[10-Q] Richmond Mutual Bancorporation, Inc. Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
Richmond Mutual Bancorporation (RMBI) reported modest operating growth for the quarter and first half of 2025. Net income for Q2 2025 was $2.60 million, up from $2.06 million a year earlier, and year-to-date net income was $4.57 million versus $4.43 million in 2024. Earnings per share rose to $0.27 basic for the quarter and $0.47 basic year-to-date as the company repurchased common stock during the period.
Total assets were approximately $1.508 billion and total deposits were about $1.096 billion. Loans and leases, net of allowance, were $1.1679 billion with an allowance for credit losses of $16.219 million. The company recorded a higher provision for credit losses in Q2 2025 of $744,690 (six-month provision $1.4758 million), and net charge-offs contributed to a modest increase in the allowance. Investment securities showed aggregate unrealized losses of about $55.148 million, but the quarter included an unrealized gain on AFS securities of $959,255 that supported comprehensive income of $3.685 million for the quarter.
Richmond Mutual Bancorporation (RMBI) ha registrato una crescita operativa modesta nel trimestre e nella prima metà del 2025. L'utile netto del 2° trimestre 2025 è stato di $2.60 milioni, rispetto a $2.06 milioni dell'anno precedente; l'utile netto da inizio anno è stato di $4.57 milioni contro $4.43 milioni nel 2024. L'utile per azione è salito a $0.27 basic per il trimestre e a $0.47 basic da inizio anno, grazie al riacquisto di azioni ordinarie effettuato nel periodo.
Gli attivi totali ammontavano a circa $1.508 miliardi e i depositi totali a circa $1.096 miliardi. I prestiti e i leasing, al netto delle rettifiche, erano pari a $1.1679 miliardi con un fondo per perdite su crediti di $16.219 milioni. La società ha registrato una maggiore accantonamento per perdite su crediti nel 2° trimestre 2025 di $744,690 (accantonamento semestrale $1.4758 milioni), e le cancellazioni nette hanno contribuito a un lieve aumento dell'accantonamento. I titoli di investimento presentavano perdite non realizzate aggregate per circa $55.148 milioni, ma il trimestre includeva un guadagno non realizzato su titoli AFS di $959,255 che ha sostenuto il risultato complessivo di $3.685 milioni per il trimestre.
Richmond Mutual Bancorporation (RMBI) presentó un crecimiento operativo moderado en el trimestre y en la primera mitad de 2025. La utilidad neta del 2T 2025 fue de $2.60 millones, frente a $2.06 millones un año antes; la utilidad neta acumulada fue de $4.57 millones frente a $4.43 millones en 2024. Las ganancias por acción aumentaron a $0.27 básico en el trimestre y a $0.47 básico acumulado, impulsadas por la recompra de acciones ordinarias realizada durante el periodo.
Los activos totales eran aproximadamente $1.508 mil millones y los depósitos totales alrededor de $1.096 mil millones. Los préstamos y arrendamientos, netos de la provisión, ascendían a $1.1679 mil millones con una provisión para pérdidas crediticias de $16.219 millones. La compañía registró una mayor provisión para pérdidas crediticias en el 2T 2025 de $744,690 (provisión semestral $1.4758 millones), y las incobrables netas contribuyeron a un aumento moderado de la provisión. Los valores de inversión mostraron pérdidas no realizadas agregadas por alrededor de $55.148 millones, pero el trimestre incluyó una ganancia no realizada en valores AFS de $959,255 que apoyó el resultado integral de $3.685 millones para el trimestre.
Richmond Mutual Bancorporation(RMBI)는 2025년 분기 및 상반기에 걸쳐 소폭의 영업 성장을 보고했습니다. 2025년 2분기 순이익은 $2.60 million으로 전년 동기 $2.06 million에서 증가했으며, 연초 누적 순이익은 2024년의 $4.43 million에 비해 $4.57 million을 기록했습니다. 주당순이익은 분기 기준 $0.27 basic, 연초 누적 기준 $0.47 basic로 상승했으며 이는 기간 중 보통주 재매입에 따른 것입니다.
총자산은 약 $1.508 billion, 총예금은 약 $1.096 billion이었습니다. 대출 및 리스(충당금 차감 후)는 $1.1679 billion이며, 대손충당금은 $16.219 million입니다. 회사는 2025년 2분기에 대손충당금 전입액을 $744,690(반기 전입액 $1.4758 million)으로 늘렸고, 순대손상각이 충당금 소폭 증가에 기여했습니다. 투자증권은 총 약 $55.148 million의 평가손실을 보였으나, 해당 분기에는 매도가능증권(AFS) 미실현이익 $959,255이 발생해 분기 포괄손익 $3.685 million을 뒷받침했습니다.
Richmond Mutual Bancorporation (RMBI) a enregistré une croissance opérationnelle modeste pour le trimestre et le premier semestre 2025. Le résultat net du 2T 2025 s'est élevé à $2.60 millions, contre $2.06 millions un an plus tôt ; le résultat net cumulé est de $4.57 millions contre $4.43 millions en 2024. Le bénéfice par action est passé à $0.27 basic pour le trimestre et à $0.47 basic depuis le début de l'année, la société ayant racheté des actions ordinaires au cours de la période.
Les actifs totaux s'établissaient à environ $1.508 milliards et les dépôts totaux à environ $1.096 milliards. Les prêts et crédits-bail, nets des provisions, s'élevaient à $1.1679 milliards avec une provision pour pertes sur prêts de $16.219 millions. La société a enregistré une provision pour pertes sur prêts plus élevée au 2T 2025 de $744,690 (provision semestrielle $1.4758 millions), et les radiations nettes ont contribué à une légère augmentation de la provision. Les titres d'investissement affichaient des pertes latentes agrégées d'environ $55.148 millions, mais le trimestre comprenait un gain non réalisé sur titres AFS de $959,255 qui a soutenu le résultat global de $3.685 millions pour le trimestre.
Richmond Mutual Bancorporation (RMBI) meldete für das Quartal und das erste Halbjahr 2025 ein moderates operatives Wachstum. Der Nettogewinn für Q2 2025 betrug $2.60 Millionen gegenüber $2.06 Millionen im Vorjahr; der Gewinn seit Jahresbeginn lag bei $4.57 Millionen gegenüber $4.43 Millionen in 2024. Das Ergebnis je Aktie stieg auf $0.27 basic für das Quartal und auf $0.47 basic kumuliert, begünstigt durch Rückkäufe von Stammaktien während des Berichtszeitraums.
Die Gesamtaktiva beliefen sich auf rund $1.508 Milliarden und die Kundeneinlagen auf etwa $1.096 Milliarden. Kredite und Leasingbestand, netto nach Wertberichtigungen, lagen bei $1.1679 Milliarden mit einer Rückstellung für Kreditverluste von $16.219 Millionen. Das Unternehmen erhöhte die Risikoabschreibung im Q2 2025 auf $744,690 (Sechsmonats-Rückstellung $1.4758 Millionen), und Nettoabschreibungen trugen zu einem moderaten Anstieg der Rückstellung bei. Anlagewerte wiesen kumulierte unrealisierte Verluste von rund $55.148 Millionen auf, doch das Quartal enthielt einen unrealisierten Gewinn bei AFS-Wertpapieren von $959,255, der das umfassende Ergebnis von $3.685 Millionen für das Quartal stützte.
Positive
- Net income growth: Q2 net income of $2.601,998 and YTD net income of $4.570,308, both higher than prior-year periods
- Improved EPS: Basic EPS rose to $0.27 for the quarter and $0.47 year-to-date
- Core balance sheet size: Total assets of $1.5078 billion with stable deposits of $1.0964 billion
- Comprehensive income improvement: Q2 unrealized gain on AFS securities of $959,255 contributed to Q2 comprehensive income of $3.685 million
- Active capital management: Repurchases of common stock totaled $5.6337 million in the six months ended June 30, 2025
Negative
- Higher credit provisioning: Q2 provision for credit losses increased to $744,690 (six months $1,475,785) versus $270,472 (six months $453,606) in 2024
- Large unrealized investment losses: Aggregated gross unrealized losses on investment securities totaled approximately $55.148 million at June 30, 2025
- Rising delinquencies and nonaccruals: Loans >90 days accruing increased to $2.491 million and total nonaccrual loans reached $5.573 million, up from $5.063 million at year-end 2024
Insights
TL;DR: Modest earnings growth with rising credit provisioning and meaningful investment unrealized losses; overall operating performance is steady.
Net interest income increased to $10.76 million for the quarter and remains the primary earnings driver. Net income and EPS improved year-over-year, aided by core loan growth and share repurchases that reduced shares outstanding. However, the provision for credit losses rose materially in the quarter to $744,690, reflecting a more cautious credit outlook and increasing allowance activity. The investment portfolio carries significant unrealized losses (~$55.15 million), which compresses equity through accumulated other comprehensive loss despite a quarter of unrealized gains. Overall, operating results are resilient but credit and investment mark-to-market effects warrant attention.
TL;DR: Credit and market risks are elevated: higher provisioning, rising nonaccruals, and large unrealized investment losses.
The allowance for credit losses stands at $16.22 million with a six-month provision of $1.4758 million, up from $453,606 a year earlier, and net charge-offs reduced but present. Loans >90 days accruing increased to $2.491 million and nonaccrual loans rose to $5.573 million. The investment portfolio shows aggregated unrealized losses of $55.148 million, and accumulated other comprehensive loss remains sizable at $(43.447) million. These indicators suggest heightened sensitivity to interest-rate and credit-cycle stress.
Richmond Mutual Bancorporation (RMBI) ha registrato una crescita operativa modesta nel trimestre e nella prima metà del 2025. L'utile netto del 2° trimestre 2025 è stato di $2.60 milioni, rispetto a $2.06 milioni dell'anno precedente; l'utile netto da inizio anno è stato di $4.57 milioni contro $4.43 milioni nel 2024. L'utile per azione è salito a $0.27 basic per il trimestre e a $0.47 basic da inizio anno, grazie al riacquisto di azioni ordinarie effettuato nel periodo.
Gli attivi totali ammontavano a circa $1.508 miliardi e i depositi totali a circa $1.096 miliardi. I prestiti e i leasing, al netto delle rettifiche, erano pari a $1.1679 miliardi con un fondo per perdite su crediti di $16.219 milioni. La società ha registrato una maggiore accantonamento per perdite su crediti nel 2° trimestre 2025 di $744,690 (accantonamento semestrale $1.4758 milioni), e le cancellazioni nette hanno contribuito a un lieve aumento dell'accantonamento. I titoli di investimento presentavano perdite non realizzate aggregate per circa $55.148 milioni, ma il trimestre includeva un guadagno non realizzato su titoli AFS di $959,255 che ha sostenuto il risultato complessivo di $3.685 milioni per il trimestre.
Richmond Mutual Bancorporation (RMBI) presentó un crecimiento operativo moderado en el trimestre y en la primera mitad de 2025. La utilidad neta del 2T 2025 fue de $2.60 millones, frente a $2.06 millones un año antes; la utilidad neta acumulada fue de $4.57 millones frente a $4.43 millones en 2024. Las ganancias por acción aumentaron a $0.27 básico en el trimestre y a $0.47 básico acumulado, impulsadas por la recompra de acciones ordinarias realizada durante el periodo.
Los activos totales eran aproximadamente $1.508 mil millones y los depósitos totales alrededor de $1.096 mil millones. Los préstamos y arrendamientos, netos de la provisión, ascendían a $1.1679 mil millones con una provisión para pérdidas crediticias de $16.219 millones. La compañía registró una mayor provisión para pérdidas crediticias en el 2T 2025 de $744,690 (provisión semestral $1.4758 millones), y las incobrables netas contribuyeron a un aumento moderado de la provisión. Los valores de inversión mostraron pérdidas no realizadas agregadas por alrededor de $55.148 millones, pero el trimestre incluyó una ganancia no realizada en valores AFS de $959,255 que apoyó el resultado integral de $3.685 millones para el trimestre.
Richmond Mutual Bancorporation(RMBI)는 2025년 분기 및 상반기에 걸쳐 소폭의 영업 성장을 보고했습니다. 2025년 2분기 순이익은 $2.60 million으로 전년 동기 $2.06 million에서 증가했으며, 연초 누적 순이익은 2024년의 $4.43 million에 비해 $4.57 million을 기록했습니다. 주당순이익은 분기 기준 $0.27 basic, 연초 누적 기준 $0.47 basic로 상승했으며 이는 기간 중 보통주 재매입에 따른 것입니다.
총자산은 약 $1.508 billion, 총예금은 약 $1.096 billion이었습니다. 대출 및 리스(충당금 차감 후)는 $1.1679 billion이며, 대손충당금은 $16.219 million입니다. 회사는 2025년 2분기에 대손충당금 전입액을 $744,690(반기 전입액 $1.4758 million)으로 늘렸고, 순대손상각이 충당금 소폭 증가에 기여했습니다. 투자증권은 총 약 $55.148 million의 평가손실을 보였으나, 해당 분기에는 매도가능증권(AFS) 미실현이익 $959,255이 발생해 분기 포괄손익 $3.685 million을 뒷받침했습니다.
Richmond Mutual Bancorporation (RMBI) a enregistré une croissance opérationnelle modeste pour le trimestre et le premier semestre 2025. Le résultat net du 2T 2025 s'est élevé à $2.60 millions, contre $2.06 millions un an plus tôt ; le résultat net cumulé est de $4.57 millions contre $4.43 millions en 2024. Le bénéfice par action est passé à $0.27 basic pour le trimestre et à $0.47 basic depuis le début de l'année, la société ayant racheté des actions ordinaires au cours de la période.
Les actifs totaux s'établissaient à environ $1.508 milliards et les dépôts totaux à environ $1.096 milliards. Les prêts et crédits-bail, nets des provisions, s'élevaient à $1.1679 milliards avec une provision pour pertes sur prêts de $16.219 millions. La société a enregistré une provision pour pertes sur prêts plus élevée au 2T 2025 de $744,690 (provision semestrielle $1.4758 millions), et les radiations nettes ont contribué à une légère augmentation de la provision. Les titres d'investissement affichaient des pertes latentes agrégées d'environ $55.148 millions, mais le trimestre comprenait un gain non réalisé sur titres AFS de $959,255 qui a soutenu le résultat global de $3.685 millions pour le trimestre.
Richmond Mutual Bancorporation (RMBI) meldete für das Quartal und das erste Halbjahr 2025 ein moderates operatives Wachstum. Der Nettogewinn für Q2 2025 betrug $2.60 Millionen gegenüber $2.06 Millionen im Vorjahr; der Gewinn seit Jahresbeginn lag bei $4.57 Millionen gegenüber $4.43 Millionen in 2024. Das Ergebnis je Aktie stieg auf $0.27 basic für das Quartal und auf $0.47 basic kumuliert, begünstigt durch Rückkäufe von Stammaktien während des Berichtszeitraums.
