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. The adoption of the new guidance did not have a material impact on Riverview’s consolidated financial statements.

The Securities Exchange Commission (SEC) has issued Final Rule No. 33-9002, Interactive Data to Improve Financial Reporting . The rule requires companies to submit financial statements in XBRL (extensible business reporting language) format with their SEC filings on a phased-in schedule. Large accelerated filers and foreign large accelerated filers using U.S. GAAP were required to provide interactive data reports starting with their first quarterly report for fiscal periods ending on or after June 15, 2010. All remaining filers are required to provide interactive data reports starting with their first quarterly report for fiscal periods ending on or after June 15, 2011. Riverview complied with this ruling in filing its quarterly report for the period ended June 30, 2011.

In March 2011, the SEC issued Staff Accounting Bulletin (SAB) 114. This SAB revises or rescinds portions of the interpretive guidance included in the codification of the Staff Accounting Bulletin Series. This update is intended to make the relevant interpretive guidance consistent with current authoritative accounting guidance issued as a part of the FASB’s Codification. The principal changes involve revision or removal of accounting guidance references and other conforming changes to ensure consistency of referencing through the SAB Series. The effective date for SAB 114 is March 28, 2011. The adoption of the new guidance did not have a material impact on Riverview’s consolidated financial statements.

In April 2011, the FASB issued ASU 2011-02, Receivables (Topic 310) - A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring . The amendments in this ASU clarify the guidance on a creditor’s evaluation of whether it has granted a concession to a debtor. They also clarify the guidance on a creditor’s evaluation of whether a debtor is experiencing financial difficulty. The amendments in this ASU are effective for the first interim or annual period beginning on or after June 15, 2011. Early adoption is permitted. Retrospective application to the beginning of the annual period of adoption for modifications occurring on or after the beginning of the annual adoption period is required. As a result of applying these amendments, an entity may identify receivables that are newly considered to be impaired. For purposes of measuring impairment of those receivables, an entity should apply the amendments prospectively for the first interim or annual period beginning on or after June 15, 2011. The adoption of the new guidance did not have a material impact on Riverview’s consolidated financial statements.

In April 2011, the FASB issued ASU 2011-03, Transfers and Servicing (Topic 860) — Reconsideration of Effective Control for Repurchase Agreements . The amendments in this ASU remove from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee and (2) the collateral maintenance implementation guidance related to that criterion. The amendments in this ASU are effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. Riverview is currently assessing the impact that ASU 2011-03 will have on its consolidated financial statements.

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820) — Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs . This ASU is the result of joint efforts by the FASB and IASB to develop a single, converged fair value framework on how (not when) to measure fair value and what disclosures to provide about fair

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Note 9 — New Accounting Pronouncements (Continued)

value measurements. The ASU is largely consistent with existing fair value measurement principles in U.S. GAAP (Topic 820), with many of the amendments made to eliminate unnecessary wording differences between U.S. GAAP and IFRSs. The amendments are effective for interim and annual periods beginning after December 15, 2011 with prospective application. Early application is not permitted. Riverview is currently assessing the impact that ASU 2011-04 will have on its consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220) — Presentation of Comprehensive Income . The objective of this ASU is to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income by eliminating the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The single statement of comprehensive income should include the components of net income, a total for net income, the components of other comprehensive income, a total for other comprehensive income, and a total for comprehensive income. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present all the components of other comprehensive income, a total for other comprehensive income, and a total for comprehensive income. The amendments do not change the items that must be reported in other comprehensive income, the option for an entity to present components of other comprehensive income either net of related tax effects or before related tax effects, or the calculation or reporting of earnings per share. The amendments in this ASU should be applied retrospectively. The amendments are effective for fiscal years and interim periods within those years beginning after December 15, 2011. Early adoption is permitted because compliance with the amendments is already permitted. The amendments do not require transition disclosures. Riverview is currently assessing the impact that ASU 2011-05 will have on its consolidated financial statements.

In August 2011, the SEC issued Final Rule No. 33-9250, Technical Amendments to Commission Rules and Forms related to the FASB’s Accounting Standards Codification . The SEC has adopted technical amendments to various rules and forms under the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Company Act of 1940. These revisions were necessary to conform those rules and forms to the FASB Accounting Standards Codification. The technical amendments include revision of certain rules in Regulation S-X, certain items in Regulation S-K, and various rules and forms prescribed under the Securities Act, Exchange Act and Investment Company Act. The Release was effective as of August 12, 2011. The adoption of the release did not have a material impact on Riverview’s consolidated financial statements.

In September 2011, the FASB issued ASU 2011-08, Intangible — Goodwill and Other (Topic 350) — Testing Goodwill for Impairment. The amendments in this ASU permit an entity to first assess qualitative factors related to goodwill to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. Under the amendments in this ASU, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. The amendments in this ASU are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. Riverview is currently assessing the impact that ASU 2011-08 will have on its consolidated financial statements.

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management’s discussion and analysis of the significant changes in the consolidated financial condition, results of operations, capital resources and liquidity presented in the accompanying unaudited financial statements for Riverview Financial Corporation (“Riverview”) and its wholly-owned bank subsidiary, Riverview National Bank (the “Bank”). Riverview’s consolidated financial condition and results of operations consist almost entirely of the Bank’s financial condition and results of operations. This discussion should be read in conjunction with the preceding consolidated financial statements and related footnotes, as well as Riverview’s December 31, 2010 Annual Report on Form 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.

Forward-Looking Statements

Except for historical information, this report may be deemed to contain “forward-looking” statements regarding Riverview. Examples of 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 any of the foregoing or other variations thereon or comparable terminology, or by discussion of strategy.

No assurance can be given that the future results covered by forward-looking statements will be achieved. Such statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could impact Riverview’s operating results include, but are not limited to, (i) the effects of changing economic conditions in Riverview’s market areas and nationally, (ii) credit risks of commercial, real estate, consumer and other lending activities, (iii) significant changes in interest rates, (iv) changes in federal and state banking laws and regulations which could affect Riverview’s operations including the impact of the enactment and implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, (v) funding costs, (vi) volatilities in the securities markets, (vii) ineffective business strategy, (viii) effects of deteriorating market conditions, specifically the effect on loan customers to repay loans, (ix) inability to achieve merger related cost savings, (x) the effects and unanticipated expenses related to the charter conversion of our banking subsidiary from a national bank to a Pennsylvania chartered bank, and (xi) other external developments which could materially affect Riverview’s business and operations.

Critical Accounting Policies

Riverview’s consolidated financial statements are prepared based on the application of certain accounting policies. Certain of these policies require numerous estimates and strategic or economic assumptions that may prove inaccurate or are subject to variations which may significantly affect Riverview’s reported results and financial position for the period or in future periods. Changes in underlying factors, assumptions, or estimates in any of these areas can have a material impact on future financial condition and results of operations.

Riverview has identified several policies as being critical because they require management to make particularly difficult, subjective and/or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be reported under different conditions or using different assumptions. These policies relate to the allowance for loan losses, valuation of securities, goodwill and other intangible asset impairment and accounting for income taxes.

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Riverview performs periodic and systematic detailed reviews of its loan portfolio to assess overall collectability. The level of the allowance for loan losses reflects the 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 records its available for sale securities at fair value. 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 quoted market prices, where available. If quoted market prices are not available, fair values used are based on the quoted prices of similar instruments or an estimate of fair value by using a range of fair value estimates in the marketplace as a result 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 extent of the impairment of the security may be different than previously estimated, which could have a material effect 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 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 the liability method. 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 of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected 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.

Overview

Net income for the nine months ended September 30, 2011 was $1,444,000 (or $0.83 per share) and was $174,000 more than net income of $1,270,000 (or $0.73 per share) for the nine months ended September 30, 2010. The annualized return on average assets was 0.70% for the nine months ended September 30, 2011 as compared with 0.66% for the comparable period in 2010. The annualized return on average equity was 7.51% for

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the first nine months of 2011 as compared with 6.66% for the same period in 2010. The increase in both ratios is attributable to the increase in net income as of the third quarter of 2011 as compared with the third quarter of 2010.

Results of Operations

Net Interest Income and Net Interest 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 three months ended September 30, 2011 and 2010.

