Good morning, and welcome to the Midpen Bancorp and Riverview Merger Transaction Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Rory Retrievy, President and Chief Executive Officer of Mid Penn Bancorp.
Please go ahead, sir.
Thank you, Rocco, and good morning to everyone joining our investor call to discuss the combination of Midpen Bancorp, Inc. And Riverview Financial Corporation. With me this morning is Michael Peduzzi, Senior Executive Vice President and Chief Financial Officer of Mid Penn Bancorp and Justin Webb, Senior Executive Vice President and Chief Operating Officer of Mid Bend Bancorp. Before I begin my remarks, I would like Mike Fadougie to read our Safe Harbor statement.
Thank you, Rory. Please note that our discussions today will include information about management's view of future expectations, plans and prospects that constitute forward looking statements. Actual results may differ materially from historical results or those indicated by these forward looking statements due to risks and uncertainties. We do not assume any obligation to update any forward looking statements as a result of new information or otherwise, except as may be required by law. Please note that the presentation and Safe Harbor statements are also available on our website, www.midpennbank.com.
All comments made during today's call are subject to that Safe Harbor statement. The investor presentation and our press release regarding this combination, which were both issued yesterday after the close of markets, can be found on our Investor Relations section of our website. Thanks for your time today, and I'll turn the discussion back over to Rourke.
Thank you, Mike. And again, let me thank everyone for joining us on the call today. We are very excited to announce our combination with Riverview this morning. Prior to providing a few thoughts on the strategic rationale and financial impact of this opportunity, I wanted to share some perspective. As you may know, we recently completed a $75, 000, 000 common stock raise, and as part of that process, we outlined to investors several strategic priorities, including gaining additional market share in our markets, continuing our strong organic loan growth, and of course taking advantage of opportunistic M and A.
Since our last M and A transaction, which was an acquisition of First Priority Financial in 2018, we have been duly focused on successfully integrating that acquisition and growing our combined markets organically. Our success has been evidenced most recently by the PPP loans that Mid Penn Bank was able to produce with over $1, 000, 000, 000 in originations with a large portion of those coming from the Southeastern Pennsylvania market acquired as part of the First Priority transaction. Since the First Priority announcement, we often stated that our focus was on realizing the significant organic opportunity in front of us and that we would only consider a bank M and A opportunity that was both strategically and financially compelling. Riverview is that opportunity for us. Please turn to or we'll go to Page 3 of the presentation.
You can see that this creates an approximate $4, 700, 000, 000 asset size bank and further strengthens our position as the top ranked community bank by deposit market share in the Harrisburg MSA. While achieving scale is important, that was not the only compelling reason for this opportunity. Riverview expands our footprint into the dynamic markets of the Lehigh Valley and the State College area, while providing highly attractive core deposits in the stable, non metro markets west of Harrisburg. It was not that long ago that interest rates were rising and banks were clamoring for low cost funding. We think that Riverview has an excellent and complementary core deposit franchise and if and when rates do rise, that core deposit platform will provide additional liquidity and fuel for our organic loan growth.
From a financial perspective, this accelerates our stated strategic goals of increasing profitability ratios and is projected to increase our ROA, excluding PPP income, over 1%, bring our efficiency ratio into the low 60s and increase our return on tangible equity to a level over 12%. This transaction is over 25 percent EPS accretive, and that material EPS accretion is heavily driven by substantial cost savings considering the branch and office overlap between our 2 franchises. We are very cognizant of how important tangible book value is and how that correlates to long term shareholder return. This transaction will be approximately 6.8% dilutive to our tangible book value at closing, and that is inclusive of all deal related charges. The earn back on that dilution is between 2 2.25 years, and we've calculated that both on a simple and cross methodology.
Before we go through a brief review of the model and transaction terms, I want to personally thank Brett Volk and the Riverview team for working with us over the past 2 months. It has been a pleasure, and we look forward to partnering together to realize this tremendous In the exchange ratio and consideration area, Riverview shareholders will receive 0.4833 shares of Midpen Bank Corp. Inc. Common stock for each share outstanding. This is a 100% stock consideration deal.