Die Gesamtaktiva beliefen sich auf rund $1.508 Milliarden und die Kundeneinlagen auf etwa $1.096 Milliarden. Kredite und Leasingbestand, netto nach Wertberichtigungen, lagen bei $1.1679 Milliarden mit einer Rückstellung für Kreditverluste von $16.219 Millionen. Das Unternehmen erhöhte die Risikoabschreibung im Q2 2025 auf $744,690 (Sechsmonats-Rückstellung $1.4758 Millionen), und Nettoabschreibungen trugen zu einem moderaten Anstieg der Rückstellung bei. Anlagewerte wiesen kumulierte unrealisierte Verluste von rund $55.148 Millionen auf, doch das Quartal enthielt einen unrealisierten Gewinn bei AFS-Wertpapieren von $959,255, der das umfassende Ergebnis von $3.685 Millionen für das Quartal stützte.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2025
or
| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _______ to ________
Commission file number: 001-38956
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation of organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices; Zip Code)
(765 ) 962-2581
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 and 15(d) of the Exchange Act 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 [ ]
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | [ ] | Accelerated filer | [ ] | |||||||||||
[X] | Smaller reporting company | |||||||||||||
Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
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]
There were 10,426,263 shares of Registrant’s common stock, par value of $0.01 per share, issued and outstanding as of August 8, 2025.
RICHMOND MUTUAL BANCORPORATION, INC. AND SUBSIDIARY
10-Q
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION | ||||||||
| Page | ||||||||
Item 1. | Condensed Consolidated Balance Sheets at June 30, 2025 (Unaudited) and December 31, 2024 | 1 | ||||||
Condensed Consolidated Statements of Income (Unaudited) for the Three and Six Months Ended June 30, 2025 and 2024 | 2 | |||||||
Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Six Months Ended June 30, 2025 and 2024 | 3 | |||||||
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) for the Three and Six Months Ended June 30, 2025 and 2024 | 4 | |||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2025 and 2024 | 6 | |||||||
Notes to Condensed Consolidated Financial Statements | 7 | |||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 30 | ||||||
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 42 | ||||||
Item 4. | Controls and Procedures | 42 | ||||||
PART II OTHER INFORMATION | ||||||||
Item 1. | Legal Proceedings | 44 | ||||||
Item 1A. | Risk Factors | 44 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 44 | ||||||
Item 3. | Defaults Upon Senior Securities | 44 | ||||||
Item 4. | Mine Safety Disclosures | 44 | ||||||
Item 5 | Other Information | 44 | ||||||
Item 6. | Exhibits | 45 | ||||||
Signatures | 46 | |||||||
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Richmond Mutual Bancorporation, Inc.
Condensed Consolidated Balance Sheets
| June 30, 2025 | December 31, 2024 | ||||||||||
| (Unaudited) | |||||||||||
| Assets | |||||||||||
| Cash and due from banks | $ | $ | |||||||||
| Interest-earning demand deposits | |||||||||||
| Cash and cash equivalents | |||||||||||
| Interest-earning time deposits | |||||||||||
| Investment securities - available for sale | |||||||||||
| Investment securities - held to maturity | |||||||||||
| Loans held for sale | |||||||||||
Loans and leases, net of allowance for credit losses of $ | |||||||||||
| Premises and equipment, net | |||||||||||
| Federal Home Loan Bank stock | |||||||||||
| Interest receivable | |||||||||||
| Mortgage-servicing rights | |||||||||||
| Cash surrender value of life insurance | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities | |||||||||||
| Noninterest-bearing deposits | $ | $ | |||||||||
| Interest-bearing deposits | |||||||||||
| Total deposits | |||||||||||
| Federal Home Loan Bank advances | |||||||||||
| Advances by borrowers for taxes and insurance | |||||||||||
| Interest payable | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and Contingent Liabilities | |||||||||||
| Stockholders' Equity | |||||||||||
Common stock, $ | |||||||||||
Authorized - | |||||||||||
Issued and outstanding - | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Unearned employee stock ownership plan (ESOP) | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total stockholders' equity | |||||||||||
| Total liabilities and stockholders' equity | $ | $ | |||||||||
See Notes to Condensed Consolidated Statements.
1
Richmond Mutual Bancorporation, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Interest Income | |||||||||||||||||||||||
| Loans and leases | $ | $ | $ | $ | |||||||||||||||||||
| Investment securities | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total interest income | |||||||||||||||||||||||
| Interest Expense | |||||||||||||||||||||||
| Deposits | |||||||||||||||||||||||
| Borrowings | |||||||||||||||||||||||
| Total interest expense | |||||||||||||||||||||||
| Net Interest Income | |||||||||||||||||||||||
| Provision for credit losses | |||||||||||||||||||||||
| Net Interest Income After Provision for Credit Losses | |||||||||||||||||||||||
| Non-interest Income | |||||||||||||||||||||||
| Service charges on deposit accounts | |||||||||||||||||||||||
| Card fee income | |||||||||||||||||||||||
| Loan and lease servicing fees | |||||||||||||||||||||||
Net loss on securities (includes $( | ( | ( | ( | ( | |||||||||||||||||||
| Net gains on loan and lease sales | |||||||||||||||||||||||
| Other income | |||||||||||||||||||||||
Total non-interest income | |||||||||||||||||||||||
Non-interest Expenses | |||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||
| Net occupancy expenses | |||||||||||||||||||||||
| Equipment expenses | |||||||||||||||||||||||
| Data processing fees | |||||||||||||||||||||||
| Deposit insurance expense | |||||||||||||||||||||||
| Printing and office supplies | |||||||||||||||||||||||
| Legal and professional fees | |||||||||||||||||||||||
| Advertising expense | |||||||||||||||||||||||
| Bank service charges | |||||||||||||||||||||||
| Real estate owned expense | |||||||||||||||||||||||
| Other expenses | |||||||||||||||||||||||
Total non-interest expenses | |||||||||||||||||||||||
| Income Before Income Tax Expense | |||||||||||||||||||||||
Provision for income taxes (includes $ | |||||||||||||||||||||||
| Net Income | $ | $ | $ | $ | |||||||||||||||||||
| Earnings Per Share | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
See Notes to Condensed Consolidated Statements.
2
Richmond Mutual Bancorporation, Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net Income | $ | $ | $ | $ | |||||||||||||||||||
| Other Comprehensive Income (Loss) | |||||||||||||||||||||||
Unrealized gain (loss) on available for sale securities, net of tax expense (benefit) of $ | ( | ( | |||||||||||||||||||||
Less: reclassification adjustment for realized losses included in net income, net of tax benefit of $ | ( | ( | ( | ( | |||||||||||||||||||
| ( | ( | ||||||||||||||||||||||
| Comprehensive Income | $ | $ | $ | $ | |||||||||||||||||||
See Notes to Condensed Consolidated Statements.
3
Richmond Mutual Bancorporation, Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Retained Earnings | Unearned ESOP Shares | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||||||||||||||
| Shares Outstanding | Amount | ||||||||||||||||||||||||||||||||||||||||
| Balances, March 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| ESOP shares earned | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||
| Stock based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Common stock dividends ($ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Balances, June 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Retained Earnings | Unearned ESOP Shares | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||||||||||||||
| Shares Outstanding | Amount | ||||||||||||||||||||||||||||||||||||||||
| Balances, December 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| ESOP shares earned | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||
| Stock based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Common stock dividends ($ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Balances, June 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
See Notes to Condensed Consolidated Statements.
4
| Three Months Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Retained Earnings | Unearned ESOP Shares | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||||||||||||||
| Shares Outstanding | Amount | ||||||||||||||||||||||||||||||||||||||||
| Balances, March 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| ESOP shares earned | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||
| Forfeiture of restricted stock awards | ( | ( | — | — | — | ||||||||||||||||||||||||||||||||||||
| Stock based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Exercise of stock options | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||
Common stock dividends ($ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Balances, June 30, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Retained Earnings | Unearned ESOP Shares | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||||||||||||||
| Shares Outstanding | Amount | ||||||||||||||||||||||||||||||||||||||||
| Balances, December 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| ESOP shares earned | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||
| Granting of restricted stock awards | ( | ( | — | — | — | ||||||||||||||||||||||||||||||||||||
| Stock based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Exercise of stock options | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||
Common stock dividends ($ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Balances, June 30, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
See Notes to Condensed Consolidated Statements.
5
Richmond Mutual Bancorporation, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Operating Activities | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
| Provision for credit losses | |||||||||||
| Depreciation and amortization | |||||||||||
| Deferred income tax | ( | ||||||||||
| Stock based compensation | |||||||||||
| Investment securities amortization, net | |||||||||||
Net loss on sale of investment securities - available for sale | |||||||||||
| Net gains on loan and lease sales | ( | ( | |||||||||
Gain on sale of real estate owned | |||||||||||
| Gain on sale of premises and equipment | ( | ( | |||||||||
| Accretion of loan origination fees | ( | ( | |||||||||
| Amortization of mortgage-servicing rights | |||||||||||
| ESOP shares expense | |||||||||||
| Increase in cash surrender value of life insurance | ( | ( | |||||||||
| Loans originated for sale | ( | ( | |||||||||
| Proceeds on loans sold | |||||||||||
| Net change in | |||||||||||
| Interest receivable | ( | ( | |||||||||
| Other assets | |||||||||||
| Other liabilities | ( | ( | |||||||||
| Interest payable | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Investing Activities | |||||||||||
| Purchases of securities available for sale | ( | ( | |||||||||
| Proceeds from maturities and paydowns of securities available for sale | |||||||||||
| Proceeds from sales of securities available for sale | |||||||||||
| Proceeds from maturities and paydowns of securities held to maturity | |||||||||||
| Net change in loans | ( | ( | |||||||||
| Proceeds from sales of real estate owned | |||||||||||
| Purchases of premises and equipment | ( | ( | |||||||||
| Proceeds from sale of premises and equipment | |||||||||||
| Purchase of FHLB stock | ( | ||||||||||
| Net cash provided by (used in) investing activities | ( | ||||||||||
| Financing Activities | |||||||||||
| Net change in | |||||||||||
| Demand and savings deposits | |||||||||||
| Certificates of deposit | ( | ||||||||||
| Advances by borrowers for taxes and insurance | |||||||||||
| Proceeds from FHLB advances | |||||||||||
| Repayment of FHLB advances | ( | ( | |||||||||
| Repurchase of common stock | ( | ( | |||||||||
| Proceeds from stock option exercises | ( | ||||||||||
| Dividends paid | ( | ( | |||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||
| Net Change in Cash and Cash Equivalents | ( | ||||||||||
| Cash and Cash Equivalents, Beginning of Period | |||||||||||
| Cash and Cash Equivalents, End of Period | $ | $ | |||||||||
| Additional Cash Flows and Supplementary Information | |||||||||||
| Interest paid | $ | $ | |||||||||
| Transfers from loans to other real estate owned | |||||||||||
See Notes to Condensed Consolidated Statements.
6
Richmond Mutual Bancorporation, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Table Dollar Amounts in Thousands, Except Per Share Amounts)
Note 1: Basis of Presentation
The accompanying financial information is unaudited and has been prepared from the consolidated financial statements of Richmond Mutual Bancorporation, Inc., and its wholly owned direct and indirect subsidiaries, First Bank Richmond, First Insurance Management, Inc., FB Richmond Holdings, Inc. and FB Richmond Properties, Inc. References in this document to Richmond Mutual Bancorporation refer to Richmond Mutual Bancorporation, Inc. References to “we,” “us,” and “our” or the “Company” refers to Richmond Mutual Bancorporation and its wholly-owned direct and indirect subsidiaries, First Bank Richmond, First Insurance Management, Inc., FB Richmond Holdings, Inc., and FB Richmond Properties, Inc. unless the context otherwise requires.
First Bank Richmond is an Indiana state-chartered commercial bank headquartered in Richmond, Indiana and the wholly owned banking subsidiary of Richmond Mutual Bancorporation. First Bank Richmond provides full banking services through its seven full- and one limited-service offices located in Cambridge City (1), Centerville (1), Richmond (5) and Shelbyville (1), Indiana, its five full-service offices located in Piqua (2), Sidney (2) and Troy (1), Ohio, and its loan production office in Columbus, Ohio. Administrative, trust and wealth management services are conducted through First Bank Richmond's Corporate Office/Financial Center located in Richmond, Indiana. As an Indiana-chartered commercial bank, First Bank Richmond is subject to regulation by the Indiana Department of Financial Institutions ("IDFI") and the Federal Deposit Insurance Corporation ("FDIC").
First Insurance Management, Inc., a wholly-owned subsidiary of the Company which was formed and began operations in June 2022, is a Nevada-based captive insurance company that insures against certain risks unique to the operations of the Company and its subsidiaries and for which insurance may not be currently available or economically feasible in today's insurance marketplace. First Insurance Management, Inc. is subject to the regulations of the State of Nevada and undergoes periodic examinations by the Nevada Division of Insurance.
FB Richmond Holdings, Inc., a wholly-owned subsidiary of First Bank Richmond which was formed and began operations in April 2020, is a Nevada corporation that holds and manages substantially all of First Bank Richmond's investment portfolio. FB Richmond Holdings, Inc. has one active subsidiary, FB Richmond Properties, Inc., a Delaware corporation which holds loans on behalf of the Bank.
The accompanying unaudited condensed consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include information or note disclosures necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. Accordingly, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K") filed with the Securities and Exchange Commission (“SEC”) on March 27, 2025 (SEC File No. 001-38956). However, in the opinion of management, all adjustments which are necessary for a fair presentation of the consolidated financial statements have been included. Those adjustments consist only of normal recurring adjustments. The results of operations for the periods are not necessarily indicative of the results to be expected for the full year.
Use of Estimates in Preparation of Financial Statements
Financial statements prepared in accordance with generally accepted accounting principles in the United States ("GAAP") require the Company 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 expense during the reporting period. Actual results could differ from those estimates.
Loans
For all loan classes, the accrual of interest is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Past due status is based on contractual terms of the loan. For all loan classes, the entire balance of the loan is considered past due if the minimum payment contractually required to be paid is not received by the
7
contractual due date. For all loan classes, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.
The Company charges off residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable regulatory guidance, which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value, less costs to sell when the loan is 120 days past due, charge-off of unsecured open-end loans when the loan is 90 days past due, and charge down to the net realizable value when other secured loans are 90 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off.
For all classes, all interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. The Company requires a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status.
On occasion, the Company will provide modifications to loans and leases to borrowers experiencing financial difficulty, by providing payment delays, term extensions, or interest-rate reductions. In some cases, combinations of modifications may be made to the same loan or lease. If determined that the value of the modified loan or lease is less than the recorded investment in the loan, a charge-off is recognized to the allowance for credit losses on loans and leases.
Note 2: Accounting Pronouncements
The Jumpstart Our Business Startups Act (the "JOBS Act"), enacted in April 2012, introduced various changes to the federal securities laws to facilitate access to capital markets. Under the JOBS Act, a company with total annual gross revenues of less than $1.07 billion during its most recently completed fiscal year qualifies as an “emerging growth company” ("EGC"). The Company previously qualified as and elected to be an EGC under the JOBS Act. As an EGC, the Company elected to comply with new or amended accounting pronouncements in the same manner as a private company, an election that had to be made when the Company first filed a registration statement and remained irrevocable while the Company maintained EGC status. However, as of December 31, 2024, the Company no longer qualifies as an EGC and going forward, it will be required to comply with new or amended accounting pronouncements applicable to public companies.