Average Balances and Average Interest Rates

(Dollars in thousands)

	For the Three Months Ended
	September 30,
	2011						2010
	Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate
Assets
Interest earning assets:
Securities:
Taxable	$	27,788	$	249	3.56	%	$	36,712	$	288	3.11	%
Tax-exempt	16,483		232		5.58	%	12,607		206		6.48	%
Total securities	44,271		481		4.31	%	49,319		494		3.97	%
Other interest earning assets	27,987		22		0.31	%	12,002		11		0.36	%
Loans:
Consumer	1,924		34		7.01	%	2,267		43		7.53	%
Commercial	15,064		193		5.08	%	12,824		199		6.15	%
Real estate	169,250		2,491		5.84	%	166,360		2,581		6.16	%
Total loans	186,238		2,718		5.79	%	181,451		2,823		6.17	%
Total earning assets	258,496		3,221		4.94	%	242,772		3,328		5.44	%
Non-interest earning assets	21,707						22,088

Total assets	$	280,203					$	264,860

Liabilities and shareholders’ equity
Interest-bearing liabilities:
Deposit accounts:
Interest-bearing demand	$	88,347	$	271	1.22	%	$	77,451	$	302	1.55	%
Savings	33,205		38		0.45	%	32,256		81		1.00	%
Time deposits	96,531		527		2.17	%	94,934		574		2.40	%
Total deposits	218,083		836		1.52	%	204,641		957		1.86	%
Borrowings:
Short-term borrowings	1,087		—		0.00	%	1,603		2		0.49	%
Long-term borrowings	10,876		74		2.70	%	10,688		69		2.56	%
Total borrowings	11,963		74		2.45	%	12,291		71		2.29	%
Total interest bearing liabilities	230,046		910		1.57	%	216,932		1,028		1.88	%

Demand deposits	22,265						20,343
Other liabilities	1,599						1,457
Shareholders’ equity	26,293						26,128

Total liabilities and shareholders’ equity	$	280,203					$	264,860

Net interest income			$	2,311					$	2,300
Net interest spread					3.37	%					3.56	%
Net interest margin					3.55	%					3.76	%

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.

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For the three months ended September 30, 2011, total interest income decreased on a fully tax equivalent basis (as adjusted for the tax benefit derived from tax-exempt assets) by $107,000, or 3.2 %, to $3,221,000 from $3,328,000 for the three months ended September 30, 2010. The decrease was due to a decline in the yield of total earning assets to 4.94% for the three months ended September 30, 2011 from 5.44% for the three months ended September 30, 2010. This decline occurred even though the volume of average earning assets increased to $258,496,000 for the third quarter of 2011 as compared to $242,772,000 for the third quarter of 2010 as a result of loan growth and an increase in other interest earning assets. The decline in the loan yield to 5.79% as of the third quarter of 2011 from 6.17% as of the third quarter of 2010 contributed to lowering the yield on total earning assets. In addition, the fact that other interest earning assets increased $15,985,000 as of the three months ended September 30, 2011 as compared with the three months ended September 30, 2010 meant that there were more assets earning the lowest asset yield of 0.31 % during the third quarter of 2011.

Total interest expense decreased $118,000, or 11.5% to $910,000 for the three months ended September 30, 2011 from $1,028,000 for the three months ended September 30, 2010. This was attributable to a 31 basis point decline in total cost of funds, which decreased to 1.57% for the third quarter of 2011 from 1.88% for the same period in 2010. The decline in the cost of funds offset the 6% increase in the volume of average interest bearing liabilities.

Net interest income calculated on a fully tax equivalent basis increased $11,000, to $2,311,000 for the three months ended September 30, 2011 from $2,300,000 for the three months ended September 30, 2010. Although net interest income increased quarter over quarter, Riverview’s net interest spread decreased to 3.37% for the three months ended September 30, 2011 from 3.56% for the three months ended September 30, 2010, while its net interest margin decreased to 3.55% for the three months ended September 30, 2011 from 3.76% for the three months ended September 30, 2010. The decrease in cost of funds was not enough to offset the decline in the yield on interest earning assets, which had the impact of compressing the net interest spread and net interest margin at September 30, 2011 as compared with September 30, 2010.

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Average Balances and Average Interest Rates

(Dollars in thousands)

	For the Nine Months Ended
	September 30,
	2011						2010
	Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate
Assets
Interest earning assets:
Securities:
Taxable	$	28,959	$	737	3.40	%	$	34,439	$	790	3.07	%
Tax-exempt	16,960		714		5.63	%	13,556		642		6.34	%
Total securities	45,919		1,451		4.22	%	47,995		1,432		3.99	%
Other interest earning assets	27,772		67		0.32	%	11,363		46		0.54	%
Loans:
Consumer	1,942		106		7.30	%	2,457		135		7.35	%
Commercial	13,981		590		5.64	%	12,880		579		6.01	%
Real estate	165,361		7,394		5.98	%	162,738		7,493		6.16	%
Total loans	181,284		8,090		5.97	%	178,075		8,207		6.16	%
Total earning assets	254,975		9,608		5.04	%	237,433		9,685		5.45	%

Non-interest earning assets	21,763						20,929

Total assets	$	276,738					$	258,362

Liabilities and shareholders’ equity
Interest-bearing liabilities:
Deposit accounts:
Interest-bearing demand	$	85,341	838		1.31	%	$	75,080	$	832	1.48	%
Savings	33,064		114		0.46	%	30,539		226		0.99	%
Time deposits	98,568		1,594		2.16	%	93,800		1,792		2.55	%
Total deposits	216,973		2,546		1.57	%	199,419		2,850		1.91	%
Borrowings:
Short-term borrowings	968		2		0.28	%	1,295		6		0.62	%
Long-term borrowings	10,747		215		2.67	%	10,692		205		2.56	%
Total borrowings	11,715		217		2.48	%	11,987		211		2.35	%
Total interest bearing liabilities	228,688		2,763		1.62	%	211,406		3,061		1.94	%

Demand deposits	20,999						19,929
Other liabilities	1,360						1,452
Shareholders’ equity	25,691						25,575

Total liabilities and shareholders’ equity	$	276,738					$	258,362

Net interest income			$	6,845					$	6,624
Net interest spread					3.42	%					3.51	%
Net interest margin					3.59	%					3.73	%

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, 2011, total interest income decreased on a fully tax equivalent basis (as adjusted for the tax benefit derived from tax-exempt assets) by $77,000 or 0.8%, to $9,608,000 from $9,685,000 for the nine months ended September 30, 2010. This decrease was due to the decline in the yield on total interest earning assets to 5.04% for the nine months ended September 30, 2011from 5.45% for the nine

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months ended September 30, 2010. The 7.4% increase in the volume of total interest earning assets year over year helped to mitigate the impact of lower yields on loans and all other interest earning assets.

Total interest expense decreased $298,000, or 9.7% to $2,763,000 for the nine months ended September 30, 2011 from $3,061,000 for the nine months ended September 30, 2010. Cost of funds decreased to 1.62% at the end of the third quarter of 2011 from 1.94% for the same period in 2010. The decline in the cost of funds offset the 8.2% increase in the volume of average interest bearing liabilities, attributable to deposit growth.

Net interest income calculated on a fully tax equivalent basis increased $221,000, or 3.3%, to $6,845,000 for the nine months ended September 30, 2011 from $6,624,000 for the nine months ended September 30, 2010. Riverview’s net interest spread decreased 9 basis points to 3.42% at September 30, 2011 from 3.51% at September 30, 2010, while its net interest margin decreased to 3.59% at September 30, 2011 from 3.73% at September 30, 2010. In consideration of the increased volume of interest earning assets and interest bearing liabilities, management initiated efforts to minimize the compression of its net interest spread and margin by proactively reducing its cost of funds.

Provision for Loan Losses

Provisions for loan losses are charged to operations in order to maintain the allowance for loan losses at a level management considers adequate to absorb credit losses inherent in the 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. The Bank 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 to Accounting by Creditors for Impairment of a Loan . After an evaluation of these factors, the provision for the nine months ended September 30, 2011 was $515,000, of which $232,000 was recorded during the third quarter of 2011. This compares with a provision of $871,000 for the nine months ended September 30, 2010, of which $582,000 was recorded during the third quarter of 2010. The amount of the provision that was recorded during the first nine months of 2011 was driven primarily by specific allocations made to the allowance resulting from an impairment measurement on commercial loans to a business which failed during the first quarter of 2011 and an additional specific allocation made for an impaired residential real estate loan based on an updated appraisal, growth in the portfolio during the third quarter of 2011 as well as $499,000 in loans charged off in the third quarter of 2011. The allowance for loan losses was $2,983,000 or 1.56% of total loans outstanding at September 30, 2011 as compared with $2,897,000, or 1.62% of total loans at September 30, 2010.