There is an implied per share value of $13.28 implied aggregate consideration of just under $125, 000, 000 price to tangible book value of around 128%, priced the most recent quarter annualized earnings per share, excluding cost savings, of 10.2x priced the most recent quarter annualized earnings per share including cost savings of about 5.2x and a core deposit premium of 2.8%. The pro form a ownership shows MidPen Bank maintaining 72% and the Riverview shareholders having 28%. Representatives of Riverview will receive 2 holding company Board seats. Midpen Bank and Riverview Shareholder approval is expected and needed, and we will have customary regulatory approvals that will be needed and anticipated closing in the Q4 of 2021. Turning to Page 5, This provides a nice overview of the Riverview franchise.
The franchise is focused and headquartered in the Harrisburg market. You can see there is substantial market share and presence East into the Lehigh Valley and Reading markets and West into the State College market. Riverview is a $1, 400, 000, 000 asset company with 81% loan to deposit ratio and provides additional room for the combined organization to fund organic loan growth. Page 6 really captures the quality and strength of Riverview's core deposit franchise. As part of our diligence, we spent a lot of time analyzing what happened to the Riverview core deposits during the last rising rate cycle of 2015 to early 2019.
What we found was that their deposit base was amongst the best in the industry with respect to stickiness and remaining low cost. As shown here, they have a very attractive cost of deposit funding level, actually lower than ours, and are very complementary to our deposit base in terms of non interest bearing level and overall core deposits composition. Page 7 shows the combined footprint and clearly there is significant branch overlap in the center of the franchise, but this provides new markets both east and west of the current Mid Penn footprint. This transaction definitely enhances the overall franchise from a market share and scale perspective. Midland will be the 6th largest community bank headquartered in Pennsylvania.
We would continue to remain the top ranked community bank in the Harrisburg MSA and 4th overall behind some very large regional and money center banks. As a combined company, we would be top 5 market share in 5 different counties. Notable, Riverview holds a top 3 ranking Clearfield County, which again supports the transaction rationale of acquiring a bank with a strong funding profile in a non metro stable market. I'm now going to turn it back over to Mike Carduzzi to walk through some of the model assumptions.
Thanks, Troy. If we turn to Page 8, in looking at some of the key financial assumptions, 1 of the key elements is our cost savings, synergies and potential with this transaction. So you can see that we've identified cost savings of approximately 50 percent of Riverview's non operating expenses and that's looking forward even beyond 2021 because Riverview has already started to implement some cost saving initiatives here in 2021 that would benefit them on a standalone basis beyond this year. We also anticipate that there is with some overlapping branches as well as some of their back office facilities that we would have some closures and consolidations and rationalization. Our revenue synergies are not completely fully modeled because there's a lot of overlap, but we obviously see tremendous potential for implementing Midpen's model in some of the new markets that we would be entering, including Clearfield and the State College market, as well as their loan production offices in the Lehigh Valley.
We have 1 time merger related expenses and this includes all their severance and related costs. This would also include contract termination costs and other traditional costs associated with an acquisition. For our loan mark, we're looking at about 1.9% loan mark with about 1.3.5% related to their credit mark. We were very pleased with the overall quality of their asset quality. We had our expert loan review firm go in and provide us an additional opinion on that.
And we believe that their current allowance is a reasonable estimate of what we would consider to be a credit mark for the transaction. We also see the need for an interest rate mark given the interest rate profile of their loan portfolio being slightly lower than midpens as well as market. So we would expect there would be an interest rate mark on the transaction. We do understand that with the combination and the fact we will be probably not utilizing all their facilities, there'll be marks on both their back office facilities as well as some of the branch locations. And we do again even though we will have a relatively very attractive core deposit premium of less than 5%, there will be a core deposit intangible mark that we will amortize using the same sum of the year's digits method that we've used in our previous transactions.