In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures, requiring public entities to disclose information about significant expenses for their reportable segments on both an interim and annual basis. Public entities must disclose significant expense categories and amounts for each reportable segment, which are derived from expenses regularly reported to the entity’s chief operating decision-maker (CODM) and included in the segment's reported measures of profit or loss. Additionally, public entities must disclose the title and position of the CODM and explain how the CODM uses these measures to assess segment performance. The ASU also mandates certain segment-related interim disclosures that were previously required only on an annual basis. The ASU is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company adopted this ASU on January 1, 2024. Adoption of ASU No. 2023-07 did not have a material impact on the Company's consolidated financial statements.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU applies to contracts, hedging relationships and other transactions that reference the London Interbank Offer Rate ("LIBOR") or other rate references expected to be discontinued because of reference rate reform. The ASU permits an entity to make necessary modifications to eligible contracts or transactions without requiring contract remeasurement or reassessment of a previous accounting determination. In December of 2022, the FASB issued ASU No. 2022-06 which extended the period of time preparers can utilize the reference rate reform relief guidance in Topic 848. The guidance ensures the relief in Topic 848 covers the period of time during which a significant number of modifications may take place and the ASU defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024.
In March 2023, the FASB issued ASU No. 2023-02, Investments Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method. This ASU allows reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program
8
giving rise to the related income tax credits. ASU No. 2023-02 is effective for all public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. The Company adopted this guidance on January 1, 2024. Adoption of ASU 2023-02 did not have a material impact on the Company's consolidated financial statements.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU established new income tax disclosure requirements and modified existing requirements. The ASU requires additional information be disclosed for specified categories, and reconciling items that meet a certain threshold, within the rate reconciliation on an annual basis. Additionally, this ASU requires information be disclosed on the amount of income taxes paid (net of refunds), disaggregated by federal, state, and foreign taxes and the amount of income taxes paid (net of refunds) disaggregated by jurisdiction based on a quantitative threshold. ASU No. 2023-09 is effective for all public business entities for annual periods beginning after December 15, 2024. The Company does not expect the adoption of ASU 2023-09 to have a material impact on its consolidated financial statements.
Note 3: Investment Securities
The amortized cost and approximate fair values, together with gross unrealized gains and losses, of investment securities are as follows:
| June 30, 2025 | |||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
| Available for sale | |||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
| SBA Pools | |||||||||||||||||||||||
| Federal agencies | |||||||||||||||||||||||
| State and municipal obligations | |||||||||||||||||||||||
| Mortgage-backed securities - government-sponsored enterprises (GSE) residential | |||||||||||||||||||||||
| Corporate obligations | |||||||||||||||||||||||
| Held to maturity | |||||||||||||||||||||||
| State and municipal obligations | |||||||||||||||||||||||
| Total investment securities | $ | $ | $ | $ | |||||||||||||||||||
9
| December 31, 2024 | |||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
| Available for sale | |||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
| SBA Pools | |||||||||||||||||||||||
| Federal agencies | |||||||||||||||||||||||
| State and municipal obligations | |||||||||||||||||||||||
| Mortgage-backed securities - (GSE) residential | |||||||||||||||||||||||
| Corporate obligations | |||||||||||||||||||||||
| Held to maturity | |||||||||||||||||||||||
| State and municipal obligations | |||||||||||||||||||||||
| Total investment securities | $ | $ | $ | $ | |||||||||||||||||||
The amortized cost and fair value of investment securities at June 30, 2025, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
| Available for Sale | Held to Maturity | ||||||||||||||||||||||
| Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||
| Within one year | $ | $ | $ | $ | |||||||||||||||||||
| One to five years | |||||||||||||||||||||||
| Five to ten years | |||||||||||||||||||||||
| After ten years | |||||||||||||||||||||||
| Mortgage-backed securities –GSE residential | |||||||||||||||||||||||
| Totals | $ | $ | $ | $ | |||||||||||||||||||
Investment securities with a carrying value of $140,436,000 and $136,799,000 were pledged at June 30, 2025 and December 31, 2024, respectively, to secure certain deposits and for other purposes as permitted or required by law.
Proceeds from the sale of securities available for sale for both the three and six months ended June 30,2025 were $6,765,000 157,000 3,789,000 62,000 no
Certain investments in debt securities, as reflected in the table below, are reported in the condensed consolidated financial statements and notes at an amount less than their historical cost. Total fair value of these investments at June 30, 2025 and December 31, 2024 was $244,053,000 and $255,749,000 , respectively, which is approximately 96 % and 98 % of the Company’s aggregated available for sale and held to maturity investment portfolio at those dates, respectively. These declines primarily resulted from changes in market interest rates since their purchase.
The Company does not consider available for sale securities with unrealized losses to be experiencing credit losses at June 30, 2025. Management considers it more likely than not that the Company will not be required to sell these investments before recovery of the amortized cost basis, which may be the maturity dates of the securities.
10
Held to maturity securities are financial assets measured at amortized cost. Held to maturity securities are required to have an established allowance for credit losses that represents the portion of the amortized cost basis of a financial asset that is not expected to be collectable. The Company estimates expected credit losses on a collective basis by security type, with consideration given to historical information, credit ratings, and the statistical probability of future losses.
The Company monitors the credit quality of investment securities held to maturity through the use of credit ratings quarterly. As of June 30, 2025, there was no allowance for credit losses recognized on the Company's securities held to maturity portfolio.
The following table summarizes the amortized cost of held to maturity securities by credit quality indicator as of June 30, 2025 and December 31, 2024:
| State and municipal obligations | |||||||||||
| June 30, 2025 | December 31, 2024 | ||||||||||
| AA+ | $ | $ | |||||||||
| AA- | |||||||||||
| A+ | |||||||||||
| Not rated | |||||||||||
| $ | $ | ||||||||||
The Company has elected to exclude accrued interest receivable from the calculation of the allowance for credit losses.
The following tables show the Company’s investment securities by gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2025 and December 31, 2024:
| Description of Securities | June 30, 2025 | ||||||||||||||||||||||||||||||||||
| Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||
| Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||
| Available for sale | |||||||||||||||||||||||||||||||||||
| U.S. Treasury Securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| SBA Pools | |||||||||||||||||||||||||||||||||||
| Federal agencies | |||||||||||||||||||||||||||||||||||
| State and municipal obligations | |||||||||||||||||||||||||||||||||||
| Mortgage-backed securities - GSE residential | |||||||||||||||||||||||||||||||||||
| Corporate obligations | |||||||||||||||||||||||||||||||||||
| Total available for sale | |||||||||||||||||||||||||||||||||||
| Held to maturity | |||||||||||||||||||||||||||||||||||
| State and municipal obligations | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
11
| Description of Securities | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||
| Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||
| Available for sale | |||||||||||||||||||||||||||||||||||
| SBA Pools | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Federal agencies | |||||||||||||||||||||||||||||||||||
| State and municipal obligations | |||||||||||||||||||||||||||||||||||
| Mortgage-backed securities - GSE residential | |||||||||||||||||||||||||||||||||||
| Corporate obligations | |||||||||||||||||||||||||||||||||||
| Total available for sale | |||||||||||||||||||||||||||||||||||
| Held to maturity | |||||||||||||||||||||||||||||||||||
| State and municipal obligations | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
SBA Pools and Mortgage-Backed Securities - GSE Residential. The unrealized losses on the Company’s investment in mortgage-backed securities and SBA pools were caused by interest rate changes and illiquidity. The Company expects to recover the amortized cost basis over the term of the securities. The decline in fair value is attributable to changes in interest rates and not credit quality. The Company does not intend to sell the securities and it is not more likely than not the Company will be required to sell the securities before recovery of their amortized cost basis, which may be maturity.
State, Municipal, and Corporate Obligations. The unrealized losses on the Company’s investments in securities of state, municipal, and corporate obligations were caused by interest rate changes. The contractual terms of those securities do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. The Company does not intend to sell the securities and it is not more likely than not the Company will be required to sell the securities before recovery of their amortized cost basis, which may be maturity.
The Company expects the fair value of the securities described above to recover as the securities approach their maturity or reset date.
12
Note 4: Loans, Leases and Allowance
The following table shows the composition of the loan and lease portfolio at June 30, 2025 and December 31, 2024:
| June 30, 2025 | December 31, 2024 | ||||||||||
| Commercial mortgage | $ | $ | |||||||||
| Commercial and industrial | |||||||||||
| Construction and development | |||||||||||
| Multi-family | |||||||||||
| Residential mortgage | |||||||||||
| Home equity lines of credit | |||||||||||
| Direct financing leases | |||||||||||
| Consumer | |||||||||||
| Less | |||||||||||
| Allowance for credit losses on loans and leases | |||||||||||
| Deferred loan fees | |||||||||||
| $ | $ | ||||||||||
The Company rates all loans and leases by credit quality using the following designations:
Grade 1 – Exceptional
Exceptional loans and leases are top-quality loans to individuals whose financial credentials are well known to the Company. These loans and leases have excellent sources of repayment, are well documented and/or virtually free of risk (i.e., CD secured loans).
Grade 2 – Quality Loans and Leases
These loans and leases have excellent sources of repayment with no identifiable risk of collection, and they conform in all respects to Company policy and IDFI and FDIC regulations. Documentation exceptions are minimal or are in the process of being corrected and not of a type that could subsequently expose the Company to risk of loss.
Grade 3 – Acceptable Loans
This category is for “average” quality loans and leases. These loans and leases have adequate sources of repayment with little identifiable risk of collection and they conform to Company policy and IDFI/FDIC regulations.
Grade 4 – Acceptable but Monitored
Loans and leases in this category may have a greater than average risk due to financial weakness or uncertainty but do not appear to require classification as special mention or substandard loans. Loans and leases rated “4” need to be monitored on a regular basis to ascertain that the reasons for placing them in this category do not advance or worsen.
Grade 5 – Special Mention
Loans and leases in this category have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or in the Company’s credit position at some future date. Special Mention loans and leases are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. This special mention rating is designed to identify a specific level of risk and concern about an asset’s quality. Although a special mention loan or lease has a higher probability of default than a pass rated loan or lease, its default is not imminent.
13
Grade 6 – Substandard
Loans and leases in this category are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans and leases so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
Substandard loans and leases have a high probability of payment default, or they have other well-defined weaknesses. Such loans and leases have a distinct potential for loss; however, an individual loan’s or lease’s potential for loss does not have to be distinct for the loan or lease to be rated substandard.
The following are examples of situations that might cause a loan or lease to be graded a “6”:
•Cash flow deficiencies (losses) jeopardize future loan or lease payments.
•Sale of non-collateral assets has become a primary source of loan or lease repayment.
•The relationship has deteriorated to the point that sale of collateral is now the Company’s primary source of repayment, unless this was the original source of loan or lease repayment.
•The borrower is bankrupt or for any other reason future repayment is dependent on court action.
Grade 7 – Doubtful
A loan or lease classified as doubtful has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of current existing facts, conditions, and values, highly questionable and improbable. A doubtful loan or lease has a high probability of total or substantial loss. Doubtful borrowers are usually in default, lack adequate liquidity or capital, and lack the resources necessary to remain an operating entity. Because of high probability of loss, nonaccrual accounting treatment will be required for doubtful loans and leases.
Grade 8 – Loss
Loans and leases classified loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan or lease has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan or lease even though partial recovery may be effected in the future.
No material changes have been made to the risk characteristics discussed above contained in the Company's 2024 Form 10-K.
14
The following tables present the credit risk profile of the Company’s loan and lease portfolio based on rating category, payment activity, and origination year as of June 30, 2025 and rating category as of December 31, 2024:
| 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Revolving loans amortized cost basis | Total | ||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2025: | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial mortgage | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Commercial mortgage | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Construction and development | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Construction and development | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Multi-family | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Multi-family | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Residential mortgage | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Home equity | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Home equity lines of credit | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Direct financing leases | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Direct financing leases | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Consumer | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Consumer | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Loans and Leases | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Total current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
15
| 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Revolving loans amortized cost basis | Total | ||||||||||||||||||||||||||||||||||||||||
| As of December 31, 2024: | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial mortgage | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Commercial mortgage | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Construction and development | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Construction and development | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Multi-family | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Multi-family | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Residential mortgage | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Home equity | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Home equity lines of credit | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Direct financing leases | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Direct financing leases | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Consumer | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Consumer | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Loans and Leases | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Total current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
For the three months ended June 30, 2025 and December 31, 2024, the Company did not have any revolving loans convert to term loans.
16
The following tables present the Company’s loan and lease portfolio aging analysis of the recorded investment in loans and leases as of June 30, 2025 and December 31, 2024:
| June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Delinquent Loans and Leases | Current | Total Portfolio Loans and Leases | Total Loans and Leases > 90 Days Accruing | ||||||||||||||||||||||||||||||||||||||
| 30-59 Days Past Due | 60-89 Days Past Due | 90 Days and Over | Total Past Due | ||||||||||||||||||||||||||||||||||||||
| Commercial mortgage | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||
| Construction and development | |||||||||||||||||||||||||||||||||||||||||
| Multi-family | |||||||||||||||||||||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||||||||||||||||||||
| Home equity | |||||||||||||||||||||||||||||||||||||||||
| Direct financing leases | |||||||||||||||||||||||||||||||||||||||||
| Consumer | |||||||||||||||||||||||||||||||||||||||||
| Totals | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||
| Delinquent Loans and Leases | Current | Total Portfolio Loans and Leases | Total Loans and Leases > 90 Days Accruing | ||||||||||||||||||||||||||||||||||||||
| 30-59 Days Past Due | 60-89 Days Past Due | 90 Days and Over | Total Past Due | ||||||||||||||||||||||||||||||||||||||
| Commercial mortgage | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||
| Construction and development | |||||||||||||||||||||||||||||||||||||||||
| Multi-family | |||||||||||||||||||||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||||||||||||||||||||
| Home equity | |||||||||||||||||||||||||||||||||||||||||
| Direct financing leases | |||||||||||||||||||||||||||||||||||||||||
| Consumer | |||||||||||||||||||||||||||||||||||||||||
| Totals | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
17
The following table presents information on the Company’s nonaccrual loans and leases at June 30, 2025 and December 31, 2024:
| June 30, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Nonaccrual loans and leases | Nonaccrual loans and leases without an allowance for credit losses | Nonaccrual loans and leases | Nonaccrual loans and leases without an allowance for credit losses | ||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | |||||||||||||||||||
| Construction and development | |||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||
| Direct financing leases | |||||||||||||||||||||||
| Total nonaccrual loans and leases | $ | $ | $ | $ | |||||||||||||||||||
During both the three months ended June 30, 2025 and December 31, 2024, the Company recognized $1,000
The following tables present the Company's amortized cost basis of collateral dependent loans, and their respective collateral type, which are individually analyzed to determine expected credit losses as of June 30, 2025 and December 31, 2024:
| June 30, 2025 | |||||||||||||||||||||||||||||||||||
| Commercial Real Estate | Multi-family Housing | Residential Real Estate | Other | Total | Allowance on Collateral Dependent Loans | ||||||||||||||||||||||||||||||
| Commercial mortgage | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||
| Construction and development | |||||||||||||||||||||||||||||||||||
| Multi-family | |||||||||||||||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Commercial Real Estate | Multi-family Housing | Residential Real Estate | Other | Total | Allowance on Collateral Dependent Loans | ||||||||||||||||||||||||||||||
| Commercial mortgage | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||
| Construction and development | |||||||||||||||||||||||||||||||||||
| Multi-family | |||||||||||||||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
18
Loan/Lease Modification Disclosures under ASU 2022-02
In certain situations, the Company may modify the terms of a loan or lease to a borrower experiencing financial difficulty. These modifications may include payment delays, term extensions, or interest-rate reductions. In some cases, combinations of modifications may be made to the same loan or lease. If a determination is made that a modified loan or lease has been deemed uncollectible, the loan or lease (or portion of the loan or lease) is charged-off, reducing the amortized cost basis of the loan or lease and adjusting the allowance for credit losses. During the three and six months ended June 30, 2025 and 2024, the Company had no new modifications to borrowers experiencing financial difficulty.