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, 2011 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.

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Non-Interest Income

Interest Income

The following table sets forth changes in non-interest income for the three months ended September 30, 2011 and 2010.

Non-Interest Income

(Dollars in thousands)

	Three Months Ended September 30,
	Increase/(Decrease)
	2011		Amount			%		2010
Service charges on deposit accounts	$	76	$	(7	)	(8.4	)%	$	83
Other service charges and fees	90		(13		)	(12.6	)%	103
Earnings on cash value of life insurance	228		166			267.7	%	62
Gains from sale of available for sale securities	38		38			—		—
Gain from the sale of mortgage loans	34		(122		)	(78.2	)%	156
	$	466	$	62		15.3	%	$	404

Non-interest income continues to be an important source of income for Riverview, representing 17.4% of total revenues (comprised of net interest income and non-interest income) for the third quarter of 2011 as compared with 15.4% for the third quarter of 2010. Non-interest income increased 15.3% in comparing the financial results for the third quarter of 2011 with the results for the same period in 2010. While a portion of the increase in third quarter 2011 non-interest income was attributable to gains from the sale of available for sale securities, most of the increase was due to earnings that were recorded relating to the cash value of life insurance. This occurred as result of the Bank’s receipt of the proceeds from bank owned life insurance due to the unexpected passing of a director during the third quarter of 2011.

The following table sets forth changes in non-interest income for the nine months ended September 30, 2011 and 2010.

Non-Interest Income

(Dollars in thousands)

	Nine Months Ended September 30,
	Increase/(Decrease)
	2011		Amount			%		2010
Service charges on deposit accounts	$	214	$	(25	)	(10.5	)%	$	239
Other service charges and fees	269		(71		)	(20.9	)%	340
Earnings on cash value of life insurance	348		160			85.1	%	188
Gain on sale of available for sale securities	274		270			6750.0	%	4
Gain on sale of other real estate owned	9		9			—		—
Gain from the sale of mortgage loans	99		(171		)	(63.3	)%	270
	$	1,213	$	172		16.5	%	$	1,041

Non-interest income represents 15.6% of total revenues (comprised of net interest income and non-interest income) for the first nine months of 2011 as compared with 14.1% for the first nine months of 2010. Total non-interest income increased 16.5% in the first nine months of 2011 as compared with the first nine months of 2010. A portion of the increase in non-interest income was attributable to an increase in the gain from the sale of available for sale securities during the nine months of 2011. Further contributing to the increase in non-interest income was the receipt of the proceeds from bank owned life insurance that the Bank received as a result of the unexpected passing of a director during the third quarter of 2011. During 2011, the Bank recorded a modest gain from the sale of other real estate owned, and recorded less of a gain from the sale of mortgage loans due to a decrease in the volume of loans available for sale servicing released to Freddie Mac as compared with 2010.

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Non-Interest Expense

The following table presents the components of non-interest expense for the third quarters of 2011 and 2010.

Non-Interest Expense

(Dollars in thousands)

	Three Months Ended September 30,
	Increase/(Decrease)
	2011		Amount			%		2010
Salaries and employee benefits	$	984	$	165		20.1	%	$	819
Occupancy expense	191		26			15.8	%	165
Equipment expense	115		16			16.2	%	99
Telecommunications and processing charges	146		27			22.7	%	119
Postage and office supplies	48		(2		)	(4.0	)%	50
FDIC premium	63		(27		)	(30.0	)%	90
Bank shares tax expense	41		(21		)	(33.9	)%	62
Directors’ compensation	64		(1		)	(1.5	)%	65
Professional services	34		(1		)	(2.9	)%	35
Other expenses	190		50			35.7	%	140
	$	1,876	$	232		14.1	%	$	1,644

Non-interest expenses increased 14.1% quarter over quarter. In particular, the increases in the expenses relating to salary and employee benefits, occupancy, equipment and other expenses are associated with the Bank’s expansion with the opening of a new branch in Tower City, Pennsylvania at the end of the third quarter of 2010 and the opening of a loan production office in Cressona, Pennsylvania during the third quarter of 2011. In looking at expenses that have decreased, the reduction in the FDIC premium expense was due to the FDIC’s revision in the method to calculate the premium assessment. The decline in the bank shares tax expense is due to a higher tax credit amount recorded during the third quarter of 2011 as compared with the third quarter of 2010 for contributions made to educational improvement organizations under the Pennsylvania Educational Improvement Tax Credit program.

The following table presents the components of non-interest expense for the first nine months of 2011 and 2010.

Non-Interest Expense

(Dollars in thousands)

	Nine Months Ended September 30,
	Increase/(Decrease)
	2011		Amount			%		2010
Salaries and employee benefits	$	2,804	$	353		14.4	%	$	2,451
Occupancy expense	566		34			6.4	%	532
Equipment expense	320		22			7.4	%	298
Telecommunications and processing charges	450		90			25.0	%	360
Postage and office supplies	145		(1		)	(0.7	)%	146
FDIC premium	222		(48		)	(17.8	)%	270
Bank shares tax expense	178		(17		)	(8.7	)%	195
Directors’ compensation	185		(7		)	(3.6	)%	192
Professional services	141		30			27.0	%	111
Other expenses	480		101			26.6	%	379
	$	5,491	$	557		11.3	%	$	4,934

The increase of $557,000 or 11.3 % in total non-interest expenses is attributable to the Bank’s growth. Specific expenses that had the greatest impact on non-interest expenses during the first nine months of 2011 included:

· higher salary and payroll tax expenses due to staff additions as a result of opening a new branch and a loan production office, and the impact of shifting executive management bonus compensation in exchange for compensation in the form of salary in the January 2011;

· increased occupancy and equipment expense are attributable to the opening of a new branch and a

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loan production office;

· higher telecommunications costs associated with the conversion to a new telephone system where additional expense was incurred as a result of early termination fees and charges associated with the need to temporarily maintain certain system redundancies;

· lower FDIC insurance premium as the result of the FDIC’s ruling to change the base assessment rate in the calculation of the premium from domestic deposits to average assets;

· increased professional services associated with higher legal costs that were related to various projects which included the implementation of a dividend reinvestment plan; the filing of a protective petition to claim tax credits relating to bank shares tax payments made in prior years; and a change in the Bank’s charter; and

· increased operating expenses attributable to growth and the need to utilize specialized outside service providers, such as a stock transfer agent, which became effective December 2010.

Provision for Federal Income Taxes

The income tax expense was $74,000 for the third quarter of 2011, an increase of $9,000 compared to $65,000 for the third quarter of 2010. For the nine months ended September 30, 2011, the tax provision was $330,000 compared to $324,000 for the nine months ended September 30, 2010. Respectively, these provisions reflect effective tax rates of approximately 18.6% for 2011 and 20.3% for 2010. Although taxable income was higher at September 30, 2011 as compared with September 30, 2010, the increased level of tax-free income in 2011 mitigated the impact of higher taxes and lowered the effective tax rate. Riverview’s effective tax rate differs from the statutory rate of 34% due to tax-exempt interest income from municipal bonds and loans, and non-taxable income from bank owned life insurance.

Financial Condition

Securities

The following table sets forth the composition of the investment security portfolio as of September 30, 2011 and December 31, 2010.

Investment Securities

(In thousands)

	September 30,		December 31,
	2011		2010
Available for Sale Securities (at fair value):
U.S. Government agencies	$	—	$	1,326
State and municipal	16,968		16,832
Mortgage-backed securities	27,151		30,538
Total	$	44,119	$	48,696

Since the year end, total investment securities have decreased as a result of maturities, repayments and sales. 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 Government National Mortgage Association (“GNMA”), the Federal National Mortgage Association (“FNMA”) or the Federal Home Loan Mortgage Corporation (“FHLMC”). Securities issued by these three 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 ability to hold the security until maturity or until the fair value recovers, and management’s opinion that it will not have to sell the securities prior to recovery of value. Riverview invests in securities for the cash flow and yields they produce and

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not to profit from trading. Riverview holds no trading securities in its portfolio, and the portfolio does not contain high risk securities or derivatives as of September 30, 2011.