Turning to Page 9, whenever you when we're evaluating the prospective cost savings, you can see that there is a significant branch overlap for over 50% of Riverview's retail offices and those of mid Penn, especially in 3 regions of the combined franchise. We view this as a tremendous opportunity to both solidify our combined position in these markets while capturing branch rationalization synergies. As you know, we have been reducing our own branch footprint via closings and consolidations. We've already closed 3 and are evaluating some additional opportunities within our own network. This merger further catalyzes that opportunity to continue making the combined branch network more efficient and contributing to our going forward improved operating leverage.
The cost savings are $14, 500, 000 fully phased in and will be primarily coming from duplicative back office functions, branch overlap and some related staffing savings. At 50%, we think this is very much in line with other bank M and A deals that have a similar branch overlap as well as our own full analysis of the redundancies that may exist in both the markets and the back office functions. We are very confident that we'll be achieving these cost synergies. In fact, in other deals we've done, we've had very successful integrations in all 3 of our recent mergers and we have either achieved or exceeded our announced EPS accretion and earn back periods in each of those deals. Turning to Page 10, this is a nice summary of the pro form a economic impact of the acquisition.
Notably, we will have just under $300, 000, 000 of combined tangible common equity, very again strong market capitalization. You can see that we are projecting strong attractive returns beginning right in the year after acquisition. So 2022 beyond of 25% plus earnings per share accretion. And that will again help us achieve the less than 2.5 year earn back given the 6.8% tangible book value dilution. We are projecting these EPS accretions of 25% based again upon the significant synergies that we have discussed on previous pages.
Again, I think 1 of the key elements is what you'll see in the lower right hand corner and that's 1 of the important elements of this transaction is it accelerates our stated goal of achieving high performing profitability metrics. We are projecting that the transaction will bring our ROA sustainably over 1%, our efficiency ratio into the low to mid-60s and our tangible return on equity to be north of 12% on a going forward basis. Turning to Page 11, again we just highlight our very robust due diligence efforts that involve both Mid Penn as well as again the wonderful cooperation of the RiverDuty team and excellent involvement we had from external advisors participating with us in evaluating this opportunity. 1 of the key elements is again the review the in-depth commercial loan review. Obviously, as Rory has stated on many times, asset quality is a non negotiable here at Mid and we're very fortunate that asset quality is also very strong at Riverview, which was another reason that made this very attractive deal for us.
Again, we had our own team look at these as well as an expert third party that we used. It's very scrutinizing. And there was a lot of consistency in evaluating their risk ratings relative to what our judgments would be and there was again a very favorable review
of that.
If you can turn to Page 12, it outlines what some of those review results were. And it demonstrated a couple of things to us that there is a strong shared philosophy of credit and commitment to asset quality with review that we also have here. We were also pleased if we look toward the lower left of this page in the schedule that Riverview's peak deferrals were well below that of the peer group and that the remaining deferrals at the end of the quarter again are have come down substantially again below peer. From our review, it appears that their portfolio thus far has led the COVID pandemic implications very well. And if we think about the pro form a total reserve coverage when you add in the allowance plus the purchase accounting credit marks, that coverage will be close to 1% and nearly 3 times of the combined bank's non accrual loan balances.
With that, I will pass it back to you Rory for some concluding remarks.
Thank you, Mike. All right, I'm going to ask you to turn to Page 13, which is a slide we're very proud of. This is showing our long term growth and shareholder value. And as you can see, this starts in 2, 009, which is when I joined the organization and goes up through the Q1 of 2021 and then a pro form a. Very significant asset growth, both in acquisition and organically.
In 2015, we acquired Miners Bank, which was right around 100 and $41, 000, 000 in assets. In the beginning part of 2018, we acquired Scottsdale Bank and Trust out in Western Pennsylvania, which was around $262, 000, 000 And then later that year, we acquired First Priority, which I referenced earlier, and that was around $610, 000, 000 And then with this Riverview acquisition, it will be in the neighborhood of $1, 400, 000, 000 which gets us to that pro form a $4, 800, 000 Also on this shows our 10 year EPS CAGR, which is at 20.7% and our tangible book value plus dividends CAGR, which is at 10.2% for the 10 years. So, how did we get this? And it gets down to what we've been able to build over these last 12 years is a very tight, very distinct, very impressive, in my opinion, culture. And that culture is based upon our employees.