There were no modified loans or leases that had a payment default during the three or six months ended June 30, 2025 or 2024, and that were modified in the twelve months prior to that default by borrowers experiencing financial difficulty.
Other Real Estate Owned
Other real estate owned is included in other assets on the Condensed Consolidated Balance Sheets. At both June 30, 2025 and December 31, 2024 there was $37,000 289,000 and $275,000 , respectively.
Direct Financing Leases
The following lists the components of the net investment in direct financing leases:
| June 30, 2025 | December 31, 2024 | ||||||||||
| Total minimum lease payments to be received | $ | $ | |||||||||
| Initial direct costs | |||||||||||
| Less: Unearned income | ( | ( | |||||||||
| Net investment in direct finance leases | $ | $ | |||||||||
The following table summarizes the future minimum lease payments receivable subsequent to June 30, 2025:
| Remainder of 2025 | $ | ||||
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| Thereafter | |||||
| $ | |||||
Allowance for Credit Losses on Loans and Leases
The allowance for credit losses on loans and leases is established for current expected credit losses on the Company's loan and lease portfolios in accordance with ASC Topic 326. This requires significant judgement to estimate credit losses measured on a collective pool basis when similar risk characteristics exist, and for loans evaluated individually. The Company estimates expected future losses for the loan's entire contractual term, taking into account expected payments when appropriate. The allowance is an estimation based on management's evaluation of expected losses related to the Company's financial assets measured at amortized cost. It considers relevant available information from internal and external sources relating to the
19
historical loss experience, current conditions and reasonable and supportable forecasts for the Company's outstanding loan and lease balances.
The Company utilizes a cash flow ("CF") analysis method of estimating expected losses, which relies on key inputs and assumptions. Significant factors affecting the calculation are the segmenting of loans and leases based upon similar risk characteristics, applied loss rates based upon reasonable and supportable forecasts, and contractual term adjustments, including prepayment and curtailment adjustments. To ensure the allowance is maintained at an adequate level, a detailed analysis is performed on a quarterly basis, with an appropriate provision made to adjust the allowance.
The Company has elected to exclude accrued interest receivable from the calculation of the allowance for credit losses, as it is the Company's policy to write off accrued interest in a timely manner as it is deemed uncollectible by reversing interest income.
The Company categorizes its loan portfolios into eight segments, as discussed above, based on similar risk characteristics. Loans within each segment are collectively evaluated using either a CF methodology or remaining life methodology. When estimating for credit loss, the Company forecasts the first four quarters of the credit loss estimate and reverts to a long-run average of each considered factor. The Company developed its reasonable and supportable forecasts using economic data, such as national gross domestic product ("GDP") and unemployment rate.
Qualitative adjustments are applied to each collectively segmented pool to appropriately capture differences in current or expected qualitative risk characteristics. When evaluating the estimation for expected credit losses, the Company evaluates these qualitative adjustments for any changes in:
•lending policies, procedures, and strategies,
•the nature and volume of the loan and lease portfolio,
•international, national, regional, and local conditions,
•the experience, depth, and ability of lending management,
•the volume and severity of past due loans,
•the quality of the loan review system,
•the underlying collateral,
•concentration risk, and
•the effect of other external factors.
The following tables summarize changes in the allowance for credit losses by segment for the three and six months ended June 30, 2025 and 2024, respectively:
| Balances, March 31, 2025 | Provision for (reversal of) credit losses | Charge-offs | Recoveries | Balances, June 30, 2025 | |||||||||||||||||||||||||
| Commercial mortgage | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||
| Construction and development | |||||||||||||||||||||||||||||
| Multi-family | ( | ||||||||||||||||||||||||||||
| Residential mortgage | ( | ||||||||||||||||||||||||||||
| Home equity | |||||||||||||||||||||||||||||
| Direct financing leases | ( | ||||||||||||||||||||||||||||
| Consumer | ( | ||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
20
| Balances, December 31, 2024 | Provision for (reversal of) credit losses | Charge-offs | Recoveries | Balances, June 30, 2025 | |||||||||||||||||||||||||
| Commercial mortgage | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||
| Construction and development | ( | ||||||||||||||||||||||||||||
| Multi-family | ( | ||||||||||||||||||||||||||||
| Residential mortgage | ( | ||||||||||||||||||||||||||||
| Home equity | |||||||||||||||||||||||||||||
| Direct financing leases | ( | ||||||||||||||||||||||||||||
| Consumer | ( | ||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
| Balances, March 31, 2024 | Provision for (reversal of) credit losses | Charge-offs | Recoveries | Balances, June 30, 2024 | |||||||||||||||||||||||||
| Commercial mortgage | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||
| Construction and development | ( | ||||||||||||||||||||||||||||
| Multi-family | |||||||||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||||||||
| Home equity | |||||||||||||||||||||||||||||
| Direct financing leases | ( | ||||||||||||||||||||||||||||
| Consumer | ( | ||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
| Balances, December 31, 2023 | Provision for (reversal of) credit losses | Charge-offs | Recoveries | Balances, June 30, 2024 | |||||||||||||||||||||||||
| Commercial mortgage | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||
| Construction and development | ( | ||||||||||||||||||||||||||||
| Multi-family | |||||||||||||||||||||||||||||
| Residential mortgage | ( | ||||||||||||||||||||||||||||
| Home equity | |||||||||||||||||||||||||||||
| Direct financing leases | ( | ||||||||||||||||||||||||||||
| Consumer | ( | ||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
During the second quarter of 2025, the allowance for credit losses on loans and leases increased from $16.1 million at March 31, 2025, to $16.2 million at June 30, 2025. The increase was attributable to provisions for credit losses totaling $767,000 during the three months ended June 30, 2025, partially offset by net charge-offs of $626,000 . Set forth below is a segment analysis of the loan and lease portfolio reflecting the change in the allowance for each segment, due to the change in the amount of each segment.
•Commercial Mortgage – allowance increased due to loan balances increasing $6.1 million.
•Commercial & Industrial – allowance increased due to loan balances increasing $4.2 million.
•Construction & Development – allowance increased due to loan balances increasing $2.4 million.
•Multi-Family – allowance decreased due to loan balances decreasing $19.7 million.
•Residential Mortgage – allowance decreased due to loan balances decreasing $3.7 million.
21
•Home Equity – allowance increased due to loan balances increasing $1.3 million.
•Direct Financing Leases – allowance increased due to loan balances increasing $1.1 million.
•Consumer – allowance increased due to loan balances increasing $353,000 .
Our commercial loan portfolio, consisting of commercial and multi-family real estate loans, commercial and industrial loans, and construction loans, represented 69.9 % and 69.5 % of our portfolio as of June 30, 2025 and December 31, 2024, respectively. The allowance for credit losses on loans and leases allocated to the commercial loan portfolio represented 69.3 % and 68.9 % of our total allowance at June 30, 2025 and December 31, 2024, respectively.
Economic Outlook
Due to the future-focused nature of the calculation for the allowance for credit losses, management must make significant assumptions. Estimating an appropriate allowance requires management to use relevant forward-looking information drawn from reasonable and supportable forecasts. Economic factors are a consequential part of these forecasts, and as such are evaluated periodically for developments that may impact the Company's allowance for credit losses and loan and lease portfolio.
As of June 30, 2025, there are several key economic factors that continue to affect the Company's loan and lease portfolio. These economic factors include persistent inflation, weakening economic growth, and unemployment. In addition, geopolitical uncertainty and risks associated with tariffs have significant indirect and direct impacts on supply chains and price increases. These key factors will continue to influence the Company's loan and lease portfolio for the near future.
The Company remains committed to three growth market regions: Columbus, Ohio, Cincinnati/Dayton/Springfield, Ohio, and Indianapolis, Indiana. As high-growth areas, these market regions specialize in commercial real estate loans. Their respective forecasts are described below:
•Columbus, Ohio – The economic outlook for the Columbus MSA region is mixed. Economic expansion is expected to be modest. The market region continues to forecast ordinary job growth, with real GDP remaining flat for the remainder of 2025. The unemployment rates edged slightly higher than the national unemployment average. However, the market region is actively investing in workforce development, targeting high-demand fields such as information technology, engineering technology, and healthcare.
•Cincinnati/Dayton/Springfield, Ohio – The economic outlook for the Cincinnati/Dayton/Springfield market region is steady job growth. However, the unemployment rate continues to be slightly above the national average due to labor force constraints, housing supply shortages, and uncertainty tied to geopolitics and tariffs. Ongoing advanced manufacturing investments are expected to boost job creation and regional diversification. The synergy between this market area as an integral part of Ohio's broader "Silicon Corridor" is increasingly vital for attracting new investment and workforce talent.
•Indianapolis, Indiana – The economic outlook for the Indianapolis market region is robust growth. This can be attributed to diversified contributions from key sectors, improving wages, and low unemployment. For 2025, Indianapolis is projected to have a top housing market within the Midwest, driven by affordability, job gains, and inventory. The economic outlook for the region is favorable, while the unemployment rate is in line with the national unemployment rate average.
The economic outlook is significantly more complex and uncertain at best, thus creating a challenging economic environment requiring heightened vigilance and adaptability by the Company. There are a myriad of potential outcomes, and the variances may be significant and unpredictable.
Future potential economic volatility may have a significant impact on the Company's loan and lease portfolio, specifically the allowance for credit losses. As a result, the Company's future estimates may fluctuate for the remainder of 2025.
22
Allowance for Credit Losses on Unfunded Commitments
The allowance for credit losses on unfunded commitments is included in other liabilities on the Condensed Consolidated Balance Sheets. The estimate of expected losses on unfunded commitments is calculated based on the loss rate for the loan or lease segment in which the loan or lease commitments would be classified if funded, adjusted for the estimate of funding probability. Adjustments to the allowance, either additional provisions or reversals, are recorded in the provision for (reversal of) credit losses in the Condensed Consolidated Statements of Income.
The following tables detail activity in the allowance for credit losses on unfunded commitments during the three and six months ended June 30, 2025 and 2024:
| Three Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Beginning balance | $ | $ | |||||||||
| Reversal of credit losses | ( | ( | |||||||||
| Ending balance | $ | $ | |||||||||
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Beginning balance | $ | $ | |||||||||
| Provision for (reversal of) credit losses | ( | ||||||||||
| Ending balance | $ | $ | |||||||||
Note 5: Fair Value of Financial Instruments
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:
Level 1 Quoted prices in active markets for identical assets or liabilities
Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
Level 3 Unobservable inputs supported by little or no market activity that are significant to the fair value of the assets or liabilities
23
Recurring Measurements
The following tables present the fair value measurements of assets recognized in the Condensed Consolidated Balance Sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2025 and December 31, 2024:
| Fair Value Measurements Using | |||||||||||||||||||||||
| Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| June 30, 2025 | |||||||||||||||||||||||
| Available for sale securities | |||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
| SBA Pools | |||||||||||||||||||||||
| Federal agencies | |||||||||||||||||||||||
| State and municipal obligations | |||||||||||||||||||||||
| Mortgage-backed securities - GSE residential | |||||||||||||||||||||||
| Corporate obligations | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
| Fair Value Measurements Using | |||||||||||||||||||||||
| Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Available for sale securities | |||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
| SBA Pools | |||||||||||||||||||||||
| Federal agencies | |||||||||||||||||||||||
| State and municipal obligations | |||||||||||||||||||||||
| Mortgage-backed securities - GSE residential | |||||||||||||||||||||||
| Corporate obligations | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the six months ended June 30, 2025.
Available for Sale Securities
Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy, which includes equity securities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include agency securities, obligations of state and political subdivisions, and mortgage-backed securities. Matrix pricing is a mathematical technique widely used in the banking industry to value investment securities without relying exclusively on quoted prices for specific investment securities but rather relying on the investment securities’ relationship to other benchmark quoted investment
24
securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.
Nonrecurring Measurements
As of June 30, 2025 and December 31, 2024, there were no assets or liabilities measured at fair value on a nonrecurring basis.
Fair Value of Financial Instruments
The following tables present estimated fair values of the Company’s financial instruments at June 30, 2025 and December 31, 2024:
| Fair Value Measurements Using | |||||||||||||||||||||||
| Carrying Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| June 30, 2025 | |||||||||||||||||||||||
| Financial assets | |||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Interest-earning time deposits | |||||||||||||||||||||||
| Available for sale securities | |||||||||||||||||||||||
| Held to maturity securities | |||||||||||||||||||||||
| Loans held for sale | |||||||||||||||||||||||
| Loans and leases receivable, net | |||||||||||||||||||||||
| FHLB stock | |||||||||||||||||||||||
| Interest receivable | |||||||||||||||||||||||
| Financial liabilities | |||||||||||||||||||||||
| Deposits | |||||||||||||||||||||||
| FHLB advances | |||||||||||||||||||||||
| Interest payable | |||||||||||||||||||||||
| Fair Value Measurements Using | |||||||||||||||||||||||
| Carrying Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Financial assets | |||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Interest-earning time deposits | |||||||||||||||||||||||
| Available for sale securities | |||||||||||||||||||||||
| Held to maturity securities | |||||||||||||||||||||||
| Loans held for sale | |||||||||||||||||||||||
| Loans and leases receivable, net | |||||||||||||||||||||||
| FHLB stock | |||||||||||||||||||||||
| Interest receivable | |||||||||||||||||||||||
| Financial liabilities | |||||||||||||||||||||||
| Deposits | |||||||||||||||||||||||
| FHLB advances | |||||||||||||||||||||||
| Interest payable | |||||||||||||||||||||||
25
Note 6: Earnings per Share
Basic EPS is computed by dividing net income allocated to common stock by the weighted average number of common shares outstanding during the period which excludes the participating securities. Diluted EPS includes the dilutive effect of additional potential common shares from stock compensation awards, but excludes awards considered participating securities. ESOP shares are not considered outstanding for EPS until they are earned. The following table presents the computation of basic and diluted EPS for the periods indicated:
| Three Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Net income | $ | $ | |||||||||
| Shares outstanding for Basic EPS: | |||||||||||
| Average shares outstanding | |||||||||||
| Less: average restricted stock award shares not vested | |||||||||||
| Less: average unearned ESOP Shares | |||||||||||
| Shares outstanding for Basic EPS | |||||||||||
| Additional Dilutive Shares | |||||||||||
| Shares outstanding for Diluted EPS | |||||||||||
| Basic Earnings Per Share | $ | $ | |||||||||
| Diluted Earnings Per Share | $ | $ | |||||||||
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Net income | $ | $ | |||||||||
| Shares outstanding for Basic EPS: | |||||||||||
| Average shares outstanding | |||||||||||
| Less: average restricted stock award shares not vested | |||||||||||
| Less: average unearned ESOP Shares | |||||||||||
| Shares outstanding for Basic EPS | |||||||||||
| Additional Dilutive Shares | |||||||||||
| Shares outstanding for Diluted EPS | |||||||||||
| Basic Earnings Per Share | $ | $ | |||||||||
| Diluted Earnings Per Share | $ | $ | |||||||||
Note 7: Benefit Plans
401(k)
The Company has a retirement savings 401(k) plan, in which substantially all employees may participate. The Company matches employees' contributions at the rate of 50 percent for the first six percent of base salary contributed by participants.