Riverview’s investment in the stock of the FHLB is required for membership in the organization and is carried at cost since there is no market value available. The amount that Riverview is required to invest is based upon a formula which weighs a dependence upon the relative size of outstanding borrowings that it has with the FHLB. Excess stock was typically repurchased at par by the FHLB from Riverview if borrowings declined to a predetermined level. In late December 2008, the FHLB announced that it suspended the payment of dividends and the repurchase of current excess capital stock to preserve its capital level. That decision was based on FHLB’s analysis and consideration of certain negative market trends and the impact those trends had on its financial condition. Based upon its agreement with its member banks, the FHLB is not generally required to redeem membership stock until five years after the membership has terminated. In July 2011 the FHLB redeemed for the fourth time since October 2010, approximately 5% of current excess outstanding stock. As a result of the four separate stock redemptions, Riverview’s FHLB stock holdings have been reduced by 3,673 shares to 16,124 shares, equivalent to $1,612,000 as of September 30, 2011. Based on the financial results of the FHLB for the second quarter ended June 30, 2011, management continues to believe that the suspension of the dividend payment is temporary in nature. Management further believes that the FHLB will continue to be a primary source of wholesale liquidity for both short- and long-term funding and has concluded that its investment in FHLB stock is not other-than-temporarily impaired. Riverview continues to monitor and assess the financial condition of the FHLB on a quarterly basis.

Loans

The loan portfolio comprises the major component of Riverview’s earning assets and is the highest yielding asset category. Total loans, net of unearned income increased $12,767,000, or 7.2%, to $190,804,000 at September 30, 2011 from $178,037,000 at December 31, 2010. Most of the loan growth since the 2010 year end has been in non-owner occupied commercial real estate loans, which increased 23.8%, commercial loans, which increased 18.8%, commercial land, land development and construction loans, which increased 8.8%, home equity lines of credit, which increased 8.7%, and owner occupied commercial real estate loans, which increased 4%. These increases were offset by a 4.9% decline in consumer installment loans, a 1.9% decline in 1-4 family investment real estate loans and a 0.4% decline in residential real estate loans.

Credit Risk and Loan Quality

The following table presents non-performing loans and assets as of September 30, 2011 and December 31, 2010:

Non-Performing Assets

(Dollars in thousands)

	September 30,			December 31,
	2011			2010
Accruing loans past due 90 days	$	539		$	1,535
Non-accrual loans	3,534			2,779
Total non-performing loans	$	4,073		4,314

Foreclosed real estate	232			230
Total non-performing assets	$	4,305		$	4,544

Non-performing loans to total loans	2.13		%	2.42		%
Non-performing assets to total assets	1.49		%	1.65		%
Allowance to non-performing loans	73.24		%	68.92		%

The non-performing asset ratios presented in the table reflect some modest improvement in the credit quality of the loan portfolio since the 2010 year end. Through the first nine months of 2011, the Bank experienced a decrease of $241,000 in total non-performing loans due to a decrease of $996,000 in accruing loans past due 90 days, which offset the increase of $755,000 in non-accrual loans. The decrease in total non-performing assets as of September 30, 2011 as compared with the 2010 year end is attributable to charge-offs

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totaling $499,000 relating to commercial loans identified as impaired in prior periods for which ultimate collection became doubtful during the third quarter of 2011. Management continues to be vigilant in its efforts to minimize, identify and evaluate 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 more structured loan collection process and close monitoring of compliance with underwriting and loan to value guidelines.

Riverview had $232,000 in real estate acquired through foreclosure as of September 30, 2011 as compared to $230,000 as of December 31, 2010. The real estate consists of one residential property located in one of the communities serviced by Riverview. Riverview currently expects to sell the property with no additional loss based upon available information at this time.

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, 2011 and December 31, 2010.

(Dollars in thousands)	September 30, 2011		December 31, 2010
Loans to Lessors of:
Residential buildings and dwellings	$	37,654	$	35,232
Nonresidential buildings	25,119		21,838

Although such loans were not made to any one particular borrower or industry, it is important to note that the quality of these loans could be affected by the region’s economy and overall real estate market. Management stress tested significant exposures in these portfolios in 2010 by applying a 10% reduction in rents and determined that the loans can still generally perform as agreed. As the market for single family homes continues to be slow, demand and rental rates for rental units has been stable to increasing. Riverview’s non-residential market has not suffered the serious deterioration evident in certain other areas of the country. Absorption of inventory has been up and down quarter to quarter, with overall vacancy rates generally stable. While the level of delinquent loans in these portfolios has increased in the first nine months of 2011, no losses have been incurred, nor do impairment measurements indicate any potential for loss. As such, management does not believe that this concentration is an adverse trend to Riverview at this time.

Riverview’s lending policy is executed through the assignment of tiered loan limit authorities to individual officers of Riverview, the Loan Committee and the Board of Directors. Although Riverview maintains sound credit policies, certain loans may deteriorate for a variety of reasons. Riverview’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 a 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.

Allowance for Loan Losses

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, a provision of $515,000 was made to the allowance for loan losses for the nine months ended September 30, 2011 as compared with $871,000 for the nine months ended September 30, 2010. 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 determinations. Because future events affecting borrowers and collateral cannot be predicted with certainty, there can be no assurance that

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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.

Analysis of the Allowance for Loan Losses

(Dollars in thousands)

	September 30,
	2011			2010
Beginning balance	$	2,973		$	2,560
Provision for loan losses	515			871

Charge-offs:
Commercial, financial, agricultural	398			540
Real estate commercial	108			13
Real estate mortgage	6			—
Installments	2			5
Total charge-offs	514			558

Recoveries:
Commercial, financial, agricultural	9			10
Real estate mortgage	—			14
Installments	—			—
Total recoveries	9			24

Net charge-offs	505			534

Ending balance	$	2,983		$	2,897

Net charge-offs to average loans (annualized)	0.37		%	0.40		%
Allowance for loan losses to total loans	1.56		%	1.62		%

The decrease in the allowance for loan losses as a percentage of total loans as of September 30, 2011 as compared with September 30, 2010 is due to $963,000 charged off on impaired loans during this 12 month period for which a like amount had been specifically reserved. This reduction in the allowance along with higher outstanding loan balances due to growth resulted in a reduction in the allowance for loan losses as a percentage of total 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 it cannot control.

Deposits

Deposits are the major source of Riverview’s funds for lending and investing purposes. Total deposits at September 30, 2011 were $247,115,000, an increase of $9,843,000, or 4.1%, from total deposits of $237,272,000 at December 31, 2010. While noninterest bearing deposits increased $3,822,000, or 20.7% at September 30, 2011 since the 2010 year end, interest bearing deposits increased $6,021,000, or 2.8 %. As a result of a decline in interest rates, the Bank’s cost of funds associated with interest bearing deposits declined to 1.57% at September 30, 2011 from 1.91% at September 20, 2010.

Shareholders’ Equity and Capital Adequacy

At September 30, 2011, shareholders’ equity for Riverview totaled $26,603,000, an increase of $1,676,000 or 6.7%, over December 31, 2010. The increase was due to net income of $1,444,000, less the payment of dividends for $654,000, an increase of $15,000 to surplus to reflect the compensation cost associated with option grants, a decrease of $43,000 reflecting the repurchase of common stock, and an increase in the net unrealized gains on securities available for sale, which net of tax, affected equity by $914,000.

Banks are evaluated for capital adequacy through regulatory review of capital ratios. The table that follows presents the Bank’s capital ratios as determined and reported to its regulator. Tier 1 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 both the regulatory minimums and the requirements necessary for designation as a “well-capitalized” institution.

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Capital Ratios (of Bank)

	September 30, 2011		December 31, 2010		Regulatory Minimum		“Well Capitalized” Requirement
Tier 1 capital (to average assets)	9.1	%	8.4	%	4.0	%	5.0	%
Tier 1 capital (to risk-weighted assets)	14.1	%	13.8	%	4.0	%	6.0	%
Total risk-based capital (to risk-weighted assets)	15.3	%	15.0	%	8.0	%	10.0	%

During the third quarter of 2011, Riverview contributed capital of $1,500,000 to the Bank. The increase in the Bank’s respective capital ratios is the result of this transaction.

Banking laws and regulations limit the ability of the Bank to transfer cash to Riverview in the form of cash dividends, loans or advances. Regulatory approval is required if the total of all dividends declared by a national 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, 2011, $1,820,000 of undistributed earnings of the Bank, included in consolidated shareholders’ equity, was available for distribution to Riverview as dividends without prior regulatory approval.