We spend a considerable amount of time hiring the right people, providing them with a great educational experience through our university, which is right next to the building that we're sitting in, and putting all of our regional teams, giving them the empowerment to go out and attack their markets and be best in class from a business development standpoint. Our employees love working here. This was evidenced most recently in 2020 when we participated in the best banks to work for in the country. And if you are familiar with that process, it's nothing more than employees providing their opinions on the company. It's an employee morale survey.
And in 2020, after they took the survey of our employees and any other bank that participated in their country, we were ranked the 20th best bank in the country from an employee standpoint, and we were the top ranked bank that participated in Pennsylvania. So that's demonstrative of a really great culture. Again, I hear the terminology all the time that our employees feel like this is their family away from their family. And that's really important to us. It's not corny.
It's really important because a lot of the things that we do educationally through our university aren't just focused on teaching them how to do their jobs better, it's teaching them how to be better people. Better people are more productive people. More productive people lead to greater shareholder return. It's a simple formula. We truly believe our employees are our greatest asset, and we're looking forward to adding the Riverview employees who will stay on with this transaction and inculcating them into that same very distinct culture.
Now I'll conclude on Page 14. We went back to the presentation from our recent capital raise roadshow and we wanted to share that this transaction checks all the boxes that we've discussed during that process. This gives us the muscle to continue to go after core loan production throughout our expanding footprint. Our organic loan growth in 2020 was in the neighborhood of 13%. That was substantially above industry averages, both across the country and in Pennsylvania.
Our organic loan growth in the Q1 of 2021 was annualized to around 12%, still significantly higher than what the industry was averaging. We feel that this partnership with Riverview will give us even more muscle to go down into that Southeast market around Philadelphia and continue to develop really high dollar, very valuable relationships. And also Point West, with the addition of their franchise in the State College area, we plan to catapult out to Pittsburgh. There are great loan markets out there. We feel Pittsburgh is an underbanked area, particularly from a community bank standpoint.
So that's where we're headed in this franchise and this acquisition helps us get there. Fee income expansion, they have a nice wealth management area. We will add that to our significantly growing trust and wealth management area and what we're doing on the non bank subsidiary, MPB Financial. This is opportunistic M and A. This transaction provides in market expansion and an opportunity to create significant earnings accretion, while adding talented new business development employees.
And expense rationalization, it's an opportunity to create operating leverage with over 50 percent of Riverview branches within 5 miles of a mid Penn bank location. And this transaction will bring our core efficiency ratio in line with our peers at low-60s. We're very happy to have gotten to this point. And again, I want to thank Brett Polk, who is the President and Chief Executive Officer of Riverview. And I want to thank all of his team who worked on the other side of this transaction.
This was a long and arduous process that was a big benefit, I believe, to both shareholder groups, both employee groups and the communities that we serve throughout Pennsylvania. With that, I'll turn it over to questions.
Thank you. We will now begin the question and answer session. Today's first question comes from Frank Schiraldi with Piper Sandler. Please go ahead.
Good morning. I wondered if you guys you mentioned certainly consolidation. What is the right number do you think in terms of branch count for the franchise now? And what is the timing of maybe getting there and also extracting these cost saves more specifically from Riverview?
Well, I'll let Mike address the timing. But Frank, we want to establish an average deposit balance in our branches of $75, 000, 000 to $100, 000, 000 So, you can do the math there. The combined franchise, if we didn't do any branch rationalization, is I think, 59 retail locations, and that's clearly too many. And particularly if you look in the center part of both of our maps, there's a lot of overlap. So, there will be closures.
Sometimes they will be Riverview locations, sometimes they'll be Midland Bank locations, but we will find an efficient way to continue to serve all those communities with that retail footprint. But clearly, it's a combined franchise that needs some consolidation.