26
The Company’s expense for the plan was $66,000 and $130,000 for the three and six months ended June 30, 2025, and $70,000 and $138,000 for the three and six months ended June 30, 2024, respectively.
Employee Stock Ownership Plan
As part of the reorganization and related stock offering, the Company established an Employee Stock Ownership Plan, or ESOP, covering substantially all employees. The ESOP acquired 1,082,130 shares of Company common stock at an average price of $13.59 per share on the open market with funds provided by a loan from the Company. Dividends on unallocated shares used to repay the loan for the Company are recorded as a reduction of the loan or accrued interest, as applicable. Dividends on allocated shares paid to participants are reported as compensation expense. Unearned ESOP shares which have not yet been allocated to ESOP participants are excluded from the computation of average shares outstanding for earnings per share calculation. Accordingly, 761,982 and 789,035 shares of common stock acquired by the ESOP were shown as a reduction of stockholders’ equity at June 30, 2025 and December 31, 2024, respectively. Shares are released to participants proportionately as the loan is repaid.
ESOP expense for the three and six months ended June 30, 2025 was $181,000 and $360,000 , respectively, and was $156,000 and $310,000 for the three and six months ended June 30, 2024, respectively.
| June 30, 2025 | December 31, 2024 | ||||||||||
| Earned ESOP shares | |||||||||||
| Unearned ESOP shares | |||||||||||
| Total ESOP shares | |||||||||||
| Quoted per share price | $ | $ | |||||||||
| Fair value of earned shares (in thousands) | $ | $ | |||||||||
| Fair value of unearned shares (in thousands) | $ | $ | |||||||||
Richmond Mutual Bancorporation, Inc. 2020 Equity Incentive Plan
On September 15, 2020, the Company's stockholders approved the Richmond Mutual Bancorporation, Inc. 2020 Equity Incentive Plan ("2020 EIP") which provides for the grant to eligible participants of up to (i) 1,352,662 shares of Company common stock to be issued upon the exercise of stock options and stock appreciation rights and (ii) 541,065 shares of Company common stock to participants as restricted stock awards (which may be in the form of shares of common stock or share units giving the participant the right to receive shares of common stock at a specified future date).
Restricted Stock Awards. On October 1, 2020, the Company awarded 449,086 shares of common stock under the 2020 EIP with a grant date fair value of $10.53 per share (total fair value of $4.7 million at issuance) to eligible participants. On April 1, 2021, the Company awarded an additional 4,000 shares of common stock under the 2020 EIP with a grant date fair value of $13.86 (total fair value of $55,000 at issuance) to eligible participants. These awards vest in five equal annual installments with the first vesting having occurred on June 30, 2021. Forfeited shares may be awarded to other eligible recipients in future grants until the 2020 EIP terminates in September 2030.
27
The following table summarizes the restricted stock award activity in the 2020 EIP during the six months ended June 30, 2025.
| Six Months Ended June 30, 2025 | |||||||||||
| Number of Restricted Shares | Weighted Average Grant Date Fair Value | ||||||||||
| Non-vested, beginning of period | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeited | |||||||||||
| Non-vested, June 30, 2025 | |||||||||||
Total compensation cost recognized in the Condensed Consolidated Statements of Income for restricted stock awards during the three and six months ended June 30, 2025 was $217,000 and $434,000 , and the related tax benefit recognized was $46,000 and $91,000 , respectively. As of June 30, 2025, there was no unrecognized compensation expense related to restricted stock awards.
Stock Option Plan. On October 1, 2020, the Company awarded options to purchase 1,095,657 shares of common stock under the 2020 EIP with an exercise price of $10.53 per share, the fair value of a share of the Company's common stock on the date of grant, to eligible participants. On April 1, 2021, the Company awarded options to purchase 8,000 shares of common stock under the 2020 EIP with an exercise price of $13.86 per share, the fair value of a share of the Company's common stock on the date of the grant, to eligible participants. These awards vest in five equal annual installments with the first vesting having occurred on June 30, 2021. Forfeited options are available to be awarded in future grants until the 2020 EIP terminates in September 2030.
The following table summarizes the stock option activity in the 2020 EIP during the six months ended June 30, 2025.
| Six Months Ended June 30, 2025 | |||||||||||
| Number of Shares | Weighted-Average Exercise Price | ||||||||||
| Balance at beginning of period | $ | ||||||||||
| Granted | |||||||||||
| Exercised | |||||||||||
| Forfeited/expired | |||||||||||
| Balance, June 30, 2025 | |||||||||||
| Exercisable at end of period | $ | ||||||||||
The fair value of options granted is estimated on the date of the grant using a Black Scholes model with the following assumptions:
| April 1, 2021 | |||||
| Dividend yields | % | ||||
| Volatility factors of expected market price of common stock | % | ||||
| Risk-free interest rates | % | ||||
| Expected life of options | |||||
28
A summary of the status of the Company stock option shares as of June 30, 2025 is presented below.
| Shares | Weighted Average Grant Date Fair Value | ||||||||||
| Non-vested, beginning of year | $ | ||||||||||
| Vested | ( | ||||||||||
| Non-vested, June 30, 2025 | $ | ||||||||||
Total compensation cost recognized in the Condensed Consolidated Statements of Income for option-based payment arrangements for the three and six months ended June 30, 2025 was $146,000 and $293,000 , and the related tax benefit recognized was $16,000 and $31,000 , respectively. As of June 30, 2025, there was no unrecognized compensation expense related to the stock option awards.
Note 8: Qualified Affordable Housing Investments
The Company has investments in certain limited partnerships that fund affordable housing projects and provide the Company with low income housing tax credits ("LIHTC"). At June 30, 2025 and December 31, 2024, the balance of these investments in LIHTC totaled $864,000 and $951,000 , respectively. These balances are reflected in the other assets line of the Condensed Consolidated Balance Sheets. The assets are amortized as a component of the provision for income taxes.
The following table summarizes the amortization expense and tax credits recognized for the Company's LIHTC investments for the three months ended June 30, 2025 and 2024.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
Note 9: Segment Information
The Company has one reportable segment: community banking. The Company's reportable segment is determined by the Chief Executive Officer, who serves as the chief operating decision maker ("CODM"), based on information regarding the Company's products and services. The CODM evaluates the financial performance of the Company's business components by assessing revenue streams, significant expenses, and budget-to-actual results.
The Company's primary source of revenue is providing banking services to its customers. Significant expenses associated with banking operations include interest expense, credit loss expense, and salaries and employee benefits. The CODM evaluates performance, directs resource allocation, and makes key operating decisions based on consolidated net income reported in the Condensed Consolidated Statements of Income. Segment assets are measured based on total consolidated assets as reported in the Condensed Consolidated Balance Sheets.
29
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
Management’s discussion and analysis of financial condition of the Richmond Mutual Bancorporation, Inc. (the “Company”) at June 30, 2025, and the consolidated results of operations for the three and six month periods ended June 30, 2025, compared to the same periods in 2024, is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto appearing in Part I, Item 1, of this Form 10-Q.
The terms “we,” “our,” “us,” or the “Company” refer to Richmond Mutual Bancorporation, Inc. and its consolidated direct and indirect subsidiaries, including First Bank Richmond, which we sometimes refer to as the “Bank,” unless the context otherwise requires.
Cautionary Note Regarding Forward-Looking Statements
Certain matters in this Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact, are based on certain assumptions and are generally identified by use of words such as “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook,” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.” These forward-looking statements include, but are not limited to:
•statements of our goals, intentions and expectations;
•statements regarding our business plans, prospects, growth and operating strategies;
•statements regarding the quality of our loan and investment portfolios; and
•estimates of our risks and future costs and benefits.
You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. These forward-looking statements are based on our current beliefs and expectations and, by their nature, are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.
Important factors that could cause our actual results to differ materially from the results anticipated or projected include, but are not limited to, the following:
•adverse impacts to economic conditions in our local market areas and other markets where we have lending relationships;
•effects of employment levels, labor shortages, persistent inflation, recessionary pressures, or slowing economic growth;
•changes in interest rate levels and the duration of such changes, including actions by the Board of Governors of the Federal Reserve System (the "Federal Reserve");
•the impact of inflation and monetary and fiscal policy responses thereto, and their impact on consumer behavior;
•effects of a federal government shutdown, debt ceiling standoff, or other fiscal policy uncertainty;
•changes in the level and direction of loan or lease delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses;
•our ability to access cost-effective funding including maintaining the confidence of depositors;
30
•unexpected outflows of uninsured deposits may require us to sell investment securities at a loss;
•fluctuations in real estate values, and residential, commercial, and multi-family real estate market conditions;
•demand for loans and deposits in our market area;
•our ability to implement and change our business strategies;
•competition among depository and other financial institutions and equipment financing companies;
•bank failures or other adverse developments at banks and related negative press about the banking industry in general on investor and depositor sentiment;
•inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on our loans and leases;
•adverse changes in the securities or secondary mortgage markets;
•changes in the quality or composition of our loan, lease or investment portfolios;
•our ability to keep pace with technological changes, including our ability to identify and address cyber-security risks such as data security breaches, "denial of service" attacks, "hacking" and identity theft, and other attacks on our information technology systems or on our third-party vendors;
•results of examinations by regulatory authorities and potential requirements to increase credit loss allowances, write-down assets, reclassify assets, change our regulatory capital position, or affect our liquidity and earnings;
•the inability of third-party providers to perform as expected;
•our ability to manage market risk, credit risk and operational risk in the current economic environment;
•our ability to enter new markets successfully and capitalize on growth opportunities;
•our ability to attract and retain key employees;
•our compensation expense associated with equity allocated or awarded to our employees;
•changes in the financial condition, results of operations or future prospects of issuers of securities that we own;
•our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire and our ability to realize related revenue synergies and cost savings within expected time frames, and any goodwill charges related thereto;
•changes in consumer spending, borrowing and savings habits;
•changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission ("SEC") or the Public Company Accounting Oversight Board, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods;
•legislation or regulatory changes, including but not limited to shifts in capital requirements, banking regulation, tax laws, or consumer protection laws;
•our ability to pay dividends on our common stock;
•our ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking, and cybersecurity;
31
•geopolitical developments and international conflicts, including but not limited to tensions or instability in Eastern Europe, the Middle East, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, energy prices, or economic activity in specific industry sectors;
•other economic, competitive, governmental, regulatory, and technical factors affecting our operations, pricing, products and services;
•the effects of climate change, severe weather, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest, and other external events; and
•the other risks detailed in this report and from time to time in our other filings with the Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”).
We undertake no obligation to publicly update or revise any forward-looking statements included in this report or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this report might not occur and you should not put undue reliance on any forward-looking statements.
Overview
The Company, a Maryland corporation, is a bank holding company for its wholly owned subsidiary, First Bank Richmond. Substantially all of the Company's business is conducted through First Bank Richmond. The Company is regulated by the Federal Reserve and the Indiana Department of Financial Institutions ("IDFI"). The Company's corporate office is located at 31 North 9th Street, Richmond, Indiana, and its telephone number is (765) 962-2581.
First Bank Richmond is an Indiana state-chartered commercial bank headquartered in Richmond, Indiana. The Bank was originally established in 1887 as an Indiana state-chartered mutual savings and loan association and in 1935 converted to a federal mutual savings and loan association, operating under the name First Federal Savings and Loan Association of Richmond. In 1993, the Bank converted to a state-chartered mutual savings bank and changed its name to First Bank Richmond, S.B. In 1998, the Bank, in connection with its non-stock mutual holding company reorganization, converted to a national bank charter operating as First Bank Richmond, National Association. In July 2007, Richmond Mutual Bancorporation-Delaware, the Bank’s then current holding company, acquired Mutual Federal Savings Bank headquartered in Sidney, Ohio. Mutual Federal Savings Bank was operated independently as a separately chartered, wholly owned subsidiary of Richmond Mutual Bancorporation-Delaware until 2016 when it was combined with the bank through an internal merger transaction that consolidated both banks into a single, more efficient commercial bank charter. In 2017, the Bank converted to an Indiana state-chartered commercial bank and changed its name to First Bank Richmond. The former Mutual Federal Savings Bank continues to operate in Ohio under the name Mutual Federal, a division of First Bank Richmond.
First Bank Richmond provides full banking services through its seven full- and one limited-service offices located in Cambridge City (1), Centerville (1), Richmond (5) and Shelbyville (1), Indiana, its five full-service offices located in Piqua (2), Sidney (2) and Troy (1), Ohio, and its loan production office in Columbus, Ohio. Administrative, trust and wealth management services are conducted through First Bank Richmond’s Corporate Office/Financial Center located in Richmond, Indiana. As an Indiana-chartered commercial bank, First Bank Richmond is subject to regulation by the IDFI and the Federal Deposit Insurance Corporation (“FDIC”).
Our principal business consists of attracting deposits from the general public, as well as brokered deposits, and investing those funds primarily in loans secured by commercial and multi-family real estate, first mortgages on owner-occupied, one- to four-family residences, a variety of consumer loans, direct financing leases and commercial and industrial loans. We also obtain funds by utilizing Federal Home Loan Bank (“FHLB”) advances. Funds not invested in loans generally are invested in investment securities, including mortgage-backed and mortgage-related securities and government sponsored agency and municipal bonds.
First Bank Richmond generates commercial, mortgage and consumer loans and leases and receives deposits from customers located primarily in Wayne and Shelby Counties, in Indiana and Shelby, Miami and Franklin (no deposits) Counties, in Ohio. We sometimes refer to these counties as our primary market area. First Bank Richmond’s loans are generally secured by specific items of collateral including real property, consumer assets and business assets. Our leasing operation consists of direct investments in equipment that we lease (referred to as direct finance leases) to small businesses located throughout the United
32
States. Our lease portfolio consists of various kinds of equipment, generally technology-related, such as computer systems, medical equipment and general manufacturing, industrial, construction and transportation equipment. We seek leasing transactions where we believe the equipment leased is integral to the lessee's business. We also provide trust and wealth management services, including serving as executor and trustee under wills and deeds and as guardian and custodian of employee benefits, and manage private investment accounts for individuals and institutions. Total wealth management assets under management and administration were $214.2 million at June 30, 2025.
Our results of operations are primarily dependent on net interest income. Net interest income is the difference between interest income, which is the income that is earned on loans and investments, and interest expense, which is the interest that is paid on deposits and borrowings. Other significant sources of pre-tax income are service charges (mostly from service charges on deposit accounts and loan servicing fees), and fees from sale of residential mortgage loans originated for sale in the secondary market. We also recognize income from the sale of investment securities.
Changes in market interest rates, the slope of the yield curve, and interest we earn on interest-earning assets or pay on interest-bearing liabilities, as well as the volume and types of interest-earning assets, interest-bearing and noninterest-bearing liabilities and shareholders’ equity, usually have the largest impact on changes in our net interest spread, net interest margin and net interest income during a reporting period.