The following presents the details of the regular and special quarterly dividends paid to shareholders during the nine months ended September 30, 2011, which reduced retained earnings by $654,000:

Declaration Date	Record Date	Date of Payment	Dividend Type	Dividend Payment per Share
2/21/2011	3/15/2011	3/31/2011	Regular	$0.08/share
2/21/2011	3/15/2011	3/31/2011	Special	$0.045/share
6/1/2011	6/16/2011	6/30/2011	Regular	$0.08/share
6/1/2011	6/16/2011	6/30/2011	Special	$0.045/share
9/7/2011	9/21/2011	9/30/2011	Regular	$0.08/share
9/7/2011	9/21/2011	9/30/2011	Special	$0.045/share

During March 2011, Riverview approved and implemented a Dividend Reinvestment and Stock Purchase Plan (the “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. 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 Plan are only made in open market or privately negotiated transactions (or a combination of both) and are administered by Riverview’s transfer agent. Riverview will not offer or sell any of its treasury shares or authorized but unissued shares to the Plan, and, therefore, will not receive any proceeds from the purchase of common stock by the Plan.

Off-Balance Sheet Arrangements

Riverview 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, 2011, Riverview had unfunded outstanding commitments to extend credit of $32,019,000 and outstanding letters of credit of $2,143,000. 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 11 of the 2010 Consolidated Financial Statements for a discussion of the nature, business purpose and importance of Riverview’s off-balance sheet arrangements.

Liquidity

Liquidity refers to Riverview’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.

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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 $36,435,000 at September 30, 2011, which was $5,964,000 higher than the $30,471,000 that was outstanding at December 31, 2010. While liquidity sources generated from assets include scheduled and prepayments of principle and interest from securities and loans in Riverview’s portfolios, longer-term liquidity needs may be met by selling securities available-for-sale, selling loans or raising additional capital. At September 30, 2011, unpledged available-for-sale securities with a carrying value of $15,679,000 were readily available for liquidity purposes as compared with $21,298,000 at December 31, 2010. This decrease was attributable to an increase in the amount of investment securities that needed to be pledged as a result of an increase in public fund deposits.

On the liability side, the primary source of funds available to meet liquidity needs is to attract deposits at competitive rates. The Bank’s core deposits, which exclude certificates of deposit over $250,000, were $242,939,000 at September 30, 2011 as compared to $226,608,000 at December 31, 2010. Core deposits have historically provided a source of relatively stable and low cost liquidity, as has also been the case for securities sold under agreements to repurchase. Short-term and long-term borrowings utilizing the federal funds line and credit facility established with a correspondent financial institution and the FHLB are also considered to be reliable sources for funding. As of September 30, 2011, Riverview has access to three formal borrowing lines totaling $86,126,000 with the aggregate amount outstanding on these lines totaling $12,179,000.

There are a number of factors that may impact Riverview’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, 2011 is 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 inability to meet anticipated or unexpected needs.

Inflation

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 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 assets. Inflation may also affect the level of interest rates in the general market, which in turn can affect Riverview’s profitability and the market value of assets held. Riverview actively manages its interest rate sensitive assets and liabilities countering the effects of inflation.

Recent Developments

Dodd-Frank Wall Street Reform and Consumer Protection Act.

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) was signed into law. Dodd-Frank is intended to effect a fundamental restructuring of federal banking regulation. Among other things, Dodd-Frank creates a new Financial Stability Oversight Council to identify systemic risks in the financial system and gives federal regulators new authority to take control of and liquidate financial firms. Dodd-Frank additionally creates a new independent federal regulator to administer federal consumer protection

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laws. Dodd-Frank is expected to have a significant impact on our business operations as its provisions take effect. It is difficult to predict at this time what specific impact Dodd-Frank and the yet to be written implementing rules and regulations will have on community banks. However, it is expected that at a minimum they will increase our operating and compliance costs and could increase our interest expense. Among the provisions that are likely to affect us are the following:

Holding Company Capital Requirements. Dodd-Frank requires the Federal Reserve to apply consolidated capital requirements to bank holding companies that are no less stringent than those currently applied to depository institutions. Under these standards, trust preferred securities will be excluded from Tier 1 capital unless such securities were issued prior to May 19, 2010 by a bank holding company with less than $15 billion in assets. Dodd-Frank additionally requires that bank regulators issue countercyclical capital requirements so that the required amount of capital increases in times of economic expansion and decreases in times of economic contraction, consistent with safety and soundness.

Deposit Insurance. Dodd-Frank permanently increases the maximum deposit insurance amount for banks, savings institutions and credit unions to $250,000 per depositor, and extends unlimited deposit insurance to non-interest bearing transaction accounts through December 31, 2012. Dodd-Frank also broadens the base for FDIC insurance assessments. Assessments will now be based on the average consolidated total assets less tangible equity capital of a financial institution. Dodd-Frank requires the FDIC to increase the reserve ratio of the Deposit Insurance Fund from 1.15% to 1.35% of insured deposits by 2020 and eliminates the requirement that the FDIC pay dividends to insured depository institutions when the reserve ratio exceeds certain thresholds. Effective one year from the date of enactment, Dodd-Frank eliminates the federal statutory prohibition against the payment of interest on business checking accounts.

Corporate Governance. Dodd-Frank requires publicly traded companies to give stockholders a non-binding vote on executive compensation at least every three years, a non-binding vote regarding the frequency of the vote on executive compensation at least every six years, and a non-binding vote on “golden parachute” payments in connection with approvals of mergers and acquisitions unless previously voted on by shareholders. The SEC has finalized the rules implementing these requirements which took effect on January 21, 2011. Additionally, Dodd-Frank directs the federal banking regulators to promulgate rules prohibiting excessive compensation paid to executives of depository institutions and their holding companies with assets in excess of $1.0 billion, regardless of whether the company is publicly traded. Dodd-Frank also gives the SEC authority to prohibit broker discretionary voting on elections of directors and executive compensation matters.

Prohibition Against Charter Conversions of Troubled Institutions. Effective one year after enactment, Dodd-Frank prohibits a depository institution from converting from a state to federal charter or vice versa while it is the subject of a cease and desist order or other formal enforcement action or a memorandum of understanding with respect to a significant supervisory matter unless the appropriate federal banking agency gives notice of the conversion to the federal or state authority that issued the enforcement action and that agency does not object within 30 days. The notice must include a plan to address the significant supervisory matter. The converting institution must also file a copy of the conversion application with its current federal regulator which must notify the resulting federal regulator of any ongoing supervisory or investigative proceedings that are likely to result in an enforcement action and provide access to all supervisory and investigative information relating thereto.

Interstate Branching. Dodd-Frank authorizes national and state banks to establish branches in other states to the same extent as a bank chartered by that state would be permitted. Previously, banks could only establish branches in other states if the host state expressly permitted out-of-state banks to establish branches in that state. Accordingly, banks will be able to enter new markets more freely.

Limits on Interstate Acquisitions and Mergers. Dodd-Frank precludes a bank holding company from engaging in an interstate acquisition — the acquisition of a bank outside its home state — unless the bank holding company is both well capitalized and well managed. Furthermore, a bank may not engage in an interstate merger with another bank headquartered in another state unless the surviving institution will be well capitalized and well managed. The previous standard in both cases was adequately capitalized and adequately managed.

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Limits on Interchange Fees. Dodd-Frank amends the Electronic Fund Transfer Act to, among other things, give the Federal Reserve the authority to establish rules regarding interchange fees charged for electronic debit transactions by payment card issuers having assets over $10 billion and to enforce a new statutory requirement that such fees be reasonable and proportional to the actual cost of a transaction to the issuer.

Consumer Financial Protection Bureau. Dodd-Frank creates a new, independent federal agency called the Consumer Financial Protection Bureau (“CFPB”), which is granted broad rulemaking, supervisory and enforcement powers under various federal consumer financial protection laws, including the Equal Credit Opportunity Act, Truth in Lending Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Act, the Consumer Financial Privacy provisions of the Gramm-Leach-Bliley Act and certain other statutes. The CFPB will have examination and primary enforcement authority with respect to depository institutions with $10 billion or more in assets. Smaller institutions will be subject to rules promulgated by the CFPB but will continue to be examined and supervised by federal banking regulators for consumer compliance purposes. The CFPB will have authority to prevent unfair, deceptive or abusive practices in connection with the offering of consumer financial products. Dodd-Frank authorizes the CFPB to establish certain minimum standards for the origination of residential mortgages including a determination of the borrower’s ability to repay. In addition, Dodd-Frank will allow borrowers to raise certain defenses to foreclosure if they receive any loan other than a “qualified mortgage” as defined by the CFPB. Dodd-Frank permits states to adopt consumer protection laws and standards that are more stringent than those adopted at the federal level and, in certain circumstances, permits state attorneys general to enforce compliance with both the state and federal laws and regulations.

