Riverview Financial Corporation and Union Bancorp, Inc. Announce Definitive Agreement and Plan of Consolidation

Fri, 08 Mar 2013, 13:17:07 EDT Edited by Christopher L Simmons

MARYSVILLE, Pa., March 8, 2013 (SEND2PRESS NEWSWIRE) -- Riverview Financial Corporation ("Riverview") (OTCQB: RIVE), the holding company for Riverview Bank, and Union Bancorp, Inc. ("Union") (OTCQB: UBPT), the holding company for Union Bank and Trust Company, jointly announced today that they have signed a definitive agreement to consolidate their respective holding companies and merge their bank subsidiaries. The resulting bank is anticipated to have approximately $450 million in total assets and will operate under the name of Riverview Bank, and its operating divisions, Halifax Bank, Marysville Bank, and Riverview Financial Wealth Management.

Under the terms of the definitive agreement, unanimously approved by the boards of directors of each company, Riverview and Union will consolidate to form a new holding company that will do business under the Riverview name. The shareholders of Union will receive 1.95 shares of common stock of the newly created holding company for each share of Union common stock that they own, and the shareholders of Riverview will receive 1.00 shares of common stock of the new holding company for each share of Riverview common stock that they own. As a result of the transaction, Union's shareholders are expected to own approximately 36 percent of the combined company, and Riverview's shareholders are expected to own approximately 64 percent.

The agreement contains customary provisions that limit the ability of Union to terminate the Agreement in order to pursue a competing transaction and a requirement that Union pay a break-up fee to Riverview in certain events. The transaction is expected to close in the third quarter of 2013, subject to receipt of regulatory approvals, the approval of the shareholders of each institution and satisfaction of other customary closing conditions.

Robert M. Garst will serve as the CEO, and Kirk D. Fox will serve as the President, of the new holding company. The Board of the resulting holding company will initially consist of sixteen members, eleven from the existing Riverview board and five from the existing board of Union Bancorp.

Due to identical operating systems and common operating methodologies, the companies currently expect substantial cost savings resulting from this transaction, along with meaningful synergies after the effective date.

In jointly announcing this transaction, Robert M. Garst, Chief Executive Officer of Riverview Financial Corp., and Mark F. Ketch, Chief Executive Officer of Union Bancorp, Inc., stated that "By combining the strengths of our companies, we are creating an institution with significantly greater scale, opportunity, and potential to generate additional value for shareholders, customers, communities and employees. We believe there are exceptional synergies that can be achieved as a result of this combination." Both executives noted that a larger entity is better positioned to effectively compete and address the continuing pressure on net interest margin and growing compliance related expenses associated with increasing regulation.

Garst explained "Given the current trends in the financial services industry, it is critically important to secure solid partnerships to continue to thrive in this era of increasing earnings pressure. Both Boards of Directors firmly believe this combination will enhance shareholder value through improved earnings and the opportunity for increased dividends and common stock liquidity. We anticipate our combined entity can offer more diverse and progressive services and products, and create substantial cost efficiencies beyond what either company could achieve standing alone. This transaction is possible because both Boards of Directors and management teams share the same strategic vision and culture that emphasizes customer service and local decision making as methods of enhancing shareholder value."

Garst went on to point out that "this is an 'in-market' merger with very limited office overlap, creating enhanced market share position and an expanded retail office network for both existing and new customers within existing markets." Ketch agreed, stating that "Union Bank has a significant and meaningful legacy within its current market. This combination allows us to build upon the rich history of the Union franchise while allowing us to remain focused on the communities we serve."

Ambassador Financial Group, Inc. served as financial advisor to Riverview Financial, and Barley Snyder, LLP served as its legal counsel. Keefe, Bruyette & Woods, Inc. served as financial advisor to Union, and Rhoads & Sinon, LLP served as its legal counsel.

About Riverview Financial Corporation:
Riverview Financial Corporation is the parent company of Riverview Bank, a community bank currently operating 10 full service banking offices in Dauphin, Cumberland, Schuylkill, and Perry Counties, and 1 dedicated wealth management office in Schuylkill County.

About Union Bancorp, Inc.:
Union Bancorp, Inc. is the parent company of Union Bank and Trust Company, which operates 6 full service banking offices and 1 dedicated trust and commercial banking office in Schuylkill and Northumberland Counties.

Additional Information About the Transaction:
Riverview and Union intend to file with the Securities and Exchange Commission ("SEC") a joint proxy statement/prospectus and other relevant materials in connection with the consolidation. The joint proxy statement/prospectus will be mailed to the shareholders of Riverview and Union. The joint proxy statement/prospectus and other relevant materials (when they become available) filed with the SEC may be obtained free of charge at the SEC's website at http://www.sec.gov .

Shareholders are urged to read the joint proxy statement/prospectus and the other relevant materials when they become available before voting on the consolidation. The foregoing description of the definitive agreement and the transactions contemplated thereby is not complete and is subject to and qualified in its entirety by reference to the definitive agreement which will be included in the joint proxy statement/prospectus. The definitive agreement is not intended to provide any other factual information about Riverview, Union, or any of their respective subsidiaries and affiliates. The representations, warranties and covenants contained in the definitive agreement were made only for purposes of that agreement and as of specific dates, were solely for the benefit of the parties to the agreement, may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of Riverview, Union, or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the agreement, which subsequent information may or may not be fully reflected in public disclosures by Riverview or Union.

Riverview, Union and their respective directors, executive officers and certain other members of management and employees may be deemed "participants" in the solicitation of proxies from shareholders of Riverview and Union in favor of the consolidation. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the shareholders of Riverview and Union in connection with the proposed consolidation will be set forth in the joint proxy statement/prospectus when it is filed with the SEC.

This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors which include, but are not limited to, factors that will be discussed in the proxy statement/prospectus. Such factors include the possibility that the proposed transaction may not be completed, anticipated cost savings may not be realized, estimated synergies may not occur, increased demand or prices for the combined companies' financial services and products may not occur, technological developments, ineffectiveness of business strategy due to changes in current or future market conditions; the effects of changes in laws and regulations on competition, including industry consolidation and development of competing financial products and services; interest rate movements; difficulties in integrating distinct business operations, including information technology difficulties; disruption from the transaction making it more difficult to maintain relationships with customers and employees, and challenges in establishing and maintaining operations in new markets; volatilities in the securities markets; and deteriorating economic conditions. Neither Riverview nor Union undertakes, and both specifically disclaim, any obligation to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of one or both of them.

Riverview Financial Corporation, 200 North Front Street, Marysville, PA 17053.

Union Bancorp, Inc., 25 South Centre Street, Pottsville, PA 17901.

TICKER REF: PINK:RIVE / PINK:UBPT .

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