Frank, with the analysis already being done by our team on our branch network as well as the work that Riverview has already done on theirs, we believe the next 6 months as we look to close this deal before year end provide us that opportunity to really finalize those plans such that when the deal is announced, we will then provide pretty quickly the decision on which branches will close with the customary regulatory notice time such that we would project that within 3 months after deal close that full branch rationalization is implemented.
Okay, great. That's helpful. And then, Riverview actually, surprisingly to me, has a pretty nice fee income stream for the size of the bank. And I noticed that the trust revenue line and just wondered are there what synergies there are there if this sort of accelerates your efforts on the wealth management side?
At the bank level, wealth management, it certainly accelerates what we're trying to accomplish there. We started our Trust and Wealth business in earnest around 2016 when we hired Joe Pease. He's done a great job in growing. I think we had about $45, 000, 000 in assets under management at that time. And in our most recent quarter, Mike, I think we were just under $300, 000, 000 and we are getting continued great organic growth in that portion of the company this year.
So, with the addition of the Riverview assets under management, which Mike, do you know what they are offhand? It's going to accelerate our efforts. And we compete for a lot of business with them and a lot of their business will be complementary to what we're doing. So, Frank, I think it's going to be a great, great non interest income add for
us. Great. Okay. And then just finally, if I could, just Rory, you mentioned Pittsburgh. I know you already do have some branches in the Pittsburgh MSA.
Just wondering your thoughts on how you envision growth there? Is it likely enter that region in a bigger way through M and A? Or do you think you could look to grow out organically there? Just wanted to get some more color, if I could, on that front.
Yes. So, Frank, we're in the eastern side of Westmoreland County and in Fayette County. And then, of course, they're in the Altoona area, Clearfield and Center County. So, we're not really in Pittsburgh or near Pittsburgh. And the markets that we're in out there, that eastern side of Westmoreland County and Fayette County, there aren't great loan opportunities.
But if you move a little bit west into Greensburg and then further west throughout Westmoreland County and into Pittsburgh, we think that there are great growth opportunities from a loan standpoint, but we need a team, right? So, we're hopeful that the Riverview team will help be the start of the team that can really attack that Pittsburgh market. We intend to do that organically, but we might also do some de novo expansion on the retail side or maybe LPOs. And then at some point, as we continue to have progress, we'll be looking for M and A opportunities still. Okay, got you.
Great. Thank you very much.
You bet.
And ladies and gentlemen, our next question comes from Matthew Breese with Stephens Inc. Please go ahead.
Good morning.
Good morning, Matt. Good morning, Matt.
Could you just remind us of where you stand in the CECL process? I believe the transaction will have traditional kind of pre CECL accretable yield. Could you just frame for us how impactful that will be to net interest income, particularly over the 1st couple of quarters after the deal is closed?
All right. So, I'm going to let Justin Webb talk about the CECL process and where we are on that and then maybe Mike can talk about the accretive yield. Justin? Yes. Thanks regarding the process.
We're well underway in terms of the transition, in terms of picking a system, picking a model, making sure that we've got the data to support and run the model and expect to be running parallel by the end of the year here as we go towards 2023.
Regarding the marks, Matt, with $17, 000, 000 of combined marks, but the vast majority of the credit mark being on the general portfolio and not on specific reserves, They would generally be accretive over the using the effective yield method generally over the maturity and amortization of the portfolio itself. As we've looked at other deals, we generally projected that to be primarily over 5 years. If we look back to the priority deal, however, in just 3 years that's actually accelerated. You get some customers to do prepayments, restructuring of deals or other things that allow that accretable yield to come in a bit faster. I believe through the 3 years since that deal, we've actually done 80% in the 3 years versus what might have been originally modeled as about a 60% coming in.