Small Business Jobs Act

The Small Business Jobs Act was signed into law on September 27, 2010, which creates a $30 billion Small Business Lending Fund (the “Fund”) to provide community banks with capital to increase small business lending. Generally, bank holding companies with assets equal to or less than $10 billion are eligible to apply for and receive a capital investment from the Fund in an amount equal to 3-5% of its risk-weighted assets.

The capital investment will take the form of preferred stock carrying a 5% dividend which has the potential to decrease to as low as 1% if the participant sufficiently increases its small business lending within the first two and one-half years. If the participant does not increase its small business lending at least 2.5% in the first two and one-half years, the dividend rate will increase to 7%. After four and one-half years, the dividend will increase to 9% regardless of the participant’s small business lending. The deadline to apply to receive capital under the fund was May 16, 2011. Whether the Fund will help spur the economy by increasing small business lending or strengthening the capital position of community banks is uncertain. Riverview did not participate in this program.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A smaller reporting company is not required to provide the information relating to this item.

I TEM 4T. CONTROLS AND PROCEDURES

Riverview’s 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 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, 2011, pursuant to Exchange Act Rule 15d-15. Based upon that evaluation, the Chief Executive Officer along with the Chief Financial Officer (Principal Accounting Officer) concluded that Riverview’s disclosure controls and procedures as of September 30, 2011, are effective in timely alerting them to material information relating to Riverview that is required to be in Riverview’s periodic filings under the Exchange Act.

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There have been no changes in Riverview’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 internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

Not required for smaller reporting companies.

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

The following table provides information on repurchases by Riverview of its common stock in each month for the quarter ended September 30, 2011:

	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publically Announced Plans or Programs (1)	Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (1)

July 1-31, 2011	600	$	13.88	600	78,563
August 1-31, 2011	200	$	13.34	200	78,363
September 1-30, 2011	100	$	13.40	100	78,263
Total	900	$	13.70	900	78,263

(1) On March 9, 2011, Riverview announced that it had reaffirmed its Stock Repurchase program to repurchase up to 4.9% of its outstanding common stock. These shares are purchased in open market or privately negotiated transactions at prevailing market prices from time to time over a twelve-month period depending upon market conditions and other factors including any blackout periods during which the corporation and its insiders may be prohibited from trading in the corporation’s common stock. During the nine months ended September 30, 2011, 3,400 shares were purchased under this program.

Item 3. Defaults upon Senior Securities

Nothing to report.

Item 4. (Removed and Reserved).

Item 5. Other Information

Nothing to report.

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Item 6. Exhibits.

3(i) The Registrant’s Articles of Incorporation. (Incorporated by reference to Annex B included in Riverview’s Amendment No. 2 to Registration Statement on Form S-4 (Registration No. 333-153486) filed November 4, 2008).

3(ii) The Registrant’s By-laws. (Incorporated by reference to Exhibit 3.2 of Riverview’s current report on Form 8-K filed April 7, 2011.)

10.1 Amended and Restated Executive Employment Agreement of Robert M. Garst. (Incorporated by reference to Exhibit 10.1 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on April 10, 2009.)

10.2 Amended and Restated Executive Employment Agreement of Kirk D. Fox. (Incorporated by reference to Exhibit 10.2 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on April 10, 2009.)

10.3 Employment Agreement of Theresa M. Wasko. (Incorporated by reference to Exhibit 10.3 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on April 10, 2009.)

10.4 Executive Employment Agreement of Paul B. Zwally. (Incorporated by reference to Exhibit 10.4 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on April 10, 2009.)

10.5 Employment Agreement of William L. Hummel. (Incorporated by reference to Exhibit 10.5 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on April 10, 2009.)

10.6 Acknowledgement and Release Agreement of William L. Hummel. (Incorporated by reference to Exhibit 10.6 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on April 10, 2009.)

10.7 Form of Director Deferred Fee Agreements with Directors Robert M. Garst and Kirk D. Fox. (Incorporated by reference to Exhibit 10.7 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on April 10, 2009.)

10.8 2009 Stock Option Plan. (Incorporated by reference to Exhibit 10.8 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on April 10, 2009.)

10.9 Second Amendment to the Supplemental Executive Retirement Agreement Plan Agreement for Kirk D. Fox dated March 29, 2007, amended June 18, 2008 and entered into between Kirk D. Fox and Riverview National Bank on September 2, 2009. (Incorporated by reference to Exhibit 10.11 to Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009 as filed with the Securities and Exchange Commission on November 12, 2009.)

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10.10 Director Emeritus Agreement of Paul Reigle, dated May 19, 2010. (Incorporated by reference to Exhibit 10.12 of Registrant’s Form 10-Q as filed with the Securities and Exchange Commission on August 9, 2010.)

10.11 Director Emeritus Agreement of Roland Alexander, dated August 30, 2011.

10.12 Executive Deferred Compensation Agreement of Kirk Fox. (Incorporated by reference to Exhibit 99.1 of Registrant’s Form 8-K as filed with the Securities and Exchange Commission on July 1, 2010.)

10.13 First Amendment to the Executive Deferred Compensation Agreement of Kirk Fox.

10.14 First Amendment to the Director Deferred Compensation Agreement of Robert M. Garst.

10.15 First Amendment to the Director Deferred Compensation Agreement of Kirk Fox.

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 Interactive Data File (XBRL) furnished herewith.

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SIGNATURES

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.

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

	Date:	November 10, 2011


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

	Date:	November 10, 2011

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EXHIBIT INDEX

3(ii) The Registrant’s By-laws. (Incorporated by reference to Exhibit 3.2 of Riverview’s current report on Form 8-K filed April 7, 2011.)

10.11 Director Emeritus Agreement of Roland Alexander, dated August 30, 2011.

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10.13 First Amendment to the Executive Deferred Compensation Agreement of Kirk Fox.

10.14 First Amendment to the Director Deferred Compensation Agreement of Robert M. Garst.

10.15 First Amendment to the Director Deferred Compensation Agreement of Kirk Fox.

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 Interactive Data File (XBRL) furnished herewith.

EXHIBIT 10.11

RIVERVIEW NATIONAL BANK

DIRECTOR EMERITUS AGREEMENT

THIS AGREEMENT is made this 30 th day of August, 2011, by and between RIVERVIEW NATIONAL BANK , a national bank located in Marysville, Pennsylvania (the “Bank”), and Roland Alexander, (the “Director”), to be effective , August 30, 2011.

INTRODUCTION

To promote orderly succession of the Bank’s Board of Directors, the Bank is willing to provide retirement benefits to the Director. The Bank will pay the retirement benefits from its general assets according to the terms of this Agreement.

AGREEMENT

The Director and the Bank agree as follows:

Article 1

Definitions

1.1 Definitions. Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

1.1.1 “Change in Control” means a change in the ownership or effective control of the Corporation or the Bank as described in Section 409A(a)(2)(A)(v) of the Code.

Notwithstanding anything else to the contrary set forth in this Agreement, if (i) an agreement is executed by the Corporation or the Bank providing for any of the transactions or events constituting a Change in Control as defined herein, and the agreement subsequently expires or is terminated without the transaction or event being consummated, and (ii) Director’s service did not terminate during the period after the agreement and prior to such expiration or termination, for purposes of this Agreement it shall be as though such agreement was never executed and no Change in Control event shall be deemed to have occurred as a result of the execution of such agreement.

1.1.2 “Code” means the Internal Revenue Code of 1986, as amended and the regulations promulgated there under.

1.1.3 “Corporation” means Riverview Financial Corporation.

1.1.4 “Disability” means the Director’s inability to perform substantially all normal duties of a director, provided such disability complies with the definition provided under Code Section 409A. As a condition to receiving any benefits, the Bank may require the Director to submit to such physical or mental evaluations and tests as the Board of Directors deems appropriate.

1.1.5 “Final Fee” means the Director’s annualized Board fee in the year of Termination of Service as a Director of the Bank.