At June 30, 2025, on a consolidated basis, we had $1.5 billion in assets, $1.2 billion in loans and leases, net of allowance, $1.1 billion in deposits, and $132.3 million in stockholders’ equity. At June 30, 2025, First Bank Richmond’s total risk-based capital ratio was 14.24%, exceeding the 10.0% requirement for a well-capitalized institution. For the six months ended June 30, 2025, net income was $4.6 million, compared with net income of $4.4 million for the six months ended June 30, 2024.
Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with GAAP. In doing so, we have to make estimates and assumptions. Our critical accounting estimates are those estimates that involve a significant level of uncertainty at the time the estimate was made, and changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. Accordingly, actual results could differ materially from our estimates. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We have reviewed our critical accounting estimates with the audit committee of our Board of Directors.
There have been no significant changes during the six months ended June 30, 2025 to the critical accounting estimates reported in Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Form 10-K. See "Critical Accounting Estimates" included in Part II, Item 7 of our 2024 Form 10-K for a further discussion of our Critical Accounting Estimates.
Comparison of Financial Condition at June 30, 2025 and December 31, 2024
General. Total assets increased $2.9 million, or 0.2%, to $1.5 billion at June 30, 2025 from December 31, 2024. The increase was primarily the result of a $9.0 million, or 0.8%, increase in loans and leases, net of allowance for credit losses, to $1.2 billion, and a $5.5 million, or 25.1%, increase in cash and cash equivalents to $27.2 million. These increases were partially offset by a $9.4 million, or 3.6%, decrease in investment securities to $252.3 million, and a $1.6 million decrease in other assets, primarily deferred tax assets.
Investment Securities. Investment securities available for sale totaled $249.3 million and $258.2 million, while investment securities held to maturity totaled $2.9 million and $3.5 million at June 30, 2025 and December 31, 2024, respectively. The $8.8 million, or 3.4%, decrease in investment securities available for sale was primarily due to maturities and principal repayments of $8.9 million and $6.8 million in sales of securities, partially offset by a $3.0 million upward mark-to-market adjustment on the investment portfolio resulting from lower market interest rates and purchases of securities totaling $4.3 million. The $566,000 decrease in investment securities held to maturity was the result of scheduled principal repayments and maturities. The proceeds received from the maturities and repayments were primarily used to fund loan growth.
Loans and Leases. Loans and leases, net of allowance for credit losses on loans and leases, increased $9.0 million, or 0.8%, to $1.2 billion at June 30, 2025 from December 31, 2024. The increase in loans and leases was attributable to increases in commercial real estate, commercial and industrial, and multi-family loans of $21.9 million, $14.3 million, and $5.9 million,
33
respectively. These increases were partially offset by a $30.2 million decrease in construction and development loans. At June 30, 2025, loans held for sale totaled $136,000, compared to $1.1 million at December 31, 2024.
Nonaccrual loans and leases totaled $5.6 million at June 30, 2025, compared to $5.1 million at December 31, 2024. The increase was primarily due to a $530,000 increase in nonaccrual direct financing leases, which increased to $564,000 from $34,000. Accruing loans and leases past due 90 days or more totaled $2.5 million and $1.7 million at June 30, 2025 and December 31, 2024, respectively. The increase in accruing loans past due 90 days or more was primarily due to one commercial real estate loan of $704,000. At June 30, 2025, this loan had a loan to value ratio of 79.1%, and was largely guaranteed by the U.S. Small Business Administration ("SBA"). Nonperforming loans and leases, consisting of nonaccrual loans and leases and accruing loans and leases 90 days or more past due, totaled $8.1 million, or 0.68% of total loans and leases, at June 30, 2025, compared to $6.8 million, or 0.58% of total loans and leases, at December 31, 2024.
Allowance for Credit Losses. The allowance for credit losses on loans and leases increased $428,000, or 2.7%, to $16.2 million at June 30, 2025 from December 31, 2024. At June 30, 2025, the allowance for credit losses on loans and leases totaled 1.37% of total loans and leases outstanding. The increase in the allowance was primarily due to changes in portfolio composition, primarily growth in commercial real estate, multi-family, and commercial and industrial loans, which generally carry higher reserve requirements relative to other segments. In addition, updated economic forecasts, including expectations for slowing GDP growth and rising unemployment, contributed to a more cautious provisioning approach. At December 31, 2024, the allowance for credit losses on loans and leases totaled $15.8 million, or 1.34% of total loans and leases outstanding. Net charge-offs during the first half of 2025 totaled $1.0 million, and were primarily attributable to direct financing leases, compared to net charge-offs of $774,000 during the first half of 2024.
Management regularly analyzes conditions within its geographic markets and evaluates its loan and lease portfolio. The Company evaluated its exposure to potential loan and lease losses as of June 30, 2025, which evaluation included consideration of a potential recession due to inflation, stock market volatility, and overall geopolitical tensions. Credit metrics are being reviewed and stress testing is being performed on the loan portfolio on an ongoing basis. For additional information on the allowance for credit losses, see "Allowance for Credit Losses on Loans and Leases" and "Economic Outlook" in "Note 4: Loans, Leases and Allowance" of the "Notes to Condensed Consolidated Financial Statements" in this report.
Other Assets. Other assets decreased $1.6 million, or 7.2%, to $20.9 million at June 30, 2025 from $22.5 million at December 31, 2024. The decrease was primarily caused by a reduction in the Company's deferred tax asset, reflecting lower unrealized losses in the available for sale investment portfolio following a decline in market rates.
Deposits. Total deposits increased $2.4 million, or 0.2%, to $1.1 billion at June 30, 2025 from December 31, 2024. The increase in deposits primarily was due to an increase in interest-bearing demand deposits of $12.0 million, and retail (non-brokered) time deposits of $10.5 million. These increases were partially offset by decreases in brokered time deposits of $18.1 million, and noninterest-bearing accounts of $3.9 million. Brokered deposits totaled $239.5 million, or 21.8% of total deposits, at June 30, 2025, compared to $257.6 million, or 23.5% of total deposits, at December 31, 2024. At June 30, 2025, noninterest-bearing deposits totaled $106.2 million, or 9.7% of total deposits, compared to $110.1 million, or 10.1% of total deposits, at December 31, 2024. Management attributes the shift from transaction accounts to time deposits to customer demand for higher yields, as financial institutions continue to offer competitive rates on certificates of deposit in response to elevated market rate levels during late 2024. Although the Federal Reserve began lowering rates in late 2024, deposit pricing remains responsive to competitive pressures and customer preferences for rate certainty.
As of June 30, 2025, approximately $249.8 million of our deposit portfolio, or 22.8% of total deposits, excluding collateralized public deposits, was uninsured. The uninsured amounts are estimated based on the methodologies and assumptions used for First Bank Richmond's regulatory reporting requirements.
Borrowings. Total borrowings, consisting solely of FHLB advances, increased $2.0 million, or 0.8%, to $267.0 million at June 30, 2025, compared to $265.0 million at December 31, 2024. The increased borrowings were used to fund loan growth.
Stockholders’ Equity. Stockholders’ equity totaled $132.3 million at June 30, 2025, a decrease of $550,000, or 0.4%, from December 31, 2024. The decrease in stockholders' equity resulted from the payment of $2.9 million in dividends to Company stockholders and the repurchase of $5.6 million of Company common stock, partially offset by net income of $4.6 million and a decrease in AOCL of $2.4 million. The decrease in AOCL was a result of improved fair values in the Company's available for sale investment portfolio, resulting from a reduction in market rates of interest. At December 31, 2024, the available for sale portfolio had a net unrealized loss of $58.0 million compared to a net unrealized loss of $55.0 million at
34
June 30, 2025. The AOCL impact to equity, after tax affecting the unrealized loss, was $43.4 million at June 30, 2025 compared to $45.8 million at December 31, 2024. The Company repurchased 425,823 shares of Company common stock at an average price of $13.14 per share for a total of $5.6 million during the first half of 2025. The Company's equity to asset ratio was 8.78% at June 30, 2025. At June 30, 2025, the Bank's Tier 1 capital to total assets ratio was 10.75% and the Bank's capital was well in excess of all regulatory requirements.
Comparison of Results of Operations for the Three Months Ended June 30, 2025 and 2024.
General. Net income for the three months ended June 30, 2025 was $2.6 million, a $541,000 or 26.3% increase from net income of $2.1 million for the three months ended June 30, 2024. Diluted earnings per share were $0.26 for the second quarter of 2025, compared to $0.20 diluted earnings per share for the second quarter of 2024. The increase in net income primarily was the result of an increase in net interest income of $1.2 million, partially offset by a $474,000 increase in the provision for credit losses. In addition, noninterest income declined $32,000, and noninterest expense increased $58,000.
Interest Income. Interest income increased $1.3 million, or 6.3%, to $21.3 million during the quarter ended June 30, 2025, compared to $20.1 million during the quarter ended June 30, 2024. Interest income on loans and leases increased $1.4 million, or 7.7%, to $19.2 million for the quarter ended June 30, 2025, from $17.8 million for the comparable quarter in 2024, due to an increase in the average balance of loans and leases of $28.6 million, and an increase of 31 basis points in the average yield earned on loans and leases as new loans and leases were originated at higher rates and existing variable rate loans in the portfolio adjusted upward due to the overall higher interest rate environment. The average outstanding loan and lease balance was $1.2 billion for the quarter ended June 30, 2025 and $1.1 billion for the same quarter of 2024. The average yield on loans and leases was 6.51% for the quarter ended June 30, 2025, compared to 6.20% for the comparable quarter in 2024.
Interest income on investment securities, excluding FHLB stock, decreased $123,000, or 7.1%, to $1.6 million for the second quarter of 2025 from the comparable quarter in 2024. The decrease was due to a $21.4 million decrease in the average balance, primarily as a result of maturities and paydowns on securities being used to fund loan growth, partially offset by a two basis point increase in the average yield earned on investment securities. The average yield on investment securities, excluding FHLB stock, increased to 2.56% for the second quarter of 2025, compared to 2.54% for the second quarter of 2024. The average balance of investment securities, excluding FHLB stock, decreased to $251.7 million for the quarter ended June 30, 2025, compared to $273.1 million for the quarter ended June 30, 2024.
Dividends on FHLB stock decreased $13,000, or 4.0%, during the quarter ended June 30, 2025, from the comparable quarter in 2024, resulting in an average yield on FHLB stock of 8.89% for the three months ended June 30, 2025, compared to 9.26% for the three months ended June 30, 2024. Interest income on cash and cash equivalents increased $25,000, or 11.5%, to $243,000 during the quarter ended June 30, 2025 from the comparable quarter in 2024, due to a $7.7 million increase in the average balance of cash and cash equivalents, partially offset by a 127 basis point decrease in the average yield.
Interest Expense. Interest expense increased $77,000, or 0.7%, to $10.6 million for the quarter ended June 30, 2025, compared to the quarter ended June 30, 2024. Interest expense on deposits decreased $189,000, or 2.4%, to $7.8 million for the quarter ended June 30, 2025, from the comparable quarter in 2024. The decrease in interest expense on deposits primarily was attributable to a nine basis point decrease in the average rate paid on interest-bearing deposits, partially offset by a $4.3 million increase in the average balance. The average rate paid on interest-bearing deposits was 3.14% for the quarter ended June 30, 2025, compared to 3.23% for the quarter ended June 30, 2024. The average balance of interest-bearing deposits was $995.4 million for the quarter ended June 30, 2025, compared to $991.1 million in the comparable quarter in 2024. Interest expense on FHLB borrowings increased $267,000, or 10.6%, to $2.8 million in the second quarter of 2025 compared to $2.5 million for the same quarter in 2024, due to an increase in the average rate paid on FHLB borrowings of 35 basis points. The average rate paid on FHLB borrowings was 4.24% for the quarter ended June 30, 2025, compared to 3.89% for the second quarter of 2024. The average balance of FHLB borrowings totaled $262.1 million during the quarter ended June 30, 2025, compared to $257.9 million for the quarter ended June 30, 2024.
Management continues to actively evaluate funding mix and pricing strategies to balance interest expense with overall liquidity needs. This includes a focus on deepening core deposit relationships, selectively reducing higher-cost deposits, and managing wholesale borrowings to optimize the cost of funds.
Net Interest Income. Net interest income before the provision for credit losses increased $1.2 million, or 12.4%, to $10.8 million for the second quarter of 2025, compared to $9.6 million for the second quarter of 2024. This increase was due to a 29 basis point increase in the average interest rate spread and a $6.3 million increase in average net earning assets. The
35
improved spread reflects a favorable shift in asset yields outpacing the increase in funding costs, as loans and investment securities repriced or were originated at higher market rates.
Net interest margin (annualized) was 2.93% for the three months ended June 30, 2025, compared to 2.64% for the three months ended June 30, 2024. The increase in net interest margin was attributable to improved asset yields, particularly on loans and leases, outpacing the modest rise in funding costs. The Company also benefited from a more favorable asset repricing environment following the Federal Reserve's rate cuts in late 2024, which reduced deposit costs while asset yields remained elevated.
Average Balances, Interest and Average Yields/Cost. The following table sets forth for the periods indicated, information regarding average balances of assets and liabilities as well as the total dollar amounts of interest income from average interest-earning assets and interest expense on average interest-bearing liabilities, resultant yields, interest rate spread, net interest margin (otherwise known as net yield on interest-earning assets), and the ratio of average interest-earning assets to average interest-bearing liabilities. Average balances have been calculated using daily balances. Non-accruing loans have been included in the table as loans carrying a zero yield. Loan fees are included in interest income on loans and are not material.
| Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| Average Balance Outstanding | Interest Earned/ Paid | Yield/ Rate | Average Balance Outstanding | Interest Earned/ Paid | Yield/ Rate | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||||
| Loans and leases receivable | $ | 1,178,026 | $ | 19,183 | 6.51 | % | $ | 1,149,457 | $ | 17,811 | 6.20 | % | |||||||||||||||||||||||
| Securities | 251,717 | 1,611 | 2.56 | % | 273,142 | 1,734 | 2.54 | % | |||||||||||||||||||||||||||
| FHLB stock | 13,907 | 309 | 8.89 | % | 13,907 | 322 | 9.26 | % | |||||||||||||||||||||||||||
| Cash and cash equivalents and other | 24,156 | 243 | 4.02 | % | 16,492 | 218 | 5.29 | % | |||||||||||||||||||||||||||
| Total interest-earning assets | 1,467,806 | 21,346 | 5.82 | % | 1,452,998 | 20,085 | 5.53 | % | |||||||||||||||||||||||||||
| Non-earning assets | 40,536 | 44,668 | |||||||||||||||||||||||||||||||||
| Total assets | 1,508,342 | 1,497,666 | |||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Savings and money market accounts | 316,419 | 1,833 | 2.32 | % | 290,250 | 1,803 | 2.48 | % | |||||||||||||||||||||||||||
| Interest-bearing checking accounts | 140,977 | 373 | 1.06 | % | 144,363 | 437 | 1.21 | % | |||||||||||||||||||||||||||
| Certificate accounts | 538,026 | 5,605 | 4.17 | % | 556,521 | 5,761 | 4.14 | % | |||||||||||||||||||||||||||
| Borrowings | 262,088 | 2,775 | 4.24 | % | 257,885 | 2,508 | 3.89 | % | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 1,257,510 | 10,586 | 3.37 | % | 1,249,019 | 10,509 | 3.37 | % | |||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | 107,351 | 106,924 | |||||||||||||||||||||||||||||||||
| Other liabilities | 13,222 | 13,287 | |||||||||||||||||||||||||||||||||
| Stockholders' equity | 130,259 | 128,436 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | 1,508,342 | 1,497,666 | |||||||||||||||||||||||||||||||||
| Net interest income | $ | 10,760 | $ | 9,576 | |||||||||||||||||||||||||||||||
| Net earning assets | $ | 210,296 | $ | 203,979 | |||||||||||||||||||||||||||||||
Net interest rate spread(1) | 2.45 | % | 2.16 | % | |||||||||||||||||||||||||||||||
Net interest margin(2) | 2.93 | % | 2.64 | % | |||||||||||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 116.72 | % | 116.33 | % | |||||||||||||||||||||||||||||||
_____________
(1)Annualized. Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
(2)Annualized. Net interest margin represents net interest income divided by average total interest-earning assets.