So as we look at the accretable yield for this, we would expect that projecting a deal close December 31, probably in the neighborhood of $3, 500, 000 accreting in combined with the credit mark and interest rate mark for 2022. And then depending upon any acceleration or things of that nature, we would obviously have to reevaluate that with the implementation of CECL effective January 1, 2023.
Great, very helpful. The next 1 was just about loan growth. So obviously, you've done a great job, MidPen has done a great job growing organically on the back of the PPP program. Just wanted to get a sense for the loan growth outlook for the combined company and whether or not that double digit growth can be sustained on a larger balance sheet?
Well, we sure intended to. And again, with the additional muscle that this type of deal provides us And when most of our loan growth is coming from Central Pennsylvania and that Southeast market, we absolutely feel that we can continue low double digit growth. And let me just make sure that I explain what I mean by that muscle. So, everyone talks about scale, and scale is great. But what scale means in the lending business is a bigger legal lending limit.
So yesterday, I had Ray Mancarelli, who is the President of our commercial real estate group. He operates out of the Philadelphia market, and he actually came to us from 1st priority. And I asked him how many loans he's booked so far this year, and he told me it was somewhere in the neighborhood of $125, 000, 000 And I asked him how many of those loans he needed to sell because some of those relationships were pressing up against our existing legal lending limit, which was around $32, 000, 000 when we started this year. And he told me that he sold somewhere around $35, 000, 000 of that $125, 000, 000 So I also asked him if our legal lending limit was closer to $50, 000, 000 how much of that he would have been able to retain, and he said all of it. So that's sitting out there.
We've been 1 of the best producers of loans for other banks over the last 5 years in Pennsylvania because we've had always selling a portion of our really big loans to other banks to stay under the legal lending limit. So, we're comfortable in our ability to underwrite and originate loans of that size, and now we won't have to sell them to other banks. Got it. So the
new legal lending limit goes to $50, 000, 000
I'm projecting it's going to be somewhere in that neighborhood. After the common equity raise, I think we went a little north of 40 and by the time we get this deal done at the end of the year, I think that it will be closer to $50, 000, 000 plus.
Okay. The other thing I was curious about is just if you could give us I'm sorry, where we go? Go ahead. Yes.
So that additional muscle and again, it's not like we're going to be doing $50, 000, 000 loans all day, but that additional ability to originate big dollar loans, C and I loans and commercial real estate loans in the Greater Philadelphia area, which we're really comfortable in understanding. That same metro Philly area of New Jersey and into Delaware, there's a lot of great opportunities. And as we migrate west to Pittsburgh, we think that there will be smaller dollars, but bigger than what we're experiencing in Central Pennsylvania.
Great. Okay. The next 1 for me was just on the PPP program. I was hoping you could give us some sense for updated balances, the process of forgiveness. And then also, Riverview processed a fair bit of PPP for its size.
I think it was close to maybe 300, 000, 000 dollars Maybe you could just talk about their program and give us a sense for it.
Yes. So there's a let's talk about round 1 PPP and round 2 PPP. So in round 1 PPP, we originated in the neighborhood of $630, 000, 000 which I think most people would have described as punching significantly above our weight class. We did that with Justin and his team put together a really great plan. We utilized some home built technology, and then we just put some elbow grease into it.
We had the facility to create several different war rooms and a production process that I think was probably not parallel anywhere in the community bank space in the country. So, we were 1 of the best banks in origination in that round 1. When we got into round 2, we were projecting significantly lower origination balances. I think we were originally saying around $250, 000, 000 based upon the dynamics of that round 2 process, and we significantly exceeded that. I think we ended up in the neighborhood of $370, 000, 000 and it was because Justin and his team spent the last part of 2020 and the 1st part of 2021 building an even better process that was more based on technology and process than it was on people sitting in those various war rooms.
So, we feel that that whole process was indicative of the type of culture that we have that is very business development oriented. So again, I think we were among the top banks in the country in originations. However, the other side of that is the forgiveness process. And so I will tell you that I believe we were the best community bank in the country from a forgiveness standpoint. At this point, from those round 1 loans, we've had forgiveness that's in the neighborhood of 90%.