1.1.6 “Termination of Service” means the Director’s ceasing to be a member of the Bank’s Board of Directors for any reason other than death, provided such termination of service complies with the definition of termination of service under Code Section 409A.

Article 2

Lifetime Benefits

2.1 Director Emeritus Benefit . Upon Termination of Service on or after age 65, provided the Director has 10 or more years of continuous service at the date of termination and is willing to provide the ongoing services described in Section 2.1.3, the Bank shall pay to the Director the benefit described in this Section 2.1 in lieu of any other benefit under this Agreement.

2.1.1 Amount of Benefit . The annual Director Emeritus Benefit under his Section 2.1 is a percentage of the Director’s Final Fee based on the distribution period elected by the Director in Exhibit A. The Bank may increase the annual benefit under this Section 2.1 at the sole and absolute discretion of the Bank’s Board of Directors.

2.1.2 Payment of Benefit . The Bank shall pay the annual benefit to the Director in 12 equal monthly installments payable on the first day of each month commencing with the month following the Director’s Termination of Service and payable for the number of months specified in Exhibit A.

2.1.3 Contingencies . The benefit payments described in Section 2.1 are contingent on the Director (i) electing to become a Director Emeritus, (ii) being available to the Board for advice and consultation when called upon, (iii) continuing to act as a “Goodwill Ambassador” for the Bank, and (iv) avoiding any competitive arrangement (see Section 5.3) which is contrary to the best interests of the Bank. The Bank’s request for the Director’s time and service must be reasonable in nature and amount.

2.2 Disability Benefit . If the Director terminates service due to Disability prior to age 65, the Bank shall pay to the Director the benefit described in Section 2.1 in lieu of any other benefit under this Agreement, except that only item (iv) of Section 2.1.3 shall apply.

2.3 Change in Control Benefit . If the Director is in the active service as a Director or a Director Emeritus of the Bank at the time of a Change in Control, the Bank shall pay to the Director the benefit described in Section 2.1 in lieu of any other benefit under this Agreement, except that Section 2.1.3 shall not apply.

Article 3

Death Benefits

3.1 Death During Active Service . If the Director dies after electing to become a Director Emeritus but before benefit payments have commenced, the Bank shall pay to the Director’s beneficiary the benefit described in this Section 3.1. This benefit shall be paid in lieu of the Lifetime Benefits of Article 2.

3.1.1 Amount of Benefit . The annual benefit under this Section 3.1 is a percentage of the Director’s Final Fee based on the distribution period elected by the Director in Exhibit A.

3.1.2 Payment of Benefit . The Bank shall pay the annual benefit to the beneficiary in 12 equal monthly installments payable on the first day of each month commencing within 60 days of the Director’s death and payable for the number of months specified in Exhibit A.

3.2 Death During Benefit Period . If the Director dies after the benefit payments have commenced under this Agreement but before receiving all 120 payments, the Bank shall pay the remaining benefits to the Director’s beneficiary at the same time and in the same amounts they would have been paid to the Director had the Director survived.

Article 4

Beneficiaries

4.1 Beneficiary Designations . The Director shall designate a beneficiary by filing a written designation with the Bank. The Director may revoke or modify the designation at any time by filing a new designation. However, designations will only be effective if signed by the Director and accepted by the Bank during the Director’s lifetime. The Director’s beneficiary designation shall be deemed automatically revoked if the beneficiary predeceases the Director, or if the Director names a spouse as beneficiary and the marriage is subsequently dissolved. If the Director dies without a valid beneficiary designation, all payments shall be made to the Director’s estate.

4.2 Facility of Payment . If a benefit is payable to a minor, to a person declared incompetent or to a person incapable of handling the disposition of his or her property, the Bank may pay such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Bank may require proof of incompetency, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Such distribution shall completely discharge the Bank from all liability with respect to such benefit.

Article 5

General Limitations

Notwithstanding any provision of this Agreement to the contrary, the Bank shall not pay any benefit under this Agreement:

5.1 Excess Parachute or Golden Parachute Payment . To the extent the benefit would be an excess parachute payment under Section 280G of the Code or would be a prohibited golden parachute payment pursuant to 12 C.F.R. §359.2 and for which the appropriate federal banking agency has not given written consent to pay pursuant to 12 C.F.R. §359.4.

5.2 Termination for Cause . If the Bank terminates the Director’s service for:

5.2.1 Gross negligence or gross neglect of duties;

5.2.2 Commission of a felony or of a gross misdemeanor involving moral turpitude; or

5.2.3 Fraud, disloyalty, dishonesty or willful violation of any law or significant Bank policy committed in connection with the Director’s service and resulting in an adverse effect on the Bank.

5.3 Removal . If the Director is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.

5.4 Competition After Termination of Service . If the Director, without the prior written consent of the Bank, engages in, becomes interested in, directly or indirectly, as a sole proprietor, as a partner in a partnership, or as a substantial shareholder in a corporation, or becomes associated with, in the capacity of employee, director, officer, principal, agent, trustee or in any other capacity whatsoever, any enterprise conducted in the trading area (a 50 mile radius of the main office of the Bank), which enterprise is, or may deemed to be, competitive with any business carried on by the Corporation as of the date of termination of the Director’s service or his retirement. This section shall not apply following a Change in Control.

5.5 Suicide. If the Director commits suicide within two years after the date of this Agreement, or if the Director has made any material misstatement of fact on any application for life insurance purchased by the Bank.

Article 6

Claims and Review Procedures

6.1 Claims Procedure . The Bank shall notify any person or entity that makes a claim against the Agreement (the “Claimant”) in writing, within ninety (90) days of Claimant’s written application for benefits, of his or her eligibility or non-eligibility for benefits under the Agreement. If the Bank determines that the Claimant is not eligible for benefits or full benefits, the notice shall set forth (1) the specific reasons for such denial, (2) a specific reference to the provisions of the Agreement on which the denial is based, (3) a description of any additional information or material necessary for the Claimant to perfect his or her claim, and a description of why it is needed, and (4) an explanation of the Agreement’s claims review procedure and other appropriate information as to the steps to be taken if the Claimant wishes to have the claim reviewed. If the Bank determines that there are special circumstances requiring additional time to make a decision, the Bank shall notify the Claimant of the special circumstances and the date by which a decision is expected to be made, and may extend the time for up to an additional ninety-day period.

6.2 Review Procedure . If the Claimant is determined by the Bank not to be eligible for benefits, or if the Claimant believes that he or she is entitled to greater or different benefits, the Claimant shall have the opportunity to have such claim reviewed by the Bank by filing a petition for review with the Bank within sixty (60) days after receipt of the notice issued by the Bank. Said petition shall state the specific reasons which the Claimant believes entitle him or her to benefits or to greater or different benefits. Within sixty (60) days after receipt by the Bank of the petition, the Bank shall afford the Claimant (and counsel, if any) an opportunity to present his or her position to the Bank orally or in writing, and the Claimant (or counsel) shall have the right to review the pertinent documents. The Bank shall notify the Claimant of its decision in writing within the sixty-day period, stating specifically the basis of its decision, written in a manner calculated to be understood by the Claimant and the specific provisions of the Agreement on which the decision is based. If, because of the need for a hearing, the sixty-day period is not sufficient, the decision may be deferred for up to another sixty-day period at the election of the Bank, but notice of this deferral shall be given to the Claimant.

Article 7

Amendments and Termination

This Agreement may be amended or terminated only by a written agreement signed by the Bank and the Director, except as specified in Article 5.

Article 8

Miscellaneous

8.1 Binding Effect . This Agreement shall bind the Director and the Bank, and their beneficiaries, survivors, executors, successors, administrators and transferees.

8.2 No Guarantee of Service . This Agreement does not give the Director the right to remain a member of the Bank’s Board of Directors, nor does it interfere with the Bank’s right to terminate the service of the Director. It also does not interfere with the Director’s right to terminate his or her service at any time.

8.3 Non-Transferability . Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

8.4 Tax Withholding . The Bank shall withhold any taxes that are required to be withheld from the benefits provided under this Agreement.

8.5 Applicable Law . The Agreement and all rights hereunder shall be governed by the laws of the Commonwealth of Pennsylvania, except to the extent preempted by the laws of the United States of America. This Agreement shall also be interpreted as is minimally required to qualify any payment hereunder as not triggering any penalty on the Director pursuant to Code Section 409A and the regulations promulgated there under.