36
Provision for Credit Losses. A provision for credit losses of $745,000 was recognized during the three months ended June 30, 2025, compared to a provision for credit losses of $270,000 for the three months ended June 30, 2024. Net charge-offs during the second quarter of 2025 were $626,000, compared to $450,000 in the second quarter of 2024. The increased provision for credit losses during the quarter was primarily due to loan growth in the commercial real estate and commercial and industrial loan portfolios, which generally carry higher estimated loss rates compared to other segments. Additionally, the provision reflected replenishment of the allowance following charge-offs and was influenced by changes in the macroeconomic forecast, including a modest deterioration in projected economic indicators such as national GDP and unemployment rates.
While we believe the steps we have taken and continue to take are necessary to effectively manage our portfolio, uncertainties relating to the level of our allowance for credit losses remain heightened as a result of continued concern about a potential recession due to tariffs, inflation, stock market volatility, and overall geopolitical tensions.
Noninterest Income. Noninterest income decreased $32,000, or 2.9%, to $1.1 million for the quarter ended June 30, 2025, compared to the same quarter in 2024. The decline resulted primarily from an increase in net losses on sales of securities of $95,000, partially offset by higher card fee income and other income. Card fee income increased $34,000, or 11.4%, to $336,000, primarily due to higher transaction volume and increased customer utilization of debit and credit card services. Other income increased $13,000, or 3.8%, to $354,000 for the quarter ended June 30, 2025, compared to $341,000 for the comparable quarter in 2024 due to increased wealth management income. Additionally, net gains on loan and lease sales increased $11,000, or 12.2%, in the second quarter of 2025 from the comparable quarter in 2024.
Noninterest Expense. Noninterest expense increased $58,000, or 0.7%, to $8.1 million for the three months ended June 30, 2025, compared to the same period in 2024. Salaries and employee benefits increased $95,000, or 2.0%, to $4.8 million, primarily due to annual merit increases and higher staffing levels. Legal and professional fees decreased $33,000, or 6.9%, reflecting lower external consulting and legal service costs. Deposit insurance expense decreased $76,000, or 20.0%, primarily due to changes in the Company's asset and deposit mix. Data processing fees increased $46,000, or 5.3%, to $926,000, primarily due to increased software implementation expenses.
Income Tax Expense. The provision for income taxes increased $77,000 during the three months ended June 30, 2025, compared to the same period in 2024. The effective tax rate for the second quarter of 2025 was 12.8% compared to 12.9% for the same quarter a year ago.
Comparison of Results of Operations for the Six Months Ended June 30, 2025 and 2024.
General. Net income for the six months ended June 30, 2025 was $4.6 million, a $141,000 or 3.2% increase from net income of $4.4 million for the six months ended June 30, 2024. Diluted earnings per share were $0.46 for the first half of 2025, compared to $0.43 diluted earnings per share for the first half of 2024. The increase in net income primarily was the result of an increase in net interest income of $1.6 million, partially offset by a $1.0 million increase in the provision for credit losses and a $214,000 increase in noninterest expense, with noninterest income remaining relatively unchanged.
Interest Income. Interest income increased $2.6 million, or 6.6%, to $42.2 million during the six months ended June 30, 2025, compared to $39.6 million during the six months ended June 30, 2024. Interest income on loans and leases increased $2.9 million, or 8.3%, to $38.0 million for the six months ended June 30, 2025, from $35.1 million for the comparable period in 2024, due to an increase in the average balance of loans and leases of $48.1 million, and an increase of 28 basis points in the average yield earned on loans and leases as new loans and leases were originated at higher rates and existing variable rate loans in the portfolio adjusted upward due to the overall higher interest rate environment. The average outstanding loan and lease balance was $1.2 billion for the six months ended June 30, 2025, compared to $1.1 billion for the same period of 2024. The average yield on loans and leases was 6.44% for the six months ended June 30, 2025, compared to 6.16% for the comparable period in 2024.
Interest income on investment securities, excluding FHLB stock, decreased $267,000, or 7.6%, to $3.3 million for the first half of 2025 from the comparable period in 2024. The decrease was due to a $21.6 million decrease in the average balance, primarily as a result of maturities and paydowns on securities being used to fund loan growth. The average yield on investment securities, excluding FHLB stock, was 2.54% for both the first half of 2025 and the first half of 2024. The average balance of investment securities, excluding FHLB stock, decreased to $256.9 million for the six months ended June 30, 2025, compared to $278.5 million for the six months ended June 30, 2024.
Dividends on FHLB stock decreased $26,000, or 4.0%, during the six months ended June 30, 2025, from the comparable period in 2024, resulting in an average yield on FHLB stock of 8.92% for the six months ended June 30, 2025,
37
compared to 9.35% for the six months ended June 30, 2024. Interest income on cash and cash equivalents increased $17,000, or 4.8%, to $374,000 during the six months ended June 30, 2025 from the comparable period in 2024, due to a $3.9 million increase in the average balance of cash and cash equivalents, partially offset by a 79 basis point decrease in the average yield.
Interest Expense. Interest expense increased $1.0 million, or 5.0%, to $21.2 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. Interest expense on deposits increased $589,000, or 3.9%, to $15.7 million for the six months ended June 30, 2025, from the comparable period in 2024. The increase in interest expense on deposits primarily was attributable to a $24.2 million increase in the average balance of, and a five basis point increase in the average rate paid on, interest-bearing deposits. The average rate paid on interest-bearing deposits was 3.16% for the six months ended June 30, 2025, compared to 3.11% for the six months ended June 30, 2024. The average balance of interest-bearing deposits was $992.4 million for the six months ended June 30, 2025, compared to $968.2 million in the comparable period in 2024. The increase in interest-bearing deposit balances and rates reflects ongoing competitive pressures for deposits, as well as a continued shift in customer preferences from non-maturity deposit products into higher-yielding time deposits. Interest expense on FHLB borrowings increased $420,000, or 8.2%, to $5.5 million in the first half of 2025 compared to $5.1 million for the same period in 2024, due to an increase in the average rate paid on FHLB borrowings of 30 basis points. The average rate paid on FHLB borrowings was 4.13% for the six months ended June 30, 2025, compared to 3.83% for the first half of 2024. The average balance of FHLB borrowings totaled $268.3 million during the six months ended June 30, 2025, compared to $267.6 million for the period ended June 30, 2024.
Net Interest Income. Net interest income before the provision for credit losses increased $1.6 million, or 8.3%, to $21.0 million for the first six months of 2025, compared to $19.4 million for the first six months of 2024. This increase was due to an 18 basis point increase in the average interest rate spread, partially offset by a decrease of $827,000 in average net earning assets. The improved spread reflects a favorable shift in asset yields outpacing the increase in funding costs, as loans and investment securities repriced or were originated at higher market rates. The modest decline in average net earning assets was primarily the result of higher average balances of interest-bearing deposits.
Net interest margin (annualized) was 2.86% for the six months ended June 30, 2025, compared to 2.69% for the six months ended June 30, 2024. The increase in net interest margin primarily was due to the yield on interest-earning assets increasing faster than the rate paid on interest-bearing liabilities. This margin expansion was supported by growth in higher-yielding asset categories, particularly commercial and multi-family loans.
38
Average Balances, Interest and Average Yields/Cost. The following table sets forth for the periods indicated, information regarding average balances of assets and liabilities as well as the total dollar amounts of interest income from average interest-earning assets and interest expense on average interest-bearing liabilities, resultant yields, interest rate spread, net interest margin (otherwise known as net yield on interest-earning assets), and the ratio of average interest-earning assets to average interest-bearing liabilities. Average balances have been calculated using daily balances. Non-accruing loans have been included in the table as loans carrying a zero yield. Loan fees are included in interest income on loans and are not material.
| Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| Average Balance Outstanding | Interest Earned/ Paid | Yield/ Rate | Average Balance Outstanding | Interest Earned/ Paid | Yield/ Rate | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||||
| Loans and leases receivable | $ | 1,179,329 | $ | 37,957 | 6.44 | % | $ | 1,137,522 | $ | 35,062 | 6.16 | % | |||||||||||||||||||||||
| Securities | 256,866 | 3,264 | 2.54 | % | 278,505 | 3,531 | 2.54 | % | |||||||||||||||||||||||||||
| FHLB stock | 13,907 | 620 | 8.92 | % | 13,818 | 646 | 9.35 | % | |||||||||||||||||||||||||||
| Cash and cash equivalents and other | 19,177 | 374 | 3.90 | % | 15,232 | 357 | 4.69 | % | |||||||||||||||||||||||||||
| Total interest-earning assets | 1,469,279 | 42,215 | 5.75 | % | 1,445,077 | 39,596 | 5.48 | % | |||||||||||||||||||||||||||
| Non-earning assets | 40,278 | 43,365 | |||||||||||||||||||||||||||||||||
| Total assets | 1,509,557 | 1,488,442 | |||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Savings and money market accounts | 310,484 | 3,556 | 2.29 | % | 274,724 | 3,182 | 2.32 | % | |||||||||||||||||||||||||||
| Interest-bearing checking accounts | 137,737 | 697 | 1.01 | % | 146,244 | 819 | 1.12 | % | |||||||||||||||||||||||||||
| Certificate accounts | 544,192 | 11,403 | 4.19 | % | 547,207 | 11,066 | 4.04 | % | |||||||||||||||||||||||||||
| Borrowings | 268,343 | 5,540 | 4.13 | % | 267,552 | 5,120 | 3.83 | % | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 1,260,756 | 21,196 | 3.36 | % | 1,235,727 | 20,187 | 3.27 | % | |||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | 103,316 | 107,750 | |||||||||||||||||||||||||||||||||
| Other liabilities | 13,477 | 13,984 | |||||||||||||||||||||||||||||||||
| Stockholders' equity | 132,008 | 130,981 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | 1,509,557 | 1,488,442 | |||||||||||||||||||||||||||||||||
| Net interest income | $ | 21,019 | $ | 19,409 | |||||||||||||||||||||||||||||||
| Net earning assets | $ | 208,523 | $ | 209,350 | |||||||||||||||||||||||||||||||
Net interest rate spread(1) | 2.39 | % | 2.21 | % | |||||||||||||||||||||||||||||||
Net interest margin(2) | 2.86 | % | 2.69 | % | |||||||||||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 116.54 | % | 116.94 | % | |||||||||||||||||||||||||||||||
_____________
(1)Annualized. Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
(2)Annualized. Net interest margin represents net interest income divided by average total interest-earning assets.
Provision for Credit Losses. A provision for credit losses of $1.5 million was recognized during the six months ended June 30, 2025, compared to a provision for credit losses of $454,000 for the six months ended June 30, 2024. Net charge-offs during the first half of 2025 were $1.0 million, compared to $774,000 in the first half of 2024. The increased provision for credit losses during the period was primarily due to loan growth in the commercial real estate and commercial and industrial loan portfolios, which generally carry higher estimated loss rates compared to other segments. Additionally, the provision
39
reflected replenishment of the allowance following charge-offs and was influenced by changes in the macroeconomic forecast, including a modest deterioration in projected economic indicators such as national GDP and unemployment rates.
While we believe the steps we have taken and continue to take are necessary to effectively manage our portfolio, uncertainties relating to the level of our allowance for credit losses remain heightened as a result of continued concern about a potential recession due to tariffs, inflation, stock market volatility, and overall geopolitical tensions.
Noninterest Income. Noninterest income remained relatively flat for the six months ended June 30, 2025, compared to the same period in 2024, totaling $2.2 million for both periods. Other income increased $54,000, or 8.2%, to $714,000 for the six months ended June 30, 2025, compared to $660,000 for the comparable period in 2024, primarily due to increased wealth management income. Service fees on deposit accounts increased $23,000, or 4.0%, in the first half of 2025 from the comparable period in 2024, due to year-over-year deposit growth. Card fee income increased $43,000, or 7.2%, to $634,000. Offsetting these increases was an increase in net losses on sales of securities of $95,000 for the first half of 2025 compared to the first half of 2024. Additionally, decreases were recognized in net gains on loan and lease sales of $13,000, or 6.3%, and loan and lease servicing fees of $11,000, or 4.1%.
Noninterest Expense. Noninterest expense increased $373,000, or 2.3%, to $16.5 million for the six months ended June 30, 2025, compared to $16.1 million for the same period in 2024. Salaries and employee benefits increased $233,000, or 2.5%, to $9.5 million, primarily due to annual merit increases and increased staffing. Other expenses increased $132,000, or 7.1%, in the first half of 2025 compared to the same period in 2024, primarily due to one-time expenses associated with contract negotiations with our core service provider. The renegotiated agreement is expected to produce meaningful cost savings over the term of the contract by reducing costs on existing services and adding new products aimed at improving operational efficiency and the customer experience, while reducing reliance on third-party vendors. Deposit insurance expense decreased $140,000, or 17.9%, primarily due to changes in the Company's asset and deposit mix and related assessments. Data processing fees increased $42,000, or 2.3%, to $1.8 million, primarily due to increased software implementation expenses.
Income Tax Expense. The provision for income taxes increased $74,000 during the six months ended June 30, 2025, compared to the same period in 2024. The effective tax rate for the first half of 2025 was 13.8% compared to 12.9% for the same period a year ago. The increase in the effective tax rate was primarily due to the expiration and write-off of certain charitable contribution carryforwards.
Capital and Liquidity
Capital. Shareholders' equity totaled $132.3 million at June 30, 2025 and $132.9 million at December 31, 2024. In addition to net income of $4.6 million, other sources of capital during the first half of 2025 included $360,000 related to the allocation of ESOP shares, $727,000 related to stock-based compensation, and a $4.6 million reduction in AOCL. Uses of capital during the first half of 2025 included $2.9 million of dividends paid on common stock and $5.6 million of stock repurchases.
We paid a regular quarterly dividend of $0.15 per common share during the second quarter of 2025, compared to $0.14 per common share during the second quarter of 2024. We currently expect to continue our practice of paying regular quarterly cash dividends on common stock subject to the Board of Directors' discretion to modify or terminate this practice at any time and for any reason without prior notice. Assuming continued payment during 2025 at the current dividend rate of $0.15 per share, our average total dividend paid each quarter would be approximately $1.6 million based on the number of our currently outstanding shares at June 30, 2025.