And I was just talking to SBA Director, Natalie Palotek, yesterday, and she said that she's hopeful that we're going to be at 95 percent here within the next 30 days. So, that is significantly higher than the national average of forgiveness for banks, including community banks, which I think is probably in the neighborhood of about 60%. That's probably being generous. So, we did really well in originations and we've done really well in forgiveness and we're actually starting to recognize some forgiveness on those round 2 loans. So, let's talk about Riverview.
Riverview also significantly outpunched their weight class in that round 1. I'm not sure what their total dollar of originations was, but it was very impressive. They took a little bit of a different tack, but you got to understand, they're a community bank. They serve communities throughout Pennsylvania. There were business borrowers in all those communities that they serve that recognize Riverview as being the source for their PPP.
So that they did a really good job in those communities that they were in, In those PPP loans for those small businesses is of no surprise at all. But they also established some referral networks in neighboring states that provided them with some brand new customer opportunities. So I think Brett and his team did a really good job in that round 1. I think the round 2 might have been a little bit less because they were maybe focused on some other things. They've done a pretty good job on the forgiveness, but 1 of the things that helped drive our organic loan growth in 2020 was us going after the PPP loans that we did in that first round, which was about 4, 000 loans.
A lot of those were not existing customers of ours because we were expanding our footprint at that time just after the First Priority deal. So we spent a great amount of time throughout the rest of 2020 turning them into customers. And we're doing that same thing with our round 2 borrowers. And now we have the opportunity to do that same thing with Riverview's borrowers. So I think that the PPP process for both MidPen Bancorp and Peru review was fantastic.
I wish it never had to happen, by the way, but it was a great time for us to show the value of a community bank to all those communities throughout Pennsylvania that we serve.
Got it. Thank you. Last 1 for me. Thought it was interesting, your philosophy on purchasing a strong deposit franchise in this part of the interest rate cycle. Obviously, so many banks are awash right now in deposit funding, so much so they are having challenges putting all the liquidity to work.
However, it wasn't that long ago, especially Northeast deposit betas were a big problem. So just wanted your thoughts on that matter as I think in this environment, it's a bit different.
Well, I have enough gray hairs on the top of my head to remember when deposits were a really great thing for banks to go after. I'm a deposit guy. I love deposits. And I think that it and we love core deposits. So, if you look back on that page that showed the makeup of our deposit portfolio versus Riverview's, I think that my friend Jason O'Donnell Bennett in Philadelphia Bluestone would tell you that if you have more than 70% of your deposit portfolio in core deposits, that's really good.
So, we're at 86%, 87%. That's fantastic. Riverview is in the mid-70s or high-70s. That's also fantastic. So, I'm never going to want to not go after a quarter pups.
We'll figure out a way to deploy them. Mike is really good on the investment side, and Scott Micklewright, our Chief Revenue Officer, is really good at developing new loan relationships. So, we might temporarily be awash in liquidity, but we're never going to not go after deposit relationships.
Great. That's all I had. I appreciate taking my questions. Thank you. You bet.
Thanks, Matt.
And ladies and gentlemen, this concludes the question and answer session. I'd like to turn it back over to the MidPen team for any final remarks.
All right. Well, again, thank you everyone for joining us today. I think that we had a good volume of participants on the webcast, and I appreciate Frank Schiraldi and Matt Reese asking those questions. I thought that they were very good questions. We're excited.
This is a great time for both franchises. As we put this together, we have a lot of work to do throughout the rest of this year. We have discussed this with all of our regulators, and they know it's coming, and we're going to do our very best to make those applications as quickly as we can, obviously waiting for the end of the second quarter so that we have earnings on both sides. But these are exciting times, but we do recognize we have a lot of work to do, and we appreciate you jumping on the call today. And if you have any other questions or comments or suggestions, anything that you think would be helpful, please don't hesitate to look us up and direct them to me or to Mike Fiduci or to Justin Webb.
And again, thank you for joining us today.
Ladies and gentlemen, this concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.