8.6 Unfunded Arrangement . The Director and beneficiary are general unsecured creditors of the Bank for the payment of benefits under this Agreement. The benefits represent the mere promise by the Bank to pay such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Director’s life is a general asset of the Bank to which the Director and beneficiary have no preferred or secured claim.

8.7 Recovery of Estate Taxes . If the Director’s gross estate for federal estate tax purposes includes any amount determined by reference to and on account of this Agreement, and if the beneficiary is other than the Director’s estate, then the Director’s estate shall be entitled to recover from the beneficiary receiving such benefit under the terms of the Agreement, an amount by which the total estate tax due by the Director’s estate, exceeds the total estate tax which would have been payable if the value of such benefit had not been included in the Director’s gross estate. If there is more than one person receiving such benefit, the right of recovery shall be against each such person. In the event the beneficiary has a liability hereunder, the beneficiary may petition the Bank for a lump sum payment in an amount not to exceed the beneficiary’s liability hereunder.

8.8 Entire Agreement . This Agreement constitutes the entire agreement between the Bank and the Director as to the subject matter hereof. No rights are granted to the Director by virtue of this Agreement other than those specifically set forth herein.

8.9 Administration . The Bank shall have powers which are necessary to administer this Agreement, including but not limited to:

8.9.1 Interpreting the provisions of this Agreement;

8.9.2 Establishing and revising the method of accounting for the Agreement;

8.9.3 Maintaining a record of benefit payments; and

8.9.4 Establishing rules and prescribing any forms necessary or desirable to administer the Agreement.

8.10 Named Fiduciary . The Bank shall be the named fiduciary and plan administrator under this Agreement. The named fiduciary may delegate to others certain aspects of the management and operation responsibilities of the plan including the service of advisors and the delegation of ministerial duties to qualified individuals.

IN WITNESS WHEREOF, the Director and a duly authorized Bank officer have signed this Agreement.

	BANK:
ATTEST:	RIVERVIEW NATIONAL BANK

/s/ Kirk D. Fox	By	/s/ Robert M. Garst

	Title	Chief Executive Officer

	Date	August 30, 2011

By execution hereof, Riverview National Corporation, consents to and agrees to be bound by the terms and conditions of this Agreement.

ATTEST:	CORPORATION:
	RIVERVIEW NATIONAL
	CORPORATION

/s/ Kirk D. Fox	By	/s/ Robert M. Garst

	Title	Chief Executive Officer

	Date	August 30, 2011


WITNESS:	DIRECTOR:


/s/ Theresa M. Wasko	/s/ Kimberly Alexander POA Roland Alexander

EXHIBIT 10.13

FIRST AMENDMENT

TO THE

RIVERVIEW NATIONAL BANK

EXECUTIVE DEFERRED COMPENSATION AGREEMENT

DATED JUNE 30, 2010

FOR

KIRK FOX

THIS FIRST AMENDMENT is entered into this 30 th day of August, 2011, by and between RIVERVIEW NATIONAL BANK, a nationally chartered commercial bank located in Marysville, Pennsylvania (the “Bank”), and KIRK FOX (the “Executive”).

The Bank and the Executive executed the Executive Deferred Compensation Agreement effective as of June 30 th , 2010 (the Agreement) and

Pursuant to Article 3, the undersigned hereby amend the Agreement for the purpose of changing the crediting rate earned before distribution. Therefore, the following changes shall be made:

Section 3.1(b)(i) of the Agreement shall be deleted in its entirety and replaced by the following:

3.1(b)(i) The interest rate will be declared annually by the Board of Directors. For plan year 2010, the declared rate is 5.49% (30-year A-rated corporate bond index for December 31, 2009). The declared interest rate for plan year 2011 is 8.00%. For plan years 2012 and beyond, the interest rate will be determined by the Board of Directors annually. Interest shall be credited on the last day of each month and immediately prior to the distribution of any benefits, but only until commencement of benefit distributions under this agreement.

IN WITNESS OF THE ABOVE , the Bank and the Executive hereby consent to this First Amendment.

Executive:	Bank:

	RIVERVIEW NATIONAL BANK

/s/ Kirk Fox	By:	/s/ Robert M. Garst
KIRK FOX	Title:	CEO

EXHIBIT 10.14

FIRST AMENDMENT

TO THE

RIVERVIEW NATIONAL BANK

DIRECTOR DEFERRED COMPENSATION AGREEMENT

DATED DECEMBER 31, 2008

FOR

ROBERT M. GARST

THIS FIRST AMENDMENT is entered into this 13 th day of September, 2011, by and between RIVERVIEW NATIONAL BANK, a nationally chartered commercial bank located in Marysville, Pennsylvania (the “Bank”), and ROBERT M. GARST (the “Director”).

The Bank and the Director executed the Director Deferred Compensation Agreement effective as of December 31, 2008 (the Agreement) and

Pursuant to Article 3, the undersigned hereby amend the Agreement for the purpose of changing the crediting rate earned before distribution. Therefore, the following changes shall be made:

Section 3.1.2 of the Agreement shall be deleted in its entirety and replaced by the following:

3.1.2 The interest rate will be declared annually by the Board of Directors beginning in 2010. For plan year 2010, the declared rate is 7.50%. The declared interest rate for plan year 2011 is 5.25%. For plan years 2012 and beyond, the interest rate will be determined by the Board of Directors annually. Interest shall be credited on the last day of each month and immediately prior to the distribution of any benefits.

IN WITNESS OF THE ABOVE , the Bank and the Executive hereby consent to this First Amendment.

Director:	Bank:

	RIVERVIEW NATIONAL BANK

/s/ Robert M. Garst	By:	/s/ Theresa M. Wasko
ROBERT M. GARST	Title:	CFO

EXHIBIT 10.15

FIRST AMENDMENT

TO THE

RIVERVIEW NATIONAL BANK

DIRECTOR DEFERRED COMPENSATION AGREEMENT

DATED DECEMBER 31, 2008

FOR

KIRK FOX

The Bank and the Director executed the Director Deferred Compensation Agreement effective as of December 31, 2008 (the Agreement) and

Pursuant to Article 3, the undersigned hereby amend the Agreement for the purpose of changing the crediting rate earned before distribution. Therefore, the following changes shall be made:

Section 3.1.2 of the Agreement shall be deleted in its entirety and replaced by the following:

3.1.2 The interest rate will be declared annually by the Board of Directors beginning in 2010. For plan year 2010, the declared rate is 7.50%. The declared interest rate for plan year 2011 is 8.00%. For plan years 2012 and beyond, the interest rate will be determined by the Board of Directors annually. Interest shall be credited on the last day of each month and immediately prior to the distribution of any benefits.

IN WITNESS OF THE ABOVE , the Bank and the Executive hereby consent to this First Amendment.

Director:	Bank:

	RIVERVIEW NATIONAL BANK

/s/ Kirk Fox	By:	/s/ Robert M. Garst
KIRK FOX	Title:	CEO

EXHIBIT 31.1

CERTIFICATION

I, Robert M. Garst certify that:

1. I have reviewed this report on Form 10-Q of Riverview Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 10, 2011	By:	/s/ Robert M . Garst
			Robert M. Garst
			Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION

I, Theresa M. Wasko certify that:

1. I have reviewed this report on Form 10-Q of Riverview Financial Corporation;

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 10, 2011	By:	/s/ Theresa M. Wasko
			Theresa M. Wasko
			Chief Financial Officer

EXHIBIT 32.1

CHIEF EXECUTIVE OFFICER

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code), I, Robert M. Garst, Chief Executive Officer of Riverview Financial Corporation (the “Company”), hereby certify that, to the best of my knowledge, the Company’s Form 10-Q for the quarter ended September 30, 2011 (the “Report”):

1. fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the quarter ended September 30, 2011.

Date:	November 10, 2011	By:	/s/ Robert M. Garst
			Robert M. Garst
			Chief Executive Officer

EXHIBIT 32.2

CHIEF FINANCIAL OFFICER

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code), I, Theresa M. Wasko, Chief Financial Officer of Riverview Financial Corporation (the “Company”), hereby certify that, to the best of my knowledge, the Company’s Form 10-Q for the quarter ended September 30, 2011 (the “Report”):

1. fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the quarter ended September 30, 2011.

Date:	November 10, 2011	By:	/s/ Theresa M. Wasko
			Theresa M. Wasko
			Chief Financial Officer