Stock Repurchase Plans. From time to time, our Board of Directors has authorized stock repurchase plans. In general, stock-repurchase plans allow us to proactively manage our capital position and return excess capital to shareholders. Repurchased shares also help satisfy obligations related to stock compensation awards. On June 6, 2023, the Company announced that the Board of Directors approved an amendment to the Company's existing stock repurchase program, authorizing the purchase of up to an additional 321,386 shares of the Company's issued and outstanding common stock, in addition to the 827,554 shares remaining available for repurchase at that date, and extending the stock repurchase program's expiration date to June 6, 2024, unless completed sooner. On May 16, 2024, the Company announced that the Board of Directors approved a further extension of the Company's existing stock repurchase program, setting a new expiration date of June 6, 2025. As of the expiration date, approximately 47,121 shares remained available for repurchase under the program. The repurchase program did not obligate the Company to purchase any particular number of shares. See Part II, Item 2 - "Unregistered Sales of Equity Securities and Use of Proceeds."
40
Liquidity. Liquidity measures the ability to meet current and future cash flow needs as they become due. The liquidity of a financial institution reflects its ability to meet loan requests, to accommodate possible outflows in deposits and to take advantage of interest rate market opportunities. The ability of a financial institution to meet its current financial obligations is a function of its balance sheet structure, its ability to liquidate assets and its access to alternative sources of funds. The objective of our liquidity management is to manage cash flow and liquidity reserves so that they are adequate to fund our operations and to meet obligations and other commitments on a timely basis and at a reasonable cost. We seek to achieve this objective and ensure that funding needs are met by maintaining an appropriate level of liquid funds through asset/liability management, which includes managing the mix and time to maturity of financial assets and financial liabilities on our balance sheet. Our liquidity position is enhanced by our ability to raise additional funds as needed in the wholesale markets.
Asset liquidity is provided by liquid assets which are readily marketable or pledgeable or which will mature in the near future. Liquid assets generally include cash, interest-bearing deposits in banks, securities available for sale, maturities and cash flow from securities held to maturity, sales of fixed rate residential mortgage loans in the secondary market, and federal funds sold and resell agreements. Liability liquidity generally is provided by access to funding sources which include core deposits and advances from the FHLB and other borrowing relationships with third party financial institutions.
Our liquidity position is continuously monitored and adjustments are made to the balance between sources and uses of funds as deemed appropriate. Liquidity risk management is an important element in our asset/liability management process. We regularly model liquidity stress scenarios to assess potential liquidity outflows or funding problems resulting from economic disruptions, volatility in the financial markets, unexpected credit events or other significant occurrences deemed problematic by management. These scenarios are incorporated into our contingency funding plan, which provides the basis for the identification of our liquidity needs.
Our liquid assets in the form of cash and cash equivalents and investments available for sale totaled $276.9 million at June 30, 2025. Certificates of deposit scheduled to mature in less than one year from June 30, 2025 totaled $414.2 million. Historically, the Bank has been able to retain a significant amount of its deposits as they mature.
As of June 30, 2025, we had approximately $12.4 million held in an interest-bearing account at the Federal Reserve. We also have the ability to borrow funds as a member of the FHLB. As of June 30, 2025, based upon available, pledgeable collateral, our total remaining borrowing capacity with the FHLB was approximately $112.5 million. Furthermore, at June 30, 2025, we had approximately $165.4 million in securities that were unencumbered by a pledge and could be used to support additional borrowings through repurchase agreements or the Federal Reserve discount window, as needed. As of June 30, 2025, management was not aware of any events that are reasonably likely to have a material adverse effect on our liquidity, capital resources or operations. In addition, management is not aware of any regulatory recommendations regarding liquidity that would have a material adverse effect on us.
Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash provided by operating activities was $7.0 million for the six months ended June 30, 2025, compared to $5.1 million provided by operating activities for the six months ended June 30, 2024. During the six months ended June 30, 2025, net cash provided by investing activities was $2.5 million, compared to $41.2 million of net cash used in investing activities for the same period in 2024. The increase in cash provided was primarily due to a significant net increase in loans during the 2024 period, as well as higher proceeds from sales and maturities of securities available for sale in 2025. Net cash used in financing activities was $4.0 million for the six months ended June 30, 2025, compared to $34.9 million of net cash provided by financing activities during the same period in 2024. The use of cash in 2025 primarily reflected increased activity in issuing certificates of deposit, stock repurchases, and dividends paid, partially offset by an increase in demand and savings deposits and a modest net increase in FHLB advances. Management believes the capital sources are adequate to meet all reasonably foreseeable short-term and long-term cash requirements and there has not been a material change in our liquidity and capital resources since the information disclosed in our 2024 Form 10-K other than set forth above.
Richmond Mutual Bancorporation is a separate legal entity from First Bank Richmond and must provide for its own liquidity. In addition to its own operating expenses, Richmond Mutual Bancorporation is responsible for paying for any stock repurchases, dividends declared to its stockholders and other general corporate expenses. Since Richmond Mutual Bancorporation is a holding company and does not conduct operations, its primary sources of liquidity are interest on investment securities purchased with proceeds from our initial public offering, dividends up-streamed from First Bank Richmond and borrowings from outside sources. Banking regulations may limit the amount of dividends that may be paid to us by First Bank Richmond. At June 30, 2025, Richmond Mutual Bancorporation, on an unconsolidated basis, had $1.0 million in cash, noninterest-bearing deposits, and liquid investments generally available for its cash needs.
41
Regulatory Capital Requirements. First Bank Richmond is subject to minimum capital requirements imposed by the FDIC. The FDIC may require us to have additional capital above the specific regulatory levels if it believes we are subject to increased risk due to asset problems, high interest rate risk and other risks. At June 30, 2025, First Bank Richmond’s regulatory capital exceeded the FDIC regulatory requirements, and First Bank Richmond was well-capitalized under regulatory prompt corrective action standards. Consistent with our goals to operate a sound and profitable organization, our policy is for First Bank Richmond to maintain well-capitalized status.
| Actual | Minimum for Capital Adequacy Purposes | Categorized as "Well-Capitalized" Under Prompt Corrective Action Provisions | |||||||||||||||||||||||||||||||||
| Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||
| As of June 30, 2025 | |||||||||||||||||||||||||||||||||||
| Total risk-based capital (to risk weighted assets) | $ | 182,591 | 14.2 | % | $ | 102,575 | 8.0 | % | $ | 128,219 | 10.0 | % | |||||||||||||||||||||||
| Tier 1 risk-based capital (to risk weighted assets) | 166,555 | 13.0 | 76,931 | 6.0 | 102,575 | 8.0 | |||||||||||||||||||||||||||||
| Common equity tier 1 capital (to risk weighted assets) | 166,555 | 13.0 | 57,698 | 4.5 | 83,342 | 6.5 | |||||||||||||||||||||||||||||
| Tier 1 leverage (core) capital (to adjusted tangible assets) | 166,555 | 10.8 | 61,962 | 4.0 | 77,452 | 5.0 | |||||||||||||||||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Total risk-based capital (to risk weighted assets) | $ | 181,415 | 14.2 | % | $ | 102,014 | 8.0 | % | $ | 127,518 | 10.0 | % | |||||||||||||||||||||||
| Tier 1 risk-based capital (to risk weighted assets) | 165,471 | 13.0 | 76,511 | 6.0 | 102,014 | 8.0 | |||||||||||||||||||||||||||||
| Common equity tier 1 capital (to risk weighted assets) | 165,471 | 13.0 | 57,383 | 4.5 | 82,887 | 6.5 | |||||||||||||||||||||||||||||
| Tier 1 leverage (core) capital (to adjusted tangible assets) | 165,471 | 10.7 | 61,579 | 4.0 | 76,974 | 5.0 | |||||||||||||||||||||||||||||
Pursuant to the capital regulations of the FDIC and the other federal banking agencies, First Bank Richmond must maintain a capital conservation buffer consisting of additional common equity tier 1 (“CET1”) capital greater than 2.5% of risk-weighted assets above the required minimum levels of risk-based CET1 capital, tier 1 capital and total capital. Failure to maintain the required buffer could result in limitations on the Bank's ability to pay dividends and discretionary bonuses and the Company's ability to repurchase shares based on specified percentages of eligible retained income. At June 30, 2025, the Bank’s capital exceeded the conservation buffer.
For a bank holding company with less than $3.0 billion in assets, the capital guidelines apply on a bank only basis and the Federal Reserve Board expects the holding company’s subsidiary banks to be well capitalized under the prompt corrective action regulations. If Richmond Mutual Bancorporation was subject to regulatory guidelines for bank holding companies with $3.0 billion or more in assets, at June 30, 2025, it would have exceeded all regulatory capital requirements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
There has not been any material change in the market risk disclosures contained in our 2024 Form 10-K.
ITEM 4. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures.
An evaluation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) as of June 30, 2025, was carried out under the supervision and with the participation of our Chief Executive Officer (principal executive officer), Chief Financial Officer (principal financial officer), and several other members of senior management. Our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures in effect as of June 30, 2025, were effective.
42
We do not expect that our disclosure controls and procedures and internal control over financial reporting will prevent all errors and all fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control procedure are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls may be circumvented by the individual acts of some persons, by collusion of two or more people, or by override of the control. The design of any control procedure also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control procedure, misstatements due to error or fraud may occur and not be detected.
(b) Changes in Internal Control Over Financial Reporting.
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the three months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
43
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not involved in any pending legal proceedings as a plaintiff or defendant other than routine legal proceedings occurring in the ordinary course of business, and at June 30, 2025, we were not involved in any legal proceedings the outcome of which would be material to our financial condition or results of operations.
ITEM 1A. RISK FACTORS
There have been no material changes in the Risk Factors previously disclosed in Item 1A of the Company's 2024 Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a)Not applicable
(b)Not applicable
(c)On June 6, 2023, the Company announced that the Board of Directors approved an amendment to the Company's existing stock repurchase program authorizing the purchase of up to 321,386 shares of the Company's issued and outstanding common stock in addition to the 827,554 shares remaining available for repurchase at that date under the existing program, and extending the stock repurchase program's expiration date to June 6, 2024, unless completed sooner. On May 16, 2024, the Company announced that the Board of Directors approved an extension of the Company's existing stock repurchase program, which expired on June 6, 2025. The following table sets forth information with respect to repurchases of our outstanding common shares during the three months ended June 30, 2025:
| Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the plans or programs | ||||||||||||||||||||
| April 1, 2025 - April 30, 2025 | 63,921 | $ | 12.99 | 63,921 | 84,327 | ||||||||||||||||||
| May 1, 2025- May 31, 2025 | 37,206 | $ | 14.27 | 37,206 | 47,121 | ||||||||||||||||||
| June 1, 2025 - June 30, 2025 | — | — | — | 47,121 | |||||||||||||||||||
| 101,127 | $ | 13.46 | 101,127 | —(1) | |||||||||||||||||||
(1)Plan terminated as indicated above
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Nothing to report.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
(a) Nothing to report.
(b) Nothing to report.
(c) Trading Plans. During the three months ended June 30, 2025, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted terminated
44
ITEM 6. EXHIBITS
Exhibit
3.1 | Charter of Richmond Mutual Bancorporation, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1 (Commission File No. 333-230184)) | |||||||
3.2 | Bylaws of Richmond Mutual Bancorporation, Inc. (incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form S-1 (Commission File No. 333-230184)) | |||||||
4.0 | Form of Common Stock Certificate of Richmond Mutual Bancorporation, Inc. (incorporated by reference to Exhibit 4.0 of the Company’s Registration Statement on Form S-1 (Commission File No. 333-230184)) | |||||||
10.1+ | Form of Non-Qualified Deferred Compensation Plan for Garry Kleer (incorporated by reference to Exhibit 10.1 of the Company's Registration Statement on Form S-1 (Commission File No. 333-230184)) | |||||||
10.2+ | Richmond Mutual Bancorporation, Inc. 2020 Equity Incentive Plan (included as Appendix A to the Registrant’s definitive proxy statement filed with the SEC on July 28, 2020 (File No. 001-38956) and incorporated herein by reference). | |||||||
10.3+ | Form of Incentive Stock Option Award Agreement under the 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 of the Company’s Registration Statement on Form S-8 (Commission File No. 333-248862)). | |||||||
10.4+ | Form of Non-qualified Stock Option Award Agreement under the 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 of the Company’s Registration Statement on Form S-8 (Commission File No. 333-248862)). | |||||||
10.5+ | Form of Restricted Stock Award Agreement under the 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 of the Company’s Registration Statement on Form S-8 (Commission File No. 333-248862)). | |||||||
10.6+ | Change in Control Agreement, dated May 27, 2025, by and between Richmond Mutual Bancorporation, Inc. and Paul Witte (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the SEC on May 27, 2025 (Commission File No. 001-38956)). | |||||||
10.7+ | Change in Control Agreement, dated May 27, 2025, by and between Richmond Mutual Bancorporation, Inc. and Bradley Glover (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the SEC on May 27, 2025 (Commission File No. 001-38956)). | |||||||
31.1 | Rule 13a-14(a) Certifications (Chief Executive Officer) | |||||||
31.2 | Rule 13a-14(a) Certifications (Chief Financial Officer) | |||||||
32.0 | Section 1350 Certifications | |||||||
| 101.0 | The following materials for the quarter ended June 30, 2025, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Comprehensive (Loss) Income, (iv) Condensed Consolidated Statements of Changes in Stockholders’ Equity (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
+ Indicates management contract or compensatory plan or arrangement.
45
SIGNATURES
Pursuant to the requirements 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.
| RICHMOND MUTUAL BANCORPORATION, INC. | ||||||||
| Date: August 8, 2025 | By: | /s/ Garry D. Kleer | ||||||
| Garry D. Kleer | ||||||||
| Chairman, President and CEO | ||||||||
| (Duly Authorized Officer) | ||||||||
| Date: August 8, 2025 | By: | /s/ Bradley M. Glover | ||||||
| Bradley M. Glover | ||||||||
| Senior Vice President and CFO | ||||||||
| (Principal Financial and Accounting Officer) | ||||||||
46
FAQ
What were RMBI's net income and EPS for Q2 2025?
RMBI reported $2,601,998 in net income for Q2 2025 and basic EPS of $0.27 for the quarter.
How large is RMBI's balance sheet and deposit base?
Total assets were $1,507,759,185 and total deposits were $1,096,389,016 at June 30, 2025.
What is the allowance for credit losses and recent provisioning?
The allowance for credit losses on loans and leases was $16,219,007 at June 30, 2025; the provision for the six months ended June 30, 2025 was $1,475,785.
How significant are investment unrealized losses for RMBI?
Aggregated gross unrealized losses on investment securities were about $55,148,000 at June 30, 2025; management does not consider these credit losses.
Did RMBI repurchase stock in the period?
Yes. Repurchases of common stock totaled $5,633,659 for the six months ended June 30, 2025.
Richmond Mut Bancorporation
NASDAQ:RMBI
RMBI Rankings
RMBI Latest News
RMBI Latest SEC Filings
RMBI Stock Data
135.07M
8.14M
21.22%
20.19%
3.7%
Banks - Regional
State Commercial Banks
United States
RICHMOND